Digital media is a small industry. After 3 years of continuous blogging on various aspects of online media, marketing, TRAI telecom and other issues we still do get only a few thousand visitors per day. This means that those with interest in this space are not more than a few thousands. This poses a unique problem. . Firstly it poses the problem of finding, acquiring and then retaining talent. Most of the folks who are veterans in the space are themselves not more than 10 years into this business (that too with the last 4-5 years counting as some real business).
The issue of people retention
The other issue is those with about 4-5 years of experience are either branching out on their own or are just too expensive to be hired as they are already paid and pampered well by the big players in the digital space. The final issue in this talent maze is that of retaining people and this is by far the most challenging one. Ive been running a social media agency for the last 3 years and this is how things have gone for me. 2 folks who joined me in the early days have their own agencies today, 1 of them is a social gaming head at a large dotcom company, 3 others are at middle management position in other agencies handling their social media clients. In short the small company I started 3 years back gave birth to a team that today powers half a dozen firm’s social media practice. Im sure those who started with digital agencies almost a decade ago in Mediaturf, Webchutney and Pinstorm have a similar story to tell as well.
Now I believe this is natural progression as with a growing market and industry there is bound to be more and more people joining the entrepreneurial bandwagon as well. Its only good for the industry if you ask me. But the challenge to the situation arises when the Industry and its revenues don’t grow as fast as the number of people trying to make big businesses in the space. Its like trying to construct a 5000 square foot bungalow on a 4000 square foot plot. Highly ambitious to say the least.
What it also does is that forces companies to poach from each other. I know poaching is a norm in most industries but one wonders how one can retain people when the same people are being offered obscene pay packages by funded players to join them. Not all can be lured via ESOPs. Ive felt that company culture might be the only glue you have to make your key people stick around for longer than the industry average.
The issue of client retention
Now when the Industry is so small and so is the market, with so many players only one thing is bound to happen. Client pitches wherein you try and poach someone else’s clients. Again I think this is really healthy. Its bound to increase innovation in the space. How wrong could I be.. Usually when posed with competition most young companies try to compete on price. This is because their value proposition has yet not been established and the only thing they think they can beat everyone else at is pricing. This is the single largest mistake that everyone in the digital space has made. We have either sold too cheap or committed too much for too little in the name of ROI. What this does is makes clients think that digital is a ‘cheap’ medium and one that only delivers clicks or leads or conversions. I dont blame them to think that way anymore. This is how we sold it and this is how they want it now.
Also given the number of agencies out there and the number of companies trying out digital for the first time there is a shortterm aspect to engagements as well. This is when clients don’t commit for a longer duration and also negotiate on price. Most of us do business of this sort without calculating whether its a loss or a profit in the hope that someday the client will go for a yearly deal. That someday takes many days no matter how good you are at what you do.
Race to be first. Ive seen a lot of passionate and aggressive people in this space who by all means live in the fast lane. I sometimes wonder if the small pie that so many run after is even worth the toil and sweat that one invests. One Venture Capitalist said to me recently (yes they do make sense sometimes).. He said “The effort is the same whether you run a small or a big business..”. Question is why are digital media guys working for peanuts when we are sure we aren’t the pre-historic monkey? Or its just that we ourselves believe that digital isn’t there yet?
Rajiv,
Yes , there is a shortage of manpower. But the most important thing is that there is a shortage of “Knowledge”. Just because there is no talent available, people are hired from ancillary industry in addition to the age old practice of media to hire friends and relatives.
How many of the media buyers in the domain understand the cost dynamics or serving ad or running a site?. How many business heads understand the “business”?.Isn’t it the bigger issue?
It feels good to say that a lot of them have grown fast and are leading organisations. But, Most of them don’t understand the Industry and the business. My gutfeel is that a large percentage of Internet companies are managed by people who aren’t qualified enough to manage [ in terms of competency, skills and Knowledge]. I personally feel that its the biggest pain-point/Bottleneck for the Industry.