Why Agencies Charge What They Charge, and Where Your Money Goes
Short answer: Agencies charge for the time of their people, plus the cost of running the business: salaries for non-billable staff, offices, software, and sales. A larger agency carries more of that overhead, and it is built into the price. A leaner team has less to cover.
How do agencies set their prices?
Most use one of three models, according to a common pricing guide (see MarketerHire’s agency pricing models):
- Retainer: a fixed monthly fee for ongoing work. Listed ranges run from about $3,000 to $25,000 a month.
- Hourly: billed for time spent, listed at about $100 to $300 an hour depending on seniority.
- Project: a fixed price for a defined job, listed from about $5,000 to $100,000 or more.
Those are published ranges from one source, not Sumunar prices. Real quotes vary widely.
Where does the money go?
- The people doing your work
- Account managers and project managers coordinating that work
- Management and sales staff who are not working on your account
- Office space, software, and insurance
- Profit
None of this is wrong. It is how a business with many employees operates. It does mean that part of what you pay supports the structure, not the work itself.
What does a lean team do differently?
A small team has fewer layers between you and the people doing the work, and less overhead to pay for. It can also use tools, including AI, to do research and first drafts faster, with a person reviewing everything. The savings should show up in the price and in the speed.
How can you tell what you are paying for?
- Ask for the work that is included, in writing
- Ask roughly how many hours it represents
- Ask who will do the work
- Compare two or three quotes on the same list of tasks
What explains the gap between a low price and a high one?
The published ranges are wide, from a few thousand dollars a month to many times that. Several things commonly explain the difference:
- Team size and seniority. More senior people cost more per hour, and larger teams add managers to coordinate them.
- Scope. More channels, more deliverables, and more reporting all take more hours.
- Overhead. Offices, sales teams, and management are paid for out of what clients pay.
- Brand. A well-known name often commands a higher price for the same work.
A simple way to compare two quotes
Ask each provider roughly how many hours the work represents, then divide the price by the hours. As an illustration, $3,000 for about 30 hours of work is about $100 an hour, and $6,000 for the same 30 hours is about $200 an hour. If the lists of tasks match, the difference is what you are paying for beyond the work itself, and you can decide whether it is worth it.
What does a typical quote include, and what is often left out?
Two quotes with the same monthly price can cover very different things. Before you compare them, find out what is and is not inside each one.
| Often included | Often not included |
|---|---|
| Strategy and planning | Ad spend, which is paid to the ad platforms |
| The agreed deliverables, such as posts or pages | Software subscriptions and stock photos |
| A regular report or meeting | Extra rounds of revisions |
| Account management | Work outside the original scope |
None of this is wrong, but the extras are where a quote can grow. Ask for a written list of what is included and what would cost more, so there are no surprises on the invoice.
What does that look like in real dollars?
Here is some simple arithmetic using the published ranges above. It is an illustration, not a quote from us or anyone else.
- Hourly: a task that takes 10 hours at the listed $100 to $300 an hour comes to $1,000 to $3,000.
- Retainer: a $3,000 monthly retainer, the low end of the listed range, is $36,000 over a year.
Compare that with what a business can afford. The SBA’s marketing budget article cites average marketing spending of about 7.9% of revenue (see How to Get the Most From Your Marketing Budget). For a business with $500,000 in revenue, that is roughly $39,500 a year, so a $3,000 retainer would take up most of it. We walk through the full math in how much a small business should spend on marketing.
The hours do not change when the team is smaller. What changes is the price of each hour, because there is less overhead to cover. That is the number worth asking about.
When is a larger agency the right choice?
Being honest about this matters. A larger agency can be the better fit when you need many specialists at once, run a large multi-location business, manage a very large ad budget, or need support in many markets. A lean team is a good fit for focused work: your website, your content, your social accounts, and a manageable ad budget, with the person who does the work available to talk to you.
The point is not that one model is better. It is that you should be paying for what you actually need, and you should be able to see what that is. The questions to ask before hiring an agency will help you check.
What warning signs should you look for in a proposal?
- Deliverables described in vague terms, like “optimization” or “brand presence,” with no list of what you will receive
- Long contracts with penalties for leaving
- Reports that count activity instead of results, such as posts published instead of inquiries received
- No information about who will do the work
- A price that cannot be explained when you ask how it was built
What do our services cost, for comparison?
Since this post is about seeing what you are paying for, here are our starting prices. They are the same ones published on our services page.
| Service | Starting at | How it is billed |
|---|---|---|
| Social media (up to 3 platforms, two posts a month on each) | $350 | Monthly |
| Blog content (one blog every two weeks) | $250 | Monthly |
| Programmatic ads (our fee only, ad spend is separate) | $400 | Monthly |
| Website management | $75 | Monthly |
| Websites (5 pages) | $500 | One time: 50% to start, 50% on delivery |
| Competitive analysis (top 3 to 4 competitors) | $400 | One time: 50% to start, 50% on delivery |
Monthly services are month to month, with no long-term contract. Anything beyond what is listed is quoted in writing before work starts. See our services for what is included in each.
Frequently asked questions
Is a cheaper agency lower quality?
Not automatically. Price reflects overhead and structure as much as quality. Judge the work, the process, and the reporting.
Why do many agencies avoid posting prices?
Prices depend on the scope of the work, so they are hard to list. A good agency should still be able to give you a range and explain how it is built.
Are retainers a bad deal?
Not by definition. A retainer suits ongoing work such as content and social media. It becomes a bad deal when the deliverables are vague. Ask what you will receive each month, in writing, and how you can tell it was delivered.
Can I negotiate the price?
It is fair to ask what can be adjusted, such as scope, frequency, or timing. A lower price with the same list of deliverables usually means something gets cut anyway, so keep the list the same and ask what changes.
Does a smaller team mean slower work?
Not necessarily. Fewer layers between you and the person doing the work can make things faster, since requests do not pass through several people. What matters is whether the timeline is agreed in writing before work starts, and whether you get updates as promised.
What should I be able to do if I want to leave?
You should be able to end the arrangement without a penalty you did not expect, and take your accounts, files, and content with you. Ask about this before signing, not after.
Our approach is simple. We tell you the real price and the time involved for each service before we start. Read more about how we work, or ask for a free audit.
