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Reality Check
07/01/02
By: Dan Hanover, IndustryClick.com
Almost 60 percent of promotion agency professionals received no salary increase in 2001.
That fact is hardly a surprise, considering that the recession slammed into the marketing world like a sledgehammer. In terms of corporate cost-cutting, marketing budgets were like the Marines — first ones off the boat, and the department most likely to suffer heavy casualties.
Whatever happened to clients happened double to their agencies. Thus, accounts dissolved, budgets were slashed, RFPs were initiated then cancelled, and accountability intensified — clients were wary to spend a single dollar if agencies weren't cocksure they'd make back two.
The result was an enormous amount of pressure on promotion agencies, which enjoyed boon years through much of the 1990s. Many shops handed out pink slips last year, still more froze salaries, and bonuses — what bonuses? In an industry infamous for job-hopping, things were downright stagnant in 2001.
One respondent to PROMO'S first salary survey devoted exclusively to agency professionals (the magazine conducted a similar survey among corporate marketers last year) summed up the mood succinctly: “Will my job still be here in six months, or even in 30 days?”
“Nobody knows the answer. People are working harder, longer hours, and just trying to survive,” says Kevin Keating, a vp at recruiting firm O'Keefe & Associates, Southport, CT. “I've seen more of an abundance of unemployed, high-quality marketing executives in the last 12 months than ever before.”
Some say that the downturn was a necessary evil; that agencies tipsy with the success of the '90s had been overstaffing for years, certain that new business would continue to flow in the doors. Employee totals among agencies in the PROMO 100 dropped 6.2 percent to 22,439 by the end of 2001 — and that list is supposed to reflect shops having good years. (Some larger agencies reduced headcount by as much as 25 percent.)
Belt Tightening
Agency executives who managed to stay on the payroll in 2001 did so without the compensation they've been used to receiving. Overall, 57.6 percent of respondents received no salary increase last year. That includes 76.6 percent of presidents and ceos, 53.2 percent of executive vps and vps, 58.1 percent of directors, and 44.2 percent of managers.
“Salary increases are getting flatter by the day,” says Dan Moynihan, a principal with consultancy Compensation Resources, Upper Saddle River, NJ. “Pay cuts and freezes are everywhere. Reviews are getting pushed back.”
The haves were a lot better off than the have-nots last year, as the 42.4 percent of executives who did get a raise averaged pay hikes of 10.6 percent. That's nearly four times better than the standard-of-living increase of 2.8 percent posted during the year, according to the U.S. Labor Department.
On top of that, 52.8 percent of respondents received no annual bonus. Of those who did, it's interesting that more managers (54.5 percent) got the extra incentive than presidents and ceos (37.5 percent).
The primary factor in determining bonuses was the all-important bottom line: Some 61.5 percent of agency staffers who did earn an incentive payment attributed it at least in part to company profits; 44.0 percent said it was based on performance, 20.2 percent on sales, 10.1 percent on “other” factors (one said “voodoo”), and 7.1 on tenure with the employer.
What's missing from those factors is revenue growth. “Bonuses in the agency world are tied to incremental revenues,” says Keating. “That didn't happen last year.”
The figures combine for an average total compensation package of $169,083 for presidents and ceos, $129,957 for executives and vps, $91,310 for directors, and $49,410 for managers.
The Survey Says
PROMO'S survey of 1,500 agency executives from the magazine's subscriber files was initiated in April by sister division Primedia Business Market Research. The survey generated a response rate of 14.5 percent. Among other findings of note:
· Men represent 65.6 percent of president and chief executives, 68.1 percent of vp posts, 46.5 percent of director positions, and 29.9 percent of manager roles.
· The average age is 44 for the top-floor execs, 45 for the corner-office vps, 40 for directors, and 32 for managers.
· Respondents have logged an average 14.8 years as marketing professionals, ranging from 20.3 years for presidents and ceos (vps aren't that far behind at 18.6) to 7.5 years for managers.
· About 42 percent of respondents have spent time working within a corporate marketing department. Average tenure at current employer is 6.4 years, and average time at current title is 4.7 years.
· The standard level of education is a bachelor's degree and doesn't appear to be changing dramatically: Only 23.4 percent of presidents/ceos, 23.4 percent of vps, 25.6 percent of directors, and 7.8 percent of managers hold a master's sheepskin.
· More promotion agency jobs (22.1 percent) are located in the East North Central region (read: Chicago) than anywhere else. Other hot spots are the Middle Atlantic (17.7 percent, and primarily New York City shops), New England (13.9 percent, mostly in Fairfield County, CT), the Pacific (13.9 percent, mainly in California), and West North Central (9.5 percent, thanks to Minneapolis).
· The work week is long. Nearly 87 percent of respondents put in more than 40 hours; roughly 10 percent grind out more than 60 hours.
· About 46 percent of respondents work on accounts that have budgets in excess of $1 million; 22.1 percent are handling budgets between $1 million and $5 million; 12.1 percent between $5 million and $15 million; and 7.8 percent greater than $15 million. That means 53.2 percent are slugging it out on budgets of less than $1 million (with 4.8% not answering the question).
Holding Out
Obviously, the work continues — and the pressure intensifies. Expectations are greater than ever, even though many budgets are a fraction of what they used to be (as are hourly rates). That leads to stress, frustration, and dissatisfaction.
When asked about the most pressing issues facing them, respondents most often said job security and career growth, followed closely by a concern over “too much work” and the fear of job burnout. The challenge of attracting good clients, keeping pace with competitors, and coping with decreasing budgets were also hot buttons.
With billings down, many shops have adopted a strategy of rewarding whatever money they have to the true breadwinners. “A lot of agencies are suddenly thinking that Jack Welch is a genius,” says Moynihan. “You reward the top 20 percent, weed out the bottom 10 percent, and maintain the middle.”
Meanwhile, human resources departments are trying to compensate in other ways, with such non-financial perks as training and extra vacation days. St. Louis-based Javelin, for example, takes field staffers out for team-building meals and tries not to pinch pennies on travel accommodations. “Keeping employees involved keeps them invested in the business,” says Brad Carsten, the shop's senior partner.
Chicago-based DraftWorldwide last year began helping career paths for its 1,200 U.S. employees by launching a Leadership Awakening program, which helps develop marketing skills and best-practices acumen, while offering luncheon seminars on such personal topics as stress management. “Because people are staying with us longer, we're focusing on training and soft benefits,” says Sharon Beyer, the agency's executive vp-director of U.S. human resources. “We're very motivated about taking our employees to the next level.”
Despite recent downsizing, agencies continue to recruit, albeit on a smaller scale. Collecting resumes and maintaining contacts with potential job candidates “help us prepare for when the economy recovers,” says Angela Tamales, human resources director at Draft's Chicago headquarters.
Recruiters think they see a light at the end of the tunnel. Keating says business has tripled in the last few months, after a 2001 in which revenues in the executive recruiting industry dropped 25 percent. “It's a buyer's market for employers. Because of that, jobs and salaries are tighter,” he warns.
A Reuters survey found that the economy added a modest 58,000 jobs in May, following a gain of 43,000 gain in April. But that's extremely positive, considering that an average of 250,000 jobs were lost in each of the last three months of 2001, according to the Department of Labor.
“Things will get going after the summer,” predicts an optimistic Moynihan. “I really think we've bottomed out.”
If he's right, maybe some of these overworked employees will finally get a raise.
By the Numbers
Average salary, based on size of agency
|
| Mean
| Median
| Less than $1million
| $81,152
| $77,500
| $1mil-$4.9 mil
| 113,871
| 77,500
| $5mil-$9.9 mil
| 93,202
| 87,000
| $10mil-$24.9 mil
| 85,581
| 70,000
| $25 million+
| 101,406
| 77,500
| Source: PROMO
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Agency/client comparisons
| Position
|
| Salary
| Bonus
| Years in marketing
| Years at company
| Years in position
| Age
| Male
| Pres./ceo
| Agency
| $169,000
| $58,000
| 20.3
| 8.7
| 7.7
| 44
| 78%
| Exec. vp/vp
| Agency
| 130,000
| 17,000
| 18.6
| 8.4
| 4.4
| 45
| 85%
| Client
| 115,000
| 28,000
| 17.5
| 10.4
| 5.7
| 45
| 68%
| Director
| Agency
| 91,000
| 7,000
| 15.1
| 6.7
| 5.1
| 40
| 77%
| Client
| 81,000
| 17,000
| 13.4
| 8.4
| 4.1
| 41
| 49%
| Manager
| Agency
| 49,000
| 2,000
| 7.5
| 3.2
| 2.3
| 32
| 46%
| Client
| 63,000
| 7,000
| 10.7
| 8.3
| 3.6
| 39
| 40%
| Source: PROMO
Note: Client figures taken from 2001 Salary Survey (PROMO, July 2001).
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Percentage of agency marketers who …
| Position
| Received salary increase in 2001
| Received bonus 2001
| Received bonus 2000
| Work 50+ hours/week
| Have worked as a corporate marketer
| Pres./ceo
| 23%
| 38%
| 42%
| 56%
| 49%
| Exec. vp/vp
| 47
| 47
| 64
| 45
| 64
| Director
| 42
| 49
| 54
| 30
| 35
| Manager
| 56
| 55
| 47
| 14
| 29
| Source: PROMO
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Male vs. female comparison
|
| Male
| Female
| Salary
| $110,092
| $75,432
| Bonus
| $51,282
| $ 7,393
| Years, experience
| 17.8
| 11.8
| Years, company
| 7.4
| 5.5
| Years, current position
| 5.4
| 4.1
| Age
| 42
| 37
| Source: PROMO
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