For advertising, marketing firms, location can be blessing and curse

BOULDER — The advertising, marketing and digital-strategy industry is not without its challenges, and one of the biggest issues Boulder’s creative firms are facing is battling the area’s high cost of living.

At BizWest’s CEO Roundtable on Advertising & Marketing, industry leaders discussed the difficulties they face in hiring, particularly when a potential employee asks them to tack on another $40,000 to their salary to factor in cost of living.

“It can be tough,” said Scott Hooten, managing director of Voltage LLC, a digital agency focused on ecommerce. “We get a lot of people with two to three years of experience who think they can get $100,000 a year. And sorry, but we can’t do that. That doesn’t make economical sense.”

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For many marketing firms, an issue has been the rise of the tech and startup industry, both in creating some unrealistic employment expectations and in entering the advertising and marketing space themselves.

“The salary demand for project managers in particular is huge,” said Patrick Mallek, co-founder of Mighty Fudge Studios, an agency focused on food packaging and animation. “At tech companies, they’re making more than I make. That’s been tough.”

Hooten, meanwhile, said he’s seen startup companies drawing talent away to go work for them.

But, true to their industry, advertising and marketing CEOs are being creative in how they hire and retain talent. Several are looking for the type of person who would want to move to Boulder — either they’re coming from a place that has a higher cost of living, like California, or are looking for a lifestyle change, like a New York executive who would like to live near the mountains.

And while Egg Strategy is based in Boulder, CEO Heather Dupre said she’s been flexible with location.

“We have a Chicago office, and we just opened New York,” she said. “We had to serve our clients the way they want to be served. But that’s enabled us to work in more locations. People want to come to different areas at different times and sometimes experience an urban market.”

Others are taking a different approach to battling the cost of living.

“We’re buying rental houses,” said Leif Steiner, principal and creative director of Moxie Sozo. “We rent to them our junior-level employees. Some of the best creative people are in their mid-20s. They need enough money to live here. For us, we’re looking down the road, and the big pinch is housing.”

Lori Jones, CEO of Longmont-based Avocet Communications, said to retain talent, she’s using the area’s culture to her advantage.

“It’s all about the lifestyle,” she said. “Our team members come in at 5 a.m. or 6 a.m. because they want to ride their bikes or be on the trail at 3 in the afternoon. It’s important to them.”

Jones also said she was doing a lot to keep the culture at her firm in a place that reduces employee turnover. Recently, the entire team flew to Arizona for a team-building trip — no strategy talk.

“There’s a thought process out there that if team members have friends they work with, they’re more likely to stay at the place they work.”

The Boulder atmosphere isn’t just a draw for employees, said Sterling-Rice Group founder Rick Sterling.

“Most of our clients are out of state,” Sterling said. “In this business, you usually travel to the client. But our clients say, ‘we’ll come to you.’ Most of our competitors are in New York, Chicago or big urban centers. Being in Boulder can be a real differentiator. It’s known for its progressive, creative thinking.”
There are other challenges the industry faces, not least of which is competition. Just as tech companies are entering the marketing field, so are major companies such as Deloitte and Accenture. Sterling said that while those firms never were in the creative-services field before, they are entering it and stealing away potential contracts.

But small firms have their advantage.

“We don’t have the huge salaries,” said Doyle Albee, CEO and president of MAPR.agency, which does mostly B2B marketing for tech companies. “I’m shocked at what my competitors are billing. I thought some of their budgets are obscene, given the results. For 60 percent, I can deliver dramatically more value.”

Other companies, such as Pamela Stewart’s Essenza Communications, can offer flexibility.

“I don’t have employees at all,” Stewart said. “It’s all on-demand work-for-hire. And they’re all vested. In that vein, I can go to small emerging brands who need PR and marketing but can’t afford a big agency. We can do a better job in a more focused way because I’m not paying the salaries and overhead of office expenses.”

Bob Morehouse, CEO of Vermilion, a firm that serves social-change and natural-food companies, said his firm’s mission is its appeal.

“People come to us because they want to work on things they believe in,” Morehouse said. “I found over and over that’s our biggest draw in finding a good client. They want to do something they care about.”

Overall, running an advertising or marketing firm in the Boulder Valley can be a double-edged sword, but the quality of life can be hard to beat.

“Boulder has a better pace of life,” said Don Poe, CEO of People Productions. “Maybe we can’t compete on price, but we can compete on the fact that for the work we do we get to go home at 5 or 6 p.m.”

The CEO Roundtable is sponsored by EKS&H LLLP and Berg Hill Greenleaf & Ruscitti LLP.

Participants

Doyle Albee, president and CEO, MAPR.agency; Heather Dupre, CEO, Egg Strategy; Scott Hooten, managing director, Voltage LLC; Lori Jones, CEO, Avocet Communications; Patrick Mallek, co-founder, Mighty Fudge Studios; Bob Morehouse, CEO, Vermilion; Don Poe, CEO, People Productions; Leif Steiner, principal and creative director, Moxie Sozo; Rick Sterling, founder, Sterling-Rice Group; Pamela Stewart, president/ founder, Essenza Communications. Moderator: Christopher Wood, co-publisher/editor, BizWest Media LLC.