Internet Marketing
Published October 19th, 2016 by

Biggest Mistake Companies Make When Evaluating a Digital Agency

Price Vs. Value

Often times companies, especially small or startups, will decide on a marketing agency based solely on price. This is a mistake. Yes, money doesn’t grow on trees and budgets are tight, but when it comes to hiring an agency, companies need to dig into those numbers.

To do this, one of the first questions you ask should be, “what’s your hourly rate?” All agencies have one, but many offer a flat rate fee in their proposals. There’s nothing wrong with charging a flat price or a percent of ad spend—it’s a standard practice. BUT, you should still ask what the hourly rate is, then divide that flat price by the hourly rate and look at how many hours you’re actually paying for. Often times that low price ends up being so low that the proposed services can’t be fulfilled.

For example, an e-commerce company with 150 products is looking to hire an agency to manage their SEO and their AdWords. They have received two competing bids.

Competing proposals

While Agency B charges twice as much, it is the only proposal that enables the team to properly manage the account and make a difference in your company’s performance—which is what you’re paying for in the first place.

The moral of the story, do your math and don’t be swayed by a low price. Paying a low fee often leads to mediocre results and defeats the purpose of hiring an agency.

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