Most companies and agencies, regardless of margins or other tricks, charge a management fee for search marketing. This fee typically ranges from 15 to 50%, depending on the campaign budget. Media companies usually charge between 25 to 35%, while agencies usually range from 15% to 30%. Licensing fees are the second type of technology fees and are related to the marketing technology your company uses.
For example, your CRM or marketing automation system. If the agency you work with licenses the software on your behalf, they may take part because they service that software. When it comes to printing materials, the agency may not print them but subcontract them to a printing partner. In turn, they would mark that service between 10 and 20 per cent to cover their function of research, organization and administration of the provider.
A commission-based structure is the most traditional approach to ad billing. The agency simply takes a percentage commission based on the media budget for the campaign. A 15 percent commission is the norm, which means that the advertising agency receives 15 percent of the total spent on the advertising campaign. This method has become less common in the early 21st century due to its potential for conflicts of interest.
Advertising agencies develop media strategies, create media plans, buy media, measure effectiveness, optimize the campaign, provide weekly reports and use their knowledge to secure the best media at the best prices. To do this, they take a percentage as a fee; usually between 5% and 18% depending on the media and according to the agency. Business owners who want to increase revenue can choose between a marketing agency or an advertising agency. If you already have a quality mobile-friendly website and a high-performing social media marketing team, you'll spend less on agency services to meet those needs.
When a marketing or advertising agency or consultant has to travel, whether for a meeting, trade show or photo shoot, that cost will be budgeted as a separate travel cost or within your hourly rate. Improved technology and improved communications have enabled mid-sized marketing companies to do almost the same level of work as large agencies, resulting in significant savings. The fee structures of advertising agencies represent a balance between the needs of customers who want to get the best return on their advertising investment and the agencies that must make a profit from the services they provide. Agency fees are the hourly costs you pay for strategy sessions, digital planning, workshops, creative presentations, research, reviews, Zoom calls and late-night panic phone calls.
Onboarding is also known as discovery and is when the marketing agency or consulting firm catches up with your business. A better plan for you as a buyer is to understand what makes agency costs go up or down; something that will really help you when it comes to budgeting other marketing services.