The cost of social media marketing services ranges widely. There’s a reason that’s in italics: Some agencies charge $500 a month, while others charge as much as $15,000 a month or higher.
The disparity doesn’t always come down to quality or even the services performed, though those factors obviously play an important role in pricing. But some agencies simply charge more than others. With pricing literally all over the place, how do you make a cost-conscious decision about which social media marketing agency to choose?
The answer is not “just go with the company with the cheapest price.” You do get what you pay for, after all. The trick is learning how to tell what that is.
Depending on what type of services the agency offers, it might use one of several common pricing models. Here’s a look at three of the most used.
Some social media marketing agencies charge a percentage of your total ad spend. This is actually akin to traditional advertising agency models, which would do the same thing. So, if an agency charges 30 percent of ad spend and you have a budget of $10,000 for social media ads for the quarter, the agency charges you $3,000. That means $7,000 of your spend actually goes to buying ads.
This sounds fine when it’s spelled out like that, and it might work for you if all you’re paying the company for is to manage your advertising on social media. However, if you’re working with an agency that provides more than these services, things can get murky quickly. Some agencies don’t publish the percent they charge for advertising, and they may take money out of your ad budget without you realizing it.
Before opting to work with this type of model, make sure you get the percent in writing and ask for an accounting of marketing spend and fees on a monthly basis. You can also eliminate issues with hidden fees or inappropriately managed budgets by paying for your ad pricing directly and only paying your social media company management fees.
Fixed-fee models involve charging you a specific amount for monthly service. Typically, you and the agency come to an agreement about what the fee will be and what services it covers. Make sure you get this in detail in writing in case there are discrepancies in the future. The monthly fee can then be renegotiated if you want to add or take away services, depending on what type of contract you signed.
This model works well because there are never any surprises in your marketing budget, and both you and the agency are on the same page about what each is receiving out of the deal. This model also requires the least amount of accounting management on your part; as long as you’re satisfied that you’re receiving all the services you pay for, you simply pay a single invoice.
If your service requirement is going to swing widely from month to month, you might not want to commit to a flat rate that’s the same every month. In this case, a variable-fee or a la carte structure might be better. With this option, the social media marketing agency charges you individually for services performed based on a specific fee schedule you agree to.
For example, you might be charged specifically for the design and content for an ad and then pay another fee for management of the ad at an hourly rate. This type of pricing model can obviously become complex and confusing, and you’ll have to work closely with your agency to ensure your budget is maintained. This is really only a model you want to consider if your needs are going to be unique every month or if you want very specific services here and there through the year.
In some cases, agencies may work out a hybrid model that benefits you both. Perhaps you only want to place a small number of social media ads most months but will far exceed the normal around certain holidays. The agency may charge you a fixed rate for every month and then a percentage of marketing spend on amounts exceeding a certain cap. For example, maybe the agency will agree to manage up to $2,000 of ad spend for $300 a month and then charge you 10 percent on amounts above that.
Ultimately, the goal is to choose an agency you can trust and work out a pricing model that protects your budget while ensuring you get the social media marketing services you need.