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How Much Does It Cost to Hire an Ad Agency?

How Much Does It Cost to Hire an Ad Agency?

Randy Lynn via Quora give an exhaustive answer to this question.

Key TakeAways

1. The cost varies greatly according to the SizeReputation and Geographic location

2. The Hourly rate ranges from $100 to $600 depending on the previous criteria.

3. It is better to match yourself up with an agency of a comparable size.

4. If you are searching for a help with a project assignment and not a long-term agency relationship, ask two or three agencies for a quote based on a project price – not an hourly rate.

Full Answer

“The cost of working with an advertising agency varies greatly according to the sizereputation and geographic location of the agency.

Most agencies bill their services by hourly rate, with different staff members assigned higher or lower rates according to seniority, job position, and the degree of specialization that their job requires. In the U.S., costs from agencies in New York, Los Angeles, San Francisco and Chicago are typically significantly higher than in smaller markets. 

The most recent 4A (American Association of Advertising Agencies) rate survey, reported in Advertising Age, cites rates of $600+ per hour for a top creative person at a Madison Avenue NYC agency and $300+ in other regions. Here’s the article: Advertising Age Survey Finds Digital Agency Execs Bill Clients Less Than Creatives | Agency News

Keep in mind, these rates are based on agencies that are members of the 4A’s, which are typically larger agencies. In contrast, the rates in smaller markets are typically more in the $100-$200 per hour range. Also, smaller projects typically go to the younger team members who bill at a proportionately lower rate.

As Trishul Patel mentioned, some clients prefer to be charged according to a blended rate – an average (roughly speaking) rate for all agency services. That keeps the accounting simple, but it may or may not work out in your favor.

In most situations, the key to keeping your budget under control is to match yourself up with an agency of a comparable size. If you’re a small business, you will probably be better served by a small agency. If you’re just starting out and have little to spend, you should consider hiring a freelancer.

There are exceptions. An agency that’s “hungry” may be more willing to negotiate if your business seems attractive to them or has good potential for long-term growth and profits. Or, if your product is oozing with creative potential, you may be able to pique the interest of a young creative person at a respected shop that’s eager to show what they can do, independently, without the typical layers of creative approval. 

Since it sounds like you are looking for an agency to help with a project assignment, as opposed to a long-term agency relationship, I would ask two or three agencies for a quote based on a project price – not an hourly rate. I would also let the agency know that your budget is firm. But be willing to clearly define your objectives and allow +/- 10% of variance in cost. Some clients require more service. And some jobs just end up taking more time than others.

If these costs end up being too high for your budget, the agency reps you’ve contacted may be willing to recommend a qualified freelancer. It doesn’t hurt to ask.

About Andrea Balducci

Business Engineer with a passion for #Tech, #Wearables and #DigitalMarketing. I am inspired by how technology enhance people and businesses life. Currently working @Sortlist : an online-tool reinventing the way businesses find marketing and communication agencies.