Are advertising agencies behind the market curve for entry-level salaries?
The Seattle Times (via <a href="http://www.adpulp.com/archives/2007/12/microbenefits.php">Adpulp</a> ) has reported a story that advertising starting salaries for entry level folks are below the market. I have an associate HR Director for an agency who tells me entry level for agencies nationally, except New York, is right around $28,000, and would maybe climb to $30,000 for a really talented creative.
What's your agency standard for entry level? Do you think advertising is behind the curve, as an industry?
Good Answers (1)
Lynn O
Marketing Consultant specializing in direct, interactive, and word-of-mouth marketing & house party fundraising
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I don't think agencies are behind the curve, as that would suggest a change is on the horizon. Entry-level advertising jobs have always been low paying compared to other fields in boom times and in recessions. Since so many people want entry-level positions at agencies, it is classic supply and demand - entry-level salaries are kept down by the competition.
As people gain experience and can demonstrate their ability to make money for clients, the market dynamic flips entirely. Highly experienced and effective advertising pros are always in demand... which leads to higher salaries.
Two other factors:
* ad agencies run on very thin profit margins. In order to afford to pay the experienced talent, they have to keep salaries down on entry-level jobs.
* changing technology has eliminated the need for many of the traditional entry-level jobs. We used to have hordes of interns and entry-level staffers just to produce proofs, mock them up, pack them up, send to clients, get notes back, log notes, file proofs, and then start the process again. Now? The art director saves the file to a PDF and the account manager posts or emails it. A whole lot of assistant jobs have disappeared in the last decade.
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I'm not sure a curve applies. The reality is that they can pay so little because they are desirable jobs and the Finance people know about supply and demand. Toll collectors make $56k or so in MA and T (subway) operators make around the same wage. That sounds outrageous, but nobody wants those jobs and there is no growth available. Agencies have a 'cool' factor and put emphasis in paying dues until you get paid.
All that said, I don't know how experience helps creativity...
Bob A
CEO, Adler Media Services Inc
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Even in NYC, the starting salary hovers around $30k for the large agencies, but I don't know if that's true of digital specialist agencies. Since they are competing for the best and the brightest, they may be offering more (on the other hand, their cool factor is +100%).
Joshua and Lynn's answers are accurate. Another issue that argues for the status quo is that if a starting level is increased, those hired a year or two earlier would have to be adjusted, so there is a greater cost than just for future hires.
One of the ironies about agency hiring is that an MBA is not a prerequisite, yet many, if not most, major advertisers recruit MBAs. Therefore, agencies often serve as an 18 month training ground for grads with a BA who then go back to school for the MBA and then go client-side. Or, they go client-side first, then get their company to pay for the MBA.
Advertising seems to have its own curve when it comes to salaries. It's unfortunate but as a recent graduate from college I worked in advertising for several years at a very low pay grade. Much lower than any averages.
That being said, many people think Advertising is a creative job and working in that environment you meet a lot of creative people. However, account people/teams use the coordinators as runners, note takers, job pushers, etc.. The low pay is actually, and I hate to say it, fair for the work.
The coordinators/team members during their first few years, if they stick it out will learn an incredible amount and that experience will take them far in marketing or advertising.
Is the pay low, yes...
Is it on par with other agencies, usually...
Is it justifiable, when utilized as mentioned above, yes.
Was it painful to be that underpaid... Yes...
Jenny,
I think the salaries paid in entry level positions vary dramatically from those on the "creative" side and those on the "account" side. Reason being, when I was a Junior at BBDO in NYC, I started out at 35k, and that was in 1995!
Still, I'm actually quite surprised by the numbers you mention and have my doubts about their accuracy. (Nothing against your HR Director contact.)
While the salaries paid out to those in entry-level positions do vary from city to city and are affected by the economy in general, as well as dozens of other variables, I can't imagine anyone who is worth hiring not being paid at least 30k. And, to be honest, it would have to be an exceptional agency for a creative to accept 28k as a starting salary, I think.
I recommend you look at Talent Zoo's Salary Monitor for some additional input. Granted, I don't know when it was updated last, but I think it's pretty accurate.
My best,
Jacqui
Links:
Mike C
Group Account Director, Associate Partner
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The industry is WAY behind the curve... when I started out 12 years ago as an Account Executive, my salary was about 17K...
For this industry, management still believes it is a 'club' that people must pay for to enter via low salaries for the initial 1-4 years in the industry.
The traditional/national agencies fall prey to this because their business model is built on Executive Compensation... and young people are willing to take these low paying jobs for the 'chance' at the Executive Suite' down the road.
Unfortunately for entry-level people today, those national agencies will either be out of business b/c they cannot compete - or will have changed their business model in order to compete...
In short, the national agencies will not change - and these low salary ranges are absolutely in line with the marketplace.
HOWEVER, small-to-mid-sized firms offer better compensation for entry-level people b/c their business model is different (remember, in national agencies, as much as 50% of agency revenue goes to upper management) - and their view of the marketplace is different. They typically are more aware of the shift in the marketplace in terms of traditional vs. interactive marketing/advertising - and are positioned to grow with their clients.
Anyway, my two cents...
Brett M
Partner + Brand Services at Citizen
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Follow the link below to the AIGA/Aquent 2007 Survey of Design Salaries.
This is a great resource and is quite accurate.
Links:
You can't put a price on creativity but good creative recruiters know it when they see it and know when to pay for it. Unfortunately advertising agencies are behind the curve across the country as I've found many of my former students deciding to pursue other career opportunities with higher starting salaries.
Mae Lon D
Compensation and Performance Management Consultant, Expert Witness, Keynote Speaker, Author, Vistage Member
I agree with many of the comments made here. Advertising is a glamorous job where supply is greater than demand. People will work for low wages to get a foot in the door. However, my experience with advertising related businesses indicates that once the employee gets a few years of experience, damaging turnover can occur if the employer is not attentive to providing more agressive compensation opportunitites as well as satisfying work to good performers. Research shows that the average employee will change jobs for a 10-15% raise. I recommend the use of incentive plans to provide motivating and satisfying rewards when individual and company financial performance targets are met. This can reduce, but not eliminate salary increase pressure and helps to assure that those who contribute the most receive the majority of the rewards.
I think you may be comparing apples to pears.
Apprentice plumbers and kindergarten teachers all start off at different ranges.
Advertising and communications jobs are notoriously low paying to start with, not to mention the work can be grueling, mundane and a little disheartening for new grads (I was unprepared to be sending FedEx packages and faxing at my first job with a Y&R affiliate).
What is interesting to me is how the ranges differ by geography. Here in San Diego, they tend to pay less than in NYC and attribute it to the "sunshine tax." It's not that sunny though and I advise people looking for jobs in any marketing to demand what they're worth, if they can. If you're entry level though, you'll have to take your lumps.
Jonah H
Chief Consumer Coach (CCC) at EXIT3A.com
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First, ad agencies are cheap. Second, blame supply and demand - too many people willing to work for nothing. Third, blame the lack of credentials/education needed to start a ‘career’ in advertising. Lastly, blame the media. Everyone else seems to.
Peter B
Student at Virginia Polytechnic Institute and State University - Pamplin College of Business
This is a very interesting topic. My girlfriend is graduating this December and has received an employment offer from a major healthcare advertising agency in New York City. The salary is $38,000. As you may know, the cost of living in New York is extraordinarily high. So her salary adjusted for COL, would be in the neighborhood of $28,000 or less. Pretty poor, IMO, for a college graduate. The posts by other members here has really helped us to understand why salaries for entry level graduates in this industry are artificially depressed. Her degree is in Marketing Management. Do you think that it would be better, in terms of time-value of money/ long term earning potential, to take the position and work her way up or to look for another related career field, such as sales? We are interested in hearing your thoughts/insights and any advice you may have on this subject.
The maxim I've always heard is "You're underpaid for the first 10 years, and overpaid for the last 10."
I'd check the salary monitor at Talent Zoo. For the markets I've looked into, it seems pretty accurate.
Links:
No, we actually pay a bit higher than the going rate for the market
