Decoding Agency Fees: The Truth Behind How Agencies Charge You

If you are an agency/brand owner looking to outsource your digital marketing requirements offshore, saving on the costs involved is probably the major driving factor behind the decision. You are not alone in that!

According to a study conducted by Deloitte, 70% of businesses cited reduced costs as the main reason behind partnering with an offshore agency.

You could wonder, “How do offshore agencies keep the prices lower than other regions?” Well, the reasons could be varied:

The reduced costs are not the only driving factor behind choosing to outsource to offshore digital marketing agencies, 

1. Enhanced productivity because your in-house resources can now focus on core business processes
2. Greater scalability to effectively meet varying workflow during the year
3. Enhanced accuracy afforded by niche expertise

Now that we are clear on the benefits of outsourcing, one might be worried about the costs involved. 

Though we are an offshore digital marketing agency with a repertoire of 12+ years of experience under our belt, we will attempt to present honest and detailed answers to your queries regarding the price aspect. 

Let’s hit the ground running!

Why choose an offshore agency?

Outsourcing your digital marketing needs to offshore agencies has several benefits that can help scale your business effectively. Offshore agencies offer services at a competitive price and often do so at a lower cost than managing projects in-house.

This affordability is not due to a compromise in quality but rather a combination of several factors that make offshore agencies capable of delivering high-quality services at the right price.

Why offshore agencies can offer competitive prices?

Offshore agencies can offer competitive prices due to:

• Lower operational costs in their respective regions.

• Access to a large talent pool with specialized skills.

• Economies of scale that allow them to manage more projects efficiently.

These factors enable offshore agencies to deliver services at a lower price point, but it is crucial to ensure that this lower price also reflects the right value and accountability.

So, what is the cost of hiring an offshore agency?

Though the costs vary depending on the project and service, on average, the cost of hiring a digital agency on Clutch varies from $25 to $49 per hour globally.

An important point to note is that the advertising costs for services such as social media marketing and PPC are not included in the agency fees and must be accounted for separately. 

The ad costs result from various factors such as audience, industry, campaign length, and location. 

It is essential to communicate your budget needs to the digital marketing agency so that they can help you work out the best solution to your unique needs. 

Let’s take a look at the factors affecting the cost of hiring an agency;

Even though the scope and nature of the digital marketing services opted for are major factors influencing the final costs, factors such as the portfolio size of the agency you seek to partner with and their geographical location also have a role to play. 

Those with a proven ability to deliver results and a huge clientele will likely charge more, citing the trust factor, rather than a newbie who has yet to make a mark for themselves.  Also, if they are located in regions where labor costs run high, it will be reflected in the numbers in your final bill. 

Source

What is the cost of outsourcing social media marketing to an agency?

The real cost of hiring a social media marketing agency on Clutch is USD 100- 149 per hour. 

The cost is an outcome of factors like the company’s expertise and the scope of delivery.  The average hourly rates of different social media services offered at digital marketing agencies vary between $25–$49. 

The SMM services could range from Facebook advertising to influencer marketing, Instagram, LinkedIn, Pinterest, Reddit, Snapchat, TikTok, and Twitter advertising. 

The factors affecting the cost of hiring a social media marketing agency are;

1. Engagement criteria
2. Resources utilized
3. Tools deployed for content creation, scheduling, and publishing
4. Location

The following infographic depicts social media marketing companies’ hourly rates by location.

Source

The best way to zero down on a well-suited social media marketing company for your needs is to peruse service packages/bundles on their websites, check out reviews and testimonials, and then request proposals from the service providers who seem to fit your specific budget. Also, note that the agency fees do not include the social media ad spend.

What costs will be involved if I seek to outsource my email marketing campaigns?

While email marketing may border on the more traditional side of digital marketing, it is quite a sought-after offshore outsourced digital marketing service. The email marketing pricing can vary from a few hundred dollars to tens of thousands of dollars depending on multiple factors such as industry, location, services opted for, email volume, reputation, brand, features, and functionality, to name a few. 

Source

The average cost of partnering with an email marketing agency varies from $100 to $149 per hour globally.

Let’s now have a look at the costs associated with partnering with a firm for email marketing by industry.

Source

While thinking about offshore outsourcing your firm’s email marketing needs, it makes sense to peruse the prices by location to make the right choice. 

Source

Popularly used email marketing tools such as MailChimp, HubSpot, GetResponse, Sender, Sendinblue, etc., also play a role in the campaign’s price and success.

Some email marketing agencies also offer bundled pricing that may include services such as,

1. Copywriting & design
2. Email marketing tool setup
3. Subscriber form set up
4. Number of monthly campaigns
5. Report generation and analytics tracking

It has been seen that email marketing packages on Clutch start from USD 200 for the basic ones and may go up to USD 10000 per month for the more inclusive packages that feature additional services, larger email lists, etc.

Interesting! Tell me more about the costs involved in outsourcing PPC services.

While the real cost of hiring a PPC agency on Clutch can range between $100 and $149 per hour, the ultimate monthly PPC cost may vary from a few thousand dollars to tens of thousands of USD. The final cost is a product of multiple factors such as scope of work, industry, campaign goals, chosen resources, allocated budget, chosen ad networks, and location. 

At this point, it is important to note that the agency fees are separate from the Google Ad campaigns budget. 

Source

The location of the offshore PPC services agency can play a major factor in the final costs. Check out the infographic below to make the right decision;

Source

There are multiple campaign management services that PPC agencies offer to their clients, such as;

1. Audience and keyword research
2. Managing bids
3. Ad spending
4. Copywriting ad copy and creating ad designs
5. Tracking conversions
6. Creating landing pages
7. Optimizing metrics

The services you opt for will have a role to play in the final bill. Here’s a look at the average hourly costs for each channel that companies may use for PPC advertising;

1. Amazon Advertising: $25 – $49
2. Baidu Advertising: $25 – $49
3. Google Ads: $100 – $149
4. Bing Advertising: $100 – $149
5. Spotify Advertising: $25 – $49
6. Yahoo Advertising: $25 – $49
7. YouTube Advertising: $25 – $49

That’s so informative! Tell me more about the costs involved in outsourcing my SEO services!

For any online business to grow, it has to have a solid digital presence; that is where sound SEO comes in. If you seek to outsource your firm’s SEO needs to a digital market agency offshore, then the cost can vary from $100-$149 per hour.

Source

The final bill is an outcome of various factors, such as;

1. Type of SEO services opted for
2. Agency size
3. Reputation
4. Experience
5. Location
6. Urgency in realizing results

Here’s an insight into the type of SEO services that a client may avail of and their hourly rates;

1. Link Building: $25–$49
2. Multilingual SEO: $25–$49
3. Local SEO: $100–$149
4. On-Page (On-Site) SEO: $25–$49
5. Technical SEO: $25–$49
6. SEO Mobile Optimization: $25–$49
7. SEO Content Creation: $100–$149

The location of the digital marketing agency offering SEO services also has a role to play in the final bill. It has been seen that SEO agencies located in Australia, North America, and Western Europe tend to charge a lot more than their counterparts in other countries. 

Source

Industry practices: how agencies charge for different services

When considering outsourcing to an agency, it’s essential to understand how they typically charge for their services. Agency fees can vary based on several factors, including the scope of work, the complexity of the project, and the expertise required.

Let’s explore the common pricing models.

• Hourly rates: Agencies charge based on the number of hours spent on your project.

• Project-based fees: A fixed price is agreed upon for the entire project.

• Retainer fees: A monthly or quarterly fee is charged for ongoing services.

Understanding these models will help you make informed decisions when choosing an agency. Are you wondering how to engage with Mavlers? We have a blog for that as well!

Why lower price doesn’t always mean better value?

While opting for the lowest price might be tempting, it’s important to consider what that price includes. A lower price might come at the cost of reduced scope, lack of transparency, or inadequate support. 

To ensure you’re getting the right value, look for agencies that offer:

• Transparency: Clear communication about pricing, scope, and deliverables.

• Comprehensive support: Full ownership, accountability, efficient handovers, and robust data security and compliance measures.

• Guidance and consultation: Agencies that provide strategic insights and advice, not just execution.

Avoid agencies that offer suspiciously low prices by cutting corners in these critical areas.

Questions that I must ask to get the right pricing for my requirement

As an agency/brand owner looking to outsource your digital marketing needs, it becomes imperative that you seek answers to the right probing questions so that you can better justify the numbers on the final invoice. Here’s a list for ready reference that you might want to use as a checklist the next time you interview an offshore agency! 

1. How long have you been in the business doing SEO/PPC/Email Marketing?
2. Have you worked with clients from my industry segment?
3. For SEO, how would you approach the process of acquiring high-value backlinks?
4. What are the engagement/pricing models that I must be aware of?
5. Can I hire a dedicated resource/team?
6. Who will be responsible for the outcome and quality of the deliverables?
7. For SEO, do you offer technical, UX, and content-based services?
8. Would you mind sharing some case studies similar to my problems and business goals?
9. How will you help me stay ahead of the competition?
10. How long will it take for the positive results to materialize?
11. What systems and processes are in place to manage my project?
12. How do you handle team transitions and ensure efficient handovers?

This is an indicative and not an exhaustive list; please feel free to jot down any more relevant questions that you think could bring more value to the table for the quoted costs.

What lies ahead?

Now that you have gained some insight into the costs of offshoring multiple digital marketing services, it makes sense to jot down your budget and begin interviewing agencies in locations that best fit your needs. You might want to check out our blog on some best practices to follow when outsourcing to an Indian agency.