More Marketing Agencies Using Hybrid Billing Models (New Report)

Last week, the Magazine Manager blog wrote about the uncertainty around current media agency models. Now, a new WordStream report is looking closer at the cost of these agencies.

The State of the Digital Marketing Agency report included a survey of more than 300 U.S. and Canadian agencies, finding that almost half (49%) use a hybrid billing model of flat fees/retainers, billable hours, and spend percentage. (In WordStream’s 2020 report, the hybrid model and one priced strictly on flat fees were equally common; in 2023, flat-fee pricing was used by 24%.)

25% of the agencies surveyed did not charge additional fees, but those that do charge for landing page creation (52%), image ad creation (43%), and display creative (41%).

“This makes sense because these are time-consuming marketing activities that require expertise and creativity,” WordStream’s Stephanie Heitman writes. “Plus, effective landing pages and strong creative are crucial to the success of digital marketing campaigns.”

Among the services offered, agencies boasted social ads (80%), content (79%), creative services (73%), SEO (72%), search advertising (71%), and email marketing (70%). “These strategies continue to be accessible and cost-effective for all types of businesses,” Heitman writes, “making them a reliable option for agencies offering digital marketing services.”

(Source: WordStream)

When it comes to search advertising services, the largest share of respondents (41%) were spending between 2 and 4 hours per week on PPC management per client, but 16% were spending five hours or more per week.

“This time can add up quickly and hinder your agency from onboarding new clients and adding more services to help retain existing clients,” Heitman writes. “If you’re spending more than a couple hours per week managing search per client, consider outsourcing or researching automated tools that can cut down on your PPC management without sacrificing results.”