Advertising agencies dedicate a higher percentage of revenue than almost any other business to personnel expenses. Compensation and employment levels, of course, are key determiners of agency profits.
To get a picture of where salaries stand now at agencies in each region of the country, we enlisted the accounting firm Arthur Andersen to help us query 355 full-service U.S. ad agencies, typically those with revenue of $10 million or more. We sought to determine salary and bonus payments—total cash compensation, in other words— earned by the top executive as well as the average employee in the creative, media and account-service sectors. The survey also asked for data on hiring and salary freezes, as well as layoffs.
We kept the form simple—just 16 questions—and anonymous. Completed questionnaires were returned directly to Arthur Andersen. We don't know which agencies participated, just their size and location.
The response rate was greater than 24 percent and appears to have yielded valid and coherent data for most measures across the six regions where we publish.