How Much Does a Digital Agency Cost?

How Much Does a Digital Agency Cost?

‘What will it cost?’ is one of the most popular questions we get asked when talking about a new SEO, PPC, Paid Social, EDM or general digital marketing campaign. There’s a short and a long answer and I am going to give you both. Read right till the end though, this will not be one of those articles that promise much and delivers little!

The Short Answer

It depends.

Surely, you knew this was going to be part of the answer! Any agency looking to price an effective, mutually beneficial and long-term engagement will carefully consider the following before coming to a price:

1. Your desired campaign outcomes.
2. Your requirements, where you are now and the level of competition in your industry/location.
3. How much the agency spends on people, training, and offices (and more). We’re located in Sydney, Australia and hire the best people we can find. An agency based in India or Sri Lanka, for example, is always going to cost less than one in Sydney.
4. How the agency values their time, knowledge and skill and the profit they intend to make from the engagement.

The Long Answer

Here’s exactly how we reach a $ value

The agency/client relationship only works if there’s real value generated for both parties. For this reason, most good agencies will take the pricing stage very seriously. Be very wary of any agency willing to give you a price before they truly know the answer to the first two points above. A cookie cutter price will almost certainly result in a cookie cutter solution. This might result in a lot of campaign activity but will not always lead to the desired outcomes.

To flesh out the desired outcomes, requirements, current situation and the level of competition, we typically go through the following process:

• Budget: We’ll transparently discuss the likely price ranges of different approaches we could take. Most clients have budgets they need to work with and we want to know what we’re working with before we start suggesting solutions.
• Discovery: We’ll hold a discovery workshop with the prospective client including a deep dive on their needs, current situation and an exploration of what will constitute success for them.
• Research: We’ll then do competitive research to see what we’ll be up against in reaching these outcomes. Just how challenging is the space?
• Strategy Development: Next up are internal strategy discussions to assess the likely amount of work and the types of channels we think will be needed to achieve the outcomes desired by the client. As part of this, we develop a ‘roadmap’ clearly showing how and when we plan to tackle the various elements of this specific campaign.
• Strategy Delivery: Finally, and most importantly, we deliver the strategy, roadmap, and budget to the client to make sure we are all on the same page and that we all agree on the campaign goals and potential challenges. All going well, it’s time to get to work!

This is a lot of work for us. However, more than a decade of running effective marketing campaigns has taught us that these steps are critical to long-term success. Bottom line, doing this is a lot less work than trying to save a poorly thought out campaign 6-months later.

We enthusiastically do all the above before a dollar has changed hands or a contract has been signed.

Don’t forget, you always get what you incentivise

The best pricing model for you and your agency is the one which best incentivises the right people to focus on the outcomes you value. We see agencies charging by the hour, working for a percentage of media spend, paid on specific performance outcomes, paid by channel or working for a set monthly fee. Depending on the agency and what you want to achieve there is a place for one or more of these approaches. None of them is inherently flawed.

Never forget though that each model incentivises specific behaviour.

• Paying by the hour might incentivise people to work a little slower.
• A percentage of media spend might encourage an agency to find ways to spend more media.
• Performance-based models will incentivise an agency to only do what is measurable for them and ignore things that are not measurable (and many really valuable things in marketing are not directly measurable or attributed to a specific action).
• Similarly, working without a long-term contract will likely encourage short-term thinking.
• Negotiating down the price so the agency is left with little or no profit might motivate the agency to put its least experienced (and least expensive) staff on the project.

The overall pricing model is a critical thing to consider! Price is important. But it needs to be secondary to achieving the outcomes you need. Don’t ‘win’ on the price negotiation only to ‘lose’ on the whole purpose of needing an agency in the first place.

Finally, here’s what we charge for our digital marketing services

You’ll find a lot of people cheaper than Rocket and you’ll also find agencies charging a lot more. We believe we’re above the average but not massively so. That said, our ongoing clients don’t tend to focus much on how much we charge. We like to think it’s because they see value in what we do.

There are two ways we work with clients and both are priced in slightly different ways. Here’s how it works.

Channel Specific Campaigns

We’re often approached by in-house marketing teams to provide scale or execute on a single tactic or channel. This is often the case with our larger clients who look at us as their SEO Agency, Paid Media Agency or Paid Social Agency (or a combination of more than one of these). We also work this way for several smaller clients with specific requirements who want excellent results.

Typically, this sort of engagement is for an agreed monthly fee (plus potentially a % of media if applicable). Pricing depends on the complexity and required outcome.

We have current clients paying us between $3,500 to $15,000 per channel per month depending on complexity, competition and scope. Such campaigns are for an initial period of 6 or 12 months with an intention from both parties of a much longer relationship. We have clients using us for single or multiple channels.

Blended Digital Campaigns

We also have clients who are more focused on the outcomes themselves and do not care about specific channels. Where this is the case our strategists develop 6-month roadmaps outlining what we believe to be the activities required to achieve key outcomes in the coming six-month period.

If something significant changes, or when we reach the end of the six-month roadmap, we create a new roadmap. From roadmap to roadmap the channels we use for a client will change as required. As an example, a typical roadmap (if such a thing exists) could include discovery work to assist in setting up the strategy, several channels (such as Google Ads, retargeting, paid social, EDMs, display advertising, SEO or CRO) as well as analytics, education and sales enablement services.

We have current clients paying us from $6,000 per month for blended digital campaigns. We also have clients paying up to double or triple this amount, and more, for significantly more complex blended campaigns. Again, initial campaigns are for a 6 or 12-month period and we’ve worked with some of our clients on this basis for many years.

This can be an extremely effective way to work for companies who want us to look after overall digital strategy as well as digital execution.

Where to from here?

You now know what we charge our current clients and roughly the way we approach things.

If you are interested in our approach and feel we’re somewhere in the ballpark for your budget, then get in touch! We’d love to find out more about what you do and what you’re trying to achieve in digital.

If we think we can do an amazing job for you, then we’d love nothing more than to put time into coming up with a strategy and giving you an exact price for the engagement. No obligation, but experience tells us you’ll be impressed.

Call us on 02 8310 2393 or leave us your details and let’s get the conversation started!