Buoyant digital agencies facing recruitment challenge

by David Allott Media Week 02-Jul-08, 13:13

LONDON - Digital agencies remain confident about their prospects in 2008, according to research firm E-consultancy.

According to E-consultancy, agencies expect to increase turnover by 28% on average in 2008, with four out of five agencies expecting to post improved performance compared to 2007.

However, agencies have identified recruitment and retention of staff as the biggest challenge in maintaining growth.

Linus Gregoriadis, head of research at E-Consultancy, said: "There is still a chronic shortage of suitably qualified professionals in a number of specialties, which is reflected by higher salaries. This is good for individuals, but not necessarily for the agency bottom line."

Its digital agency rate card survey echoes forecasts made this week by Group M and ZenithOptimedia, about growing online ad spend this year.

The internet is expected to become the UK's single largest advertising medium next year, according to ZenithOptimedia. Internet ad spend is projected to increase by 32.3% this year and 28.2% next, to reach £4.06bn in 2009, according to Zenith. The next biggest medium, newspapers, is valued at £3.95bn in 2009.

GroupM forecasts that internet spend will rise by 27% this year compared to 2007, and by 20% next year, compared with 2008, noting that "the current ad slowdown is unlikely to affect the internet much".

The E-consultancy survey benchmarks day rates for around 50 individual job roles, including positions such as SEO consultant, online marketing manager, head of media and information architect.

Among online media planners and buyers, the largest wage increase is for traffic managers, whose daily charge-out rate has increased 16% to an average of £576.

The rates for head of media/online media director have remained relatively stable at £788 per day, reflecting the increased competition among agencies to win accounts.