The common fee models
- Monthly retainer: a fixed fee for a defined scope of work each month.
- Project fee: a price for a defined deliverable, such as a website or a campaign.
- Percentage of ad spend: common in paid media, where the fee rises with the budget.
- Hourly rate: used for flexible or small tasks.
- Performance fee: a share of results, which needs very clear measurement. Many proposals mix two of these. Make sure you understand which part changes when your spend or scope changes.
What drives the price
Four things move an agency price the most.
- Scope: the number of channels and deliverables.
- Seniority: who does the work and who only attends meetings.
- Complexity: markets, languages, products and approvals.
- Speed: how fast you want results and how much is needed upfront. A low price with a large scope usually means junior people spread thin. A high price with a narrow scope should buy senior attention.
Compare proposals on the same brief
Give three agencies the same brief and ask them to state what is included, who does the work and how often you will talk. Put the answers side by side. The cheapest proposal may leave out reporting or access that the others include.
Costs that are easy to miss
- Ad spend, which is usually separate from the fee.
- Tools and licenses.
- Creative and production.
- Set up fees.
- Extra charges for reports, calls or changes. Ask for every cost in writing, and ask which costs will rise.
Match the fee to your budget
A common rule is to match the fee model to your size. Small budgets suit fixed fees, since a percentage of a small spend can leave too little to cover the work. Large budgets benefit from a mix with a cap, so the fee does not grow without limit.
Protect yourself in the contract
Keep ownership of your accounts, content and data. Agree a notice period you can live with and a review after the first quarter. Before you sign, paste the proposal into Pitch Check to see unclear promises and one sided terms.
Where to read more
The guides for each type of provider explain what a fair offer looks like: SEO companies, PPC agencies and digital marketing agencies. For the selection process, read how to choose a marketing agency.