Sole traders: how will the freelance boom affect ad agencies?

Freelancing is thriving, but what are the implications for ad agencies?

Creative freelancing is thriving. But what are the implications for advertising agencies in the new creative economy?

You need only step into a coffee shop in any major city to observe that the freelance economy is thriving. Armed with laptops and lattes, this emergent creative elite flits between projects as it does cafes, responding to the ebb and flow of the industry’s needs at a time when individual creativity is flourishing. As technology allows individuals to connect and share faster than ever before, the way ideas are bought and sold by brands and agencies is transforming.

Freelancers have risen to represent 35% of the US workforce, according to a study from Upwork. In the EU the rate is 16.1% (Organisation for Economic Co-operation and Development) and in Singapore it’s 14% (Singapore government). These figures demonstrate the same global trend: from entrepreneurs to those who are part of the so-called gig economy, freelancing constitutes a significant chunk of the economy – and particularly in marketing and advertising.

According to the Creative Industries Federation, nearly half of workers in the UK’s creative industries are freelance compared with 15% across the workforce as a whole. In 2016, the IPA’s member agencies alone hired a total of 1,727 temps and freelancers.

But while it’s often portrayed as an empowering and glamorous way of life, the reality of being a freelancer is much more complex. Scratching below the surface, the root of this high demand for creative freelancers is an industry grappling to find sustainable business models, turning to temps to fill resource voids when responding to briefs that are otherwise out of their scope.

Marketing director churn was at a record high last year, according to research from executive search firm Russell Reynolds, as marketing leaders are under increasing pressure to prove return on investment from creative output. The report details that creative-led chief marketing officers are waning as financial departments become increasingly aggressive about identifying fat to be trimmed. In some industries the trend is staggering, with sectors such as retail looking particularly volatile – 48% of the top 30 US retailers had a change in marketing leadership in the past year.

So what does this look like for agencies? Pressurized, increasingly risk-averse brands are demanding more for less as models move from ‘agency of record’ to short-term projects.

In the Creative Industries Federation’s Creative Freelance report, M&C Saatchi’s head of marketing Elle Tylee explains: “We use freelancers in creative, design and production. Primarily we use them when we need specialist expertise from a team or individual. Equally, good freelance resource is useful for short periods of time where we are working on projects that are out of our scope and impact on our permanent resource.”

This change in the creative process makes freelancers an essential component of the workforce for a project-by-project business where retainers are seemingly becoming the exception, not the rule. “The brief changed a long time ago, so agencies changed the offering. Retainers became projects and projects became agile,” says Steve Cater, communications partner at freelance platform YunoJuno. “This has totally changed the way businesses work with freelancers because the output has become so much more complicated. And with complexity comes the need for specialists.”

According to Deloitte’s Global Human Capital Trends survey, 90% of businesses say agility and collaboration are crucial to business success, yet only 6% say they are ‘highly agile’ today. In a bid to become more agile, brands and agencies are bypassing formal structures and going directly to creatives with the skillsets they need through freelance marketplaces on a project-by-project basis. Brands such as Google, Skyscanner and Dell, for example, have gone directly to freelancers through Movidiam’s platform for creative content production services, while agencies turn to platforms such as YunoJuno and The Dots to source creative talent to match the brief.

Pip Jamieson, founder of The Dots, says: “Creative talent mobility is the key to our future prosperity. Traditionally, companies would have a full-time in-house creative team that they’d shoehorn into different projects, even if that team didn’t have the right skills to deliver those projects. “However, with the rise of freelancing, there is a good opportunity to improve skills-matching across the industry, leading to better creative output and efficiencies for the economy as a whole.”

Creative network and agency Livity operates with an open-door policy, allowing young talent to use space and equipment free of charge with the aim of bringing artists, agency creatives, entrepreneurs and strategic thinkers into their offices on a daily basis. “We work with some of them and bring them into our teams, while others just inspire everyone else to do better,” says Katy Woodrow Hill, strategy director at the agency.

“We are always looking for diverse, interesting people from a spectrum of creative disciplines rather than searching in the same pool of agency talent. We recruit for our own creative roles but we also hothouse talent and embed them internally within client businesses, so we’re having to be smart with the ways we find and keep them.”

Freelance copywriter Casey Bird founded The Freelance Circle, a platform where freelance creatives can anonymously review advertising and marketing agencies they’ve worked with. She notes a trend of senior freelancers coming together to start ‘micro agencies’, thereby undercutting big agency costs and becoming more nimble in their processes. Furthermore, some agencies have begun downsizing to accommodate more freelance talent and cut costs, according to Bird. “This allows the agency to size up and down depending on the project. Six-month creative contracts are not unheard of – you then have a ‘permalance’ creative team or department, without the permanent workforce fee looming over your head. This works well for everyone involved.”

From a freelancer’s perspective, the benefits of working in this way are well documented: flexibility, variety and freedom. “Freelance is great for anyone self-disciplined enough to take advantage of the freedom it offers,” says Alexander Basek, a freelance creative director and copywriter based in Portland. “Creatives have restless, inquisitive minds, so frequently working on new projects helps generate fresh ideas, keeping clients and freelancers happy.”

Utilizing freelancers can have positive implications in terms of diversity, as more flexible working patterns enable recent parents to get back into the workplace sooner. Mixing up the team by bringing in objective outside opinions can create a positive atmosphere, provided temporary staff are properly integrated into teams and included in lines of communication. Besides the commonly cited problem of late or absent payments, which appears to be rife in the industry, a major pain point for freelancers is account directors bringing in creatives with the wrong skillset for the job, and being given vague or sloppy briefs and unrealistic timelines.

“The briefs are more or less the same. The point at which creatives get called in has changed. It’s often last-minute, mid-project,” recalls Basek. “As account people become more junior, this poses a problem for the creative freelancer: figuring out what the heck is going on in the middle of a project. Once everyone is on the same page, great. With a condensed timeline, it’s not always possible.”

This young project-based creative economy is seemingly still figuring out the most appropriate ways to recognize the role of freelancers in the creative process. YunoJuno’s Cater believes some kind of recognition is vital, and the platform has set up its own awards for freelancers. “The creative industries love an award, be it in Cannes or in The Grosvenor. Did a freelancer ever get that level of recognition? It’s never been more important for businesses to respect the contribution that freelancers make to the industry, and focus efforts on building a good freelance culture within the business.”

Lines are also blurred on the question of intellectual property. When the creative process is so fluid and collaborative, who owns the idea and what is the best way to credit freelance input?

“I have worked on many projects as a freelancer that have started as someone else’s idea, and I’ve been brought in to finish off and help mold it,” says Bird. “This has also worked the other way round – I’ve come up with an idea, then I’ve seen it developed and produced by another creative team who claim it as ‘theirs’. If an agency has half their workforce as liquid talent it’s important to still credit everyone involved – whether they started it or finished it.”

Despite the frustrations of freelancers, the rise of marketplaces and networks like The Freelance Circle, YunoJuno and The Dots are democratizing the creative process by plugging workers with specialisms in and out of agencies to meet their demands in tandem with the ebb and flow of project work.

Thomas Frey, executive director and futurist at Colorado’s DaVinci Institute, notes that in the filmmaking business, freelance talent comes and goes as opportunities appear and vanish. “The movie industry has been doing this for years. Every new project attracts writers, directors, actors, actresses, camera guys, lighting guys and makeup people for a short period of time. Once a project is finished, everyone leaves and the talent dissipates, forming around new projects. It’s a very organic process.”

Could this be what the agency of the future looks like? If brands can hire entire teams, spanning strategic, planning, creative and administrative services, this calls into question what role an agency plays, besides aligning and organizing workers. The general consensus seems to be that agencies aren’t going anywhere anytime soon, but that agility is essential for survival. As Bird concludes: “Agencies need to mold and adapt to the times. They can still be great and create bad-ass work, but it’s a time of change and I’m very interested to see how the industry adapts to this new liquid workforce.”

Shirin Majid, freelance creative director and brand consultant, New York

I prefer working for smaller agencies and startups who want to break the mold. I’ve found larger agencies plug you into the traditional creative process – a machine where everyone has their specific role. I like it when everything is being figured out and re-thought and I’m brought in to help figure out the puzzle, whether that’s a creative brief or building a creative team.

My advice to agencies would be to ask freelancers what they think, and not just about their particular brief. Freelancers are incredibly valuable because of their objective perspectives and exposure to an array of agencies. They can give you fresh insights on everything from other briefs you’re working on to agency culture.

Agencies need to start treating freelancers as one of their own. If you require freelancers to work in the office, ingratiate them with the team. Make sure they have a place to sit. Invite them to grab lunch. My most positive freelance experience was as creative director at LadBible for the past year. I was treated as a full-time member of the team from day one. Whether it’s a five-day or five-month gig, it makes you invest so much more to know you’re valued as part of the team, not just ‘support’.

Adam Lowe, freelance copywriter, London

After five years of permanent employment, I made the decision to go freelance, mainly because I wasn’t sure where I wanted to work next and freelance let me ‘try out’ lots of different agencies to get a feel for the work and culture. I’m now in my third year of freelance and have been into agencies such as R/GA, VCCP, Atomic and Possible, to name a few. Making the leap was quite scary and daunting, but also probably the best decision I’ve ever made.

The work agencies do these days is so varied, and you’re unlikely to have a team who can do it all. Everyone has strengths and weaknesses, so it allows agencies to pull in specialists as and when they need them. Overall I think it’s a good thing and definitely the way more agencies will go. There are so many talented creatives, writers and designers out there, but agencies can only hire so many. Freelance allows them to utilize more talent on demand.

If you ‘penciled in’ a freelancer and they took a gig elsewhere, you’d be really annoyed. Same goes with freelancers if you cancel on them last-minute. Let’s just agree to either book someone or not. You can’t expect freelancers to turn down other gigs on the off-chance your pencil turns into a firm booking – it can be a lot of money to lose out on.

Tim Voors, freelance creative director, Amsterdam

12 years ago I decided to start freelancing after having learned the trade at several agencies such as TBWA, Lost Boys and Agency.com. As a creative director I became more involved with internal politics and reviewing, and spent less time creating concepts and producing great work.

In Amsterdam the industry has been changing rapidly over the past few years. Brands are working increasingly with smaller agencies on a project-by-project basis, with each new project being like a pitch. Agencies have become more network-based with strong full-time teams in accounts and strategy, but keeping a flexible network of specialist creatives close.

I believe the best freelancers should have a specialism. However, if you are a one-trick pony you won’t manage to bill many hours for your client as your specialism will likely be done quite fast. I believe the best way is to get the work based on your specialism and offer a lot more ‘sub skills’ once you are in. I’ve noticed many great agency creatives don’t last more than a year on the market as freelancer. They are simply too specialized and have become too lazy during their time working at a big agency.

This piece was first published in The Drum's October issue in 2017.

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