Why marketers are leaving tech and moving to ad agencies

The desire for variety and community
“People are coming back to the agency world, quite frankly, because they like to have more variety and creativity in their work,” said Sarah Pak, national vp of strategic accounts at the Robert Half-owned consulting group The Creative Group, which recruits on behalf of both the agency and client sides for holding companies like Omnicom and Havas and businesses like JPMorgan Chase, Wells Fargo and Bank of America. Although she said it is difficult to quantify, and there are no studies the firm has conducted that back up the trend yet, she said there has been a noticeable shift over the past 12 to 18 months of marketers moving away from technology companies and either back to ad agencies or finding themselves at one for the first time.

Abdul Ovaice is one such marketer. Ovaice started as a creative director at San Francisco-based ad agency Basic last June. It’s his first position on his resume not on the client-side at a tech startup. His past positions include creative director at Uber, associate creative director at Square and art director at Apple. For him, the largest draw of joining an ad agency is being part of a larger team.

“You’re a lone wolf,” he said, describing his work life working in-house at his past jobs. “One of the draws of agency life is the sense of community. You don’t get that in-house.”

In August, Adam Singer left Google, where his title was analytics advocate because he no longer felt like he was actually doing the work he was hired for. Singer, who initially began his career at PR agencies, joined the tech giant because he wanted more “skin in the game,” or equity, but eventually became disappointed. After leaving, his first thought was to apply for positions at ad agencies.

“I went in-house at Google and I found they just want managers,” he said. “They really have agencies do all the actual work and most of the marketers at Google basically rubber-stamp whatever it is. I like doing the work, so I got frustrated at a lot of that.”

The end of the startup dream
Startup life is also unreliable. A number of recent articles relay the souring fact that the startup scene is not what it used to be during the tech boom of the early 2000s and in subsequent years, with many experts postulating the decline of ‘Silicon Valley unicorns’ to be around 2014. Stats back that up as well. Companies that were less than two years old made up of about 13 percent of all companies in the U.S. in 1985, and only accounted for 8 percent in 2014, according to data from the Bureau of Labor Statistics.

“The mentality of believing a startup will someday be the next Facebook has gone down a little since a lot of companies just haven’t made it,” Pak said.

Rian Schmidt, now svp of technology at creative and analytics ad agency R2C Group, has boomeranged. Schmidt, who began his more than 25-year marketing career working at an ad agency, migrated to tech startups when the tech industry began to boom, working as, among other jobs, the head of labs at Amazon-owned Zappos and then the CTO and vp of engineering at video startup Vadio, which reportedly burned through $11.8 million in four years before shuttering.

And once a company closes, equity dries up. Schmidt now hoards a chest of equity certificates, some embossed with seals, from about half a dozen startups in a safe in the basement of his house. “I don’t have the heart to throw them away,” he said.

Even at large technology companies, the equity an employee receives does not last. “A lot of marketers go into a Facebook, a Google or a Twitter, they get their equity and then leave,” said Singer. “If there are marketers leaving big tech, it’s because, after four years, they don’t give you that initial grant again.”

Schmidt said his empty equity certificates are partially what drove him to get a job at an ad agency, where he might not get any equity, but he does not have to take a pay cut. “I can make the same thing in tech as I can make at an agency,” he said, declining to share specifics.

The growing demand for tech prowess
It’s true that in today’s job market, Schmidt is likely to get a salary comparable to what he was making at his old job, making life at a tech startup that much less desirable.

Pak said the falling unemployment rate is also partially to thank. Job seekers are currently favored in America’s labor market, and carry the power when it comes to negotiating their contracts. For eight straight months, job openings have surpassed the number of people searching for jobs. The unemployment rate is at 3.7 percent, the lowest since 1969, the Labor Department reported in October.

The power is especially in the hands of marketers with technology backgrounds, said Pak. As ad agencies have evolved their business models to become more focused on serving data-hungry clients the analytical insights they need, agencies are seeking talent who historically wouldn’t belong as part of their world.

In The Creative Group’s State of Creative Hiring report for the first half of 2019, released last week, 63 percent of the 200 ad agency executives surveyed and 57 percent of the 200 markers at companies surveyed were looking to hire new positions in the areas of web and mobile production and development, and user experience with cybersecurity, cloud security and cloud computing as skills needed immediately. Out of all who were surveyed, 87 percent said it’s challenging to find skilled IT professionals.

Salaries at ad agencies have also risen to be more competitive, and agencies continue to tack on more benefits. “Agency salaries have gone up a few percentage points in the last five to 10 years,” said Pak. “Because of the demand outpacing the supply, it has given creative professionals the leverage to dictate their pay when going back to the agency world.”

These professionals can often command what they would make at technology companies, said Pak. According to The Creative Group’s 2019 Salary Guides, while it depends on experience and the resources of individual companies, a data scientist can expect to earn anywhere from $100,000 to $175,000, depending on experience, and a user experience designer can expect to make between $75,000 to $148,000.

Merging tech and advertising
Thanks to ad agencies’ boosting their data capabilities, many marketers are finding they can do the same kind of job for the same pay at a company that does not rely on VC money.

Part of Schmidt’s job at R2C Group, which works with clients like 23andMe and Peleton, is to manage a division the agency built out that focuses on helping clients do media and measurement in-house, allowing him to bridge his analytical and creative skills.

“Over the past few years, the distinction between a tech company and an agency or particularly anything else has really faded,” he said. “R2C Group is developing software, using data for analytics purposes and that’s the same kind of work I sought out in the tech space, and now I have this nice agency environment I really enjoy.”