What a marketing agency costs, and what actually moves the number

The ways a marketing agency charges, and what each one really buys

Almost every quote you receive is one of five shapes, and the shape tells you more about the year ahead than the figure does. Ask which one you are being offered before you argue about the number, because the same monthly total behaves completely differently depending on what it is attached to.

Most real arrangements combine two of them. A retainer for the work, with media spend billed separately and paid straight to the platform, is the common case. A buyer who does not separate those two in their head will believe they are being charged twice, or will compare a quote that includes budget against one that does not and reach a conclusion about value that is really a conclusion about arithmetic.

• A monthly retainer. You are buying a share of a team's week. The figure is set by how many hours the agency expects to spend on your account and by how senior the people spending them are, which is why seniority moves it more than results do.
• A percentage of what you spend on advertising. You are buying management priced as a share of media. The fee rises with the budget rather than with the work, and it falls on exactly the days when the correct advice is to spend less.
• A project fee. You are buying a defined piece of work with an end: a site, a launch, a rebuild of the tracking. The risk of it running long sits with the agency, which is the whole reason this shape exists.
• Payment per result, usually per qualified lead or per sale. You are buying an outcome, and you are also buying somebody else's definition of what counts as one, which is where these arrangements come apart.
• A hybrid, which is what most mid-sized agencies actually sell. A base retainer, a smaller percentage on top of media, and a separate charge for anything that looks like a build.

Why no honest average exists

The average cost of a marketing agency is the most searched question in this category and the least answerable one. The figures in circulation come from directory listings and from surveys that agencies fill in about themselves, and neither controls for what is inside the price. An average taken across arrangements that differ in scope is arithmetic wearing the costume of guidance.

The gap between two quotes for one brief is usually not margin. It is one side having assumed it produces the creative and the other having assumed you supply it. It is one side pricing the tracking work that the other intends to raise as a change request in month two. It is one side reading your brief as three channels and the other reading it as one.

So the useful question is not what other businesses pay. It is what this quote includes, what it excludes, and what happens to the figure when something nobody asked about turns up in week three.

The variables that actually move a retainer

The number of channels is a weak predictor. What moves the figure is a short list of conditions inside your business and inside the arrangement, and every one of them is knowable before anybody signs anything.

• How many people touch the account each month and how senior they are. This is the retainer, more than any other single input.
• Whether creative is produced or supplied. New advertisements every month are the largest recurring cost in paid media, and an agency that quietly assumes you will hand them over has quoted a different job from the one you thought you were buying.
• Whether your tracking already works. An account that cannot tell which enquiries came from where cannot be optimised, and fixing it is a project rather than a line in a retainer.
• How many markets and how many languages. Each is its own account structure, its own creative and its own reporting, so a second market is closer to a second engagement than to a small extension of the first.
• How often you want to be reported to, and whether the report is generated by a tool or written by a person who has looked at it.
• Who holds the accounts. An agency running your advertising inside its own business manager is holding an asset you paid to build, and recovering it later has a cost that never appears in the quote.

That last one is worth settling in writing on the first call. Who owns the accounts and the data is a commercial question rather than a technical one, and it is cheap to answer at the start and expensive to answer at the end.

The number to work out before you take a single call

A price is only high or low against something, and the something is not what other businesses pay. It is what a customer is worth to you, and how many more of them the fee has to produce before the arrangement breaks even.

Work it out roughly, on paper. Take the gross profit on an average order rather than the revenue, and multiply it by the number of times a typical customer buys before they stop. Then divide the monthly fee, plus whatever media budget goes with it, by that figure. What comes out is the number of extra customers a month the arrangement has to deliver before you are level. Sit with that number for a minute and decide whether it sounds plausible for your business.

Most owners have never run this, which is why quotes end up judged against instinct or against whichever number arrived first. If the work you are weighing up is internal rather than external, our manual work cost calculator runs the same shape of arithmetic and gives you an annual figure to hold a quote against.

What a Google Ads agency and an SEO agency charge, specifically

A Google Ads agency charges a management fee that sits on top of the money you give Google, and those are two separate payments going to two separate places. If a quote does not make the split obvious, ask for it, because a single monthly figure that quietly includes media makes a small management fee look large and a large one look reasonable.

An SEO agency charges a monthly fee for a process rather than for a position. Nobody sells a ranking, and anybody who offers one is selling something they do not control. What you are buying is a quantity of work per month: pages written or rewritten, technical faults fixed, and whatever off-site effort the agency genuinely does rather than merely describes. Ask what share of the fee is content production, because on most engagements it is the majority of it.

If that answer makes you wonder whether you could do it yourself, that is a reasonable thing to wonder, and it has an honest answer either way. We wrote it out in should you hire an SEO agency or do it yourself.

What changes when the same work is run as a system

Everything above describes buying hours. Hours have one property no pricing model mentions: they stop the moment the invoice does. A year of retainer buys a year of campaigns, and on the day it ends you own the account, the creative you paid for and no capability whatsoever.

The alternative is not cheaper in month one, and anybody telling you otherwise is quoting a sales number. It is a different shape. The repeatable part of the work is built once and left running inside your own accounts: the reporting, the reconciliation between what the platform claims and what your records show, the first draft of every creative variation, and the reply that goes out to an enquiry at eleven at night. The judgement stays with a person, because judgement is the part that does not repeat.

This is worth arguing about rather than assuming. Paid media in particular is genuinely recurring work, and pretending a one-off build finishes it would be dishonest, so we price it as recurring. The four ways to own a system set out where that line falls and where each model is the wrong choice.

Two situations where the honest answer is not yet

If you have not yet sold the thing without advertising, an agency will find out what the market thinks of your offer using your budget. That is a real service and it is an expensive way to buy an answer you could get from ten conversations. The first proof that people want it should cost less than a retainer.

The second case is a business with nobody free to answer the enquiries. Advertising is a machine for creating obligations to reply, and a business already behind on replying will simply be more visibly behind. Fix the answering first. It costs less and it improves every channel you already have.

Common questions

How much does a marketing agency cost?

There is no standard figure, because the price is set by how many people touch your account each month and how senior they are, not by a menu of services. Ask which charging model you are being offered, whether creative production is included, and whether media spend is inside the number or paid separately to the platform. Then judge the total against the gross profit on one of your customers.

What is the average cost of a marketing agency?

Averages in this category come from directory listings and from surveys agencies complete about themselves, and neither controls for scope. Two arrangements at the same monthly figure can differ on creative, on markets, on reporting and on who holds the accounts, which means the average is describing a spread rather than a price. Compare inclusions instead.

How much does it cost to use a Google Ads agency?

There are two payments and they go to different places: a management fee to the agency and the media budget to Google. Some agencies price management as a flat monthly fee, others as a share of what you spend. Ask which, and ask what happens to the fee in a month when the right decision is to spend less.

How much does it cost to hire an SEO agency?

You are buying a quantity of work per month rather than a position in the results, so the fee tracks how much gets produced. Ask how many pages are written or rewritten, who writes them, what technical work is included, and what proportion of the fee is content production. On most engagements content is the majority of it.

Should the fee be a percentage of my advertising spend?

It is common and it carries an incentive worth naming. A percentage pays the agency more when you spend more, which is a poor arrangement on the days the correct advice is to spend less. A flat fee removes that and turns the monthly conversation into one about results rather than about budget.

What is the 70/20/10 rule in marketing?

The 70/20/10 rule is a way of dividing a marketing budget rather than a way of setting one. The usual reading puts seven parts of the money into what is already proven, two parts into what is growing, and one part into things that will probably fail. It is a guard against spending everything on whatever worked last year. It says nothing at all about how much an agency should charge.