Agency pricing is opaque because the work is hard to compare. Two agencies quoting "$2,000 a month" can be selling completely different amounts of attention.
The three models
Flat retainer
A fixed monthly fee for a defined scope. Typically $1,000 to $10,000 a month depending on channels and volume.
Incentive: neutral on your ad spend, but rewards doing the minimum that keeps you. Good scopes state deliverables — number of campaigns, creative volume, reporting cadence.
Percentage of ad spend
Commonly 10% to 20% of what you spend, sometimes with a floor.
Incentive: the agency earns more when you spend more, whether or not spending more is right. It can be fine with an honest partner, but the conflict is structural. Watch for advice to raise budgets before performance justifies it.
Performance-based
A fee tied to revenue, leads or a return target, usually with a base retainer underneath.
Incentive: best aligned in principle. In practice it depends entirely on attribution — if the agency defines what counts as a conversion, they define their own invoice. Agree the measurement source before you agree the fee.
What a retainer should include
- Campaign strategy and build.
- A stated volume of creative per month.
- Ongoing optimisation, not just monthly check-ins.
- Reporting you can read without them present.
- A named person who answers you.
Anything not written down is out of scope, however reasonable it sounded on the call.
Questions that reveal the truth
- Who owns the ad accounts? The correct answer is you, with them granted access. If they own it, leaving means starting from zero history.
- How many hours a month does this scope represent? Vagueness here is informative.
- Who does the actual work? The person on the sales call is frequently not the person on your account.
- What is the notice period? Twelve-month lock-ins for paid media are a red flag.
- Can I see a report you sent a client last month? Redacted is fine. Reports reveal how they think.
Red flags
- Guaranteed results. Nobody controls auction dynamics.
- They own your accounts. Your data, your history, their asset.
- Reporting only in their own dashboard with no access to the platform.
- Vanity metrics. Impressions and reach reported where revenue should be.
- One person doing strategy, creative, media buying and analytics across twenty accounts.
Agency or in-house
A competent in-house media buyer costs a salary plus tools. An agency costs a retainer and brings pattern recognition across many accounts.
The honest rule of thumb: below roughly $20,000 a month in ad spend, an agency usually gives better value than a hire. Above it, in-house with a specialist agency for particular channels often wins.
Budget realistically
A $500 monthly ad budget does not support a $2,000 retainer. As a starting point, keep management fees under a quarter of total spend — if the fee dwarfs the budget, the campaign never gets enough data to optimise on.
Before hiring anyone, make sure your measurement is trustworthy: see setting up conversion tracking you can trust.