Cyber Week Sale! 50% Off All Access

Digital Marketing Agencies' Rates and Services Cost Less Than You Think An Entrepreneur contributor wanted to know what digital content work costs these days. So she asked.

By Alexandra Tachalova Edited by Dan Bova

Opinions expressed by Entrepreneur contributors are their own.

Shuterstock

Every entrepreneur at some point hires an SEO, PPC (pay-per-click) or SMM (social media marketing) expert -- which generally means an agency or freelancer. But money is tight, so how do startups evaluate whether the candidates they're considering offer reasonable rates? Is gut instinct enough?

Related: Everything You Need to Know About Hiring a Freelancer

Your own answer to the question is likely, "No, gut instinct is not enough, but what are my options? I don't have sufficient data about price rates in the digital marketing industry." And you're not alone in that thinking: Those of us hiring outside professionals for digital marketing work haven't had a clear idea of the average costs being asked for monthly retainers and hourly rates.

Until now. In recent months, I've conducted fresh research on the current state of digital-marketing agency services and costs, to help entrepreneurs orient themselves in the digital marketing sphere. My (nonscientific) survey, which brought in more than 1,000 responses from digital marketing agencies and freelancers, spanning 16 countries, including the United States, the United Kingdom and several European regions, included queries about services covered, prices and payment models. Among the biggest takeaways:

  • Freelancers' hourly rates in the digital marketing industry start at $50 (all cost figures given here are U.S. dollar amounts).
  • The most commonly used payment models are monthly retainer contracts and project-based fees.
  • Agencies typically prefer monthly-retainer contracts, while freelancers service clients mostly on a project-based fee payment model.
  • In the United States, the hourly model is the most popular, vs. the monthly retainer contracts and project based fees that UK and other European respondents said they preferred.
  • The average industry fee for a monthly retainer contract (across all studied regions) starts at $1,000.

Here are the details:

1. Freelancers' monthly retainer contracts start from $251, and their project-based fees, from $5,000.

You can expect to hire a freelancer on a monthly retainer contract at a cost that starts as low as $251 -- though the $1,000 noted in the last bullet above is the average. You can expect freelancers' project-based fees to start at $5,000.

2. Freelancers' hourly rates range between $50 and $100.

The average hourly rate for a freelancer is more than $100. But the majority of freelancers charge less than $50 per hour. Also, the hourly fee model is quite popular, regardless of agency size.

3. The average industry fee for a monthly retainer contract doesn't go beyond $3,000.

The average fee across all U.S. regions for a monthly-retainer contract ranges between $1,000 and $3,000. However, in Europe, it is a bit lower, around $751.

Related: 9 Ways Freelancers Can Get Paid on Time and Avoid Deadbeat Clients

4. Agencies mostly prefer monthly retainer contracts, while freelancers prefer a project-based fee-payment model

A payment models chart I created (see this infographic) shows that a majority of agencies are using the monthly retainer payment model, which helps businesses regulate their cash flow. Freelancers are also now using this model quite often, and most freelancers have a good number of clients on a project-based fee.

5. Small- and medium-sized businesses are the best clients.

The general trend shows that small- and medium-sized businesses are the best clients for the freelancers and agencies surveyed. The reason is that the digital marketing industry is still quite a new market, and most agencies aren't experienced enough or big enough to deal with enterprise customers.

However, according to the survey, a percentage of agencies do already prefer to deal only with big businesses, so the industry is moving in this direction -- it's only a matter of time until this trend spreads.

6. Freelancers deal mostly with hyper-local, local and small businesses.

Hyper-local, local and small businesses have limited budgets, which is why they prefer to deal with freelancers who will charge significantly less than the average agency.

7. Agency clients are seeking mostly SEO and PPC services.

The survey revealed that the following services were the top five -- in the following order -- that survey respondents across all regions said they preferred:

  1. SEO
  2. PPC management
  3. Social media
  4. Content marketing
  5. Analytics and UX

However, the survey also showed that social media were less popular in the United Kingdom than in the United States or the rest of Europe. I assumed that the reasons revolve around differences in market demand or the inclusion of social media in other services.

8. The bigger the agency, the more 'other services' they offer.

The survey reflected the obvious correlation between the growth of the "other services" tier and agency size. That made sense: The bigger the company, the more customized solutions it provides, and the higher the average price per customer.

9. Analytics and UX is a growing trend.

It was great to see analytics and user experience design (UX) among the most popular services agencies said they needed, because this data correlated perfectly with the current worldwide trend. As an active speaker and contributor, I have observed a significant increase in various types of content related to this topic. And that makes the analytics/UX niche an extremely promising one.

On the other hand, these statistics clearly showed that business owners should consider setting up the proper analytics needed, and developing a quality user experience from the very beginning of their projects, which would entail an increase in their startup investments. This matters, because web users have become more experienced, and business websites must meet those users' expectations.

More information about the survey results is available here. I am grateful for the help of companies like RavenTools, Ahrefs, DeepCrawl, Horizon, Kerboo, SERPstat, Oncrawl, Predikkta, Learn Inbound, Search Marketing Connect, which distributed the survey among their clients and contractors, enabling me to collect more than 1,000 responses.

Please share your thoughts, ideas and feedback in the comment section below.

Related: 3 Steps for Getting Over Your Fears of Starting a Freelance Business

Alexandra Tachalova

Digital marketing consultant

Alexandra Tachalova has worked in digital marketing for over six years. She is a digital marketing consultant, helping makers of digital marketing tools to open new markets and boost sales. Previously, she was responsible for advancing SEMrush's brand presence in European markets. Tachalova is a frequent speaker, and you can find her at all the major search industry events such as BrightonSEO, Ungagged, SEOzone, SMX, SEMdays, and many more. 

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Growing a Business

This Breakthrough Technology is Poised to Accelerate Your Company's Growth

Discover a breakthrough technology stacked on top of generative AI, now poised to revolutionize businesses across nearly every sector. Unlock unprecedented growth and profitability potential, achieving levels once thought unattainable.

Business News

Google CEO Sundar Pichai Says 'You'll Be Surprised' By How Google Search Changes Next Year

AI has already changed the look of search, but Google's CEO says there are more changes to come.

Business News

'This Is Nuts': TikTok Just Got Closer to Being Banned in the U.S — Here's Why

The TikTok ban could go into effect one day before the inauguration of President-elect Donald Trump.

Leadership

How to Master the Art of Delegation — Lessons From Andrew Carnegie's Legacy

Here's what Andrew Carnegie can teach today's entrepreneurs about leadership, teamwork and effective delegation.

Side Hustle

'I Just Hustled': She Earned More Than $300,000 Wrapping Gifts Last Year — and It All Started With a Side Hustle

When Michelle Hensley lost her husband to cancer, she needed to figure out how to earn an income for her family.