Understaffed Ad Agencies Are Turning to Outsourcing and Automation – Business Insider

Ad agencies are gearing up for a frenzy of new business pitches butlack the staffto handle them.

Agencies have a big opportunity to win business as brands restart spending and put billions of ad spend up for grabs.

But Graham Brown, cofounder and CEO of agency search firm MediaSense, said brands for media-buying pitches in particular are demanding more complex ideas and costly ways of targeting consumers, which takes big agency teams.

At the same time, burned out people are leaving the ad industry in droves and agencies are having trouble recruiting talent to fill hundreds of open roles. All this is adding up to agencies having to sit out certain pitches.

Brown said agencies are "being much more discerning with what they will pitch for and what they won't pitch for."

Brown said that with agencies facing as much as $300,000 to $500,000 in cost to pitch an account worth around $500 million, they're only going for one or two large global pitches at a time, while they may have juggled three or four in the past.

When agencies do pitch, they're using "all resources freelancers, folks from other offices, interns and yes, automation," said Joanne Davis, founder and president of search firm Joanne Davis Consulting.

Davis said she's seeing many agencies pulling in employees from different offices to participate in a pitch, which is easier to do in the remote work environment.

"We have been doing more cross-office pitching than we normally do but mostly keep it to the coasts," said Jason Harris, CEO and president of ad agency Mekanism. He said the agency will pair its East Coast and West Coast offices to pitch accounts.

One holding company exec said they're seeing ad agencies everywhere using more freelancers to pitch new business.

Agencies are also leaning on automation to fill their staffing gaps.

One company they're using is Helixa, a consumer insights platform, which automates data and strategy work.

Christine Burke, Helixa VP of growth, said the platform has gotten an influx of business from agencies since the pandemic, when agencies laid off staff and had to do more with less.

Helixa uses AI to figure out what people are interested in buying based on their social media habits. She said agencies mostly use it for pitching new business, but also for existing clients.

She said one agency used Helixa to win an energy drink brand and was surprised to learn that the brand attracted a lot of people over age 50, not just young gamers.

One Helixa client is WPP's VMLY&R agency, which said the platform is saving the agency from having to use multiple tools to get the same information.

The shift toward automation and outsourcing may continue even if the labor crunch subsides.

Brown said agencies are also pushing their clients to think about offshoring, nearshoring, and outsourcing back-office operations like pre- and post-campaign work, ad serving, and platform management.

An agency "can only work on so many challenges" at a time, he said.

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Understaffed Ad Agencies Are Turning to Outsourcing and Automation - Business Insider