As ad tech firms struggle, agencies benefit from an influx of programmatic-adept talent

With growth in the ad tech industry hitting a speed bump, media agencies are increasingly seeing ad tech talent flow into their ranks — in many cases people who have previously left the agency world for the lure of ad tech.

It’s not hard to see why. Investors and venture capitalists pulled back investments in the sector. Stocks of several publicly traded ad tech companies saw major drops in value, with growth being nowhere as rapid as was expected. Costs continued to rise amid several companies — including Centro, PubMatic and Rocket Fuel — laying off hundreds of employees. While Rocket Fuel’s April 2015 layoffs were aimed to cut $30 million in operating costs annually, sell-side platform PubMatic dismissed more than 100 employees as recently as December 2015.

“We are seeing an uptick in talent coming in from the ad tech side maybe because they are beginning to realize that the grass is not always greener on the other side,” said Amanda Richman, president of investment and activation at Starcom.

Take David Gaines, chief planning officer at Maxus is one, moving back to the agency after serving as a managing partner at Edentify. Mike Racic, head of iCrossing’s cross-functional media team, is another — spending a few years at Rocket Fuel before his move to the agency. Damian Blackden, Maxus’ global chief strategy officer, also spent time at Adnologies before coming to the agency in April 2015.

“It is increasingly common on the media side,” said Gaines, whose job at Edentify was to build a range of tools to simplify the volume of data and research in a way for it to better inform marketing decisions.“I’d imagine that consolidation is a factor too,” he added, pointing at continued consolidation in the space behind the “walled gardens” of the digital giants, such as Amazon, Google and Facebook.

There was also a noticeable downturn in hiring at major ad tech firms in the fourth quarter of 2015, according to Pivotal Research analyst Brian Wieser, who conducted an analysis of LinkedIn data. In his analysis, Wieser found that the headcount among the 79 pure-play ad tech and marketing tech companies was up 0.8 percent from the third quarter — a marked slowdown for these companies, which had thus far seen sequential headcount growth rates of 5.2 percent in the first quarter, 6.8 percent in the second quarter and 7.4 percent in the third quarter.

But while jobs in the ad tech space shrink, agencies, on the other hand, are investing heavily in expanding their own technological capabilities and seeking people who fit those roles. The upside is that agency staffers who have spent time on the ad tech side have gotten something of a crash course in programmatic — and insights into the strengths and weaknesses of tech vendors.

“I’d attribute ad tech talent going to agencies as a shift on the part of the agencies to grow their in-house capabilities,” said Ted Dhanik, CEO of engage:BDR. “They want to bring in people who have deep understandings of the tech they have dependencies on as well as the ad tech landscape.”

Gaines is just one example, returning to Maxus in 2014 to lead the planning and architecture of the agency’s own operating system, using rigorous approach to data and analytics. Gaines’ colleague Robert Marshall, Maxus’ head of programmatic, also left Arena Media to sharpen his programmatic skills, with a stint at Rocket Fuel to understand programmatic better.

“Incremental knowledge is always good, but the fact is that while you get to build technology stacks on that side, you don’t actually get to apply them and develop actual insights,” he said.

With programmatic emerging as a more permanent fixture within agencies, they are also seeking talent who can take the lead. For Accuen CEO Megan Pagliuca, that has meant developing new roles like programmatic planning specialists, which fuse technological expertise with marketing acumen.

“For the longest time, programmatic just ended up being a line item in media spending,” she said. “What we are trying to do is develop a new breed of marketer, that targets audiences by using data to understand them first.”

As tech becomes the bigger part of the media toolkit, the same flow is going to keep on happening, said Gaines.

“This movement between ad tech and agencies allows us to push the envelope in terms of what’s next,” he said. “As an industry, we need to get used to it and create frameworks that encourage it.”

More in Marketing

What TikTok’s e-commerce launch could mean for marketers and content creators

TikTok has officially launched its new e-commerce platform, TikTok Shop, earlier this month on August 1. Using the new e-commerce platform, brands and creators can sell products directly on the platform, potentially creating new revenue streams, and tap into the short-form video platform’s growing popularity.

‘The influencer industry can be really vile’: Confessions of an influencer marketer on the industry’s unfair hiring practices

While the influencer industry might sound exciting and like it’s full of opportunities, one marketer can vouch for the horrific scenarios that still take place behind the scenes.

Digiday+ Research: Marketers said revenue grew in the last year, with more growth expected ahead

After a tumultuous 12 months, marketers are getting a clear picture of how they really did during a time of true uncertainty. And, as it turns out, it wasn’t all that bad.