James Mahoney, Razor’s Edge Communications

Market dislocation has hit the creative world. It started about a decade or so ago with the decimation of the commercial photography business. It spread to the graphic design business a few years ago. Now it’s hitting the writers, too.

The recession didn’t help, and we’ll see how in a minute. But it wasn’t the primary cause for the market collapse—at least the collapse as the independent creative pros see it. The major culprit that’s eating into the creative revenue stream is technology—tools and the web.

Increasingly sophisticated “entry level” tools automatically apply much of the base-level professional judgment and skill needed to produce reasonable-quality work. They enable just about everyone to indulge their inner photographer/designer. And just about everyone now does.

This means that many smaller companies are now doing work themselves that they used to engage outside creatives to do. Worse, larger companies are also tasking staff to do the same thing; pressuring marketing departments, for example, to produce most, if not all, of their material in-house.

Consider PowerPoint as an example. Enduring actual presentations was bad enough in the corporate world. Several years ago, though, PowerPoint crept into other areas of marketing communications. Many companies began using PowerPoint as an ersatz brochure factory, substituting PowerPoint printouts and PDF files for traditional print media.

You can’t blame them, really, since it’s not illogical to equate a business presentation with a comprehensive brochure. It’s wrong, but not illogical.

Separately, through various websites, you can get any number of people who will do all sorts of “brand” and graphic work for peanuts. Note the quotation marks around “brand.” As an old manager once observed, “You pay peanuts, you get monkeys.” While this isn’t necessarily so, how much true brand work do you think you can get for $500? And how good can the quality be from the writer you can get for $2? (No kidding; $2.)

The net result is considerable shrinkage of the available revenue across the creative spectrum—designers, writers, and photographers in both small shops and large agencies.

And then there’s the recession.

Every time a recession hits, or even a strong regression, loads of marketers and related disciplines find themselves on the street. To avoid appearing as unemployed, or “between positions,” many of them become consultants (“freelance” isn’t stylish enough any more). The market gets rapidly flooded with them.

(Historical note: In the writing game of the ‘90s, it was English teachers who migrated en masse from academia for the green grass of marketing communications. Now it’s mostly marketing types, though there’s also a healthy smattering of out-of-work journalists who’ve reluctantly dragged themselves over to “the dark side.”)

So, you’d deduce from this that the sudden increase in supply of consultants leads clients to think they can drastically cut their budgets for creative services. And you’re right. But that’s not all.

Most of the new consultants haven’t got a clue how to price their work so it will support a business. (“What do you mean my social security tax is 13%? I’ve only ever paid 6.5%!”) They consistently set their fees too low, depressing the going market rate even further.

Compounding their pricing and business naiveté, most of the newly minted consultants will offer their services for what even they recognize is an unsustainably low fee. Sometimes they do this to beef up their portfolio. Other times it’s doing a friend, relative, or business acquaintance a “favor.”

Frequently, though, they’ll do it for pocket change because they still have some financial resources—severance, savings, unemployment—and some income’s better than none.

And, of course, there’s the tried and true client carrot of “work with us on the budget now, and there’ll be lots more work coming later.”

Regardless of the reason, it’s always a loss-leader. And it always degrades the market rate.

Need a proof point? LinkedIn told me my profile would be more visible if I included “creative direction” as a skill, pointing out that 49,681 others on LinkedIn list that skill—and that’s down 2% in the last year! Really? nearly 50,000 creative directors?

So it’s a brave new world that’s emerging. What the new status quo will be is anybody’s guess. Two thing are certain, though:

As always, there’ll be work that smarter companies consider important enough to hire people who know what they’re doing and can bring the A game.

And the spunky ones among us will figure out how to make enough money to live quite well in the new world. Stay tuned.