The UK direct marketing industry has changed substantially over recent years, growing not only in revenue, but also in the wide range of media channels that are now considered below the line. The first DMA/Brand Republic Salary Survey aims to bring the different roles within these channels together to present an overall picture of the industry today.
According to DMA marketing and new business director, Mike Barnes: "This new DMA/Brand Republic survey is incredibly useful as it relates directly to our business and the people who work within it. It is worth remembering that direct marketing, being such a diverse number of channels across such a large industry, can be very difficult to generalise on. However, this survey provides us with an invaluable starting block."
The past year has been something of a reality check for the direct marketing industry as far as salaries and bonuses are concerned. The heady days of over-inflated packages and a bullish seller's market are well and truly over as the sector gets "back to normal", as Institute of Direct Marketing chairman and Proximity CEO Simon Hall puts it.
If you've still got a job, chances are you're pretty keen to hold on to it as the uncertainty caused by cautious clients continues. But it is certainly not all bad news for direct marketing -- the downturn has had its casualties but the sector has not suffered nearly as badly as most above-the-line operators.
Barnes believes the survey is a reflection of current activity in the sector.
"This salary survey very much reflects the direct marketing business climate for suppliers and clients across all the sectors and channels -- that of caution with relative stability and no surprises."
Peter Phillips, managing director of Hexfax and chair of the DMA training and development committee, believes the industry is in pretty good health and that the figures in the survey are evidence of its rising prominence in the wider marketing industry.
"These figures start to suggest that the industry is becoming much more comparable with the more established above-the-line industry and are an endorsement of the growing strength of direct marketing. It indicates a blurring of the demarcation lines between the different sorts of marketing companies."
As the latest IPA quarterly Bellwether Report showed, direct marketing was once again the exception to the rule of falling marketing budgets for the third quarter running, with evidence that companies are shifting budget to the discipline because it is more cost effective.
At WWAV Rapp Collins, CEO Adam Coleman says direct marketing's development into a more strategic function has enabled it to catch up with above-the-line despite the tough environment. "Direct marketing isn't the poor cousin it once was. We're now paying salaries that are pretty much the same as above-the-line agencies at most levels. This is a reflection of the calibre of people we're trying to attract, but also because we're now being paid for doing the thinking and not just the implementation."
Nevertheless, there's no doubt that over the past 18 months, the downturn in the market has prompted everyone to do a certain amount of belt-tightening, as Hannah Brown at headhunters Kendall Tarrant explains. "Everything is pretty tight. There haven't been any massive rises and there have been lots of pay freezes. For agencies, it's a dog fight to get new business, to keep hold of the clients you have, and to try and maintain their spending," she says.
Hall says salaries are becoming more realistic as a result of the economic climate. "We're getting used to salary increases, which are closely related to inflation, rather than the situation a few years ago when people expected sizeable leaps in their packages," he says.
Wunderman's European CEO Stewart Pearson agrees, saying that it is as if the industry has "escaped from a time of absolute madness in the late 1990s".
"There was a high level of inflation in salaries fuelled by the internet boom, and it was crazy. That's all gone now, although good, experienced people are still able to command increasing salaries," he says.
As the first DMA/Brand Republic Salary Survey shows, however, salaries are still looking pretty healthy across the board, in agencies and in-house.
The average figures include salaries from around the UK, but for all grades of staff in the DM industry, salaries are usually higher in London than in the regions.
In at the bottom
Those who enter the world of direct marketing on the bottom rung of an agency can expect a starting salary of around £15,000-£16,000, with salaries at this level averaging £18,500, with a high from respondents to the survey of £21,000. This rises to an average of £27,700 at account manager level, with a low of £25,000 and a high of £30,400.
Senior account managers don't necessarily have the same hike in salaries along with the new titles on their business cards: those who took part in the survey are earning an average of £31,777, with a low of £29,999 and a high of just over £34,000.
According to Coleman, this is the area where there is most activity at the moment. "We're seeing a lot of movement at account manager and senior account manager level. This isn't unusual in itself because people with two to four years' experience often do decide to use that experience elsewhere, but we're also seeing movement because last year some people decided to take a career break or sabbatical while the market was so difficult."
At Haigh Recruitment, direct marketing consultant Damion Deans says the trend for employees in their late 20s and 30s to take off travelling for a few months is on the up: "We've seen several people taking a year out, either when they have been made redundant or when they don't see any opportunity for them to move on."
Higher up the food chain at account director level in an agency, salaries average around £40,000, with respondents reporting a low of £36,250 and a high of £43,750.
Group account directors within agencies, not surprisingly, earn significantly more, with an average salary of £54,500, although remuneration can rise to around £60,000 at this level.
IDM chairman Hall says the speed with which agency personnel move through this traditional career path has "slowed substantially" over the past year or so. "Employers and employees are having to think more carefully about working arrangements, proper career paths, motivation and keeping salary expectations in line with the new reality."
Comparing across the divide
Anecdotal evidence suggests that in-house salaries within direct marketing have traditionally been higher than in agencies, but the DMA/Brand Republic survey shows at most levels there is a broad similarity in salary bands.
Direct comparison is not easy since titles and roles differ significantly between client and agency employers. In the lower ranks, marketing assistants and coordinators are earning roughly the same as agency account executives, although starting salaries are likely to be nearer £16,000 than £15,000. The salaries of marketing executives are also around the same mark as senior account executives or junior account managers in agencies, with an average of £22,500.
Senior account managers and account directors in agencies correspond to the seniority of a number of different in-house roles, including marketing and sales managers, who average a salary of £35,240, with a low of £31,900 and a high of more than £38,500. At around the same level are direct marketing managers, who earn an average of £31,250, with a low of £28,750 and salaries reaching £33,750 at the top end.
Those going under the title of managers average income of £32,500, and campaign managers' salaries are at a similar level, averaging £27,000 with a low of £25,000 and a high of around £30,000. Brand and product managers in-house earn more, with an average of £32,500.
General managers in-house are taking home around the same as account directors in agencies, with an average of £36,700, although this varies from a low of £33,400 to a high of more than £40,000. So depending on where you are standing, in-house people in middle management roles are either earning a bit more or a bit less than their approximate agency counterparts.
It is in the most senior roles that in-house talent is raking in significantly more than agency directors. Sales and marketing directors, for instance, earn an average of £64,640, with a low of £57,900 and a high of more than £71,000, compared with group account directors, who average around £10,000 less. However, the average age of a sales and marketing director is 39, compared with 31 for agency group account directors.
Creative directors are also netting much higher salaries than most in the agency world, with an average salary of £63,000, which rose as high as £72,500 within our pool of respondents. Similarly, in-house directors are earning an average of £73,700.
In-house communications managers are also earning more than senior agency staff, with average salaries of £45,000, although the salaries of agency account directors are closely aligned with in-house business development managers, who earn an average of just over £40,000. In-house consultants earn an average of just under £48,000, putting them somewhere between account directors and group account directors in agencies.
There are a number of roles within client companies that can't be compared with agency titles because of the nature of the work. Copywriters earn an average of £35,000, and this is only likely to vary by a couple of thousand either way, according to our respondents.
Web and graphic designers aren't brilliantly paid, according to the survey, with salaries averaging just £17,500, about the same as in-house production managers. Production directors, with an average age of 38, net an average of £37,500.
While planners, with an average age of 30, earn a respectable £31,000 on average, their bosses are among the highest paid in the industry -- planning directors earn an average salary of £78,000, which can rise to nearer £90,000. The real winners, however, are communications directors, who are likely to be earning more like £84,000 and even as much as £100,000.
Car allowances, healthcare and pensions are now pretty commonplace benefits for employees at most levels in the industry, whether in-house or working in agencies. Around half of all respondents said they received some kind of healthcare allowance, for instance, although this is slightly more likely to be the case in-house than in agencies.
Hall says employers in the industry are finding they need to be more creative with "soft" benefits, which do not have to cost much, to keep staff happy, motivated and interested while the market is slow. Agencies are reporting perks from everyone having their birthday off to subsidised bars, Friday chocolate runs and weekly massages, but the classic "duvet day" also needs to be complemented by proper career development and training.
It's no surprise that bonuses are no longer a given in the industry, particularly for agencies that are part of big international marketing services groups under pressure from the City and Wall Street. For some job titles (such as copywriters, operations directors and agency group account directors), no respondents receive any bonus, while for others (including managers, campaign managers and CEOs), every respondent at that level earned a bonus. In general, about half of all respondents said they received some bonus, although there is no indication of how much of a boost to salaries that represents.
At WWAV Rapp Collins, Coleman says it's no surprise that "we're not in the bonus environment we were two or three years back", and adds that management packages are increasingly being renegotiated to include a performance-related element.
Time to take off
Respondents to the salary survey said their holidays varied from the standard minimum of 20 days, up to 30 days, although most said they had a holiday allowance of 24 or 25 days.
There's some disagreement among pundits as to whether people in the industry are having to work harder. Brown at Kendall Tarrant says there is a lot of hard graft to put in at the moment, and "10- to 12-hour days are not uncommon", while Coleman says working hours have always been long in the industry and there's no evidence that people are working any harder than a couple of years ago. He does believe that people are having to use their time more effectively, however, for instance by trying to cut down on unnecessary meetings.
The nose-to-the-grindstone stance is starting to get too much for some and the industry is starting to see a bit more people movement. Last year, everyone may have been clinging on to the job they had and accepting pay freezes and no bonus, but Brown for one thinks this is changing. "People are working hard for not much reward and they want to take control back into their own hands. We're seeing more people prepared to look above the parapet and see what's out there -- the fear factor has decreased slightly. But it's a buyers' market still for sure, because there are a lot of good people out there who were let go and are looking for jobs."
What lies ahead
The true picture of salaries in the direct marketing sector will become much clearer in 2004, when direct comparisons can be made with this first survey. But for the first time, this DMA/Brand Republic salary survey has established a definitive benchmark for salaries across the industry, adding to the body of research and statistics, which help to make the case for direct marketing and assess its true worth.
Hexfax's Phillips believes the survey will be a valuable source of information for direct marketers.
"This first salary survey from the DMA and Brand Republic establishes a benchmark for the future with the hope that going forward we can produce increasingly meaningful statistics, which will prove of great value to the industry," he said.
So what are pundits predicting the year ahead will hold for the industry and the fortunes of those who work in it? At Haigh Recruitment, Deans says he has seen a lot more movement since January this year, despite the continuing depressed market. "Iraq didn't help and things will remain sluggish for the next six to eight months, and I can't see things getting back to anything like how they were in the late 1990s for another couple of years. But there is at least more of a general air of optimism now."
At Kendall Tarrant, Brown also thinks caution will prevail. "I have a sense that things will certainly stay tight this year. The difference between this recession and the last is that things will start to improve only much more gradually. But we're at the bottom of the next wave, and those who have the vision and ability could create the new direct marketing industry."
Download a copy of the DMA/Brand Republic Salary Survey 2003 here.
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