Best of the Week: The opposite of rose-tinted spectacles

[View web version]( BEST OF THE WEEK And another thing... Welcome to Best of the Week, written on a rainy Friday afternoon in Singapore, after an upbeat, albeit low energy, lunch with the Mumbrella Asia team. They may have gone a tad too hard in celebrating [News Media of the Year and Trade Media of the Year wins at the Asia Pacific Publishing Awards]( on Thursday night. I can’t recall seeing anybody look at a barely-touched pizza with as much trepidation as that displayed by our publisher Dean Carroll. Today’s writing soundtrack: 2 Many DJs: As Heard on Radio Soulwax, part 21. Who else could segue from Rah Band’s Clouds Across The Moon to Harold Faltermeyer’s Axel F? (I think I’d better turn up my headphones; the loud British businessman at the next table in the hotel lounge, telling his colleagues how important it is that nobody finds out he’s invested in the company, is really quite distracting. I imagine if I leant across and told him I’m a journo he might shut the hell up.) Glad to wear glasses (glad to have ears) Friday was a day of new sensations. I’m in Singapore ahead of next week’s Mumbrella Asia Awards. So a Friday off included the spontaneous tourist activity of dropping into a fish spa, followed by Googling the health risks of doing so. (I did those two things the wrong way round.) But odder than the sensation of dozens of tiny fish nibbling at my toes is the one I’m dealing with right now. This is the first time I’ve written Best of the Week while wearing glasses. Yes, after months of annoyance at food manufacturers for publishing ingredients in unreadable fonts, I’ve faced the fact that it might be me, rather than an outbreak of poor packaging design. So I’ve joined the speccy army. And it is indeed an odd sensation looking at words that I’d become accustomed to being slightly blurry, and suddenly seeing them sharply once more. Even harder though is the sudden loss of clarity when I look into the distance without removing the glasses. Near or far - choose one… there’s a metaphor in there somewhere. The media recession? And I’m not the only one who’s dealing with a new normal. For as long as most people currently working in agencies have been there, they’ve been in the privileged position of being in a growth industry, even after the GFC. It slipped into focus for me over dinner with a couple of friends from the media and agency world on Wednesday night. “There’s something I’ve been meaning to mention…” one of them told me. He’d been advertising some digital roles. Senior but not top end. And he’d noticed a trend. Whereas before he’d have expected perhaps a couple of dozen applications, he’d had 200. And among them were people who he had come across before when they were in $200,000 jobs. But many of them have not been working for months, and are now willing to take less than $100,000 because they’ve got mortgages to service and school fees to pay. I’ve been seeing the same thing for a while now. A year or two ago, it was media sales side where you’d see it happening. Executives with big jobs and big mortgages would move on or be moved on, and assume they’d easily find another gig on the big salary they were used to. I remember a couple of times when we advertised roles, we’d talk to people about salary expectations where they had no idea just how much their world had changed. In at least a couple of cases they’d still be looking a year later, still in denial, for a salary that they’d never see again. Now it feels like the contagion has rolled from media owner side to agency side. For the last decade, the evolution of media buying into a digital discipline had guaranteed roles for those whose skills are reasonably up to date. Even as declining revenues for traditional media reduced the number of big sales roles, opportunities opened up within marketing technology supplies and media agencies for those who stayed up to date. We hadn’t scripted to talk about it in [this week’s Mumbrellacast](, but the subject came up. And it struck a chord with the team. As we’ve discussed before, on a whiteboard in the office, we’ve been keeping a list of big name executives who are not currently in work. The original intention was to match names to vacancies. But when the list got so long we had to rub it out and rewrite the names smaller to fit them all in, the thought began to occur that something else was at play. The vacancy list has barely grown. I suspect that what happened a decade ago, was despite the GFC, there was enough activity generated by digital transformation that demand for skills helped the sector defy gravity. That skill gap is one reason why we saw such an influx of media agency staff from the UK. But that transformation wave has crested. Knowing how a demand side platform works no longer makes you special. Meanwhile, the number of big media sales jobs has reduced with each merger. And the ad tech and martech companies are rapidly consolidating too. Which means that if there’s a downturn in the wider economy, the communications industry probably won’t avoid the worst of it this time round. And when it comes to the economy, I’m a pessimist. For people who’ve heard me go on about it over the last 18 months or so, it’s a bit of a running joke. I wrote about it in Best of the Week in September last year. At the time I received far more feedback than I expected from those who were seeing the same thing I was. We were, I suggested, relying on avoiding a property crash which might in turn taint the wider economy. And when the economy dips, marketing spend crashes. Since then, the property slump has of course become undeniable and a full-on crash has become more plausible. The closer the people you talk to are to banks and real estate bosses, the more worried they sound. Hayne, negative gearing, low auction rates - it all bodes badly. Should that crash follow, working in the Australian marketing industry will be no fun at all. The psychology of consumer spending is inextricably linked to how wealthy people’s property ownership makes them feel. And that’s before we factor in the realities of the financial stress to be faced by those transitioning off interest-only mortgages and unable to refinance because the value of their home is no longer rising. Meanwhile, the ASX has wobbled, and a slowdown in China has become increasingly obvious. As today’s SMH puts it: “The $6 trillion wipeout in Asian stocks is getting deeper.” In time, that all feeds into Australia. We’ve gone from the Wile E Coyote moment when the cartoon character runs off the cliff and continues to hover, to the moment when he notices gravity is taking hold and looks at the void below.. Not that the impact is yet being felt at all levels throughout the marketing industry. I’m yet to talk to an executive who’s budgeting to shrink next year. Nobody can say for sure whether a downturn will happen; and the timing is even more unpredictable. So better to cross the fingers and budget for at least a few more months of growth. We’re still hovering... Then there are the structural shifts. The adtech-martech knowledge boom is running its course. And the automation offered by programmatic is arguably reducing the relevancy of agencies’ role in buying media for clients. Plus, the murkier revenue opportunities for agencies in taking a clip from the programmatic chain may be fading. As clients became aware of what was going on, the big groups quietly decided to “de-risk” their activities in this space, one person told me this week. (By “de-risk”, he meant stop before they got caught.) Meanwhile though, the head count in media agencies doesn’t seem to have shrunk that much, even if experience levels (and salaries) have. I wonder how much of that is to do with a continued reliance of the media agency model or charging based on headcount. The challenge this raises though is that as the offering of agencies become less distinct, their ability to extract a premium from clients also declines. And that means that the professional prospects offered by working in agencies fall too. If the role isn’t special, neither will the salary be. When I put on my specs so I can read those tiny names on the whiteboard, the list will only be longer. 20Four a bubble victim? This week provided a useful signal about the stage the industry is reaching in the influencer bubble. It’s emerged that Australian [influencer platform 20Four - dedicated to showcasing sports stars - has pulled down the shutters]( after not much more than a year. The messy realities of whether former staff have got everything they were owed are yet to become clear. On the way up, the founders of the platform hoped to persuade would-be ASX investors that it could list for $25m. It would have been a leap of faith in the potential of the influencer space. It raises yet another question on how big - and how scaleable - the influencer niche actually is. We’re going to hear more in the coming weeks, I suspect. Squinting at The Source And finally, a new piece of housekeeping from me. On Tuesday, we unveiled our new look for [The Source](. The Source is our subscription service which tracks relationships between brands and agencies. We aim it at media sales people looking for contacts and leads, and those with new business responsibilities inside agencies. If you’re unfamiliar with The Source, please do give it a try - [you can do a seven-day free trial here](. Which is a good time to stop writing. Using these glasses for extended periods of time still makes me feel kinda squinty. (Yes, words are my power.) I welcome hearing from you at tim@mumbrella.com.au. And our media writer Zoe Samios is running the newsdesk this weekend. You can reach her at [zoe@mumbrella.com.au](mailto:atzoe@mumbrella.com.au). Have a splendid weekend. Toodlepip... Tim Burrowes Content director - Mumbrella Mumbrella | 46-48 Balfour Street Chippendale NSW 2008 Australia [Unsubscribe](| [Manage Subscriptions]( [Facebook]( [LinkedIn]( [Twitter](