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Econsultancy has just released the latest version of its Digital Agency Rate Card Survey, which benchmarks average charge out rates for more than 50 different job roles.

The Rate Card Survey is produced on a triennial basis and this year 364 agencies participated in the research. 

Average rates range from £465 a day for a junior media planner to £891 a day for a director / partner, though fees increase if an agency is based in London, and also rise in line with turnover.

How are agencies doing compared with 2008?

Unsurprisingly, the shaky economy has definitely impacted rates. Most roles are now charged out for 1-10% less than they were in 2008, before the recession properly took hold. 

Although there has been some minimal deflation in rates overall, some roles appear to be bucking the trend. For example, agencies are charging out data and tech roles at a small premium. It suggests that talent may be scarce in these areas, while demand from clients is high.

The future is bright

Despite the trials and tribulations of the past two or three years, confidence is soaring. On average, agencies are anticipating growth of around 26% in 2011. Even the largest agencies predict that they’ll grow by 20% this year. 

In 2012 we can expect to see rates increase. Respondents to the survey said that they expect charge out rates to rise by an average of 8%. The smaller agencies are likely to push up rates by 10% next year, while the larger ones expect to charge an additional 4%.

It is safe to say that the digital agency sector has matured. Around 10% of the agencies we surveyed had at least 100 employees and have an eight figure annual turnover.  

The London factor

It goes without saying that there is a premium for London, and it can be rather hefty. For example, you might expect to pay double for a director / partner at a large agency based in London, compared with a smaller one based outside the capital.

As a rule of thumb, London-based agencies charge around a fifth more than other South East agencies, and a third more than agencies outside the South East.

The bigger the agency, the bigger the fee

Larger agencies charge higher rates. This is illustrated if we look at the spread of fees for a director / partner, where rates double for agencies with a £5m+ annual turnover compared with those that generate less than a million.

More detail please

Download the full survey (subscriber access, from £295 a year - unlocks all of our premium research) to find out about the proportion of retainer-based work, the average discount offered on the rate card, the proportion of freelancers and contractors used, how business is usually won, the detail on individual roles, and much more besides.

The survey is ideal for people working in procurement, as well as for agencies that wish to benchmark their own rates against the average. Hope you find it useful.

Chris Lake

Published 1 September, 2011 by Chris Lake

Chris Lake is CEO at EmpiricalProof, and former Director of Content at Econsultancy. Follow him on Twitter, Google+ or connect via Linkedin.

582 more posts from this author

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John Courtney

John Courtney, CEO and Executive Chairman at Pay on Results SEO, Content Marketing, Social Media, Digital PR, PPC & CRO from Strategy Digital

"Average rates range from £465 a day for a junior media planner" ?!

Much better than paying daily rate is to pay on results or performance.

John Courtney
Strategy Internet Marketing

almost 5 years ago

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martin fairall

It's not surprising to see charge out rates increasing. Times are tough - aganecies are letting people go left right and center

almost 5 years ago

Sanjit Chudha

Sanjit Chudha, Integrated Marketing & Communications Consultant at Personal

What this also points out is the lack of skills and experience out there. Demand for digital talent is growing, supply remains scarce - it's the old rule of supply and demand.

almost 5 years ago

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Cyber Pundit, Principal at YWM Consulting

The supply is not as scarce as it's made out to be. If the leaders have the vision (and leaders are not needed in hordes) then the teams are very easy to train and repurpose. It's time for the industry to look at itself with slightly more innovative eyes.

And to the author: bigger agencies also attract bigger, better talent. Sure, there are some excellent minds who start their little Tom and Harry Inc, but big clients need big scale and these shops don't offer that value. At all. Scale is the play of bigger network agencies, and this has genuinely higher overheads.

Writing a pontificating piece without setting this educated context is not only disingenuous, it's counter-productive.

almost 5 years ago

Hero Grigoraki

Hero Grigoraki, Head of Media Product at lastminute.com

Considering the high churn rate agencies have, the fact that, despite the boasting, self important job titles, most staff have very little experience in their fields and non-existent understanding of the wider online industry, it's not surprising to see that the recruitment market is booming with jobs from clients looking to move channel management in house. So it is surprising that agencies are looking to charge even more - especially when you take in account they mostly work on hefty retainer fees and won't even discuss performance-related pay.

almost 5 years ago

Lawrence Ladomery

Lawrence Ladomery, Founder at automatico

Cyber Pundit, I tend to agree with your comments.

What would you (or anyone else) consider to be big scale? What size project and what monthly retainer.

I've never worked on project with budgets over 100K, which I woukld consider to be medium scale. But I may be wrong.

almost 5 years ago

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Cyber Pundit, Principal at YWM Consulting

@Hero, you need to spend some time in the industry looking at dynamics. Really don't know where to start to respond to your oblivious ignorance.

Clients will never, ever reach the scale of an agency. Sure, there's the delusion that "let's move it inhouse, that will work", but these are overheads at the end of the day and the progressive clients who dabbled early enough a few years ago have already begun to realize it.

Meanwhile, "self important titles" -- one needs them for talent retention. Banking has "Vice Presidents" and Consulting has "Senior Consultants" who are 2 years post-MBA. Ever wondered why? Give it some thought.

Clients, and people like you, are no better informed. Things are changing at a very rapid pace and true talent has to constantly keep revamping itself every 12 to 15 months. It's like Moore's Law applies to the media industry too. I'm tired of people who spew topline observations like you did in that post with zero on-the-ground understanding of what's actually up.

To retain talent that goes out of its way to train itself, agencies absolutely need to pay more. Much more than the client marketers who don't do squat, and mostly rely on their agencies for all the knowhow and learning. It's quite easy being a client.

Hope this helps you reflect a bit more before you post ill-educated drivel online.

almost 5 years ago

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Cyber Pundit, Principal at YWM Consulting

@Lawrence, big scale is, for example, managing the several BILLION dollars that P&G spends in Asia. Covering consumer insights, comms planning, creative strategy, production, media planning, media execution/buying, data analytics/reporting.

Guess what. There is nothing like a "digital agency" today.

All big agencies have digital capabilities embedded right into their product. Digital plays an important role across the entire value chain I described above.

Managing senior client relationships all the way to lower level operations takes a huge array of skills. The kind of puerile and out-of-depth comments I see from the ilk of Ms Hero up there is precisely what's wrong.

Opinions are like nostrils. Everyone has a couple.

almost 5 years ago

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innes

I think this will be fine for the proven agencies which genuinley speak for themselves. I do not, however, feel all agencies will be able to charge prices of these levels. More and more often now, customers want guarantees and are more picking when making the purchasing decision.

almost 5 years ago

Lawrence Ladomery

Lawrence Ladomery, Founder at automatico

@Cyber Pundit, P&G is the very top end of the scale and I think a better measure would be to measure how much each of their brands spends on digital. Bearing in mind that in even with most integrated of projects the digital components are budgeted for separately.

I can't speak for Hero but often there is frustration on the client side when the 'great idea' is never quite that great... propriety technology never quite fits the purpose... and poor project management eats up 20% of your budget. Scenarios affecting projects great and small.

almost 5 years ago

Hero Grigoraki

Hero Grigoraki, Head of Media Product at lastminute.com

@Cyber Pundit - as an FYI, I've been specialising in online for 10 years now and I've worked both client and agency side. I know for a fact that the job market is dominated by new positions created by clients looking to build their inhouse teams so that they stop their over-reliance on agencies, even if it is to manage the agency relationships. What I'm pointing out is that agencies are coming under a lot of scrutiny and they are increasingly struggling to justify their fixed costs, especially if these are set to go up. I'm not dismissing all agencies and certainly not bundling all of them together, but the fact of the matter is that clients will be reviewing the service provided and will be expecting to see some performance fee element introduced for the digital channels at some point.

Whether you like it or not, agencies need to start servicing the clients a bit better rather than solely looking at their pockets.

almost 5 years ago

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