Is a Digital Marketing Agency Worth the Money?

Timothy Carter
April 3, 2023

Digital marketing is a practical necessity if you're interested in greater brand visibility, generating more traffic for your website, landing more sales, or a combination of these.

But how do you handle that digital marketing?

One option is to hire a digital marketing agency – a special type of business designed to provide digital marketing services in exchange for recurring fees.

Unfortunately, digital marketing agencies are rarely cheap. If you're swimming in extra money, you probably don't need a digital marketing agency in the first place, which means most potential digital marketing agency clients need to think critically about whether hiring an agency is truly worth the money.

Are digital marketing agencies worth it? And how can you tell for sure?

What Is a Digital Marketing Agency?

What Is a Digital Marketing Agency?

A digital marketing agency is a business that provides many different types of digital marketing services to its clients. These services can include things like:

  • Consulting and planning. Your agency will work with you in a consulting capacity, analyzing your past marketing efforts and making recommendations for how to plan for the future. They can also help you plan your spending and orchestrate better campaigns from the top down.
  • Strategic branding. Depending on your needs, your digital marketing specialists can help you create a brand from scratch, update your existing brand, or better position your brand to serve your marketing meats.
  • Creative work. Agencies are skilled at providing creative collateral, including photos, videos, web designs, copywriting, and more to serve your marketing and advertising needs.
  • Strategy/tactic management. Which strategies and tactics should you use to support your brand? And how should you implement them? Digital marketing agencies can help you sort this out, covering strategies like SEO, PPC advertising, email marketing, social media marketing, and more. Some agencies specialize in a single strategy or tactic, while others aim to provide full service across many different channels.
  • Reporting and analytics. Of course, most digital marketing agencies concentrate on analyzing and reporting on their efforts, demonstrating value to keep their clients happy.

Digital marketing agencies typically employ individual specialists, including strategists, data analysts, designers, writers, and account specialists to take care of this work. 

Because they also have an extended network of contacts and resources they can draw upon, working with the digital marketing agency is typically scalable. When you're first starting out, you can take advantage of a relatively inexpensive plan, and as your business grows and your needs change, you can tap into those extra resources.

Digital marketing agencies typically charge money in one of three ways. They may charge a monthly retainer fee, based on the number of hours you used during a specific time period, or based on individual projects.

The digital marketing agency’s efforts will likely boost brand visibility and reputation, increase web traffic, and increase conversions—though agencies rarely guarantee these types of improvements.

What Are the Alternatives to a Digital Marketing Agency?

A digital marketing agency isn't your only option.

There are also several alternatives to consider.

In a discussion of whether a digital marketing agency is worth the money, we need to know what we're comparing against; a $500 hamburger might be worth it if you're starving, but probably isn't worth it if you can make a similar hamburger for a couple of dollars at home.

  • Not marketing. One option is to simply avoid digital marketing altogether. Considering most experts advise business owners to spend at least 2 to 5 percent of their gross revenue on marketing and advertising, this is usually a bad idea. If you're not marketing and promoting your brand, you're probably not generating new business; while this is perfectly viable to maintain the status quo in a business that's already thriving, it's a death sentence if you depend on growth and advancement. Compared to this alternative, digital marketing agencies are almost certainly worth it.
  • In-house teams. You could also choose to work with an in-house team of marketing experts. This comes with some pros and cons. Having your own internal team means you have more control and more transparency, though there's no guarantee you'll see results as good as the ones you get with a digital marketing agency. Additionally, building a team is stressful and time-consuming – and there's no guarantee you'll save money by having an internal team of your own.
  • Freelancers/contractors. Working with freelancers or contractors is a more affordable alternative since these free agents typically charge a lower rate than what you would find in an agency. 

The problem is tracking down and continuously working with freelancers who are truly reliable experts. If you depend on a network of contractors, half of your marketing responsibilities will be finding new freelancers and coordinating them. While inexpensive, freelancers are less consistent and less reliable.

There's no clearly superior alternative, though some businesses will clearly prefer one of the above options over digital marketing agencies for one reason or another.

How Much Do Digital Marketing Agencies Cost?

The cost of digital marketing

We also need to consider the cost of digital marketing agencies. Obviously, the price of a digital marketing agency will depend on many factors, including the agency's experience level and specialty, the services you require, the extent of those services, how the payment plan is structured, and more.

Still, we can make a high-level assessment of the price of the average digital marketing agency.

Currently, digital marketing agencies charge about $2,500 to $12,000 per month for small- to mid-sized business clients. That equates to an hourly rate between $50 and $500 (for most agencies), or $1,000 to $7,500 per project (though this varies significantly based on the nature of the project). 

Depending on what you need, you can expect to pay at least a few thousand dollars every month for these services.

How to Measure the Value of a Digital Marketing Agency: ROI

Is a digital marketing agency worth the money?

That depends on how you define “worth” – in other words, how you define the value an agency gives you. In our previous example, a $500 hamburger is worth it when you're starving, because the alternative is death, thus making the value of the hamburger “life” itself. Most of us would estimate that the value of a human life is far more than $500, making this a deal. But if the value is simply a slightly bigger hamburger, most of us would agree that the extra money is a waste. In most situations, the best tool to measure digital marketing agency value is your return on investment, or ROI, though this isn’t always easy or straightforward to calculate.

Essentially, you want to figure out how much material value the digital marketing agency is generating for your brand, relative to the amount of money you’re spending with the agency. You'll also need to consider this metric as it relates to alternative options.

For example, let's say you spend $10,000 per month with your digital marketing agency of choice. If they generate $5,000 in new sales for your business, you can clearly see a problem; you'll essentially be losing $5,000 every month, proving that this digital marketing agency is not worth the money. If they generate $50,000 in new sales for your business, the agency is very obviously worth the money.

Unfortunately, ROI can be difficult to calculate. There are simply too many variables to account for. If your agency is charging you a flat rate for services, this can streamline things, but you'll still need to take into account subtler cost variables, like how much time you spend talking on the phone with your account representative. 

On the benefit side of the equation, it's important to consider the net value of meaningful actions generated by your agency, which isn't always straightforward. For example, let's say your digital marketing agency sends 100,000 people to your website. To understand how much value this has, you need to understand the average value of a website visitor.

We must also consider how we attribute things to the digital marketing agency. If 100,000 people visit your website, are you confident that all of them visited because of the actions your digital marketing agency took? What if you have independent marketing strategies running in the background? What would have happened if you executed this campaign, instead of your digital marketing agency? 

Complicating things further, we need to consider forms of value that digital marketing agencies provide that can't be easily calculated. For example, if a digital marketing strategist teaches you a new principle that changes how you construct landing pages forever, multiplying your conversion rates many times over, how do you represent this in your ROI equation? 

Because of these complicating variables, we can’t even begin to ballpark the “average” or expected ROI of a digital marketing agency. Even if we could, there would be digital marketing agencies seeing results far above and far below this figure. What’s important is that you have some kind of ROI-centric value equation you can use to approximate the value of the agency you work with. Your agency will likely attempt to prove its value as well, in a bid to keep you as a satisfied client. 

Though certainly not guaranteed, most digital marketing agencies will return value that exceeds what you spend on them. If an agency can’t at least meet this threshold for service, it typically loses clients quickly and fades into oblivion; if an agency has been around and serving many clients for many years, you can usually count on a relatively high ROI.

When Are Digital Marketing Agencies Not Worth the Money?

When Are Digital Marketing Agencies Not Worth the Money?

Since our default assumption is that digital marketing agencies are usually worth the money, it might be easier to explain the situations and circumstances that make a digital marketing agency not worth the money.

  • Overpricing. Some digital marketing agencies charge as much money as possible, for understandable reasons. In some cases, these price increases can lead to overpricing. The services rendered by these digital marketing agencies are valid, and will likely benefit your business, but they may not provide value that exceeds what you're spending. As a simple example, a digital marketing agency may rise to prominence by charging $1,000 per month for services that lead to $5,000 of value per month, but once they start charging $5,000 per month, these services lose their value.
  • Minimal experience/expertise. A digital marketing agency usually isn't worth the money if the leadership team has minimal experience or expertise to guide the agency. Remember, it's always possible to do your own marketing, hire an in-house team, or work with freelancers. You're turning to a digital marketing agency because you expect them to have greater knowledge and experience to share. Without that knowledge and experience, you'll end up wasting your money.
  • Limited capabilities. For some clients, it's critically important to find a digital marketing agency with robust capabilities. It's not enough to work with an agency that can handle one or two strategies competently; they want an agency that can do everything, from start to finish. Some clients are also interested in agencies with the ability to scale; this is especially important if your business is a startup that plans on expanding rapidly in the near future. If your agency can't support you with the resources you need, it may not be worth the money.
  • Poor communication. Your relationship with your digital marketing agency is an important one, as most of your marketing campaigns will require at least some degree of collaboration. If your points of contact at the agency are plagued by poor communication, it could make everything more difficult, requiring far more steps and much more time for every incremental decision. This can wreck your value equation, forcing greater investment for each stage of the marketing development process. It can also lead to increased stress on your end.
  • Lack of flexibility/adaptability. A digital marketing agency should be the designated expert in your relationship, and you should take their advice and direction seriously. At the same time, you should expect some wiggle room. It’s important to find a plan that genuinely works for your business – not some random template they put together for generic businesses. It’s also important that your perspectives on branding are taken seriously. If your digital marketing agency isn’t sufficiently flexible or adaptable, it can end up causing more problems than it’s worth.
  • Very limited budgets. Digital marketing agencies can be expensive, even if they perform well. If you’re running a small business, or if you’re currently dealing with economic uncertainty and internal budget cuts, you may not be able to afford one. In this scenario, the hypothetical ROI of a digital marketing agency doesn’t matter – you simply can’t afford their invoices. This is especially true if you’re planning for strategies that only pay off in the long term.
  • Attractive alternative options. Finally, a digital marketing agency may not be worth the investment if you have more attractive alternative options available to you. For example, if you have significant marketing experience, you may feel competent in directing and organizing your own marketing campaigns. If you already know a handful of very talented, reliable freelancers, you may choose to work with them over a comparable agency.

Finding the Best Digital Marketing Agency

As long as you have decent standards for agencies you hire, you can generally count on finding an agency that returns a sufficient amount of value to your organization. The real question is whether you're able to find the best possible digital marketing agency for your brand.

In other words, assuming nearly all digital marketing agencies are “worth the money,” how do you find the agency that returns the greatest amount of value for the money you spend?

Define this, and pay especially close attention to the agency’s areas of specialty, years of experience, current client portfolio, reviews, and general reputation within the marketing community. Due diligence is essential if you want to make the best choice. 

Additionally, be ready to collaborate with your digital marketing agency to push your results even higher. A positive ROI is a good thing, but there's no upper limit to how high your ROI can climb when you're ready to push for it.

The Bottom Line: Is a Digital Marketing Agency Worth the Money?

So, what's the bottom line here? For most businesses in most situations, a digital marketing agency is worth the money, assuming that a digital marketing agency is sufficiently experienced and competent. 

There are many forms of value to consider when estimating worth, making ROI equations complicated, but you should still be able to estimate the prospective value of digital marketing agencies you're considering.

Are you interested in working with a digital marketing agency that can prove its value? Or are you just interested in seeing what types of digital marketing agencies are out there? Start here. Contact us for a free consultation today!


Timothy Carter

Chief Revenue Officer

Timothy Carter is a digital marketing industry veteran and the Chief Revenue Officer at Marketer. With an illustrious career spanning over two decades in the dynamic realms of SEO and digital marketing, Tim is a driving force behind Marketer's revenue strategies. With a flair for the written word, Tim has graced the pages of renowned publications such as Forbes, Entrepreneur, Marketing Land, Search Engine Journal, and ReadWrite, among others. His insightful contributions to the digital marketing landscape have earned him a reputation as a trusted authority in the field. Beyond his professional pursuits, Tim finds solace in the simple pleasures of life, whether it's mastering the art of disc golf, pounding the pavement on his morning run, or basking in the sun-kissed shores of Hawaii with his beloved wife and family.