Are you considering working with a marketing agency but worried about your budget? Have you compared agencies and noticed a wide range of prices?
Reaching out and working with a marketing agency can be daunting, especially if you’ve never worked with one before. You probably have loads of concerns running through your head, asking yourself, are they worth it? Or what is a fair price?
Marketing companies can vary in price, and if you’re looking to get a better understanding of what goes into how agencies set that number, then look no further. We’re going to take you behind the scenes of why agencies might cost what they do, so you can make sure you find the right marketing agency for your budget.
In this article, we’ll explore the top 5 factors that influence agency pricing:
- Specialist area
- Location
- Project pricing
- Size
- Experience
Specialist area
Specialisation is a major factor in determining agency pricing. If you work in a niche industry, you might be looking for a marketing agency that not only understands your area but specialises in it. Specialist agencies can offer great value because they know your field inside out, but this expertise often comes with a higher price tag.
When it comes to choosing between a specialised agency and a non-specialised agency, the non-specialised agency may have lower costs upfront.
However, in the long run, this might not be the cheaper choice, especially if industry knowledge is critical to your marketing. The non-specialised agency will likely require quite a bit of support from your team to understand the brief and review all outputs for industry accuracy, taking up precious internal time and resources. On the other hand, a specialised agency will likely be able to work more independently, freeing up your team’s time to do other business-critical activities.
If you’re torn between both, a good tactic might be to split your marketing between specialised and non-specialised, allowing you to benefit from both agencies.
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Location
You might think that in this remote working world, location will no longer play a role in price, but that isn’t true. Even if your marketing agency has a remote team, their offices will still have overheads.
Does your marketing team work in a city? Do they work in the same country as you? Wherever your marketing agency works, the cost of living will be different, and their prices will reflect this.
For example, a marketing agency in New York will likely cost considerably more than a team working in Stevenage, UK.
Project Pricing
How an agency charges for its services is another key factor in pricing. Do they charge by the hour, work on retainers, or offer fixed project rates?
Curious about whether hourly rates or project-based pricing is better for your company? Check out our article on how Podymos prices projects.
Experience
Experience can be another factor that agencies consider when deciding their rates. While lower rates don’t necessarily mean that the work produced is of a lower quality, it might mean that the company is young and looking to encourage new clients to work with them.
Older and more established companies often charge higher rates as they have a proven track record, so they might not feel the need to lower their rates to bring in new clients as they have an already established clientele and reputation.
Size
The size of your agency also plays a factor in how much they charge. If your marketing agency is on the smaller side, they will have lower overheads allowing them to work at a lower rate.
On the flip side, you will likely find that larger agencies result in higher costs due to more overheads.
What does this mean for you?
These 5 factors are all important to keep in mind when you’re looking to work with a marketing agency but are confused by the seemingly big range of costs.
When it comes to finding the right agency for you, think about the level of specialisation you need, how much time you have internally to work with your agency and how you can split your marketing spend across agencies so they complete the projects they’re best at. For instance, you may find that an agency closer to home is cheaper, but are they able to offer the specialisation that you want?
Whatever is important to you, make sure that’s reflected in the agency you choose.