Clemenger Sydney’s CEO has handed down a withering assessment on the parlous state of the advertising agency industry in Australia and blames clients’ unwillingness to remunerate them fairly as the root of the problem.

Andy Pontin, CEO of Clemenger BBDO Sydney, who is responsible for the Clemenger BBDO, Proximity and Porter Novelli businesses in NSW, was speaking as part of a skills shortage workshop organised in partnership by ADMA and B&T.

“I think you can either say there is a talent shortage or there is a dollar shortage. And our issue is that there is a dollar shortage. The talent’s out there, we just can’t afford to pay for it,” he said.

Pontin said the problem applied to both talent already living in Australia as well as talent the agency was trying to bring into Australia.

“I think where we and every other agency is really struggling is that we used to be able to attract really great thinkers because generally we pay more, we used to offer a better working environment and often more variety in the role. All three of those things have changed now.”

Pontin said that agencies were now paying relatively less for their staff than the the clients they serviced.
“So I think now we’re beginning to pay less, so it used to be an account director would be sitting across the table from the client, our guy would be earning more, now they are probably earing 30 per cent less than the person on the client side. So that’s a big challenge.”

So how do you keep people on board with that, Pontin asked the room?

“One way to keep on board is the soft stuff. So it’s the cultural side, the environment, well that costs money and we all have tight controls over line items. So, that’s difficult to do and also frequently now many of our clients have funkier premises than us.

“They have their own creative product, their own great thinkers and they can offer similar scope and scale in the roles that really only used to exist in advertising.

“So that’s the issue really: the talent’s there, we’ve got to find a way to make an advertising agency the right place for the right talent to land,” he answered his own question.

He also said that while many agencies were going for people with broad skill sets, he said what was really needed was people who are jacks of all trades, masters of none.

“You still need experts. Clients still look across the table at you and say: who’s your digital guy? Or, who’s your social guy? So you need all that because the generalists know some things, but most clients will say that that’s a weak link but it’s actually what they pay for.”

Pontin finished off his  opening salvo in the workshop with one last observation: “If clients paid us properly, probably we’d have better talent. And that sounds like a whinge, but the industry is in a dramatic hole at the moment, because we sold ourselves 20 years ago onto the consultancy, head-hour based model and I’m telling you in 20 years, that hourly rate for that creative director has not changed, but the salaries have changed.

“So our ability to detach our revenue line from a linear connection to a cost line is zero. And that’s a horrendous business model in a business changing as fast as ours.”