Leaner but not meaner – Marketing Week/Ball & Hoolahan Marketing Salary Survey

Marketers’ salaries rose by 12% in 2006 after several years of lacklustre growth, but life in the nation’s marketing departments is changing as middle-ranking managers exert more influence and conditions and perks mirror those across the Atlantic. By Hilary Hoolahan and David Reed.

Good times, for a change. After several years in which marketers’ salaries have been rising below the rate of inflation, 2006 saw a significant leap in incomes. Across the board, respondents to the survey, distributed in copies of Marketing Week and completed by 1,471 respondents, have reported higher salaries.

At the same time, terms and conditions of employment appear to be shifting. The days of the big-spending marketing department are long gone, replaced by more modest budgets and smaller departments.

Perhaps as a consequence of this, the role of the marketing manager is attracting more responsibility and better remuneration. This could be the position from which the industry’s stars of the future emerge, rather than the higher profile marketing directorships.

The American Way
With years of restructuring – much of it still ongoing – marketers have also been looking for more security, trading benefits and bonuses for a higher guaranteed salary. As a result, the discipline is moving ever further towards the American model of high salaries, few frills, short holidays and notice periods – but with it comes little job security.

Across the whole sample, the average basic salary now stands at £46,310. This compares to £39,326 in the 2006 survey, the same level as in recent years. The reason for this uplift in income is the 12.1% average pay rise received by marketers during the year.

Compared to the previous year’s 5.7% rise, it is evident that marketers have started to reclaim some of the ground they have been losing to other professions in recent times. A growing number of vacancies combined with a shortage of skilled candidates on recruiters’ books has helped to drive up salaries.

Better incomes are visible at every level, as Table 1 shows. The salary differential between managers and directors of the marketing department is still nearly double, with average incomes of £82,261 for marketing directors compared to £42,950 for marketing managers.

In both positions, women earn less than men. This difference is steepest for marketing directors, although the impact of a career break and maternity may account for much of this. Responsibility comes early for some, with 8% of marketing directors aged 26 to 30, and 37% aged 31 to 35. Only one in five are aged over 46.

Among marketing managers, the gender effect on salary is less marked, although women outnumber men in this post by two to one. This is very much a young person’s job, with one quarter aged under 26, and 41% aged 26 to 30. Only one in ten marketing managers are in their 40s – and with salaries showing relatively little growth after the age of 35, there is little reason to hang around.

Footloose and Female
Product and brand managers are even younger in profile – they are also one of the few positions in which women are the higher earners. Careers in this position are short and sweet, with no respondents older than 40 and salaries staying the same for the 15 year age band that covers all the respondents.

Bigger than the gender divide is the gap between the top and bottom earners. In every role, half of all marketers are earning more than the average, but it is in the top ten where things really take off. As Table 2 shows, the big money is going to a handful of staff who are often earning more than twice the average.

Marketing directors, in particular, can expect to be suitably rewarded at the very top level, with 8% earning more than £150,000. But it is among marketing managers where a new cadre of top professionals can now be seen, with the top 10% pulling in £73,200 on average.

In this role, 14% are earning between £60,000 and £90,000. Product and brand managers have seen a similar polarisation, although salaries top out at £70,000 in this position. One of the consequences of year-on-year restructuring has been a reduction in the number of directors, but more responsibility being added to the shoulders of marketing and brand managers, in return for higher salaries.

And that restructuring shows no signs of slowing down. In the past 12 months, 66% of marketers have seen changes in their department. But the trend is now for slight increases in size (42%) as opposed to reductions (24%).

In both cases, the numbers of staff involved are modest – 76% of departments which have grown added between one and four staff, while 63% of those reducing in size shed less than four people. The majority of marketers (52%) expect further changes during 2007.

Budgets Hit the Roof
Right sizing of the marketing function is a constant process, since the level of expenditure and the staff needed to deploy it reflects the changing nature of competition, corporate structure and media efficiency. What most businesses appear to have realised, however, is that the right size for their function rarely involves a marketing budget of more than £25m – only 14% reported a higher level of spend.

That in turn has generally led to a decoupling of salaries from the size of marketing expenditure. For marketing managers especially, once the budget passes £1m, only a handful experience a significant advantage from working with a big-spending business.

Nor is department size a factor in salaries for marketing managers, with most earning around the average except in the very smallest departments. These have become more prevalent – in this year’s survey, 24% of respondents are working in teams of just one or two people, compared to 12% last year, while one-third work alongside three to ten others.

What these findings suggest is that those who remain in marketing now have to work harder, but they do get paid better for it. A notable finding of the survey is that alternative working practices seem to have fallen from favour. Only 6% of respondents now work from home, down from 19% last year and 65% the year before.•Hot desking was used by just over half in the 2006 survey, but by only 32% this time round. What has changed is the proportion of marketers in job shares – up to 43% from 12% last year, and those working flexible hours, up to 41% from 11% previously.

This reflects a change in importance in what marketers are looking for in their working conditions. The highest score (at 1.2 out of a possible score of 2) was given to high base salary with few benefits. In second place, they now score flexible working at 1.1. Third place, with a score of 0.9, went to bonuses based on personal and company performance.

As with the City, marketers may well have profited this year from a more favourable trading environment for their businesses. The double digit salary rises shown in Table 3 for nearly every position provide evidence of this. The more modest expectations for next year (Table 5) suggest marketers are not yet convinced that the upward trend will continue.

Bonus Benefits
Bonuses have become the most widely-enjoyed benefit, with 77% of marketers on a company-related bonus and 75% on a personal performance-related bonus, compared to 74% on a contributory pension. A lucky 28% also enjoy guaranteed bonuses, up from 16% last year.

Personal bonuses appear to provide a bigger reward than company-related ones. More than four out of ten marketers got an extra 6% to 16% on top of their salary from personal bonuses, whereas for those on company-related bonuses, 52% got a bump of less than 4.9% of their salary. A mixed bonus, which combines the two, delivered even less value, with 63% of recipients getting less than 4.9% extra.

There has been less tinkering with pension benefits this year – only 8% say their company has attempted to change the pension scheme from final salary to defined contribution, half the rate who reported this change last year. Perhaps employers have noted that 33% of marketers say such alterations affect their loyalty to the company.

What is notable about bonuses, however, is that marketers are much more optimistic about seeing them rise next year than they are about getting a higher salary. Table 5 shows that pay rises are forecast to be half the level that was seen during 2006.

For bonuses, it is a different story. One third of marketers believe their company-related bonus will be between 5% and 10.9% next year – only 21% got a bonus at that level this year. Forecasts for personal performance-related bonuses are softer – 46% believe these will be less than 5.9%. As the market rises, marketing gets more difficult, perhaps.

Chasing a higher salary by switching sector is relatively rare. Based on the reported salary levels by industry (Table 6), no single sector consistently pays more across every type of marketing job. While a marketing director can earn most working in financial services and retail, marketing managers do better in packaged goods (FMCG), as do product and brand managers.

But heading for a US-owned business does produce clear benefits (see Table 9). With the exception of marketing services roles, the rates of pay are higher for marketers at American companies than they are elsewhere. Given the changes in pay and conditions experienced at other employers, this is no longer represents the big cultural change it once did.

Taking a Break
Holiday entitlement is one example. American companies trading in Europe are having to follow employment regulations that give staff more time off. Three-quarters of marketing directors get 21 to 25 days off, as do 53% of marketing managers, but one-quarter of managers get more holiday time (26 to 30 days) compared to only 16% of directors.

Among brand managers, 57% get three to four weeks off while 30% get five weeks. Across all functions, notice periods have got shorter – the majority now report they are on less than three months’ notice.

Better rates of pay, higher bonuses and a more positive business climate are helping to restore confidence among marketers. Changing jobs appears to be on the cards for most functions, according to Table 7, although marketers are still more concerned about the challenge than the money (Table 8).

But there is little they can do about the macro-economic and social factors that determine whether marketers stay or move on. According to 43%, this decision will be influenced by economic uncertainty.

What they can look to is their employment practices, which are starting to cause dissatisfaction – 42% say they will make a career decision because their company has revised its policy on job opportunities and 34% because of a change in strategy on pay. Employers would do well to set out their vision of a career path if they want to retain staff.

Key Points
Average salaries have risen significantly this year. Across all ten job titles in the survey, the average salary was £46,310, compared to an all-respondent average last year of £39,326.
Salary increases averaging 12.1% were reported for the last year. This is more than double the 5.7% rise reported in the previous survey. The highest reported average rise was for marketing services directors who received a rise of 14.5%, followed by marketing services managers with 12.8% more on average.
Marketing director’s salaries have recovered strongly, with the reported average salary for this year standing at £82,261, against £66,221 last year. The top 10% of marketing directors commanded an average of £176,538, substantially up on the £97,500 earned by the top echelon last year.
The average salary for marketing managers was £42,950, up from £39,316 in the last survey. Female marketing managers earn 87% of their male colleagues’ salaries.
With restructured marketing departments losing senior directors, marketing managers and brand managers now take more responsibility. This is reflected in salaries – the top 10% of marketing managers are now earning substantially above the average at £73,199.
Female marketing directors lag significantly behind their male colleagues, with an average salary of £66,052 compared to £80,921. This is the biggest gender pay gap for any marketing position surveyed.
There are fewer big-spending marketing departments than before, with little correlation between budget and salary. Department sizes have also fallen, with salaries rarely reflecting staff numbers.
Higher salary with fewer benefits has become more important to marketers, alongside flexible working. US-owned companies still offer bigger salaries, but there has been a closing of the gap in terms and conditions between American and European businesses.
Strong pay rises this year may reflect higher performance-related bonuses. Personal performance bonuses gave 41% of marketers a pay rise of between six and 16%. But marketers are more confident that company-related bonuses will produce bigger benefits next year than personal related ones.
Job mobility is on the rise, with respondents in every marketing position expecting to change jobs within the next two or three years. Lack of a clear vision for their career path is a major factor in the decision to move.

The Marketing Week/Ball & Hoolahan Salary Survey 2007
The annual salary survey, of which this is the 24th, has always been acknowledged as an authoritative and unique guide to pay and benefit conditions and expectations in the marketing industry. As well as acting as a benchmark to marketers of their earning power, it is a valuable tool for employers who wish to recruit and retain marketing professionals.

Research was carried out by Compass Research. The report is based on 1,471 responses overall (10%), gathered through an online survey in November 2006 by Marketing Week of over 15,000 readers.

The sample was split 37% men and 63% women, 5% of respondents held the most senior positions of chairman/chief executive/ managing director, while 9% were marketing directors. Marketing managers made up the main job function covered (34%), indicating the breadth of roles that this title covers.

The next largest groups were product/brand manager at 7% of the sample; senior product/ brand manager (3%); assistant product/brand manager (2%); marketing assistant /graduate trainee (4%); and group product manager (less than 1%). Other titles together accounted for 36% of respondents, covering trade/ retail manager/executive, category manager/ executive, sales director/manager, national accounts manager and marketing services director, manager or executive/assistant. Marketing services includes these areas: ad/PR, direct marketing, communications, promotional marketing and research.

In terms of ages 31% of the sample were 27 and 30 years old; 23% were between 31 and 35; 14% were aged between 36 and 40; and 19% were 26 and under.

In the main version of the survey, there is a full set of tables, including numerous cross-tabulations.

Specially tailored analyses are available on request from Hugh Pinnock at Compass Research (01980 619018) or via e-mail: hugh@compassresearch.org.uk.

Copies of the report on the Marketing Week/Ball & Hoolahan Salary Survey 2007 are available from Marva Hudson,
Marketing Week
50 Poland Street
London W1F 7AX
Tel: 020 7970 6301
Fax: 020 7970 6722

The price is £129 (including P&P). Please make cheques payable to Marketing Week.

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