I was asked if I would mentor a friend's daughter who is thinking about going to school for advertising/marketing...Part of me really wants to tell her to pursue something else because the outlook for this industry doesn't feel great. Should I try to talk her out of this field or just support her in her studies? What's the right move here?

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That’s her decision to make. Do not project your own trauma or insecurities onto her. For all you know, this person could end up being the one who revolutionizes and saves this industry. Or not. That will be her experience to have.
I didn’t go to ad school. I went through a university design program. And in my first day of my “graphic design” upper division class, our teacher went around the class counting people and every 10th person he tapped on the shoulder and asked them to stand up.
Then he said something like “look around at the people standing. Statistically speaking, only the ones standing will ever work in this profession. 1 in 10. The rest of you will never make it in this field. If that’s something that scares you, I suggest you drop your major and drop this class.”
The next class, only half the people were still there. After a couple weeks, the class ended with about a third of the original enrolled.
I did appreciate the dose of reality, but I think he wasn’t trying to discourage anyone. He just wanted to filter out the people who were majoring in art because they thought it was going to be easy, or the people who were not passionate about it. But other than that, he never discouraged anyone or talked shit about a creative career.

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It seems a little alarmist. It makes it sound like graphic design is like playing in the NFL. You can still be a designer if you are terrible at it. Many are

People have been saying the outlook for the industry doesn’t look great for decades and yet here we are. I’d focus on giving them advice about the industry and not about your worries regarding the industry.

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you don't have to "talk her out of it", but I would encourage her to consider other options and give her insight into what the industry is actually like. she may still pursue it anyway, but I wish someone had done that with me early on.

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In the words of the Zombies, Tell Her No.

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