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How Much Does it Cost to Hire a Marketing Agency?

Originally published in April 2020. Updated on October 4 2022.

Many business owners like yourself are wondering: is marketing a good investment? You may have heard that digital marketing can be an expensive endeavor, but the ROI has a great payoff. It’s understandable that you may be hesitant to pour money into marketing and have probable reservations about using a digital marketing agency. It can daunting to trust someone else with capturing your brand well and getting you more customers, but there are many benefits of outsourcing your marketing to a digital agency that has proven they can deliver on their promises.

Choosing to use a digital marketing agency can come with many questions. How much does it really cost to hire a marketing agency? Why is digital marketing so expensive? Is it really worth it? Does it make a difference to pay this much for marketing?

We know these are important questions to answer when trying to decide if investing in marketing is the right choice. So, here’s an overview of how much it costs to hire a digital marketing agency and how this partnership can pave the way for future growth and success for your business.

Are you interested in how Beacon Media + Marketing can help your business? Learn more about our work and how we can help your business thrive!

Why Do Costs Vary When Hiring a Digital Marketing Agency?

The cost to hire a marketing agency can vary to surprising extremes. It depends on many factors, including company size, reputation, the scope of work, and even geographic location.

Digital marketing agencies used to bill on an hourly rate or a quote for an entire project. However, in 2022, most marketing firms have changed to charge by monthly revolving services.

Businesses typically prefer this over an hourly charge, as it makes a monthly budget predictable, and they’re not nickeled and dimed by unexpected costs.

Agencies will often have different hourly rates for services such as project management, graphic design, illustration, programming, creative direction, content creation, or strategy development. The cost to hire a marketing agency will often vary based on the market rates and the skill or experience of the person performing the task.

Demand is typically high for senior-level staff, and their talent will come at a higher hourly rate. Project billing considers all the different rates, skill sets, etc., to get the project done and provides one flat fee. It puts the burden on the agency to work efficiently to ensure they meet their deadlines and their profit goals. Keep these things in mind when researching the cost of hiring a marketing agency because this will help you find the right one to fit your needs.

How do Marketing Agencies Charge Their Clients?

How Much Should You Spend on Marketing? Infographic

So, there is no clear answer on exactly how much it’ll cost to hire a marketing agency. However, four main variables will factor into the answer: hourly billing, project billing, revolving charges, and managing budgets. How much money you have available to spend on marketing is a significant component of finding the right marketing agency.

Typically, the average range for how much businesses spend on marketing is determined by their company size and overall revenue. On average, companies will use the following percentages of their revenue to spend on marketing.

  • Small Business: 7–8%
  • Mid-Sized Business: 10%
  • Enterprise Business: 15%

With that budget in mind, you can analyze how firms usually charge their clients to see which one works best for you. Marketing is an investment, so knowing your options is essential for a greater payoff. The following is a run-down of how marketing agencies typically charge their clients and the average prices.

Hourly Billing Means an Unpredictable Cost

Digital marketing agencies can bill by the hour for some projects like an accountant, but most often marketing consultants or freelancers are the ones to charge an hourly rate. Several factors can contribute to the hourly rate, such as geographical location. This can make a huge difference as local competition is taken into consideration.

For example, a marketing agency in New York City might bill an average of $500+ per hour. In contrast, in other regions of the United States, a bill of $300+ per hour is considered standard (according to the American Associate of Advertising Agencies). In smaller areas or markets, an average cost can range anywhere from $95-$335 per hour, depending on the service and skill of the person supplying the service.

Many agencies have turned to a “blended rate.” This is a rough average rate for all services and skill levels. This keeps the accounting simple, and with smaller agencies, it can work in favor of the client since they will get even senior-level staff involvement at an average rate.

Project Rates with Potential Budget Creeps

Quoting work on the whole project, instead of per hour, is much more challenging when assessing the cost of hiring a marketing agency. As the agency will need to estimate the amount of time it will take to complete the project, you’ll need to shop around and see the best option for price and quality.

A project rate approach allows for budget creep, as the assignment may start as a simple website redesign. But this could be tweaked to include a blog roll, social media management, or corporate photography that bumps the price up.

Typically, the project cost will increase when the marketing agency sees how adding the service will increase your success.

A project many businesses will turn to a marketing agency for is a website redesign. The average prices for updating your website can include:

  • Website Design: $2,500 – $100k / website
  • Website Copywriting: $25 – $25,000 / page

Marketing agencies must accurately estimate the time their staff will take to complete the job, and they are betting on little to no issues arising. As such, this model is much less flexible. The agency must ensure its staff is working efficiently and on point if it wants to make a profit. This can both help and hinder the client.

Keep your budget in mind as you’re talking with your marketing agency about the project you want to do. Depending on your financial range and industry, your project limitations will change.

How Much Do Industries Spend on Marketing? Infographic

If the scope of work is very clear, you’ll only pay one flat fee, making the cost of hiring a marketing agency simple and easy to assess. This can benefit small businesses operating on a tight marketing budget.

However, if there is any wiggle room or ambiguity about the brief or the budget, it will be less flexible to adjust. Because of this, it’s critical that you pay particular attention to the project scope when accepting a bid. The project scope should be very specific and explain in detail what the price does and does not cover.

Speaking from experience, beware of vague scopes of work that leave a lot to the agency’s imagination. Talk with them about the specifics. This will save you and the agency time and money.

Ask for examples if you’re interested in what kind of work they can provide with your budget. This is a great way to understand better the value of what you’re getting for the price you pay. It’ll also help you have a clearer vision of what you want the final product to look like and communicate that with the marketing agency.

Revolving Charges Ensures Predictable Costs

How much do Revolving Services Cost? Infographic

Inbound marketing is changing the scope of services and introducing a new paradigm of how billing is done to benefit the client. Revolving billing brings in the best of the project world, with the advantages of a long-term agency relationship, which makes the cost to hire a marketing agency more straightforward than ever.

Many agencies will have a tiered system of packages that can be adapted as needed. These packages allow marketers to provide consistency in monthly billing, as it’s not based on hourly billing and allows you to upscale services to tailor your needs. This means you know exactly what services you’re paying for each month, which is a tremendous asset for annual budgets.

The following is a guide on the prices of revolving marketing services:

  • Search Engine Optimization (SEO): $1,500 – $5,000 / month
  • Pay Per Click (PPC) Advertising: $9,000 – $10,000 / month or 5-20% of month ad spend
  • Email Marketing: $300 – $5,000 / month or $0.1 – $0.5 / email
  • Social Media Marketing: $900 – $20,000 / month
  • Content Marketing: $2,000 – $10,000 / month

These revolving services make it easier to understand how much you’ll spend on marketing each month. And with the advice of your marketing agency, you can see which services will provide the best ROI for your specific business. As your business grows, you can adjust your budget or services depending on the new goals you’re trying to reach.

Businesses with tight budgets can utilize the revolving charge process for their marketing to still benefit from marketing but stay within their financial range.

Do you want to see what services Beacon Media + Marketing can provide? Learn more about the excellent marketing services we can offer your business!

Simple Tips to Keep the Cost to Hire a Marketing Agency Manageable

Simple Tips to Keep the Cost to Hire a Marketing Agency Manageable Infographic

Keeping your budget under control is crucial, especially for small and growing companies. We’ve worked in the marketing industry for 20 years and have learned a few essential tools. Here are some tips we’ve learned all along the way to ensure you can afford the cost of hiring a marketing agency and get the best value possible.

  1. Match your company up with an agency that is similar in size. Typically, larger firms will charge more than smaller ones, so choose a marketing agency matching your size and business goals. Not only with the cost be within a reasonable range, but the agency will often understand where you are at as a company, your goals, and even your struggles because they’ll be able to relate.
  2. Have an open and honest conversation with your marketing agency about your budget and its limitations. Most often, this does not result in the agency spending the entirety of the budget but instead gives them the ability to make the most of what you have to spend. This can include adjusting your services or strategy to match your needs.
  3. Establish benchmarks for the project based on results and only increase the budget as the marketing increases your bottom line as a company. This will ensure the cost to hire a marketing agency stays within your comfort zone and doesn’t accidentally blow out.
  4. Commit to a long-term relationship with an agency. Often, marketing agencies will extend special pricing to companies willing to commit to working with them for a length of time. It also allows them to work through different marketing strategies to find a successful and effective plan for your business.

What is the Value of Investing in a Marketing Agency?

Check Out These Digital Marketing Statistics Infographic

It’s hard to encapsulate the true value that good marketing can make to your business. It’s prevalent that marketing your business helps with brand awareness. However, other marketing services such as Google or Facebook ads can also help escalate your business by bringing client conversions.

Over time, companies have invested more money in marketing than their sales teams. Marketing strategies take up a large chunk of business success now. And with more investments happening towards marketing, finding an agency that is right for you is even more critical for success.

There are several benefits to hiring a marketing agency, including:

  • Having professionalism and expertise in the marketing industry.
  • Widening the talent pool of marketing experts who work on your business.
  • Gaining new perspectives to brainstorm the best method of marketing your company.
  • Staying up to date on all new effective marketing strategies.
  • Controlling and interacting with everything to ensure that it reflects who you are.
  • Focusing on growing your practice by providing your products or services.
  • Saving money by outsourcing your marketing instead of in-house marketing.
  • Creating a cohesive marketing strategy for long-term growth and sustainability.
  • Obtaining more content with the efficiency of a marketing team.
  • Achieving greater results with concrete data and client conversions.

Although some marketing services can be done by yourself, the whole scope of marketing is a huge undertaking that can take away from your business if done wrong. Pairing with a marketing agency allows you to benefit from a cohesive and effective marketing strategy guided by experts.

It also lets you understand which marketing aspects are doing well and what could be improved upon. For example, your website is one of the most critical aspects of your marketing. The Hubspot State of Marketing Report (2021) states that your website is the number two channel used in marketing behind social media.

In other words, if your website is outdated or not effective for a friendly user experience, this can be a significant hindrance to your client conversions. Working with a marketing agency lets you have data on how well your website functions and get advice on what would be successful. Then you can utilize their website design and development services to update it and watch your customer numbers rise through organic website traffic.

How to Choose Your Marketing Agency

Of course, a critical item to keep in mind, other than the cost of hiring a marketing agency, is whether or not the agency is a good fit for your business. The right fit isn’t always about financials; in fact, the money part is only one piece of the puzzle. It is important to evaluate based on experience, creative approach, company values, business procedures, and the agency’s skill set.

Discuss with potential partners upfront about the cost of hiring a marketing agency and your budget expectations. We are firm believers in transparency and community. Make your needs clear and make a decision based on your company values. Who knows? This might be the beginning of something beautiful.

Take Your Business to the Next Level with Beacon Media + Marketing

Are you ready to see how a digital marketing agency can transform your business? Take your business to the next level with Beacon Media + Marketing! We offer several services that will improve customer conversions, such as website design and development, content marketing, social media marketing, paid advertising, branding, and more. Our Beacon Media + Marketing team is excited to work with you to appeal to your target audience and encourage them to take the next step.

Are you ready to see how Beacon Media + Marketing can elevate your business? Schedule your free consultation today!