How A Marketing Agency Creates Estimates

Marketing agencies provided with clear project specifications should be able to estimate +/- 15%; considered by many in the industry to be normal and customary.

“How much will this cost?” is a question many clients and prospects ask, with good reason. While not the only deciding factor on proceeding with a project, costs definitely play a role.

When an agency is estimating a project, a number of factors go into the mix.  Client budget plays a role as does the anticipated delivery date, but the most important factor is the amount of agency resources to allocate to the project.  This includes services like project management, art direction, design, copy writing, proofing, file prep, etc.  All are steps in the process for nearly every project whether it’s a simple business card layout or a grand trade show booth or ad campaign.

Agencies have different pricing models, but one of the most common is a model based upon hourly rates for various services.  When developing a project cost, a determination of the steps in the process with anticipated number of hours required to complete each step will be made.

Determining this can be challenging as creative services rarely follow a linear path.  Thus, ranges may be shown for estimates.  However, experienced agencies will be adept at accurately estimating the resources required for each project and often get better over time the more they’ve worked with a particular client and have learned the individual client’s preferences or style.  For instance, some clients may average five rounds of review for every project whereas others may be more decisive and only need two.  These differences impact time requirements and ultimately project price.

Additionally, any marketing projects with outside services will need to be estimated and included.  Common examples are printing, photography or media costs.  So, if a client asks their agency for a cost on a brochure, the client could reasonably expect to receive an estimate showing the agency services that cover the design and development of a print-ready file.  The estimate should also then include printing estimates based upon printing specifications such as number of pages, ink selections, paper selection, quantities, etc. A bottom line price combining both agency services and outside expenses would represent the total project estimate.

Again, because there is variability inherent in creative projects and changes made throughout the process may require more or less time to complete, it is a fairly common practice to receive an estimate from an agency that is considered valid plus or minus 15% of the cost.

Matt Birchard