Talent shortage and price wars
They remain the fundamental issues in the ad and media space
AS the local advertising industry moves into the new year with fresh opportunities and challenges, there is one glaring issue which still rears its ugly head in the industry. It is no other than talent shortage and retention in the competitive advertising space.
Based on a survey by The Creative Group which was published in December last year, it noted that 60% of advertising and marketing decision makers, for example in North America alone, plan to expand their teams in the first half of 2019.
It showed that web production and web and mobile development were top areas for recruitment but were the hardest positions to fill. Professionals with knowledge in user experience, creative development and visual design were also in the lists, it revealed.
The Creative Group is the top provider of the creative and marketing worlds’ best and brightest. The talent crunch on the home turf is no different.
Talent crunch and price wars
Havas Media Group Malaysia CEO Andreas Vogiatzakis attributes the talent crunch and brain drain in the industry to price wars and undercutting among players.
He tells StarBizweek that the fundamental issue in the ad and media space all these years has been the price wars and the relentless undercutting in the industry driven by several factors.
“Talent shortage is a painful issue that no one wants to openly discuss, yet I do believe it has been the source of most evils in our industry. There has been a massive brain drain not only of advertising/marketing professionals leaving Malaysia but also of them leaving the ad industry itself.
“The efforts from various industry association have not really managed to reverse this trend fully for several reasons. The industry must unite to tackle this challenge together. Unite to offer training, internships, programmes that bring back the excitement to our industry, and above all, enhance the solidarity to stop the price wars and undercutting, though difficult, but not impossible.”
Dentsu Aegis Network Malaysia CEO Nicky Lim agrees that shortage of talent has been a trend over the past five years. As more and more new businesses open and coupled with the lure of better forex opportunities abroad, he adds it will be a persistent challenge.
Compounding the talent shortage issue is the millennials which have a very different value and priority system. On one hand, automation is the way forward, he says, on the other hand, beefing up on providing better training to potential candidates to become better human with empathy may also be the way forward.
“As philosophical as it may sound, empathy and gratefulness will be key qualities to have in the future where digital reigns,” Lim stresses.
Meanwhile, Publicis One Malaysia and Leo Burnett Malaysia CEO Tan Kien Eng says that to overcome talent crunch in a sustainable way, an enterprise needs to value add to make it worthwhile for talents to stay and grow with the business.
Value-add can be in the form of continuous learning through trainings, recreation and flexi-work-life environment, he says. “We are also constantly grooming our managers to be better leaders as talents stay or leave because of their immediate managers and the manager’s ability to lead, guide and support them,’’ Tan adds.
With over 200,000 graduates in a year, he says the challenge the industry faces is a shortage of strong and employable talents as a fifth of graduates remain unemployed.
“At Leo Burnett, we are continuously working with institutions of higher learning to shape future talents to be employable and industry ready. Some of our recent initiatives include working with Monash Malaysia researchers on funding and tech support.
“We recently signed with Xiamen University Malaysia to share case studies, lectures and initiatives with the newly-established advertising and PR faculty,’’ Tan notes.
IPG Mediabrands Malaysia CEO Bala Pomaleh says finding good talents will continue to be a top priority for the agency. He adds that it will support each talent to steer towards reinvention in order to remain relevant.
Bala notes: “Each and every member of our team, including myself, will be learning across different spaces, especially within the digital sphere, in order to stay ahead of the curve.”
Having an upbeat view, the Association of Accredited Advertising Agents Malaysia president and Havas Immerse Malaysia managing director Andrew Lee says talent shortage can be mitigated by hiring specialists and professionals from other backgrounds to inject fresh ideas in the fast-evolving advertising and communications landscape.
With more specialists from various professions, he says it will allow an agency to see things in a different perspective and to understand better the people’s fast-changing needs.
Quality content amid digital disruption
Vogiatzakis views technological advancements will at the same time pose as the biggest opportunities and challenges for the industry. In the next five years, he foresees the industry advancing at unprecedented levels. The agency model, he says will change where smaller, more agile, nimbler and specialised agencies will win more businesses.
“The consumer ecosystem will become more fragmented and complicated. The attention spans of consumers will diminish further. However, when relevancy kicks in, I believe the engagement duration between agencies and consumers will increase. The challenge will be how to create meaningful content that will engage with the consumers in meaningful ways.
“I believe technological advancements like artificial intelligence, voice recognition and intelligent assistants will further enhance the hype in new advertising mediums, yet the fundamentals need to be relevant. For example, there must be quality content and powerful story-telling in campaigns.
“Remember that platforms and technologies are nothing more but means to an end desired result. What we want is not the platform itself, but the outcome it brings. So when we get entangled in our tech talk, I always refocus back to what is the outcome and KPI we want to achieve,” he says.
The pressure on margins Bala opines will remain a challenge in the ad space. Media agencies will need to focus on business outcomes as a key metric in order to retain a solid partnership with clients, he says.
Traditional media he adds will continue to be important as it still forms the base for many mass brand clients. At the same time, he says many vendors of traditional platforms are actively introducing digital solutions which will allow for natural transition. The agency, he notes is continuously working with key partners on this front.
Whilst digital media consumption is increasing exponentially at the expense of most traditional media, he says the agency sees one offline media standing the test of time.
“High potential remains within out-ofhome (OOH) media that many advertisers are not yet capitalising on. There remains a huge vacuum to be filled in terms of creating customised messaging for OOH media that will highly complement online and other offline media, and brands should be cognisant of these opportunities,” Bala says.
Lim says if there is one certainty going into 2019, it is that digital disruption will continue to happen. Traditional creative agencies will go bust as no access to data will be the cause of it. “Evolve or die, that’s the reality,” he notes.
Another trend to observe is the continued automation via AI or machine learning, ultimately leading to better quality and greater cost efficiency. This, he adds combined with blockchain technology will eventually make the role of middlemen redundant. “Similarly, media agencies are being forced to evolve and expand its offerings, failing which, will be relegated to become a commodity broker,” he stresses.
Malaysian ad industry a laggard?
Dentu’s Lim says the local ad industry unfortunately hasn’t evolved to be as dynamic as it should and still a laggard in South-East Asia behind Singapore and Thailand. That said, he adds the industry will be forced to evolve at a much more critical speed, more so when consultancies and hybrid agencies comes to play.
Tan adds on the whole, most corporations as well as agencies are not evolving fast enough to meet the changing landscape. Having said that, he says Publicis Groupe and Leo Burnett Malaysia is keeping abreast with the change.
“We set up Digitas as data and tech lead agency in view of the impending change and requirements in the market. Prodigious, our brand production and logistics agency, is to cater for end-to-end digital production at scale. By looking at some of our recent new business wins in the region, our office is well ahead compared to our competitors in the neighbouring countries in the area of performance marketing, data related initiatives and CRM.
Lee says although there are some aspects where Malaysia is behind some countries in Asia-Pacific but there are also many aspects where the country is advanced compared to the world.
“People around the world are becoming more sensitive to diversity and equality and Malaysia is way ahead of many countries in managing racial and religion sensitivities. The Dolce & Gabbana issue that happened in China would not have happened in Malaysia,’’ he emphasises.
In November last year, the designer duo behind luxury Italian brand Dolce & Gabbana issued an apology to the Chinese in an effort to stall a growing backlash against their label after a social media campaign soured and leaked comments that were deemed racist.
Vogiatzakis stands by his views that the ad industry is now more dynamic. He says the creativity level is higher and in terms of awards win in the international arena such as in Cannes. And for that, he says ironically, Malaysia has also become a source of talent export to various regional markets.
Painful stuff: Vogiatzakis says talent shortage is a painful issue that no one wants to openly discuss. Fresh idea: Lee says the problem can be mitigated by hiring specialists and professionals from other backgrounds. Value add: Tan says an enterprise needs to value add to make it worthwhile for talents to stay and grow with the business. OOH factor: Bala says good potential remains within out-of-home media that many advertisers are not yet capitalising on.