They, too, are gaining preference over raises in salary because bonuses, unlike raises, are sensitive to fixed costs.
Such trends are the retention of cost-conscious moves enacted during the recession of the early 1990s.
It must have been a good year for ad agencies, because bonuses this year are ranging from a high of 32% of base pay for CEOs to 6% for chief copywriters.
By contrast, executives in the four VP-level marketing posts at marketers/advertisers surveyed by the AM&G study are seeing bonuses of 9% on the high end, for VP-brand managers, to an average 6% for VP-product managers and VP-advertising.
The lower bonus range in 1995 and the parsimonious pay increases for '96 afforded marketers may be influenced by a lower response rate-about 2%. But pay levels for both years appeared free of distortion. They virtually were the same.
"I'm not giving out the pay increases as before," says Robert C. Jaeschke, chief financial officer of Arian, Lowe & Travis, Chicago. "Business is more unstable than in the past, and rather than increase salary we turn to one-time payouts or bonuses based on performance. It's the old story. You have to keep everything variable. The less fixed cost the better off you are."
"We've gotten a lot more cost-conscious than we've ever been," says Phil Helser, director of finance at Lord, Sullivan & Yoder, Columbus, Ohio, referring not only to agency fee and commission pricing structures but to productivity levels.
While 21% of responding agencies say bonuses were set by a predetermined formula, and 30% by operational goals, the remaining 49% have no schemes.
Some don't even have bonuses. "We don't," says Walter Ohlmann, president-CEO of Penny/Ohlmann/Neiman, Dayton. "Why not just raise salaries and commit yourself."