Millennials are the most attractive target for marketers. That is why companies spend five times as much trying to reach them than on Baby Boomers, even though Boomers control 70% of all disposable income. Millennials, goes the argument, are critical for a brand success in the long run. Get them when they are young, and they’ll stay with you for a lifetime (an overly optimistic, wishful thinking about the ficklest generation ever).
Clients are being made to believe that the people who write the ads directed to Millennials must be Millennials as well. However, the downside of this approach is that the industry is too quick to devalue experience. By worshiping at the altar of youth, agencies undermine themselves and struggle to move forward.
Just take a walk through the corridors of an agency and you might think you are on the set of the 1976 science fiction movie Logan’s Run, about a Utopian future society revealed as a dystopia, in which adults are killed when they reach a certain age.
The average age of employees in agencies is 33 years, probably 30 or below in the creative department. More than half the employees in the ad industry are Millennials, vs. only 25% of all U.S. workers. Conversely, only 5% of ad agency employees are over 50, and most are not in the creative department.
Other creative crafts do not have a problem with older people linking with 20-somethings. Tom Ford is 57, Quentin Tarantino is 56, Jay Z is 49, and nobody doubts their ability to reach young people. Why is it that just ad agencies believe that only young people can communicate with young people? The issue is not necessarily in and of itself Ageism, but is, instead, an outgrowth of today’s agency economics.
The elephant in the room is that when it comes to talent, experience is expensive. Client procurement has cut fees so ruthlessly that agencies are trying to survive on wafer-thin margins. To do so, they hire young, and they hire cheap. Those Millennials have little insight into anyone different from themselves and they are so isolated in their tech and social media bubble that they don’t seek the insight into the broader population.
However, when the average age of a creative team is 25 and the average age of a car buyer is 52, you know you have a problem. Especially since almost all agencies do not invest in professional development anymore. Older employees, on the other hand, often possess the kind of broad experience and big thinking that can help lead brands through complex challenges and hurdles.
Ageism isn’t hurting just the agencies. It’s hurting the work. And it’s hurting the brands agencies serve. It hurts the culture itself. Advertising has tremendous influence in shaping our society, and when it is homogeneous and doesn’t reflect our age diversity, or gender diversity, or sexual preferences diversity, it becomes less relevant.
In becoming a workforce that’s dominated by young people, agencies are losing competency in the kind of creativity and strategy that bring about long lasting, brand building ideas. Creative brilliance depends on the diversity of perspective and inspiration from invaluable cross-generational mentoring.
To add insult to injury, Millennials are perpetual job-hoppers. The average agency annual turnover rate is 30%. Instead of prioritizing professional development, the true antidote to advertising’s talent exodus, agencies respond with Margarita Mondays and Pizza Fridays. And money provides little incentive: Last year, the average salary for entry-level employees at agencies was about $35,500.
Marketers can’t afford not to demand greater transparency of how agencies manage their sole asset, their staff. They need to understand the agency hiring policy, its retention policy, development plans and how they optimize diversity across gender, ethnicity, race – and age.
Agencies are now obsessed with acquiring capabilities for personalization at scale. Publicis Groupe just acquired data and technology company Epsilon for $4.4 billion. However, one can have all of the knowledge of the consumers in the world and all of the technology to reach them but, if the content and the ideas are not right, if they don’t persuade, it won’t have any impact.
Accenture is buying Droga5 at high multiples, precisely because they know that there is no way that the future does not require creativity. The question is, whether the holding companies, who are not retaining their most creative, experienced people understand that too.
