Hiring A Digital Marketing Agency: The Cost And The Benefits

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So, you need a digital marketing firm to fulfill all of your digital marketing needs. From social media marketing to Search Engine Optimization (SEO), web design, and e-Commerce, hiring a digital marketing agency to help build an online presence for your business can be very beneficial. But, aren’t agencies expensive?

Well, what if I told you that hiring a digital marketing agency can actually save you money? Depending on your firm’s price model, an agency can save you time and money as compared to doing it all yourself.

In this article, we are going to dive deeper into the costs and benefits of hiring a digital marketing firm. First, let’s start off with the 7 different types of billing.

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7 Different Types of Marketing Agency Billing Structure

When hiring a digital marketing agency, you should always know exactly what the billing and costs will look like. In the world of digital marketing firms, there are several different billing structures including hourly, retainers, and value-based billing.

Keep reading to learn the pros and cons of these pricing structures.

1. Hourly

For a young and up-and-coming digital marketing agency, hourly billing is the ideal structure. Here’s why.

Hourly billing works well for less-experienced agencies because they may not know how long a project can take. By charging by the hour, they won’t accidentally short-change themselves, particularly if they end up with a client who requests a lot of revisions and edits.

The average blended rate for a marketing service agency in today’s market is $150 an hour to $200 an hour in most markets. In the bigger markets like New York or California, it runs closer to $250 an hour.

2. Per-Project

While the per-project billing structure is more common with freelancers, it’s still something to be aware of. You could be charged by the project, rather than the hour. The benefit of this pricing model is that you can ask for as many revisions and changes as you’d like.

In fact, you can ensure the project is tailored to your exact specifications without the risk of blowing your marketing budget. However, if you have several projects you’d like the agency to handle, per-project billing can quickly get pricy.

per-project billing

3. Retainers

Another pricing model is retainers. If you plan on using the agency for a significant amount of time or have several projects you’d like them to work on, a retainer is the ideal setup for a company. This type of billing will allow you to request as many projects as you need without being charged individually or by the hour.

Luckily, most digital marketing agencies prefer a monthly retainer versus a per-project setup. This can also help your business regulate your cash flow and better balance out your marketing budget.

So, how much does hiring a digital marketing agency typically cost? The current average fee for a monthly retainer contract across the U.S. will typically range between $5,000 to $20,000.


4. Recurring

Some contracts are long-term, like those involving SEO. These longer-term projects will often use a recurring billing model. This basically allows for a flexible or discounted annual pricing plan.

One benefit to this is that it allows you to establish a relationship with the agency so they continue to learn what kind of content you prefer. Plus, recurring billing will save you money compared to the hourly rates.


5. Performance-based

Typically, an agency that charges based on a performance-based model is one that is established and has the reputation to back it up. Because they have a reputation and plenty of history to prove their above-average performance, you may find a higher price tag. On the bright side, you have some assurance of the quality of work they offer.

performance-based billing

6. Value-based

With a value-based pricing model, the agency will charge you based on the value they can bring to your company, or rather the value their work can bring to your bottom line. Typically, this will be another tactic used by more established digital marketing agencies. Similar to performance-based billing, this price model can be a good indicator of the quality of materials you will receive from the agency.

7. Point Pricing

Point pricing is one of the most unique pricing structures, and it arguably provides the highest value to the customer. Just as the name suggests, this structure is based on points. An agency will assign points based on value. For example, 1 point  = 1 hour. Typically, you can buy packages of points each month.

At Chatter Buzz, we assign a set number of points to each deliverable based on how long it takes to complete a task.  For example, a blog post may be worth 6 points, but a landing page may be worth 20 points since it’ll require more time to complete.  The #1 reason you should hire an agency that uses point pricing?

Points NEVER change! If it takes longer for the agency to complete the deliverable than anticipated, you’re never charged extra as you would be with an hourly rate. Here are some other amazing benefits of point pricing:

  • Transferrable from month-to-month
  • Available to buy in packages
  • YOU get to choose how you use every point

Now that you understand the 7 different types of billing, let’s talk about the advantages of hiring a digital marketing agency over a team of freelancers.

Hiring a Digital Marketing Agency vs. Freelancers

Depending on the size of your business, you may have considered a freelancer to complete the digital marketing projects you have in mind. There are plenty of ways this can be beneficial, but also many reasons to turn to an agency.

One of the biggest reasons to use an agency is that you can save money. Let me explain.

Say you need to create an entire digital campaign for your business. For that, you will want to invest in social media posts, digital ads, video ads, and maybe even a podcast ad. To make all these pieces seamlessly fit together, you’ll need a copywriter, graphic designer, maybe a scriptwriter, an actor or voiceover specialist, and someone to actually implement all these marketing materials.

That’s a HUGE team of freelancers! Not to mention, they will all require you to pay per project so each and every part of your digital marketing campaign costs a fee for each and every freelancer you have working on it.

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So, what if you hire another in-house employee to join your team instead?

This also isn’t an optimal option for your business’ bank account. In-house hires require hours of training, a costly salary, bonuses, healthcare, and a computer… need I say more?

But when you hire a full-service agency, they’re already experts in their field, come equipped with the best tools and tech, and cost less than an average yearly salary!

While this may sound too good to be true, I assure you it isn’t!

BUT it’s important to note that full-service teams are not a good fit for every business. Factors like the size of the business and monthly revenue, should all be taken into consideration before you make any big decisions. Luckily, there are several free resources available to businesses to help them determine if in-house is a good fit for their specific needs.

Remember: you should always strive to see a return on investment to ensure you’re hired help is helping and not hurting your business!

Do you think your business will benefit from a full-service team? Read on!

Agencies Offer Flat Monthly-Retainer Fees

Instead, you could pay a flat monthly retainer fee by hiring a digital marketing agency. Since most firms range between $1,000 to $3,000, you won’t have to worry about how many revisions you want or if you think of another facet to add to your campaign. You can get a complete and thorough digital marketing campaign for the one fee.

It’s like the difference between renting a car and driving your own. Sure, renting a car is the right choice when you’re on vacation. But, for everyday use, your own is much cheaper. Similarly, you can save a ton of money simply by hiring a digital marketing agency with a monthly retainer.

freelancer vs agency

Price of an Agency vs. Freelancers

To compare the two using numbers, you can expect to spend anywhere from a couple hundred dollars to thousands for a freelancer. The average hourly rate for a freelancer is between $50 and $100. Imagine paying a team of freelancers $50 to $100 each every hour for your marketing campaign.

Instead, you could pay $1,000 to $3,000 for an agency and not have to count the hours or cut corners.

3 Advantages of Hiring a Digital Marketing Agency

Clearly, there are plenty of benefits to hiring a digital marketing agency. Here are just a few to keep in mind:

1. Save Money

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Hiring the right agency will save you money, especially for larger projects or campaigns. Freelancers who charge by the hour can add up quickly. Another option is to hire the people you need, but then there are the costs of benefits and equipment they will need.

By hiring an agency, you will be able to avoid the cost of onboarding new employees and providing benefits. Plus you’ll work with people who have specialized skills for what you need. This leads to the next advantage of a digital marketing firm.

2. Receive Specialized Attention

An agency will be staffed with people who have dedicated their careers to exactly what you need for a great digital marketing campaign. Furthermore, suppose you want to focus on data-driven results or improve your ROI. In that case, you can hire a technology marketing agency to ensure they pay special attention to this region of your business.

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With the fee you pay, you receive the specialized attention to your company that you need to increase your customer base and your revenue. Essentially, you’re paying for the skills necessary to make a digital marketing campaign work.

3. Increase your Revenue

Did you know that a successful digital marketing strategy can increase your revenue? For a marketing campaign to do well, it has to look professional and use certain techniques to reach your target customers.

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Here’s the good news: A digital marketing agency will know exactly how to make that happen. All you have to do is sit back, relax, and enjoy the increased revenue and broader customer base that comes from a great campaign.



As you can see, hiring a digital marketing agency can provide your business with several great benefits. Prioritize your projects and fully determine your budget before hiring one at all.

Shalyn Dever

Shalyn is the Founder & Chief Growth Consultant at Chatter Buzz. An engineer recruited by Google, she loves solving the most complex business growth problems and utilizing technology as solutions. She loves amazing UI/UX, out of the box SEO tactics and forward thinking paid campaigns.

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