If you’ve never outsourced your marketing before, or have gotten burned in the past, the world of digital marketing agencies can be challenging to navigate: dramatically different rates, various pricing models, vague offerings, and confusing terms. . .
Here, we’ll try to demystify these areas and give you an idea of 1) how agencies price their services, and 2) rough price estimates for how much you should expect to spend.
Disclaimer! We are a digital marketing agency that loves getting new clients as much as the next business. At the same time, we’ve found that our best clients are businesses that actively need the specific services we provide, so we’ll strive to provide helpful information you can use, whether or not you decide to work with us.
Table of Contents
- Common inbound services
- Inbound marketing costs
- How to vet a potential agency partner
- How we handle pricing
Common services offered by inbound agencies
What does “inbound marketing” mean?You may be wondering what “inbound marketing services” really are, and what you might be getting in an agency retainer.
Here’s my definition—
Inbound marketing: a type of marketing that aims to generate brand awareness and lasting client relationships by targeting audiences that actively need your products or services and providing them with resources and support that helps them achieve their goals.
Doesn’t narrow it down, does it?
That’s because “inbound marketing” includes a vast array of digital marketing strategies and techniques, and every agency offers a different set of offerings.
Still, some services are more common than others.
According to the HubSpot partners’ report of inbound and non-inbound agencies, these services were most often in agencies’ top 3 offerings (excluding generic descriptors like “inbound marketing”):
- Website design and development (46% of agencies) This refers to building and designing websites. 46% of the agencies said it was one of their top three services.
- Design & branding (29%): This refers to building a business’s unique identity.
- Content marketing (27%): This refers to using content like videos, blog posts, and whitepapers to attract, engage, and convert customers.
- SEO & SEM (21%): This refers to helping your brand get found in search engines.
- Social media marketing (19%): This refers to attracting, engaging, and converting customers using social media content.
According to the same report, many agencies also offer services like:
- Email marketing - Attracting, engaging, and converting customers through emails and e-newsletters
- Sales enablement - Supporting salespeople through tools they can use to convert prospects into customers
- Analytics - Tracking how many people are engaging with your business online
- CRM implementation and consulting - Managing communications with current customers
- Public relations - Managing your business’s image and relationship with consumers
- Market research - Studying the market to create more effective strategies and business decisions
- Strategy - Planning campaigns and other marketing activities in order to get the best results
- Community management - building and maintaining a healthy and supportive network of employees, partners, and customers around your business
- Conversational marketing - communicating with customers through casual, real-time conversations (often through chatbots) to meet their needs
- Custom API integrations - connecting different apps so they can share information
- Customer marketing - marketing to existing customers
- Customer success training - teaching how to create better relationships with customers
- Customer support training - teaching how to provide great customer service
- Help desk implementation - setting up a customer support service/troubleshooting line for a software company
- Programmable automation - automating business processes using software
- Sales and marketing alignment - helping sales and marketing teams to work together more effectively
- Sales coaching and training - teaching salespeople how to be more effective
- Website migration - making systematic changes to a website, such as moving it to a different location or radically changing the content.
As you can see, “inbound marketing” can include a wide range of different services, and there is no standard set that an agency will offer. This, in itself, adds to the confusion surrounding inbound pricing.
Before selecting agencies to vet, It may be worth your time to skim a potential partners’ website and read up a little on their offerings to determine whether they offer the inbound solutions you want.
Inbound marketing costs
Of course, the next logical question after identifying what an agency has to offer is: How much will it cost?
As you have likely seen, pricing for digital marketing services depend on a lot of factors, like the agencies’
- Experience level - According to Jami Oetting, senior or more experienced individuals may command a higher hourly rate than someone less experienced.
- Specialty - According to Prometheus Research, agencies that specialize in a niche, like branding, may cost more per hour than an agency that offers a range of services.
- Location - According to Prometheus Research, the location of an agency can also affect cost. In their SEO services pricing survey, Ahrefs broke down the average hourly rates by country, which ranged from under $25–$300 dollars per hour in the US alone.
- Size - According to TechCrunch, the size of a branding firm may also affect price.
As well as:
- The value placed on the service - If an agency uses a value or results-based pricing model, the value or results of their work directly affects how much you have to pay for it.
- The size of your market and industry - According to Prometheus Research, agencies that serve larger markets often bill more per hour.
And the projects’:
- Complexity level - A more complex service may cost more than a simple one. For example, a simple website with just the basic pages will generally cost less than a complex website with microsites, for example.
- Time to completion - Often, the longer a project takes, the more it will cost, if an agency is using an hourly rate or retainer model.
- Type - Projects may have unique, built-in costs according to their type and context. For example, if an agency is setting up a pay-per-click ad campaign for you, you will need to pay for the agencies’ work plus the fees platforms charge you for every click on your ad, which will vary in price depending on what keywords you bid on.
Plus, agencies use many general pricing models, which can also have an effect on pricing. For example, work completed via value-based pricing (with an agreed upon rate based on how much you’re willing to pay) may cost more or less than work priced at a flat rate.
Common Agency Pricing Models
Marketing agencies price their services in many different ways. Some agencies (like ours) use multiple pricing models.
What model(s) your prospective agency partner uses can have an effect on the cost, quality, speed of delivery, and volume of the marketing results they generate for you.
Because of this, it may be useful to identify how your agency handles pricing in order to ensure you are positioned to get a good return, and that yours and the agencies’ goals are aligned.
Here are some of the most common inbound agency pricing models.
With this common model, you pay a set amount of money per month for various services. Agencies arrive at this monthly price through a few different methods, including:
- Hourly retainer: According to Mike Skeehan, With this type of retainer, you pay for a set number of service hours per month.
- Deliverable-based retainer: According to Skeehan, with this type of retainer, you pay for a certain number of deliverables per month.
- Points-based retainer: According to Melissa Garner, this type of retainer requires clients to pay for a certain number of points per month, rather than hours, and each service is worth a certain number of points.
- Tiered-pricing or “packages”: According to Eric Pratt, these are bundles of services sold together and rolled into a retainer. Often, they are in the form of tiered models, where clients pay more for increasingly premium packages.
While retainer-based fees are still used (and were once popular), they have been falling out of fashion in favor of using a mix of different models or relying on project-based fees, according to HubSpot’s 2018 marketing agency growth report.
This may be because, as Skeehan notes, the retainer model is risky for agencies, and not very flexible if clients want to change their minds and add on a service.
Project-based, or fixed-fee models, on the other hand, can seem less risky to many clients, because these models enable clients to choose exactly what they want to buy, without entering into a longer-term commitment, according to HubSpot.
This model seems pretty self-explanatory: you pay a certain amount per hour for agency work. However, agencies calculate this in different ways as well. After all, they want to make the best use of their time and ensure they’re getting a good return.
According to Promethean Research, these fees are typically calculated by determining the cost of the project and adding a margin.
A couple common models are:
- Fixed hourly rate: According to Oetting, some agencies use a set hourly rate no matter who is doing the work.
- By expertise/seniority: Oetting also notes that some agencies set different hourly rates depending on the experience or seniority level of the employee doing the work.
One drawback to hourly rates is that it may incentivize an agency to work inefficiently, since additional costs are absorbed by the customer, according to Oetting.
According to Promethian Research, the expense of hourly rates also varies widely based on agency location, the types of projects being worked on, and agency expertise. For example, the hourly rates of agencies that offer a range of services tend to be less expensive than agencies that specialize in a specific service.
Project-based vs. fixed-fee vs. flat-rate pricing
According to the 2018 survey of HubSpot partners, this is the second most popular pricing strategy, and was the second most popular strategy when HubSpot partners conducted a similar survey in 2016.
With this model, you pay a certain amount per project or deliverable, which, according to Promethian Research, is typically calculated by estimating the cost of a project and adding a margin, or the hourly rate of an employee and how many hours it will take to complete (Oetting).
This system is convenient for many clients, since you can pick and choose what specific services or deliverables you want to buy for a set price. Oetting adds that this model is good for budget-conscious clients, who can plan exactly how much they want to spend.
However, if a client realizes they need something more that was not covered within the original scope, it can be a bit more difficult to add things on (Garner), and these additions often take the form of either fees (Oetting) or tweaks to a contract when it comes up for renewal (Promethian Research).
Oetting notes that another drawback to this model is that it incentivises the agency to work quickly to make a profit, rather than focusing on quality.
According to AJ Beltis, this pricing model calculates the cost of services by asking customers how much they are willing to pay and weighing it against how much value the service provides, requiring the agency and customer to settle on a price together.
A classic example of value-based pricing is art. If your aunt tries to sell a beautiful landscape that took many hours to paint, she may only get $30 for her trouble. Whereas, a famous artist might get $30,000 for a similar painting, due to the perceived rarity and prestige of owning a famous artist’s work.
Oetting notes that this style of pricing is helpful in that it aligns the agency’s and client’s goals, at the same time, Beltis adds that it can be “difficult to set a price” and the subjectivity can make it a more expensive proposition for one or the other party.
According to Benson Shapiro, with this pricing model, what you pay the vendor is dependent on the performance of their product or service.
This is a type of value-based pricing that focuses on results, and an exact price is not arrived at until after the service has been performed.
This model, while somewhat experimental, actually aligns clients and agencies’ goals. As Shapiro says, “as the seller provides more, it is paid more” while at the same time, “the buyer also receives insurance that it will not overpay at both the institutional and the individual level.”
Agencies focus on providing greater, high-quality results rather than sacrificing them for speed. Plus, the need for hands-on communication between agency and client may help build a stronger working relationship. Still, it may not be the best choice for every situation. It is very complex and requires time to execute.
For more details, read Shapiro’s article.
Mixed pricing models employ multiple pricing strategies. According to the 2018 HubSpot partners’ report, 43% out of 763 respondents across six countries used a combination of different pricing models at their agency, making this the most popular approach by far. (The next most common was project-based/fixed-fee pricing at 22%.)
Inbound marketing service cost estimates
As you can see, inbound agency pricing is quite complicated and variable, making it difficult to pin down what a reasonable rate looks like. Still, we can put together some rough estimates.
In the interest of brevity, we’re going to focus on some of the most common inbound services, and what you might expect to pay if you outsource them.
How much does web design and development cost? ($16,000–$30,000)
In our experience, building a high-quality website containing just the essentials costs somewhere between $16,000–$30,000.
You can get a less expensive (or more expensive) website made, but you tend to get what you pay for. For example, less expensive websites may be developed with less precision by outsourced developers, and can end up undermining the entire effort if they offer a bad user experience due to bloated code, poor design, and rigid functionality—all issues you may likely end up paying to fix down the road.
Why does it cost a lot to build an effective website? In short, they’re a lot of work.
They require several specialists to put in a lot of hours, from developing the code, to designing and branding all the visuals, to writing (and editing) every page of copy with keyword research and other SEO considerations in mind, to making sure the forms and other elements are configured correctly and are easy to use.
In other words, corners have to be cut to produce a less expensive result.
How much do professional SEO services cost? ($500–$5,000 per month; $50–$150 per hour; $501–$1,000 per project)
SEO (search engine optimization) services can include many strategies, such as “updating webpages, internal linking, backlink building, and content creation” (Ahrefs) as well as developing unique SEO strategies according to your business’s needs, performing keyword research, conducting SEO audits, and more.
Monthly retainers are the most popular pricing strategy for SEO, according to Ahref's research. A recent Backlinko survey of business owners also found that small businesses in the US pay an average of $497.16 per month for SEO services from a freelancer or agency, and most respondents paid less than $1,000 per month. Agencies are 2X as likely to charge on the higher end of that spectrum, and over $1,000.
Similarly, an international Ahrefs survey of agencies, consultants, and freelancers indicates that, in the US, $2,500–$5,000 per month is the most popular pricing tier for SEO services.
As for hourly rates for experienced freelancers or agencies, Brian Dean of Backlinko says expect to pay $50–$150 per hour. According to Ahrefs, $100-$150 is the most common range for agencies. Fortunately, agency rates rarely exceed $150 per hour according to both Ahrefs and Backlinko.
Or, if you’re paying by the project, Ahrefs found that $501–$1,000 is the most common bracket.
Right about now, you may be wondering why SEO is so expensive.
The short answer is that it’s very complex, time-consuming, and requires experience to do well.
Dean suggests that you may also pay more for experience or expertise in a related area, like coding, and Ahrefs found that compared to consultants and freelancers, agencies tend to cost more.
Unfortunately, like websites, you get what you pay for. The internet is full of inexperienced and unscrupulous SEOs who may not know what they are doing and even damage your search rankings by incurring penalties for trying to cheat the system.
In the same survey of business owners I mentioned earlier, Dean found that “business owners that spent less than $500/month were 75% more likely to be dissatisfied than those that invested at least $500/month on SEO.”
So how do you avoid wasting money on bad actors or inefficient strategies?
Chuck Price suggests checking to see if an agency offers an SEO audit to identify what specific SEO issues your site has, hiring agencies for specific projects (like keyword research), and checking to see if agencies have low-risk trial packages.
It may also be helpful to estimate cost according to your business’s developmental stage.
David Leonhardt notes that businesses with new websites should expect to pay more early on and spend less over time. This makes sense, because SEO is a long-term strategy, unlike advertising, which is focused more on short-term returns. They also note that finding a sweet spot for ROI is more important than cost, since the profits can offset the costs.
PPC Advertising (SEM) ($500–$5,000+ per month management fee and/or 20%-30% of ad spend)
Pay-per-click advertising, also called SEM (Search Engine Marketing) involves creating ads that appear in search engine results when people search for a particular word or phrase.
Pay per click services can include campaign setup, campaign management, and creating landing pages.
Johnathan Dane notes that agencies use a number of different pricing models, such as charging you by a percentage of the ad spend, a percentage of ad spend plus a management fee, a flat rate, or performance-based pricing.
Jules Tompkins estimates 20-30% of your ad spend and/or a management fee of $500-$5,000+ per month to be the middle of the pricing spectrum.
A survey of international agencies and consultants by Credo found that the minimum management fee of respondents was $1,500 per month, and then 15% of ad spend after ad spend passed $10,000.
Note that these costs are for the services themselves, not including the ad spend that you pay to the search engine's company.
Content marketing ($5,000-$50,000+ per month)
Inbound content marketing involves creating content (such as blog posts, videos, whitepapers, or webinars) in order to attract, engage, and delight existing clients.
InvestisDigital points out that in order to do this, further services like creating a content marketing strategy, doing keyword and market research, SEO, persona building, content promotion, content auditing, analytics reporting, and updating older content is also necessary.
If you want to hire a professional to do all of this, InvestisDigital breaks down cost estimates for each element of content marketing.
- Site audit: $5,000-$25,000
- Strategy: $5,000-$50,000
- Content development: $500 – $3,000
- Content optimization: $75-$200 per hour
- Promotion: $75-150 per hour (for social media services & content promotion via social), and/or an ad budget of $100-$1,000
Agencies may write content in-house or outsource it to freelancers, and rates often vary according to experience level, content length, and how much a customer is willing to pay.
The time it takes to write content is infamously unpredictable, and varies depending on the writer and the project.
Many writers also specialize in particular niches or have more authority, which may command a higher rate, according to Price.
InvestisDigital estimates that paying exclusively for “solid” content costs in the neighborhood of $500 – $3,000.
As with other services on this list, better quality content (content that is well-researched, well-written, proofread, original, and highly useful to the reader) typically performs better in search results, which can lead to a good ROI. This is because Google’s algorithms typically reward content that is more useful to the reader, more thorough, and often, longer.
Great content is generally time-consuming to write, but ultimately can generate leads for months or even years when done right.
Social media marketing ($1,000-$20,000 per month)
Social media marketing includes services like creating social media content, managing social media accounts, creating social media ad campaigns, planning a social media strategy, reporting on social media analytics, and setting up social media accounts.
February 2021’s CMO survey reported that, in Feb 2021, companies surveyed (for profit B2Bs and B2Cs across industries) were spending an average of 14.9% of their marketing budget on social media.
According to Content Factory, you can expect to pay “$1,000 per month to $20,000 per month” for professional social media services. They further break it down into:
- $1,000-$7,500 per month for Twitter (includes account setup, management, and content creation)
- $2,500-$5,000 per month for Facebook (includes setup, training for business partners)
- About $1,000 per month to add on another platform, like LinkedIn
- At least $4,500 per month for strategy
- 10%-20% of the total ad buy for social media advertising
As another data point, Credo reported in their survey of marketing firms that Facebook advertising firms charge an average of $137.50. per hour, and that more than half of Facebook reporting firms charged “between $101-$200 per hour”
Similarly, InvestisDigital estimates that it costs about $75-$150 per hour to create, optimize, and manage social media accounts.
In your agency vetting process, you may see numbers higher or lower than these estimates, according to all the different variables we outlined earlier in this section, but hopefully this can give you a general idea.
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How to vet a potential agency partner
Finding a reliable marketing agency that can meet your needs at a reasonable price can be a tall order, so we’ve put together a few questions to help you prepare by identifying what you need, whether an agency can help you, and whether they have your best interests in mind.
What you need to know before you approach an agency
Before contacting an agency, it’s good to have a clear idea of what you need from them in order to help both you and the agency determine whether they are able to help you, and how they might achieve your goals.
- What worked? What types of marketing efforts succeeded in the past? For example, maybe you’ve found that Facebook ad campaigns typically give you a good return on your investment.
- What didn’t work? What tactics failed to produce results? For example, maybe you’ve tried blogging, but no one is reading your posts.
- What would success look like? What goal do you need an agency to help you achieve? SMART is a good framework for goal setting you could try if you’re struggling to quantify your needs.
- What problems do I need to solve? What specific issues are impeding the success of your marketing efforts? For example, maybe your website is older and has a few bugs that turn away visitors before they can convert into leads.
- Which problems are the highest priority? Which issues are most urgent? For example, you may need both a website redesign and content marketing, but the website redesign takes priority, since having a buggy website could undermine your attempts at engaging visitors with content.
- What’s the timeline for completing our goals? Timelines can be helpful for figuring out which strategies to use and how to execute them.
Questions to ask about a potential agency partner
Use these questions to help determine whether an agency is competent and trustworthy.
- Do they have case studies I can read that demonstrate results they’ve gotten for businesses like mine? - a reliable agency should be able to show you quantifiable results they’ve gotten for a client.
- Does the agency have experience with my industry? An agency that already understands your industry may be in a better position to judge what you need.
- Do they charge for strategy? Agencies that do not charge for strategy often take a more simplistic, boiler-plate approach to your inbound marketing strategy, whereas an agency that does charge is more likely to tailor your strategy to meet your specific needs.
- Do they write copy, design, and develop in-house, or is it outsourced? Outsourcing is not necessarily bad, particularly if an agency works with outside vendors they trust to do good work, but sometimes outsourcing may lead to a cheaper product. It also means that someone you don’t know is working on your product.
- Can they provide references for copywriting, design and development work? As with buying anything else, reviews from real clients are valuable tools in evaluating whether an agency can produce quantifiable results and are pleasant to work with.
- What is their strategy for building leads? A good agency should have a strategy and clearly convey what it is.
- Are they willing to train me to eventually take over marketing tasks? Agencies understand that even long-term client relationships will end someday, and the clients will need to be able to manage their own marketing efforts, or hand them off to other partners. A good agency will help educate their clients.
- Are they honest and clear about their intentions? Healthy working relationships are built on trust. An agency should be above board, communicate clearly, and allow clients to have access to their own data.
- Do they tailor their pitch to suit my business? Every business has unique needs, so an agency’s strategy should be custom-tailored to meet them, rather than superimposing a generic strategy that doesn’t take the business’s situation into account.
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How we handle pricing
At Madison Marketing Group, we use a mixed pricing model that makes use of project-based pricing, as well as hourly-based retainers, depending on the needs of our individual clients.
Our data-driven approach to inbound marketing strategy emphasizes making measurable progress and producing quality results over generating a high volume of low-quality leads.
Get in touch with us today to discuss whether we can help you meet your goals.
Topics: Working with an Agency