How Much Should an Agency Pay a New Business Hire? This Study Reveals How Much

Heads of growth, directors of new business, chief marketing officers—all roles with similar remits that have grown in importance over the years as agencies are forced to claw their ways toward growth in a world where fees are shrinking and shareholder pressure is growing. This past year, there's been movement across the industry, most notably TBWA plucking Ben Myers from Johannes Leonardo, which in turn recently hired John McCarthy of DDB San Francisco as its CMO. Mojo Supermarket found itself reversing course on needing a head of growth, bringing in Ray Kang. Dentsu Creative elevated Abi Evans in January to a head of growth role, while WPP's Wavemaker invested in an expansion of its global growth team, hiring Lynne Reilly as chief growth officer for North America as well as adding execs in other markets. Barbarian snagged Henry Fernandez from VCCP to fill a executive director of business development and marketing role. Everyone is grappling with: 'how much is this person worth and how do I compensate them?'Simone Mandel, NBZ Partner As the market evolves, agencies are finding themselves asking how much they should be paying top talent in new business. NBZ Partner, a consultancy that helps agencies create their own growth strategies, was asked that very question by a client. So NBZ surveyed the industry and shared the findings exclusively with Adweek. Some of the results weren't surprising—holding companies pay more than independent agencies. But other findings stood out—mainly that commissions have increasingly become a part of a new business professional's salary. Simone Mandel and Rachel Segall, the founders of NBZ Partner, worked with Eli Pakier of The Field Trip Department, a strategic marketing firm for the survey, and are conducting a second wave of the study looking specifically at commissions (you can access the full report and participate in the second wave on commissions here). The results The data is based on 65 respondents, with about three-quarters of the responses coming from employees of independent agencies. The report found that roughly half of the new business professionals who participated in the study make more than $200,000 per year, and most of those making over $200,000 had 10 years of experience or more in the industry. The report also found that half of agency biz dev folks earn commissions for their work. While Segall and Mandel don't have data to benchmark how prevalent commissions were in the past, they believe that rate is far higher than in the 2010s. Salary bands (excluding commission/bonus) ranged widely: The study also found that commissions were common at any salary level, with at least one-third of respondents at each salary band above $100,000 receiving commissions, but they are increasingly prevalent among higher pay bands with 67% of respondents who make $250,000/year receiving commissions and 53% of those making $300,000. They are more common at holding companies (67% receive them) than independent agencies (45%). "Advertising is a team sport," Pakier said. "But when you're in new business, you're probably the one who's incentivized individually, the rest of that organization while they're part of that team might not be incentivized in the same way that the person who is directly tasked for that growth." Higher salaries are found at bigger companies: Salaries were typically higher at holding company agencies, but working for a holding company comes with higher pressures to deliver results due in part to the shareholder-induced drumbeat to drive constant growth. Segall and Mandel added that independent agencies can accelerate someone's career faster than a holding company agency might be able to. "When you go to a smaller agency, you have a lot more control," Segall said. "There's perhaps a quicker trajectory from junior level to a growth leadership level." Smaller agencies often have just one person running new business, and even at larger agencies, it's typically one of the smallest departments, Mandel added. Advice for employees Be wary of how much you rely on commissions, Segall said. Those in charge of new business are often the only ones whose compensation is "in jeopardy if the rest of the team does not deliver a win." She advised employees to negotiate a compensation structure that is not tied "to elements that are too far out of your control." ‘Partnership Is a Multiplier’: 9 Execs on How CMOs Can Foster Better Agency Relationships It's also critical you do your due diligence on the full team you're depending on to hit your target compensation, getting to know the strategists, creatives and any other key figures in the pitch process before joining. "Make sure that you really understand what the ambitions are, what the challenges are and are comfortable with what you have at your disposal to win," Segall said. When interviewing for a new gig, Mandel recommends treating that agency like you would a potential new business client. Just as you'd vet a client to make sure they have created an environment that's suitable for success, evaluate the agency the same way. Higher salaries are seen more at holding companies: Advice for agencies Smaller agencies are increasingly finding they need a head of growth. For instance, Mo Said told Adweek earlier this year that in order to successfully service current clients while pursuing new business, Mojo Supermarket needed a head of growth who could seek out clients they felt were the right fit for the agency. For many other agencies, the landscape is just so competitive that they cannot get by without a new biz lead, Mandel said. YouTube Is Now TV—Here’s Why Food and Beverage Brands Should Embrace It "They have to be more conscious and (have) more rigor in terms of how they grow which takes bringing somebody in," she added. "Everyone is grappling with how much is this person worth and how do I compensate them." Clients don't often grade the new business team in report cards, Pakier said, adding they'll typically rate strategy, creative, chemistry and operations, but not the new biz team, which makes their results for the year highly dependent on wins and growth. Employers should recognize "there's a lot of skill in how they bring out the best in everybody, how they understand those clients' needs and what's going to not just win but what is going to help grow that client's business."