Marketing agencies are groups of marketing experts whose services are sold to businesses that have a requirement for support due to a gap in capacity or capability.
A marketing agency is a service business, whose revenue comes from the sale of time, as opposed to the sale of products.
Marketing agencies operate in a variety of ways, usually at the request of a customer (often referred to as a client in the marketing agency world).
Marketing agencies are able to charge a premium for their work due to the fact that the people they employee are generally experienced and specialists in certain areas, i.e., paid media managers, brand strategists, PR executives or copywriters.
A business might appoint a marketing agency to fulfil a specific brief or project. This could be to create and distribute a press release or to deliver a project or campaign from end-to-end.
Marketing agencies work in one or two ways:
A retainer-based approach can often be more cost-effective due to the commitment of hours across a 3, 6, 12 or more month period. Retainers generally come with a fixed number o hours, and any additional work is then scoped or charged for.
A project-based approach, on the other hand, offers more predictable costs. Typically, an agency will be appointed to deliver an outcome for a set cost. If the project drags on (but the scope does not change), then the customer essentially gains, and the agency loses out on profitability as they have under-estimated the effort required.
A marketing agency may have the following teams: