Our ‘LIVE’ Industry
“We live in a cynical, cynical world with tough competitors*”
*While a line from a late Nineties classic Tom Cruise film (Jerry McGuire to the uneducated), this is now more prevalent in our industry than 15 years ago.
Our industry 15 years ago, it was a free for all – like Russia immediately post the Soviet Union collapse. A free market. Undisciplined. Unregulated. No real accountability, where money was to be made in abundance. I know an agency (gone now) that made £50k additional profit, marking up shopping mall site fees on one campaign alone… #goodtimes?
First off, what was our industry called? Were we field marketing, sampling, brand experience? Then there was the question - when is ‘experiential’ to be considered? Typically, it was an additional bolt on. “We’re doing a highly creative and strategic campaign here and oh yes, we should do some sampling, right?!” said a very clever planner.
Fast forward to today and you will see experiential has grown year on year.
An industry with a spend exceeding £450m in the UK alone.
Once only a scattering of agencies, now there are hundreds.
Other agencies, ATL/TTL were once ‘pure bloods’ in their own channels (oh the irony) are now adapting and bringing experiential in-house.
It has taken many years for our industry to be at the foundation of a brands marketing strategy, but for a while now it has been firmly established.
So how did this evolve? A few thoughts:
The Experience Economy
This is a whole book not a simple blog post, so please look this up if you are not familiar with it: https://en.wikipedia.org/wiki/The_Experience_Economy.
Brands, agencies and the media agreeing to the term ‘experiential’ (although there are those who still have issues with pronunciation).
An evolving landscape, consumers today are time poor, less trusting, media cynical and over subscribed to communication and messaging in this digital age.
Technology and new platforms
For example, with Sky you can fast forward adverts and with Netflix as a subscription, there are none.
Agencies investing in the industry, awards, white papers etc.
Developing robust models to evaluate short and long term sales, to brand changing perceptions.
Helping to amplify the experience and reach while continuing the story adding further accountability.
But the issue today is the same as when we started ten years ago…the commercials on the table.
We can charge for account handling time, for creative ideas, for a strategic proposal that, while competitive, can result in the thousands.
We can charge for the running costs, the media space, every service and ‘commodity’ involved at cost, in line with increased inflation.
But for the last decade or so, we cannot increase, in line with inflation, the rates for the face of each campaign - the Brand Ambassadors. The people who empower the spirit of the brand. The people who complete the journey, who drive the experience.
To put, this into perspective, ten years ago, minimum wage for bar work was a little over £4 an hour. From April this year, minimum wage increases to £8.21
In 2009, in this industry, you could earn £12-£15 an hour, yet this rate is still the same today. While we applaud MW increases, this affects us a business and any other agency in this space whether they admit it or not.
Why? The appeal to work in this industry on a standard campaign, i.e. outside, handing out a sample or leaflet in the cold and rain, versus earning not too dissimilar an amount in a bar where it is warm, there’s a live band on etc. You get the picture.
So why can’t we increase the staff rates?
• No governing body/entity has presented a recommended guide for brands to pay or agencies to charge
• We have ourselves to blame - no agency we can see strives to push this, afraid of being undercut by their lovely competitors (it’s a small world)
• Brand ambassadors are viewed as a commodity
• The influx of agencies entering the market permits price war to the lowest denominator
• Agencies not adhering to HMRC/PAYE regulations and paying ‘self-employed’
• Procurement driving (viewed as a commodity)
• Fragmentation in pricing - open book versus a traditional mark up
• Third party agencies wanting their margins as squeezed elsewhere
• Online platforms devaluing the industry with short term staff solutions
As a result:
• How attractive is our industry in general?
• How do we ensure the best in class for our clients?
We are lucky (or not, as we have worked extremely hard) we are an agency with our own in-house staffing team. We have a fantastic pool of staff across the UK and Europe. A database of circa 1,800 individuals across all skillsets, demographics and industry experience to draw upon.
Our recruitment process is award winning, industry leading. The initiatives we empower to ensure continued best in class; on brand, motivated, engaged, on time and, most importantly, delivery of results, are a testament to our long-standing client relationships.
But in this wage ‘stalemate of pricing’, it is getting harder. There are less entries to the sector. It takes longer to find the best. The life cycle is shorter. Recruitment takes longer. As an agency we invest considerably more today than we did five years ago for the same results.
As for the future, personally we believe we have to work together as an industry. The next few years will bring changes to our landscape that could have serious implications to both quality and quantity influx of people, retention of clients and agency margins.
So LIVE will set in place a two-year plan with the industry, to deliver the following:
1. Regulate the last remaining wild west of pricing
2. Encourage agencies to present a standardised rate card that aligns the industry
3. Encourage brands to pay competitive, reflective costs for a particular role
4. Educate the ‘employees’ of our industry about what they should be receiving in their pay packets
5. Increase awareness of the ‘Field Staff Price Initiative’ #FSPI