Related Posts
Do all FAANG companies offer a joining bonus?
I joined KGS in feb 2022, we recently got a mail regarding timeline of appraisal and bonus payout from the partner. My reporting manager hasn't yet reached out to me regarding goal setting, not sure if that happens here. Can you pls help me to know what all things we need to do from our end for the appraisal cycle and bonus payout? Since I'm new to this company KPMG KPMG India
More Posts
I got the job. That is all.
Additional Posts in Advertising
Is the emperor wearing any clothes?
I got the job. That is all.
What’s it like producing at 360i NY?
New to Fishbowl?
Download the Fishbowl app to
unlock all discussions on Fishbowl.
unlock all discussions on Fishbowl.
I’ve always heard that we are underpaid half our career and overpaid the second half. Curious where the line is drawn.
It’s when your salary surpasses that of a public school teacher. What we do is bullshit, but we’re capitalizing on it. I’m definitely not doing the work or providing the worth of a doctor or otherwise
A lot of different ways to answer this. IMHO, it’s when your salary surpasses that of a doctor
@BBDO 1, you’re only halfway there. You need to account for overhead and margin. Those numbers are rarely shared broadly throughout the agency.
“Profitability threshold for your billing rate” -> um what? 😅
@AD1 I feel like this is pretty easy, but:
You can take your salary and figure out how much you make an hour. Thats the amount the agency pays you.
Then there's an hourly rate the agency bills for you for to clients. Thats the money the agency makes because of you.
As long as they make more than they pay you, that's what they call a profit. When you cross that line though, profitability threshold.
Im a stupid GCD and it made sense to me right away. Seems like pretty elementary stuff for an Account Director, but Im sure youre doing your best.
At my agency, on my account, we are billed by title. We charge our client the same amount of money for a SAD regardless of what that SAD's salary is. Assuming a similar output in quality and efficiency of work, a SAD that is at the bottom end of the pay scale is more profitable per hour than one at the top end of the pay scale. As OM1 pointed out, there are other factors at play than just the straight bill vs. cost ratio. If you're at the top end of the pay scale for your title, you're going to be one of the first that gets looked at when the financial belt gets tightened. If you're bringing in high value, that will be taken into account. If you're not, that will also factor into the decision.
ACD/CD+ start making money that can't be easily overlooked when times get tight, and they're much more difficult to re-allocate when a piece of business is lost. Agency just can't afford to have unallocated CDs for very long.
As for exactly what that threshold is, I'm sure it varies by agency and account, and probably even position. I assume I'm under it since I'm still employed. But I guarantee you my Management Director and Finance know exactly what it is, even if our Account Director doesn't.
It's when your salary exceeds the profitability threshold for your billing rate. Different for every position, but generally not a huge concern for creatives until we start talking ACD money.
@SAD2 how do we find out our billing rate? How how do we find out its profitability threshold?
SP: ask a producer or a new biz person for the rare card, it’s not a secret.
I'm surprised I understood it at all. 😃 Im just lucky the matrix still needs banner headlines to be written by humans. For now.
Well on your way to learning all the things, BBDO1.
When clients no longer want to pay your billing rate and you get swapped for a cheaper and likely younger person and your agency doesn’t think it’s worth it to pick up your unbillable time because you aren’t a rainmaker
Complicated to ascertain. Its a bit mathematical. Are you holding down fee? That has value in a volatile marketplace. Can you win new business? If so, that's worth a lot. Is your work what the agency brags about? Or what they bury? If your work pulls in clients, that has a value.
Typo above: it’s rate card. Your agency has one and they are easy to lay hands on. Your title has a rate. Online calculators should help figure out your overhead roughly but you could also just ask your CFO the overhead per employee. Then BBDO and MD1 have it from there.
@VP ❤️❤️
Hey SAD1, I run a $18M account so I know how it works. Managing Director is right re: overhead and margin. It’s both more complicated and more simple than you think. But I will say that any agency finance dept running a tight ship can or should be able to weather the storm of salary changes, incl promotions etc, especially at ACD level through forecasting/float. If the agency isn’t making profit on your salary then you are under billed and badly managed, not “overpaid"👍🏽