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.
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Source: HubSpot
Among them:
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.
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’
As well as:
And the projects’:
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.
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:
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 HubSpot 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:
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 HubSpot.
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.
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 (HubSpot).
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. HubSpot 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 (CallRail).
These additions often take the form of either fees (HubSpot) or tweaks to a contract when it comes up for renewal (Promethian Research).
HubSpot notes that another drawback to this model is that it incentivizes the agency to work quickly to make a profit, rather than focusing on quality.
According to HubSpot, 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.
HubSpot notes that this style of pricing is helpful in that it aligns the agency’s and client’s goals, at the same time, 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 the Harvard Business School, 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 the full 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%.)
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.
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.
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 pay to fix down the road.
Why does it cost a lot to build an effective website? In short, it's a lot of work.
They require multiple specialists to put in a lot of hours, from developing code, to designing and branding visuals, to writing (and editing) every page of copy with SEO considerations in mind, to making sure forms and other elements are configured correctly and easy to use.
In other words, corners have to be cut to produce a less expensive result.
SEO (search engine optimization) services can include many tactics, from content to website development best practices, as well as the creation of unique strategies according to your business’s needs—performing tailored keyword research, SEO audits, and more.
Monthly retainers are the most popular pricing strategy for SEO, according to Ahref's research. They also found 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, Backlinko says expect to pay $50–$150 per hour. According to Ahrefs, $75-$100 was the most common tier for respondents in the US and Canada. Fortunately, rates rarely exceed $201 per hour according to the same survey.
Or, if you’re paying by the project, They found that $2,500–$5,000 is the most common bracket in the US and Canada.
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 a survey of business owners purchasing SEO services, Backlinko 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?
SEJ 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.
Semrush 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.
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.
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.
CallRail 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 agencies and consultants by Credo found that hiring an agency for a year might cost about $33,000, including management fees for two ad channels, onboarding fee, and "15% of spend above $10,000 in monthly ad spend", which comes out to about $2,750 per month.
Note that these costs are for the services themselves, not including the ad spend that you pay to the search engine's company.
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 major content marketing services.
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 SEJ.
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 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.
September 2022’s CMO survey reported that, companies surveyed (for-profit B2Bs and B2Cs across industries) were spending 14%-15% 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:
As another data point, Credo reported that Facebook advertising providers in the US charge an average of $136.69 per hour, and that 67.5% firms worldwide 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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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.
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.
Use these questions to help determine whether an agency is competent and trustworthy.
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.