Thirty-four percent of small businesses are working with an outside marketing partner right now, down from 60% the year before1 (opens in a new tab). Read it as a churn number. Roughly one business in four ended a marketing relationship inside twelve months and decided not to replace it.
Which tells you the question do I need a marketing agency is being asked mostly by people who already tried one. And it is usually the wrong question. Most owners typing it want to know whether they can afford help. What decides the answer is whether buying media is the thing holding your revenue down, because buying media is the only thing an agency sells.
The thing you would be replacing is a Sunday afternoon
Half of small businesses have no one dedicated to marketing, and 60% of owners spend somewhere between one and ten hours a week on it themselves1 (opens in a new tab). So whatever an agency invoice buys, it gets compared against a few distracted hours from the busiest person in the building, most of them on a weekend.
Confidence has fallen alongside the hours. Only 18% of owners rate themselves highly confident that their marketing is working, down from 27%, while 42% have less than an hour a day to give it2 (opens in a new tab). An owner in that spot does not have an agency problem. They have a time problem, and hiring is one solution to it. Cutting the number of things you advertise is another, and it costs nothing.
Under $1,500 a month in ads, the fee is the campaign
Our own price list makes this test easy to run against us. Starter is $2,500 a month on our services page, before a one-time onboarding fee, and your ad spend goes straight to Google or Meta with no markup from us. Put that fee next to $1,200 of monthly ad spend and you are writing checks totaling $3,700 to place $1,200 of advertising. Sixty-eight cents of every dollar buys management.
There is no fee structure that fixes that, ours included. A cheaper agency at $900 a month is still taking 43 cents of every dollar, and at that price nobody senior is looking at your account anyway.
So here is the rule we hold ourselves to: if you are spending under $1,500 a month on ads, do not hire us, and do not hire the shop quoting you $900 either. Our retainers require at least $1,500 a month in ad spend, so below that we will tell you the same thing on the phone. Run one platform yourself, on the single service that makes you the most money, in the tightest geography you serve. Spend the fee on ads instead. Come back when the budget has outgrown what you can supervise in an evening, which for most owners happens somewhere north of $3,000 a month.
Past $50,000 a month, buy a person instead
A full-time marketing hire costs about $122,000 in year one once you count salary, payroll taxes, benefits, software, and recruiting, settling near $103,000 a year after that, which you can check against every alternative in our marketing cost calculator. That number looks enormous next to a $5,000 monthly retainer until your ad spend gets large.
A percentage-of-spend agency gets more expensive every time you raise the budget. Market management fees run 10 to 20% of ad spend, so at $71,000 a month a 15% fee is roughly $128,000 a year, and now the employee is cheaper and sits in your building. Above roughly $50,000 a month our calculator has the dedicated hire winning on more than price, because at that budget the daily decisions come faster than any outside team returns emails.
Freelancers hold the low end and the low middle. At $50 to $150 an hour they are the cheapest option available until spend approaches $21,000 a month, at which point the hours required to manage it stop being cheap.
Two problems that arrive disguised as an advertising problem
No media buyer alive can make a bad deal sell, and none of us can fix a phone nobody answers. Both of those failures produce the same symptom, which is leads that go nowhere, and that symptom is what most owners take to an agency.
You can test for them with numbers you already have. Our published band for general home services puts a lead between $25 and $80, with 35% of those leads typically turning into customers, and you can see the same bands for your trade in our lead cost calculator. If your leads cost $45 and you close 12% of them, the advertising is doing its job and the failure is somewhere between the ringing phone and the signed invoice. An agency that takes that account and reports a lower cost per lead has moved a number that was never the problem.
Price does the same thing. If your quote lands 30% above the two competitors the customer is also calling, more traffic buys more losses, faster.
What the middle band pays for
Between roughly $1,500 and $50,000 a month in ad spend, outside management is the sensible default, and what you are buying is judgment on a schedule. Our tiers run $2,500 for Starter, $5,000 for Growth, and from $7,500 for Scale, with a three-month minimum and six months on Scale, all posted publicly so you can compare before anyone calls you. We publish them for the same reason we tell people below the floor to walk, which is that the comparison is the whole argument we make against traditional percentage-of-spend agencies.
Which leaves the ratio nobody in this business likes saying out loud. At $2,000 a month in ad spend against a $2,500 fee, you are paying $1.25 in management for every dollar of advertising. That is defensible if the person managing it can make your $2,000 produce more than $4,500 would have produced without them. It is indefensible if they cannot, and in most of the accounts that arrive here from another shop, nobody had ever been asked to prove which one happened.