UPDATE: I’ve updated this post for 2017 here. It includes a bit more depth and some minor updates to the prices.
A small business owner I spoke with last week needed a marketing pricing guide. He asked me how much he would have to spend to have someone run his social media accounts.
“That really depends on what you mean by ‘run’,” I said. “Do you want someone to just answer questions, customer service style? Do you want someone to help you figure out how to drive business? Do you want someone to post your content, find other’s content, create content for you?”
There are various degrees of scope and involvement for a marketing consultant or agency when working with your business. For the full gamut of services, you need someone to devise strategy, plan and manage execution, measure, then optimize your marketing efforts.
Depending on the complexity of your business, you may have multiple needs within those sets. Chances are, those that can help you with social marketing aren’t going to necessarily have the chops to build your above the line advertising. The ad folks probably won’t be as useful in public relations. The PR types may not be the right people to help you devise channel strategies, navigate legislative stakeholders and so on.
At the end of a full needs assessment you may find that you need 10 different marketing consultants/advisors/agencies to help you do different things optimally. At that point, it becomes a question of priority and budget.
Based on my experience navigating the marketing world as an independent consultant, SVP at a digital marketing and PR firm, brand-side VP overseeing much of the marketing efforts of a team and consulting with various agencies, software and technology companies, I thought a quick marketing pricing guide might be helpful.
No marketing effort is optimally efficient without some degree of market research. Yes, much of this can be collected from your own internal knowledge of your customers, target audience, competition and industry. But the more you know, the smarter your marketing decisions.
Still, market research can range from an informal customer survey you build that costs only time, to a full-on consumer research study commissioned to get specific on understanding an audience.
What You’ll Pay: For a custom research study, expect anywhere from $20,000 and beyond. Secret shopper programs are also great research but are also custom and will run you in the thousands of dollars, typically. For the online version of that – a conversational research assessment – a good one will run you $3,000 -$5,000. (Disclosure – I do these for brands. Holla!) To drop a question or two in a national survey (think Gallup Poll), you’ll pay $1,000-$5,000, depending on the sample size, scope, etc. Of course, you can also develop your own questionnaire and send an intern to the mall for whatever it is you pay the intern. Just ask the mall’s permission to do it first.
Agencies can be broken down a million ways from Sunday. There are ad agencies, PR firms, digital agencies, SEO shops, web development firms and even printing companies. The awful part of agencies is that most sell themselves as far more than what they are truly good at. It’s their job to say, “Yes! We can do that!” When they hang up, they often then say, “Oh shit! We have to go find someone who can do that!”
Most traditional advertising agencies and PR firms suck at digital. They make up for it by farming out the digital work to digital marketing or web development shops and marking up that work. So, you pay more. But you also get a partner who is hopefully going to ensure the work is consistent and has strategic ties throughout each consumer touch point.
PR firms aren’t as bad, but many do sell themselves as running the gamut when in reality they just pitch media and outsource everything else, again costing you more than you should pay. The truly integrated agencies and firms will have known practice leaders in specific disciplines and well-staffed departments that focus on PR or social or digital or mobile, etc.
(For the record, I typically tell people that Elasticity is a digital marketing and public relations firm. We have done and continue to do a little bit of everything, but we’re really good at content marketing that drives social and PR to elevate search results.)
What You’ll Pay: The best way to think of the consultant/agency world is by hourly rate. The “blended rate” is a nice benchmark to ask for in an agency. This is an average hourly rate you’ll pay for access to anyone’s time who works on your business. You may get the services of a $50 an hour proofreader right along side a $250 per hour global strategists, but you’re going to pay a blended rate for both of, say $125.
The blended rate depends on a lot of things. It changes by depth and breadth of the agency, the scope of work they’re being asked to perform, the geographic market they’re in and perhaps even the industry you’re in. A good, experienced, professional advertising agency in a medium to large market is going to have a blended rate between $100 and $200 per hour. In Louisville, $125-$150 is a solid blended rate for agencies like Doe-Anderson, Scopecchio, Power Creative – the bigger agencies in town. In New York or Chicago, the BBDOs and TBWA\Chiat\Day’s of the world are probably going to be more expensive … closer to $200 per hour.
In my honest opinion, if you’re paying more than $200 per hour for an agency, you can find a better deal out there in smaller markets where overhead, real estate and champagne in the break room aren’t issues.
This means, though, that you’re paying that for a team of people to work on your business, not that you’re going to pay no more than $125 per hour for a 40 hour work week. You might pay $125 per hour for a 40 hour work week for 12 people! So depending on size and scope of your marketing needs with that agency, expect to pay anywhere from $2,500 to $50,000 and up for larger scopes, per month. And that’s just for the staff member’s time and expertise. You’ll also have to budget for production costs, media buys and the like.
But many agencies will also price out your work based on the project. This “project-based pricing” is still typically based on a blended rate. They’re just guessing how many hours they’ll spend accomplishing the goals. Build a website? Think $10,000 or so from a small web development firm and for a blog or simple site. Go up to hundreds of thousands for a big, global site with e-commerce and database tie-ins and so on.
And for you brand managers who think you’re clever and want to engage an agency on a revenue share or pay-for-performance basis? You’re just ignorant to the realities of what marketing partners bring to the table. Whether the campaign works or not, agencies still have to pay the dozen people working on your business and the overhead associated with them. When you’re dealing with more than one person’s work, that’s just not practical.
And don’t let the prices above scare you. The smaller the agency, the smaller the market, the lesser the experience, the lesser the per-month cost. But also, the fewer people and lesser time spent on you.
While there is a gray area between agencies and consultants for the boutique and 2-3 person consulting shops, you can assume they’ll be somewhere between what is mentioned above and what I’ll cover here. The independent consultant can be a boon for your marketing efforts. Typically, you’re hiring a sort of strategic or tactical lead for your project or programs. You’re paying for their expertise and time to actively work on your brand.
What you’re not paying for – and will thus be billed through for, should these be required – are the other people or disciplines you’ll need to pull it all off. A strategic consultant isn’t likely to design your brochure or website. They’re going to hire someone to do that for you with their supervision. So there will be additional costs.
Certainly, you can hire a person to just write your press releases or design your brochures, but we’ll cover them in the Do-ers section below.
Think of a consultant as another brain on your team to help you make decisions, manage or lead projects and coordinate what you need done. Everyone else is a do-er (rather than manager or thinker).
What You’ll Pay: Again, depending on the market, experience, scope, etc., you can expect anywhere from $50 to $150 per hour. There are a few exceptions, of course. If you have a subject matter expert with significant national, global or enterprise experience, you may see an hourly rate more in line with agency rates. My independent consulting rate before Social Media Explorer became an agency was $250 per hour. I’ve used a PR consultant in a mid-tier market before who charged me $85 per hour. That’s pretty close to what you’d need to be a modestly experienced, good consultant in Louisville. For bigger markets or experience levels, inch closer to the $100 to $125 range.
Sometimes you just want someone to write your blog posts, respond to people on Twitter without much thought to strategy, turn your sales deck into a brochure for customers and the like. When the task is more tactic than strategy, you can find people out there to do the work.
From community managers to graphic designers and copywriters to media relations pitch artists, the marketing world has dozens of this sub-set of consultants. They like doing the work. They’re good at it and with some direction they can be very good for you.
What You’ll Pay: $20 to $75 per hour, depending on experience, size and scope. If you want to pay less than $20 per hour for something, outsource it overseas and hope the quality doesn’t suck. Otherwise, pony up. It’s your marketing, not the neighbor’s kid cutting your grass.
What Did I Miss?
Certainly, this is a broad view and not 100 percent complete. There are specialists and specialty agencies and even high-level consultants I’ve certainly left off. I’m sure more than one person in the consultant or do-er bucket may take umbrage with that I’ve carved out here. So, go ahead … what did I get wrong?
Also, there are softwares and other vendor services you can use — that’s a whole different pricing guide that I’ll perhaps work on later. But for those you’ve worked with at any of these levels, what has your experience been? What do you get and how much do you have to pay?
The comments, as always, are yours.