Costs and pricing
Part of Marketing agencies costs and pricing without the guesswork
Before you compare marketing agencies pricing models
Marketing agencies pricing models in England compared: retainer, project, hourly, media commission and performance fees, with a rubric and worked examples in pounds.
What to take away
- Most buyers compare headline rates, then discover the pricing model is the real cost driver. Sort the model first, the number second.
- Retainers buy capacity, project fees buy output, hourly bills buy time. Only one of those matches most briefs.
- Media commission is the model buyers scrutinise hardest, because it can align or conflict with your interests depending on how it is disclosed.
- Every model carries a cash-flow assumption. Ask what happens in month three if scope changes.
- Score each model on predictability, incentive, transparency and exit cost before you negotiate a fee.
The five models in use
Most marketing agencies pricing models settle into five shapes. A retainer is a fixed monthly fee for agreed capacity. A project fee prices a defined output, such as a website build or a campaign launch. Hourly billing charges recorded time. Media commission takes a percentage of ad spend placed. Performance fees link payment to a result you both define.
Five agency pricing models
Retainer
- What it prices
- Monthly capacity
- Typical use
- Ongoing support
- Common hybrid
- Plus media comm.
Project
- What it prices
- Defined output
- Typical use
- Website or campaign
- Common hybrid
- Plus change rate
Hourly
- What it prices
- Recorded time
- Typical use
- Audit or advisory
- Common hybrid
- Rarely hybrid
Media comm.
- What it prices
- Ad spend placed
- Typical use
- Paid search
- Common hybrid
- With retainer
Hybrids are common. A retainer plus a media commission is standard for full-service agencies handling paid search. Project fees with a change-request rate sit behind many creative shops.
What each model suits
A retainer suits ongoing work where demand is steady and you want a team on call. It suits agencies too, because revenue is predictable. The risk is paying for capacity you underuse.
Which model suits your brief
Retainer
- Suits
- Steady ongoing work
- Risk
- Paying for unused capacity
Project
- Suits
- Defined briefs
- Risk
- Scope creep
Hourly
- Suits
- Investigative work
- Risk
- Least predictable
Performance
- Suits
- Measurable outcomes
- Risk
- Attribution disputes
Project fees suit defined briefs with a clear end. They are easier to compare across suppliers because the deliverable is fixed. The risk is scope creep, priced afterwards at a rate you did not negotiate.
Hourly billing suits investigative or advisory work. It is the least predictable for your finance team. Media commission suits large ad budgets, where the agency can buy efficiently. Performance fees suit measurable outcomes with clean attribution.
Worked cost examples
All figures below are illustrative examples, not market rates.
Illustrative costs by model
Model
- Retainer
- £4,000 a month
- Project
- £18,000 build
- Hourly
- £95 to £150
- Media commission
- 10% of £30,000
- Performance
- £250 per lead
Example
- Retainer
- Steady support
- Project
- Fixed brief
- Hourly
- Audit work
- Media commission
- Large media budgets
- Performance
- Clean tracking
Best fit
- Retainer
- Unused hours expire
- Project
- £110 an hour changes
- Hourly
- No cap on spend
- Media commission
- Gross or net spend
- Performance
- Who defines qualified
Watch for
- Retainer
- Project
- Hourly
- Media commission
- Performance
Illustrative example
- Retainer
- £4,000 a month for 40 hours
- Project
- £18,000 for a campaign build
- Hourly
- £95 to £150 an hour by seniority
- Media commission
- 10% of £30,000 monthly spend
- Performance
- £250 per qualified lead
Best fit
- Retainer
- Steady in-house support
- Project
- Fixed brief, fixed deadline
- Hourly
- Audit or advisory work
- Media commission
- Large paid media budgets
- Performance
- Lead generation with clean tracking
Watch for
- Retainer
- Unused hours rolling over or expiring
- Project
- Change requests billed at £110 an hour
- Hourly
- No CAP on total spend
- Media commission
- Whether commission applies to gross or net spend
- Performance
- Who defines a qualified lead
Scoring rubric
Score each supplier from one to five on each row, then weight the rows to match your priorities. The weights below are an illustrative example.
| Criterion | Weight | Score 1 looks like | Score 5 looks like |
|---|---|---|---|
| Cost predictability | 25% | Uncapped hourly billing | Fixed fee with a defined scope |
| Incentive alignment | 20% | Paid regardless of outcome | Paid partly on agreed results |
| Transparency | 20% | Commission undisclosed | Full breakdown of fees and pass-through costs |
| Scope clarity | 20% | Vague deliverables | Written scope with change rates |
| Exit cost | 15% | Assets and data held back | Handover terms agreed upfront |
Commercial and compliance checks
Ask how the agency accounts for income. If it is a sole trader, Making Tax Digital for Income Tax requirements may affect how it invoices and reports, which can slow down your payment cycle.
Campaign work must comply with the UK Advertising Codes published by the ASA, and the model you choose does not change that duty. A commission-based agency still needs to justify every claim it makes.
If the retainer includes staff embedded in your team, employment status questions arise. Acas guidance on how it works is a sensible starting point for those conversations.
Building the comparison
Put each model on one page before you negotiate. Use a marketing agencies budget template to model monthly cash flow under each option, then test it against your worst-case month.
Ask what happens if you pause work for a quarter. Ask who owns the assets and data. Ask how commission is calculated when you buy media directly. The answers separate a pricing model from a pricing trap.
Common questions
Which pricing model is cheapest?
None is cheapest in every case. Hourly billing can be cheapest for a one-off audit, while a retainer usually beats hourly for steady, repeatable work. Compare total cost over the contract term, not the headline rate.
Should I accept a media commission model?
It can work well when spend is large and the agency buys efficiently. Insist on written disclosure of the percentage and whether it applies to gross or net spend, then check the media invoices yourself.
How do I compare a retainer with a project fee?
Convert both to a cost per deliverable. Divide the annual retainer by the deliverables actually produced last year, then compare that figure with a fixed project price for the same output.
Can I mix two models in one contract?
Yes, and hybrids are common. A retainer for strategy plus a project fee for a specific build keeps the ongoing relationship predictable while capping the cost of defined work.
