Slowed market, corporate recalibration
This time last year, Perceptor predicted the CMO market was going to slow. And it has slowed considerably, says managing director, Mark O’Connor.
“There are a number of reasons. The primary one is corporate confidence is low. They’re simply just cutting spending across all areas. It’s not just marketing, it’s across the whole recruitment market,” he says. “And it’s broader than usual, in that it’s across the whole B2B services market. Whether you’re in executive recruitment, consulting, or anything else, corporates have cut back on their spending.
“From the recruitment market perspective, this has come naturally at the end of a five-year cycle, which was pretty good. The two years leading up to Covid were good in terms of the recruitment market. The Covid cycle was very volatile, but overall it was strong and remained so the year after Covid.
“So there was always going to be a downturn this year. But because interest rates went up so quickly, corporate confidence has pulled back. It’s had this amplifying effect on the CMO recruitment market.”
That doesn’t mean there aren’t opportunities however, which both Tucker and O’Connor, are quick to emphasise.
“Yes, there has been gradual downsizing here and there but it’s also very category-dependent. There are categories doing really well that are investing, recruiting and beefing up their capabilities,” Tucker says. “Others are gently tweaking the dials and making cuts here and there. Businesses are taking the opportunity to trim their sails a bit.”
Mi3’s latest FY25 Outlook Benchmarks report backs this up. Our report indicates marketers are operating in a three-speed economy, with one-third holding more budget than last year; one third holding the same budget; and one-third losing budget. By contrast, the 2022 edition of the State of the CMO survey from CMO magazine found the ratio of Australian marketers losing budget in 2022 compared to 2021 was only 11 per cent – more than six in 10 in fact gained budget.
Yet O’Connor was surprised to find CEOs and MDs surveyed as part of the firm’s latest annual report, Market Trends and Salary Review, were relatively upbeat.
“They were upbeat on the back of having done some pretty good cost control over the previous 12 months. They were saying we’ve made some hard decisions, and we think the medium term looks good. But that isn’t translating into going out and hire a brand new CMO because we think it’s all about to be growth, growth, growth,” he says.
“But to your point, I think it’s frustrating for people in candidate mode. Corporates aren’t panicking – it’s not like the GFC where everything has shut down and there was literally no hiring. It’s a cyclical downturn and the volume of hiring has come right off.”
Not surprisingly, categories where there has been more hiring over the last few months are the industries doing well.
“Travel, travel insurance are strong, financial services is starting to pick up, FMCG/consumer goods are reasonably resilient; it never goes through booms, and it never goes through troughs,” says O’Connor. “The sectors hurt over the last 12-18 months have been technology, professional services, plus financial services nine or 12 months ago. The banks went hard and they went early [with cuts]. But now, there’s a bit more optimism there.”
The impact on salaries
The other good news is salary expectations have held. To be fair, both Tucker and O’Connor note any spikes in salary to occur during the height of the pandemic already largely levelled out before this latest slowdown.
“CMOs have kept pace with other functional leads. Therefore salaries have increased basically with inflation,” says O’Connor. “Within the marketing world, where the big salary increase happened during Covid was more in lower mid-level roles focused on operationalisation of the martech and the digital. If you think about it, everyone built out digital and ecommerce in that early Covid timeframe. That’s where the big bubble of demand happened, so that level of candidate experienced big percentage increases.
“If you went into Covid as a $120,000, 26-year-old, you might have come out of Covid as a $160,000, 28-year-old. Because your level in the marketing team really experienced this inflation as every single industry was trying to hire those types of skills. Data analytics was the same, ecommerce was the same.”
In its latest annual report released in June, Perceptor revealed senior executive salaries for chief customer officers are sitting at $450,000 + benefits in ASX300 or large global corporate firms, while mid-size and high-growth companies are paying $325,000 + benefits on average. Slightly down the salary order, chief marketing officers are sitting at a $400,000 + benefits in the listed or large corporate entities, and $300,000 + benefits in the mid-size and high-growth companies.
This dips to $222,000 – $320,000 + benefits for heads of marketing; then between $200,000 – $250,000 for heads of customer experience or heads of brand. A senior marketing manager can expect anywhere from $150,000 to $200,000 in base salary depending on organisation size.
“Employers will pay good money for really strong candidates, particularly in those areas of specific skills, such as customer marketing, deep digital skills, experience in emerging categories like sustainability or new energy,” Tucker adds. “It’s a supply and demand equation.”