Commoditisation – an avoidable outcome?

Before I came here, I’d often thought that coming to the Australian market from the UK must be a little bit like possessing the Greys Sports Almanac in Back to The Future II. If the market really is behind, looking at the UK should tell you what’s going to happen in Australia, right?

I was meeting Stuart Beckingham, Head of Search at Mediacom Australia to see if some of the trends we’ve seen in the UK market were ringing true over here.

Stuart

This year is my eighth year recruiting into the search industry, and in that time I’ve seen it change a fair bit. As the market has stabilised and competition has increased, prices have been driven down and it’s been harder for agencies to make money out of search. The knock-on effect of this can be under resourced, overloaded and unhappy teams.

We’re now in a market where the rate of growth of London search (PPC) teams is starting to slow, and where some teams are actually shrinking in favour of moving operations and implementation to offices outside of London (or even as far afield as India).

So is there any sign of this happening in Australia?

Well, according to Stuart, there is. This is a competitive market and there are signs that some agencies are gunning for business by dropping rates. It’s still early days though, and there’s still time to take pre-emptive action.

Steps are being taken to get clients away from margin-based contracts and to move them towards retained contracts to cover headcount on the account.

Testament to the effectiveness of this is a fully resourced team with low staff turnover and where most staff take full lunch and leave at 5.30pm most of the time. By 6pm the office is normally a ghost town. In the summer months, the team can leave at 4pm on a Friday. Good news for the t-shirt sun tan.

Keeping accounts well-resourced and staff happy also means more emphasis on developing the culture to promote from within rather than relying heavily on recruiting external candidates – last year alone they made 8 internal promotions to give you a flavour (saying this, the fact that 50% of 30-strong team are British has earned them the nickname ‘MediaPom’).

So if you can see it coming, you can do something about it (and that’s pretty progressive right?).

Biff