And how does that affect what they pay their agencies?

Well this topic is sure to cause some angst among the marketing practitioners. A disclaimer is in order. There are dozens of variables that affect salaries and compensation. Some readers here will feel cheated and start looking for a higher-paying job with their next mouse click. Others will want to hide this post from their employer because they are clearly overpaid.  But no matter where you stand on the compensation scale, there is one lesson for agencies to learn that affects their ability to be reasonably compensated by their client.

Some years back I asked a well-paid CEO how people get asked to sit on corporate Boards of Directors. He explained that a CEO wants all his board members to be very highly compensated in their own careers. When board members rake in the big bucks, they will be less likely to question the CEO’s compensation because it seems reasonable by comparison. Board members who don’t make a lot of money in their own right will naturally resent approving big salary packages for the CEO.

If that is true, it might follow that agencies are better compensated by clients where the marketing executives are highly compensated. On the other side, an MD might resent an agency that gets paid more than they do.

You can see how ehow.com answered the “How Much?” question here: http://www.ehow.com/info_8323967_much-do-marketing-directors-make.html

One thing is true, smaller companies and organizations need, now more than ever, to be sure that both their internal and external marketing resources are well-compensated and incentivized to perform.

If you don’t pump fuel into the engine, and it sputters or stalls, there is nothing to drive that corporate business plan into action. All the best laid plans of all the highly compensated suits in the executive suite will fail because the CFO squeezed a few more bucks out of the MD’s package and the agency’s contract.

In essence, you get what you pay for.