So you’re thinking about hiring a content marketing agency. Great idea! We think the combination of an in-house marketing team with an outsourced marketing agency is a match made in heaven.
Understandably, one of your first questions is going to be, “How much does it cost?” But asking what a content marketing agency costs is like asking, “How long is a piece of string?” There are a lot of factors to consider:
- What marketing expertise do you already have in-house?
- What stage of growth is your company in?
- What are you trying to achieve?
- What is your timeline?
- What sort of budget do you have?
All of these will impact the costs you’re looking at.
And it’s doesn’t just boil down to a dollar figure, either – after all, an inexperienced in-house employee or agency might be far cheaper, but their mistakes will likely cost several hours with an experienced freelancer or agency to fix.
When evaluating whether a marketing agency is the right fit for you, it can be helpful to look at their pricing models, as certain models will be better suited to different types of projects – and some can be red flags.
Here’s my two cents about the different pricing models of content marketing agencies, and which models might work best for you.
Hourly-rate pricing model
An hourly-rate pricing model is simply where an agency charges by the hour.
[Number of hours x Rate per hour]
Some agencies use an agency-wide hourly rate (or a blended rate), which is an average hourly rate that factors in all levels of seniority, while others use a specialist rate, which factors in the individual rate of the specialists you require for your specific project.
This model, however, is quickly going out of fashion – and for good reason. The fact is, this model actually incentivises inefficiency, encouraging agencies to draw out projects so that it is paid more. In short, what the agency wants is in direct opposition to what the client wants.
Go with this if …
- You’ve either worked with the agency before, or you’ve spoken with their clients, and can be assured they produce good work in a timely manner.
- You’ve got the strategy and tactics worked out, and all you need is help with execution.
Project-based pricing model
Under the project-based model, an agency calculates the number of hours a project is likely to take, and multiplies this by the employees’ or agency’s hourly rate.
[Number of hours x Hourly rate]
A project-based model is best if:
- The scope of work is well defined and agreed upon from the get-go;
- The project fee is based on an outcome, rather than on time spent; and,
- The budget to outsource is limited to that specific project.
A brand or website strategy is a great example, so long as potentially variable items (e.g. the number of users or customers interviewed) are clearly identified.
And when it works, it works great. A job well done, requiring very little change, and meeting your brief? Priceless. Add to that the fact that you don’t need to house, train, manage and develop a marketing person or team, and you are quids in!
However, it does have a couple of drawbacks:
- First, while good agencies will be able to see and suggest additional opportunities, they won’t have the budget to act on anything. (This is based on the idea that in an ongoing partnership, the agency is more able to identify other strategic opportunities and help you capitalise on them too, rather than having to stick to a strict, tactical scope.)
- Second, one-off projects can be a little more expensive than retained help, as agencies often include some contingency to cover them for unexpected issues, as well as offer discounted rates for an ongoing commitment.
Go with this if …
- You have a very clear and specific idea of the deliverables you want from the project, and there is little need for flexibility or changes to these deliverables.
- You need a really specialised piece of your marketing puzzle delivered as a one-off item.
- You’d like to road-test the partnership and see if the chemistry is right for a longer-term engagement.
Retainer pricing model
[Set budget per month]
A retainer pricing model is for those who want to outsource more than one specialised and specific thing. For example, content marketing requires varied skills – data, tech, and creative – that are applied to a market over a period of time. It is agile, capitalising on opportunities as they arise.
So while some level of planning is good to build the foundations, what really drives results is real-time responses to the market and customer triggers. For this, it makes sense to have a retained agency that can work within a specified monthly budget and move tasks around to follow results.
This is great for businesses who are interested in longer-term engagements, as retainers often come at a bit of a discount to project-based fees.
For around the price of a middleweight full-time employee (assuming you’re looking for strong, steady growth), you get access to a whole swathe of marketing specialists – without holiday pay or sick leave!
Agencies usually monitor budget usage either by hours – which is a traditional way of managing it – or by value points. The value points model is interesting, because it merges the best of the project-based or fixed-fee pricing with retainer pricing for clients.
Go with this if …
- You have clarity and alignment on long-term marketing goals.
- A high degree of accountability and reporting is important to you.
- You want to be one of the agency’s top priorities.
Value-based retainer pricing model
More innovative agencies (and yes, this includes Brand chemistry) are moving to a value-based retainer pricing model, which shifts the focus away from ‘hours worked’ to ‘results achieved’.
[Number of value points]
Under a value-based retainer, a certain number of points are allocated to each project within the retainer. No matter how many hours that project takes to deliver, the client is only ever charged that specified number of points, so it is up to the agency to deliver efficiently in order to make its margins.
This also makes it very easy for a client to specify an initial budget, but at some point decide that a change of scope on a project might be a good idea. With a value-based retainer, they can see the impact on their budget and on results too.
This is a win/win for everyone – the client gets predictability, transparency and flexibility over which projects can be prioritised or moved, while the agency can focus on doing what it does best – getting results for their client – without worrying about time constraints or billable hours.
Go with this if …
- You want to be able to quickly shift your strategy and tactics based on results and what is happening in the market.
- The agency can prove they have a strong track record for producing high-value outcomes for businesses like yours.
So … can I afford a marketing agency?
My advice is to do the maths on your growth. Find an agency that will calculate your average deal size, and times that by the number of new customers they think they can get you.
If there is ROI there, and they can prove they’ve done it before, why would you not give it a go? You’re not adding to your headcount, and, if you choose wisely, you’ll also get senior strategists as well as hungry execution folk getting stuff done for you at a rapid pace.
Quite aside from this, if you’ve only got a small budget to begin with, many agencies can help smooth out your cash-flow by finding low-hanging fruit for their first campaign, and using the wins to fund more and more.
When it comes to choosing the right b2b marketing agency for your business, costs are only one of the factors you need to consider. To find out more, download our 7-step checklist to choosing your inbound agency. Or if you’d like to see how we can help you, get in touch.
Brand chemistry creates brilliant content to get your brand in front of the right people. With lifecycle strategy, whip-smart word wrangling and striking visuals, our content marketing gets you results.