Close-Up: Is the UK's top ad talent underpaid?

Senior ad posts may be less well paid than other sectors, but salary hikes are unlikely.

Some will have questioned whether Jon Bond not only took leave of the shop bearing his name but also of his senses when he suggested agencies are paying their top talent too little and their lower orders too much.

In an online interview published last week, the co-founder of New York's Kirshenbaum Bond & Partners, now a strategic partner at the crowdsourcing specialist Victors & Spoils, not only compares his previous existence to the captaincy of the Titanic but claims the staff remuneration system within traditional shops is well and truly sunk.

"In the current model, the top talent are underpaid and the bottom people are overpaid," he asserts. "If we want to regain the top talent we've lost, we need to take a tip from Hollywood and make the rewards of stardom spectacular."

Bond's reasoning will strike many as perverse. Particularly those graduate trainees both in the US and the UK who may be paid as little as £18,500 a year as they step on to the bottom rung of the agency ladder, or the 23 per cent of UK agency account management staff earning less than £25,000.

Others might find it equally rich that he should be advocating fatter pay packets for executive creative directors - however talented - pulling in an annual salary of up to £680,000 plus bonuses if they work on Madison Avenue or up to £350,000 in a top-ten UK shop.

Bond's argument is that to reward hours worked rather than results and talent is to turn advertising into a commodity.

He claims that, in their efforts to satisfy client demands for better, cheaper and faster work, agencies are in a downward spiral of price-cutting. The result has been to drive talent away, making agencies worth less to clients and encouraging those clients to pay even less for their advertising services.

Nobody disputes the fact that the industry has slipped far behind in the reward stakes - just 1.1 per cent of UK agency employees earn more than £175,000.

"When I joined Boase Massimi Pollitt in 1984, advertising was an enormously popular career and there was a correlation between the salaries in our business and other comparable jobs," Nigel Jones, the Publicis Groupe UK chairman and chief executive, recalls. "That's not the case today."

Can agencies do anything about it? Not much, it seems, while margins remain under such relentless pressure and less expensive creative talent begins blossoming and flourishing in emerging markets such as Brazil, China and India. And certainly not while client procurement specialists baulk at paying top dollar to keep senior agency talent locked in.

One possible way to stop the best talent straying might be to make more extensive use of performance-related pay. Brendan Tansey, the Wunderman chief executive, says: "It seems the most obvious way forward. An increasing number of client contracts are being constructed in this way and it works successfully elsewhere."

It is the lower end of the earning table, however, that many onlookers regard as the source of a future talent famine for the industry.

"The best people aren't always best placed to take an agency job," Hamish Pringle, the IPA director-general, points out. "Instead, they're accepted by people who can afford to live in central London on a £19,000 salary because they've got parents or other family who can help them out. Small wonder that we remain a white middle class industry when we can't spread our talent net wide enough."

INDUSTRY BODY HEAD - Hamish Pringle, director-general, IPA

"The fact that just 5 per cent of staff in IPA member agencies are aged over 50 indicates how much of the industry's senior talent gets lost. And the reason is the refusal of client procurement specialists to pay for such people.

"The idea of clients better rewarding their agencies to get the most talented people on their business in order to make more money ought to be a no-brainer. Clients have to remember that creative agencies are small operations and that they need to act like 'impresarios' nurturing the talent that will build their businesses."

US AGENCY HEAD - Andrew Robertson, chief executive, BBDO Worldwide

"Jon Bond makes a sweeping and dangerous generalisation. Of course the most talented people in our business expect to be well rewarded. But they also want to work in an environment where they feel valued and appreciated and one that allows them to do outstanding work. The best creatives will always be motivated by the opportunity to do good work rather than by big money.

"What's more, I don't think the ad industry has anything to learn from Hollywood as Bond suggests. If you compare the takings of all its major movies over the past five years with what their highest paid stars were earning, you'll see they represent the worst possible return on investment."

UK AGENCY HEAD - Nigel Jones, chairman and chief executive, Publicis Groupe UK

"People like me are well paid compared with the national average but relatively underpaid compared with our peer groups in other industries. That's why the industry is lacking in talent, particularly at the most senior level.

"The problem is that margins have shrunk. I would guess they've dropped from 20 per cent to 10 per cent over the past decade. The UK has suffered even more than the US in this respect.

"The extension of performance-related pay may be one answer. But if you're an exceptionally talented individual and you want the rewards to match, the only answer is to set up on your own."

CLIENT - Ian Armstrong, head of customer communications, Honda

"Jon Bond is on very dodgy ground. Clients remember how profligate agencies used to be and none would countenance them increasing their costs.

"The market determines what we, as clients, will pay. Agencies must decide how they want to reward their best people. But they must be sure that these are the people who are actually making a difference to our business. And the success of our business isn't down to advertising alone.

"If agencies think they can justify charging more money, then fair play to them. But the past few years have shown this to be untenable."

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