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October 25, 2004
Slow, But Steady
The employment and salary picture in marketing and advertising got better, if not exactly dramatically improved, over the past year. Executive search professionals that helped assemble these 2004 Marketing salary benchmarks address the state of the job market right now and for the coming year
The participants
JOCELYN BRODIE
Director, marketing & communications practice
IQ Partners
Toronto
RICK CHAD
President
Chad Management Group
Toronto
LOUISE DESCARIE
President
La Tete Chercheuse
Montreal
MICHAEL GATES
Vice-president of the marketing communications practice
Mandrake
Toronto
LISA KERSHAW
Partner
Ray & Berndtson/Tanton Mitchell
Vancouver
MARTIN KINGSTON
Senior consultant
Morris Group International
Toronto
NORMAND LEBEAU
Directeur general/associe
Mandrake Groupe Conseil
Montreal
SYLVIA MACARTHUR
President
Madison MacArthur
Toronto
What is the mood as the end of the year approaches? Are marketers and agencies hiring? Are salaries seeing upward or downward pressure? What does the next year look like?
Sylvia MacArthur, Madison MacArthur: Judging by the level and flow of activity we are experiencing, there is a decided upswing in new hires by marketers-while agencies have continued to be relatively flat-with the exception of making replacements.
We have not seen any downward pressure on salaries. We have found that at the lower end of the scale there has been a bit of a rise while the top end has stayed pretty stagnant. This has been consistent with both marketers and agencies.
As there is currently pretty good momentum in the marketplace, we do not foresee any reason for it to drop off next year, barring some unforeseen factors.
Lisa Kershaw, Ray & Berndtson/Tanton Mitchell: The market in B.C. is generally more buoyant. There's been a general hiring uptick.
Louise Descarie, La Tete Chercheuse: Nowadays, companies are very strict about respecting their budgets no matter if it means to abandon a star candidate for someone that corresponds more to the budget. However, marketers are creating new positions to adjust to our new market.
As for agencies, they are rationalizing their resources and focusing on revamping their creative work by following the fixed salaries established by the agency. Before, we were working in a market of candidates, and now we are leaning towards a market of employers.
We've also noticed that employers are now leaving companies to become employees again, which we believe comes from the difficulty of developing different markets. Furthermore, the bigger companies/ agencies are buying small ones, which limits the marcom sector.
We also see the companies now have international needs in terms of recruiting. As an example, La Tete Chercheuse has had in the past year demands from Canadian cities like Calgary but also from England, France and Saudi Arabia. The Canadian reputation has a lot to do with it, but also French Canadians are appreciated for their ability to switch from French to English.
Martin Kingston, Morris Group International: The current mood is reflective of the weather we endured this summer: changeable and cool.
Moving into the second half of the year, employers felt generally buoyed by an improving economic picture. However, the slow recovery of the U.S. economy and only minor improvements in North America's unemployment numbers have had somewhat of a cooling effect on their optimism.
There are, however, positive indications that the climate for marketing and advertising is improving. According to the ICA, media spending is up.
My overall outlook for 2005 is positively optimistic.
Agencies are hiring again, especially at junior levels, in order to replenish the weakened ranks at the supervisor level. We seem to be clear of the recent past period of hiring freezes. But in its wake, many agencies find themselves without any depth at the middle-management level.
Marketing has been relatively stable with hiring happening on an "as needed" basis. Head count rationalization that came in the wake of aggressive cost-management programs, still remains today.
We are seeing an upward pressure on salaries in both the agency and marketing sectors. However, this is more prevalent in the agency sector where three to four years of relatively stagnant growth have resulted in salary freezes and, at minimum, increases tied into very low inflation factors (2% to 4%).
Harry Teitelbaum, InterCom Search: The mood is upbeat. It's been a long downcycle which started in 2000 and everyone seems to be busier and feeling a little bit more confident about the future. Salaries are not being pressured-yet. You are hearing some griping from agency presidents about what someone with one to three years of experience is asking for and getting, but other than that level salaries have not improved much in over eight years.
It's been an employers market for so long but that will change.
Normand Lebeau, Mandrake Groupe Conseil: I am addressing these questions from the Montreal angle.
Marketers: Montreal is a small marketing market. Even more so when it comes to the packaged goods industry (or applied marketing). With the possibility of Molson moving all or a large part of its head office to Colorado (pending the merger approval), the community is getting even smaller. In general, I would not say that the marketers based in Montreal are in a hiring mode.
I did not change any of last year's data simply because I feel that the market has not changed.
Over the last few years, we have noticed that Montreal is becoming more and more a large regional office with fewer and fewer major corporate head offices. The top marketers (VP and above) have a real challenge in trying to find interesting positions if they decide to explore the market. They often have to accept a salary cut if they want to stay in Montreal in senior marketing positions. It seems that, for the moment, the scenario does not apply to lower-level marketing positions. I would say that the value of a marketing position at the VP level is down by 5% to 7%.
As for the agencies, the mood in general in not a hiring one.
Michael Gates, Mandrake: We are seeing business improving both with marketing and agency clients. Our agency hiring has improved in the second half with most of that being for replacement/turnover related hires. These agencies seem to be experiencing a little more turnover and have often tapped out their own networks and employee referral programs and need more outside help for hiring. Client side, marketing is also improving with some creation of new positions and job growth.
We also are seeing the client-side companies restructuring, which is creating both displaced employees but also hiring as they seek out new talent and skill sets in the changing organization.
Salaries are generally fitting in the range of last year's survey. People will usually get a 5% to15% premium to move jobs and clients expect this. But they sometimes manage their costs by being willing to hire someone a little more junior to replace the departing employee.
Next year, we expect continued increased activity-a continuation of a business improvement we have seen since 2003. This growth is at a more controlled pace than what we witnessed in the late 1990s.
Jocelyn Brodie, IQ Partners: We broke this question down:
What is the mood as the end of the year approaches?
Probably best described as "cautious optimism." Our clients are expressing renewed confidence where business expansion and growth is concerned. This confidence has had a direct impact on us. We completed more assignments over the last quarter than in the previous three combined.
Are marketers and agencies hiring?
Yes. Marketers that cut what were perceived as "cost centres" over the last couple of years are now actively seeking talented people to rebuild their teams. We're seeing both new and "refresh and replace" hires across both client and agency roles with a focus in areas of specialization such as DM, Internet and PR.
As you would expect, agency hiring lags marketers-and is responsive to account changes. We foresee several evolving factors creating a significant challenge for agencies in the next three to five years:
• Clients are seeking more hands-on "senior" talent to manage their business.
• Senior talent is leaving the agency business, often for more predictable client-side roles (or to do their own thing), creating significant gaps in agency capabilities.
• Agencies have been notoriously poor at nurturing and growing junior talent. Resulting in...
• Clients seeking more hands-on "senior" talent to manage their business.
Are salaries seeing upward or downward pressure?
On average, we anticipate that salaries will be consistent for the next 12 to 24 months, and then will spike significantly.
Rick Chad, Chad Management: The mood is much more upbeat. There is a significant amount of new activity on the marketing side, particularly at the manager and the senior manager levels. There is some, but not tons, of activity at the director and VP levels. These roles become available more because of people being let go versus people moving on. And when they do become available, they get filled by promoting from within or internationally.
There are exceptional circumstances such as when a company like Virgin Mobile comes to town and needs to hire at all levels.
The traditional agencies have just started hiring. Slow but steady. However, most of the hiring in communication has been with the below-the-line agencies (direct, interactive, design, promotion, etc.). There are always the exceptional circumstances when a major agency needs to save an account by changing personnel, or wins (and loses) a big account (like Bell). There are also the circumstances with the few hot shops like Taxi, Zig or Grip where they are either invited onto every short list or win a huge account as in the case of Grip.
I am extraordinarily bullish on next year. If this quarter continues to go in the direction it is going, I believe there will be a fair amount of upward pressure on next year's salary ranges.
Lots of talk about, as the Procter & Gamble chief marketing officer Jim Stengel put it earlier this year, "the model being broken." Does marketing seem to be exploring non-traditional formats and services at the expense of traditional agencies? Is this being reflected in employment trends?
Teitelbaum: Sure. The benchmark would be, "Who are our clients today versus 10 years ago?"
Ten years ago, a tiny agency would not go through a growth curve that many smaller shops have enjoyed over the last three years. If a client can get the attention of a smart strategist and a dedicated creative director at a cost that doesn't have to cover a Bloor Street overhead, why wouldn't they look at another "model." The Bell win for Grip will hopefully silence its critics.
Brodie: There's real pressure to demonstrate accountability. Even though the economy is improving, management teams are not going to stop trying to reduce costs. To reduce costs and quantify performance, marketing professionals are responding with a shift to non-traditional technology and market intelligence solutions that are measurable and that promise greater ROI. It's all about showing accountability.
While we continue to have demand for holistic marketers and advertising/creative professionals, the primary focus of our business for the past six months has been finding top performers in non-traditional areas such as Web marketing, DM, PR and media relations.
Gates: Agencies are responding to this challenge and trying to meet their clients' needs, but "traditional" agencies still provide invaluable services to their clients.
The last several years have seen growth in the smaller "creative boutique" type of agencies. These agencies usually promise to be more nimble, provide senior (often the owner/ partner) client counsel and great work among other assets. Some of them are doing it very well and are growing as a result of great work and the resulting "buzz" that comes with being a hot agency.
As these companies grow and start to have 30, 50 and more employees, the challenge is to maintain what made them "special." It will be interesting five years from now to see how many of these agencies are still independently owned. Certainly in the last few years, the independent "boutique" has been a trend and there has been more employment growth than with larger, more-established agencies.
MacArthur: Non-traditional avenues continue to be explored aggressively as marketers vie for consumer/customer attention and work at building stronger relationships. Marketers are utilizing a broader spectrum of tactics to develop these relationships.
For the most part, the agencies have addressed this by offering a broader menu of services. The challenge for the agencies is in how they value and manage these varied services internally. As long as the various disciplines (advertising, sales promotion, direct marketing, etc.) are set up as separate profit centres, each group will continue to see the other as a threat in eroding their revenue base.
Kingston: The model has been broken for several years now. Traditional agencies have battled unsuccessfully to keep the whole "pie" of services to themselves. Many have attempted without much success to offer their clients integrated in-house services and, when this failed, had to resort to offering branded services of their stand-alone sister companies.
Clients clearly wanted the best thinking and solutions to come from those companies with specific expertise in a service area, be it interactive, direct, CRM and research. We have seen a dramatic move on the part of marketers to find strategic counsel from anywhere but their traditional advertising agencies; turning instead to consulting companies and specialized consumer insight research facilitators.
The media service sector has also greatly benefited from this shift. Historically responsible for the planning and buying of media for clients, media service companies are now providing top-notch strategic consumer insight-driven thinking and consultation as a critical add-on to their media investment duties. The result has been a dramatic reduction in the consumer and business planning strategic input requested of traditional agencies. One outfall has been the creation of many new jobs in the media service sector focusing on consumer insight and contact planning expertise.
Lebeau: The way to reach the consumer has dramatically changed and, funnily enough, some traditional agencies are slow in picking that trend up. It is showing in employment trends in the sense that demand has shifted towards the individuals whose skills are adapted to today's marketplace and realities.
Chad: Absolutely. More and more of the marketing dollars have been going to the below-the-line agencies and hence more and more individuals are being hired into these shops.
I don't for a moment think "the model is broken." I just think that the pendulum is changing. All that is happening is that marketers are reaching their target markets through different media. Creative is still creative; ideas are still ideas. Marketers still need to position their products and services in their best possible light. You still need account people, art directors, copywriters, etc., no matter what communication medium they are using.
Ad agencies are still, however, the major force with most major brands and services and the successful agencies of the future, as always, will reinvent themselves. Advertising does, and has always, worked.
What are the particularly strong marcom sectors right now for employment? Why?
MacArthur: Digital marketing continues to be strong, largely because it is seen as being faster and cheaper than direct mail and tends to engage the customer in ongoing dialogue. PR/corporate communications is healthy. As well, many companies have gone through significant branding exercises and are getting those new brands out into the market.
Kingston: The financial sector seems to be hiring again after a two-year down cycle. Interactive and direct marketing are persistently busy employment sectors as demand for their specialized services continues to grow. The media service (planning and buying) sector has shown steady growth.
Lebeau: Service industry. It is just understanding that it needs to package its offering and sell it like a brand. The industry needs marketers to do that. The industry is just starting to recognize that the marketplace does not always pick up on what the service company perceives as a USP. It needs to be packaged and then communicated/marketed.
Kershaw: There's a continued thirst by Crown corporations and other quasi-public sector organizations to hire qualified, private-sector marketers who would bring a more bottom line, customer-focused approach to the role.
Telecom and tech are rebounding, but continued mergers mean fewer marketing jobs.
The demand for good marketers willing to take their skills into another industry is still strong. Credit unions, which have a larger market share than most banks (in the West), like financial services experience; resource industries are branding traditionally commodity products (e.g. lumber, a fantastic marketing challenge).
Descarie: We see more and more that marketing is directly related to sales. Marcom sectors are looking at people who are result-oriented instead of only planners and executors.
Brodie: We are seeing a significant uptick in requests for candidates with strong understanding of direct response and "accountability-marketing." The areas of direct and interactive have surged as management in both client and agency environments seek individuals who understand the importance and impact of marketing ROI.
Chad:Direct/CRM: Companies can measure immediate results. One-on-one marketing allows for measurable results.
Promotion companies: If the right promotion is done well, it cannot only enhance the brand image or service image but can give an almost immediate shot in the arm for increased sales.
Contest and prizes, in particular, still have a way of increasing sales significantly. Sometimes just a clever idea can help build image as well as brand a product.
Gates: We have seen telecommunications growing, while also contracting in some sectors such as long distance. Virgin Mobile, of course, is launching and competitors are gearing up to defend their turf. As well, the overall growth in household penetration of digital/data-related products continues to drive this industry. As well, the forthcoming introduction of VOIP will bring further entrants to the market.
Any notable trends in non-financial compensation this past year?
Brodie: Not really. It's still a soft market. Individuals are smarter about their own self-worth and added compensation is usually in the form of cold, hard cash versus non-financial compensation.
MacArthur: Basic non-financial compensation is more in providing what have become essentials to doing business (cell- phones, lap tops).
Bonuses have been "soft" with few companies paying out at the target level and options/shares are being held to the senior ranks.
Kershaw: Equity is back as an incentive in some sectors (e.g. tech or early stage companies), but it's not even close to the degree of 2000.
Descarie: In the Quebec marcom industry, we are noticing that more and more people are asking for a better lifestyle. The new trend in terms of compensation is towards more vacation or less work time such as four days a week. Candidates are now willing to make less money in order to have a calmer life.
Gates: We have noticed that planning for maternity leaves of up to one year is a constant challenge for companies. They often are not certain if the person will return and have to make plans for either scenario.
The desire of employees to return to work to a three- or four-day week after maternity leave is quite common but not often accommodated. An effective hiring strategy for clients with a difficult to fill position is to consider offering a three- to four-day week where possible.
Are marketers and agencies making any headway on the training and development front?
Teitelbaum: I am noticing clients are hiring us for searches that would have never happened before, people with very little previous experience. But the commitment to training is still almost non-existent. Unless you consider just doing the job as "training."
It is still a problem and will become exacerbated as time goes on since the few that are trained are quickly picked up and are better compensated somewhere else. Few marketers are doing any training or hiring from the recent grad pool. In a way, you can't blame them when the few they do train get poached by the companies that don't.
MacArthur: Marketers continue to focus on training and development at a solid level while agencies appear to have less focus here.
Descarie: Marketers and agencies have fewer resources for training. There is still a place for training but the budget is not really available anymore. However, corporations are trying to create ways (i.e. conferences, professional motivators) to present solutions and options to their employees on different topics such as interpersonal relations, business development, etc.
Brodie: Regrettably, no. It's a blind spot among employers. Our review of results from various employee satisfaction surveys reveals that demand for training and development rarely, if ever, is met. The impression among employees is that they are not valued. It also causes concern that, without training and development, they will fall behind and become less competitive.
Do things like winning a Cannes Lion or Marketing Award or PCM Coq d'Or have an impact on salary opportunities for agency people and marketers? What about CASSIES?
Kingston: Yes, and much more so for agency people than for their clients.
Winning a prestigious award like a Cannes Lion or a Marketing Award is a particularly big deal at the agency. Wins of this nature raise the bar for the entire agency and often result in, at minimum, the agency being considered for new business and, better still, landing a new plum account.
A good agency will reward its people for winning such coveted awards with either bonuses and/or salary increases.
Unfortunately, to a far lesser extent similar recognition is being given to the "suits" at the winning agency. If they are lucky, they get invited to the award show for one more chicken dinner.
On the other hand, the CASSIES are awarded for proven business results. They provide an opportunity for the agency's client service team (the "suits") to shine. I hope that agencies are rewarding these folks for the strategic contributions they make on an advertising campaign.
MacArthur: Generally not if it is a "one off" win. However multiple wins for different efforts-those that can sustain a level of quality to the work that they do-will realize financial rewards.
Kershaw: There's no direct relationship between awards and compensation unless the impact of the specific individual on achieving the award is known.
It is difficult to know who really was responsible for the execution of an ad or program. There are cases where I have interviewed four or five people out of the same company who claim to be the brainchild of the same program.
Chad: Any kind of "good" recognition that increases profile has an impact on future salary increases just like "bad" recognition will do the opposite. If a creative team wins awards but develops a reputation for alienating fellow workers or clients over time, it is not a given that they will maximize future earnings.
Anything else of note you want to add?
Kingston: I am forecasting four employment factors to develop further in the next few years:
• Higher levels of job turnover with employees during their first three to four years of employment. If career or work condition expectations are not delivered by an employer, they risk talented and newly trained staff leaving for other "more promising" opportunities or even quitting without a job in hand.
People's priorities have changed significantly over the past several years to the point where personal lifestyle needs greatly influence how much sacrifice will be extended to claw up the corporate ladder. A new generation of managers is emerging with a healthy outlook to balancing work and play. Patience runs low in an instant gratification world.
Companies should consider utilizing coaching practices, beginning with an orientation program in the first three months, to better understand their employees' needs, priorities and aspirations.
• Significantly more hiring of older and work-experienced managers. A shift away from hiring MBAs fresh out of school to hiring career-hardened and savvy candidates with "real world" experience.
• A job crisis occurring at the middle manager level. Following several years of cut-backs, downsizing and lay-offs, the demand for people with five to eight years of experience will far outweigh the numbers of people qualified.
• The continued growth of women into management positions in advertising and marketing. Companies are already responding to this trend with more flexible work hours for working mothers in order to allow for childcare needs.
Teitelbaum: The most successful folks I know did not just drift into becoming president or CEO-they planned it that way. So plan your life and your career, decide what's important to you and what you have to do to get where you want to get to.
Also, ask how you perform, what can you do to better yourself and don't be afraid of the answers. You will usually be pleasantly surprised.
Find a mentor, listen and take their advice. You may think you know better, but those who have "arrived," they are the ones to listen to.
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