Tuesday, February 26, 2008

Apocalypse Now? Or Survival of the Fittest?

By Robbin Goodman, Makovsky + Company

“Media Work Force Sinks to 15-Year Low,” (subscription required) screamed the Ad Age headline. Reporter Bradley Johnson went on to describe how one in four media jobs has disappeared since the peak of newspaper employment in 1990. Loss of subscribers and ad dollars, and competition for readers’ attention with a wide range of media, including digital properties, have all contributed to the slump. Over the past year alone, 16,900 newspaper staff have been cut (nearly five percent) … while, interestingly, employment in marketing consultancies is up nearly 11 percent.

I question the implicit assumption that there is an inverse relationship between the number of staff positions on newspapers and the growth of marketing services agencies. It’s more complicated than that. Ad agencies aren’t growing. They’re slimming down and consolidating. I’m certain many of those who are leaving the world of conventional advertising are, in fact, starting their own marketing services agencies or joining other, smaller independent firms. Another factor that wasn’t explored in the article is the degree to which corporations are choosing to use external experts, rather than staff up internally.

I believe that marketing consulting is growing because, increasingly, print ads aren’t working as well as they used to, and marketers are interested in trying new things. The fact that the “mix” of marketing services is increasing is because of that experimentation.

Studies conducted by Booz Allen Hamilton, a client of our firm, in partnership with the Association of National Advertisers have shown that world class marketers are increasingly dismayed by the ad agency community’s slowness to come to grips with this shift in spending.

According to “HD Marketing 2010: Sharpening the Conversation,”, more than 90 percent of marketers surveyed say they plan to increase their digital spending. However, only 24 percent of the survey respondents think their organizations are digitally savvy. Almost 60 percent of participants believe creative, creative and media capabilities should be rebundled …but not by traditional full-service agencies. In fact, media partnerships — with both media companies and media agencies — are becoming more important than traditional full-service agency partnerships to twice as many marketers.

With respect to the decline in newspaper editorial jobs, actually, a good study that needs to be done is an examination of trends in the utilization of freelance journalists by newspapers. While it’s clear newspapers are indeed eliminating headcount … it seems that newspapers such as The New York Times and the Wall Street Journal are using a higher percentage of freelance journalists in recent years than ever before.

With the increased number of articles that are appearing online only (and the Wall Street Journal is a good example of this), there are many more opportunities for freelancers to byline articles. The Saturday and Sunday New York Times business sections have a significant amount of freelance-written content. Many of the Journal’s features, such as Career Journal, feature many freelance written stories.

The bottom line? I don’t see this as the decimation of the fourth estate. It’s just a matter of adaptation and the survival of the fittest.

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