Why is it important to compare agency costs?
You want to compare your agency costs with local and global benchmarks so that you ensure you’re always paying the right price for your work. It makes sense – you want your marketing spend to go further and do more, and you want to know that your agency is on the same financial page.
You also want, however, to feel that your relationship with your agency is transparent and that what they charge you is in line with industry standards. If you discover hidden costs or inflated prices, it’s going to impact your relationship with your agency, and probably not in a good way.
Regularly comparing and reviewing agency costs, ensures your fees are fair, your relationship is transparent, and there’s visibility in your transactions.
“Pay the right price for the work and remain on track with budgets and spend”
To compare agency costs you need apples and pears
Comparing apples and pears is, as the saying goes, not going to give you the right answers. As it turns out, comparing apples with apples will not give you the answers you need either, because there are simply too many variables. The same applies to comparing marketing agencies, media agencies and ad agencies.
Not all agencies are the same, so they won’t charge the same fees for the same work. It’s also worth noting that some agencies will inflate their costs for specific sectors such as gambling, finance and luxury brands. They might charge a premium, but it’s essentially the same team of people working on your project. Agencies don’t have a gambling team, finance team or luxury brand team.
Whether or not you sit in one of these sectors, the importance of taking the time to compare agency costs against industry standards doesn’t change. Doing so ensures your fees aren’t excessively different from agency to agency and from the industry averages.
Which means, you need to find a smart way of comparing apples and pears, and this comes in the form of benchmarking.
Compare agency costs with the data
It’s data that gives you visibility. Data around agency fees, rate cards, costs, structures and expenditure provides you with metrics on how agencies price themselves and how they structure the fees they charge your brand. Using benchmarking tools allows you to leverage this data to gain insights into global and local agency structures, fees and costs, and gain immense visibility into pricing, scope of work and performance.
Benchmarking should be done with an external service provider, like RightSpend, providing the technology and scale to deliver a depth of data from thousands of data points. This level of detail in the data lake provides an immense insight into agency costs and behaviours, and allows you to better compare agency costs against those charged to other brands. Working with a trusted service provider for your benchmarking ensures the data is up to date, not limited in scale, and is highly relevant to current market trends and expectations.
Another tick in the box for benchmarking is how it enables you to compare agency costs on a regular basis, ensuring you remain on track with your marketing spend (and that you are tracking it more effectively). You can use the data to compare agency costs as often as you need, and this will help refine your approaches, strategies and, ultimately, your choice of agency.
It’s also worth comparing your roster of agencies against one another. RightSpend’s visual reporting does this for you, showing you instantly which agencies have the highest returns on investment and which you might want to reassess. Allowing you to refine your agency selections and manage marketing spend more effectively.
When you use benchmarking to compare agency costs, you can make more informed decisions around campaigns, budgets and, of course, agency selection.
But there’s more…
Benchmarking has another advantage. You can compare agency costs from outside your specific industry and see if your costs are being inflated because you sit in one of the high-end sectors, such as beauty or finance. This will give you an edge when it comes to agency fee negotiations, and when choosing your next agency.
And, this is an edge that everyone needs right now. Costs are rising. The world continues to teeter on the economic edge and all costs are under scrutiny, especially marketing budgets.
Using the right tools, can ensure you keep a close eye on every dollar spent, and, with RightSpend, you can make significant savings thanks to rich insights and visibility. By comparing your fees in detail you can form a holistic picture of your costs and fine-tune your procurement strategies and your marketing budgets.
Benchmarking is an invaluable investment for brands, offering insight into spend, value, deliverables and campaign performance that allows for procurement, marketing and agency to reshape their approaches more effectively. It shines an intelligent spotlight on data and insights that can be used to make far more relevant decisions that are based less on historical investments and more on measurable value and strategic deliverables. And with RightSpend, comparing agency costs is possible across more than 75 countries, anonymised for richer insights and visibility, up-to-date and relevant, and provides you with extraordinary data on demand.
Costs may be high and budgets may be tight, but with the right support and insight, you don’t need to compromise on your agency or on building your brand and everyone benefits, from procurement to finance to marketing.