During the Internet bust, Gay Gaddis got used to job candidates who were grateful to have an offer...any offer. Now the president of Austin (Tex.) interactive ad agency T-3 The Think Tank is struggling to fill the 28 openings on her staff of 150. She knew things had changed when she offered a group creative director position, a gig that pays $150,000 to $200,000 a year, to a freelancer -- and got turned down. "It has eked up as ad dollars shift to the Internet," she says. "I've kind of gulped at a few salaries, but I'm willing to pay it."
Mama, let your babies grow up to be Web ad guys. With the online ad business up 30% last year to $12.5 billion, according to the Interactive Advertising Bureau, job candidates are feasting on a seller's market. The top Web ad agency, Seattle-based Avenue A/Razorfish, is looking for 200 people on a staff of about 1,500, after growing by 200 positions during the year to date.
Digitas of Boston has advertised 74 new positions since Apr. 1, on a staff of about 1,700. So eager is the outfit to drum up candidates that it recently tweaked a referral program so that even former workers can collect $2,000 for directing a friend toward a job opening.
That can make job hunting easy and lucrative. Salaries for some kinds of jobs are up 10% to 20% in the past year, says Clark Kokich, president of Avenue A/Razorfish. Candidates can get tech advertising jobs with backgrounds in technology or advertising -- and sometimes without either.
Melissa Anderson, a 28-year-old with a Harvard University philosophy degree, was working for documentary filmmaker Morgan Spurlock (Super Size Me) when she decided to shift gears. Within a couple of months, she had three offers in Web advertising. She joined Digitas last fall as an "interaction designer," planning Web sites for clients such as American Express (AXP). She's coy about her raise in salary, but it was big. "I don't know how much you know about documentary-making," she says, laughing.
Advertisers and Web publishers face their own labor crunch. It's even worse because so many workers left the industry when the Web ad market plummeted to $6 billion in 2003, off 27% from its peak of $8.2 billion in 2000. Piper Jaffray's Internet analyst Safa Rashtchy says staff shortages have emerged as the biggest barrier to the industry's growth.
Likewise, Ask.com Chief Executive Jim Lanzino says shortages are making him phase in improvements to the search engine's technology, and push work to development centers in China and Italy. "You end up choosing from among A-list priorities that you can accomplish," he says.
Some pockets of the country (New York) are hotter than others (Detroit), as are some skills, such as crunching ad-effectiveness data. Mitch Lenzen, 31, a senior art director for T-3, quickly racked up seven interviews when he wanted to move to New York from Chicago. He won't disclose the amount of the increase in salary he negotiated but says it was "considerable."
One reason for the shortage is that Web ads involve far more technology input than traditional TV and print marketing projects do. Advertisers demand more quantitative approaches to buying Web ads and measuring their impact. And the rise of visually complex rich-media advertising demands a whole new level of tech skills. Gaddis recently stopped by a cubicle where two workers were programming ads for video games and found them consulting a calculus book. "It's hard to do both -- it's both left-brain and right-brain," Gaddis says.
Employers are responding by amping up training and automating jobs where they can. New York ad network 24/7 Real Media has automated tasks such as billing and deciding what ads to place on 1,500 different sites. CEO David J. Moore says that's a big reason the 350-worker company was able to hold staffing steady, even as 2005 sales grew 73%.
Avenue A/Razorfish cut turnover by a third after doubling its training budget and hiring an "organizational development" director to match workers to training that will put them on career tracks they want. Kokich says it's money well spent: "If you can find the people, you can find the revenue."
Execs insist disruptions to big accounts are minor, though as a last resort agencies concede they'll let less important clients go to smaller shops. "Where there's real money on the table, people will make it happen," says Greg Stuart, president of the Interactive Advertising Bureau. With late nights and big ambitions back in fashion, bet on it.