Agency Rate Card Survey 2008

E-consultancy Digital Agency Rate Card Survey 2008
Digital Agency Rate Card

Survey 2008
July, 2008
Copyright © E-consultancy.com ltd 2008 – not for distribution to non-

subscribers without written permission
Other E-consultancy Survey Reports:

Online Lead Generation (B2C) Report 2008
http://www.e-consultancy.com/publications/online-lead-generation-2008
Online Measurement and Strategy Report 2008

http://www.e-consultancy.com/publications/online-measurement-and-strategy-report-2008/
UK Search Engine Marketing Report 2008

http://www.e-consultancy.com/publications/search-engine-marketing-report-2008/
Email Marketing Census 2008

http://www.e-consultancy.com/publications/email-marketing-census-2008/
Copyright © E-consultancy.com ltd 2008 – strictly not for distribution to non-subscribers without written permission
Table of Contents
1. About E-consultancy .............................................................................. 2

2. About this survey ................................................................................... 2
3. Executive Summary and Highlights ...................................................... 4
3.1 Profile of Responding Agencies ............................................................................................ 5
3.2 Business Confidence ............................................................................................................. 5
3.3 Charge-out Rates ................................................................................................................... 6
3.3.1 Summary Table - Average Daily Charge Out Rates by Job Role ......................................7
3.3.2 Summary Table - Average Daily Rates by Category of Job Role ..................................... 8
4. Profile of Responding Agencies ........................................................... 10
4.1 Year Company Founded ...................................................................................................... 10
4.2 Average Number of Employees ........................................................................................... 11
4.3 Projected 2008 Turnover..................................................................................................... 12
4.4 Geography ............................................................................................................................. 13
5. Business Confidence ............................................................................ 14
5.1 How optimistic are you for your business over the next 12 months? ................................14
5.2 Projected year-on-year growth ............................................................................................ 15
5.3 Opportunities for growth within the digital agency marketplace .....................................16
5.4 Challenges ............................................................................................................................. 17
6. Charge Out Rates ................................................................................. 19
6.1 Analysis by Job Role .............................................................................................................19
6.1.1 Average Day Rates for Director / Partner................................................................................... 19
6.1.2 Average Day Rates for Commercial / Strategic Roles................................................................ 22
6.1.3 Average Day Rates for Project / Account Management Roles .................................................. 23
6.1.4 Average Day Rates for Creative Roles ........................................................................................ 24
6.1.5 Average Day Rates for Content, Usability and Accessibility Roles ........................................... 25
6.1.6 Average Day Rates for Technical Roles ...................................................................................... 26
6.1.7 Average Day Rates for Media Planning and Buying ..................................................................28
6.1.8 Average Day Rates for Online Marketing, eCRM and Market Research .................................. 29
6.1.9 Average Day Rates for Affiliate Marketing, Email Marketing, Web Analytics.........................30
6.1.10 Average Day Rates for Search Engine Marketing .................................................................... 31
6.1.11 Average Day Rates for Testing/Quality Assurance and Training ............................................ 32
6.2 Change in Day Rates ........................................................................................................... 33
6.2.1 Change in average daily charge-out rate since 2006 ................................................................. 33
6.2.2 Expected change in 12 Months‟ Time......................................................................................... 35
6.3 Maintaining or Increasing Charge-Out Rates ................................................................... 37
6.4 Rate Card Availability ......................................................................................................... 38
6.5 Average Discount Offered on Rate Card ............................................................................ 39
6.6 Reasons for Variances in Charge-Out Rates...................................................................... 40
6.7 Method of Time Tracking.....................................................................................................41
7. Nature of Work .................................................................................... 42
7.1 Retainer versus Project Work ............................................................................................. 42
7.2 Work done by Contractors versus Employees ................................................................... 43
7.3 Fixed fee versus „Time & Materials‟ .................................................................................... 44
8. Contact ................................................................................................. 45
Copyright © E-consultancy.com ltd 2008 – not for distribution to non-subscribers without written permission 1
Comments? Call +44 (0)20 7681 4052 or email linus@e-consultancy.com

1. About E-consultancy
E-consultancy.com, an online publisher of best practice internet marketing reports,

research and how-to guides, was named Publisher of the Year at the 2006 AOP
Awards. Since moving to a paid content model, it has amassed thousands of paying
subscribers, 70,000 registered users and 145,000+ unique user sessions per month.
Subscribers pay from £195 per year to access exclusive and practical content.
E-consultancy has more than 100 events lined up for 2008, including roundtables
and Supplier Showcases, where six suppliers pitch to an audience of pre-qualified
buyers in a Central London venue.
E-consultancy also provides a range of public and in-house training programmes

including courses. If you would like to know more about our training options then
please visit our website or contact Craig Hanna on +44 207 681 4078 or email him at
Craig@e-consultancy.com.
http://www.e-consultancy.com/about/
2. About this survey
The principal objective of this E-consultancy survey is to get a clear idea about what
UK digital agencies charge for different types of skills and levels of seniority, and
to understand how and why rates may vary, for example by size of company and by
region.
This year‟s survey follows similar Rate Card Surveys we carried out in 2005 and
2003, enabling us to see the extent to which rates have changed over the last few
years.
We believe that this report provides real practical value for agencies who want to
benchmark their own fees and understand what the going rate is for different services
in the marketplace. As far as we are aware there is no comparable data available
elsewhere.
The report is also intended to be a useful resource for client-side organisations who
want to understand what level of rates they can expect to be charged and how this
differs according to region and specialty.
Some 328 digital agencies participated in this 2008 survey from different
locations across the UK.
The term “digital agency” covers suppliers across an increasingly broad range of
disciplines and service offerings. Respondents include full-service agencies, media
agencies, search engine marketing agencies and specialists in areas such as affiliate
marketing and email. In total, we asked agencies about their daily rates for around 50
different job roles.

There is no standard taxonomy for agency job roles, but we have done our best to
create a sensible and thorough list. There is obviously some overlap between different
job roles.
Business confidence
The report also contains sections on business confidence and projected

revenues which have once again enabled us to provide top-line data about the
health of the industry as well as an analysis of the foremost opportunities and
challenges which are shaping the digital landscape.
If you have any questions, please contact Linus Gregoriadis, E-consultancy’s head of
research, at linus@e-consultancy.com or call +44 (0)20 7681 4052.
Methodology
This report is based on an online survey carried out in April 2008. Information about
the survey, including the survey link, was emailed to digital agencies within E-
consultancy‟s user base. E-consultancy uses Clicktools for its online surveys.

3. Executive Summary and Highlights
E-consultancy‟s Digital Agency Rate Card Survey 2008 is based on information

provided by 328 UK digital agencies.
 Digital agencies report that daily charge-out rates have gone up by an average
of 17% in the last two years (since 2006). The biggest increases have come
from the smallest agencies (i.e. those with a projected 2008 turnover of less
than £300,000).
 The projected average increase in daily rates over the next 12 months is 9%.
Some 59% of those agencies surveyed expect their daily rate to be higher in 12
months‟ time. A third of agencies said that there would be a 10% increase, 17%
said there would be a 20% increase and 4% said there would be a 30%
increase.
 On average, digital agencies project that they will grow their turnover by 28%
year-on-year in 2008. This compares to 31% year-on-year growth in 2005
when E-consultancy last carried out this survey.
The research has also found that four in five agencies (80%) estimate that their 2008
revenue will outstrip their turnover for 2007. This constitutes more evidence of the
continued good health of the digital marketing industry despite the continued gloom
within the wider economic environment. The equivalent figure in 2005 was 83%.
More encouraging news for this sector is that 90% of agencies surveyed said that they
were “quite” or “very” optimistic about the future of their business over the next 12
months.
However, this compares to an equivalent figure of 96% in 2005 when 55% said they
were quite optimistic (compared to 51% this year) and 41% said that they were very
optimistic (compared to 39% this year).
The proportion of agencies who say they are “not very optimistic” has increased from
3% to 9%. This may to a large extent reflect the credit crunch and the continued
uncertainty surrounding the economy.
It also reflects the fact that running agencies profitably is becoming more challenging.
For many job roles, the rate of increase in daily rates has actually stayed the same or
decreased in real terms (i.e. when inflation is taken into account). Coupled with
increased competition in the marketplace, the trend towards paying higher salaries
means that margins are inevitably being squeezed.
The issue of staff recruitment and retention continues to be seen as the biggest
challenge for digital agencies. There is still a chronic shortage of suitably qualified
professionals in a number of specialties which is reflected by higher salaries. This is
good for individuals but not necessarily for the agency bottom line.

Other Survey Highlights include:
3.1 Profile of Responding Agencies
 Almost 30% of agencies were founded more than ten years ago, demonstrating
the increasing maturity of the digital marketplace.
 Just over a third of digital agencies surveyed (35%) have been around for five
years or fewer. The number of new agencies setting up has been declining
since around 2004.
 The proportion of agencies with more than 50 employees has increased from
only 6% in 2005 to 17% in 2008. One in 11 agencies surveyed now has more
than 100 employees. Less than half of those surveyed (44%) now have 10 or
fewer employees, compared to an equivalent figure of 63% in 2005 and 71% in
2003.
 The proportion of agencies expecting to earn more than £3 million in revenue

this year has increased dramatically from 10% in 2005 to 24% in 2008.
 Only 17% of digital agencies expect to have revenues of less than £150,000 this
year, compared to 28% in 2005 and 41% five years ago when the industry was
much more embryonic.
 The combined proportion (63%) of those agencies located in London and the
South-east is similar to 2005 when the equivalent figure was 64%.
3.2 Business Confidence
 The percentage of agencies expecting growth of 100% or more has decreased

from 11% in 2005 to 5%. This reflects the maturation of the digital marketing
sector and growth of agencies to a level where it is much harder to keep
doubling in size during a single year.
 The most frequently cited opportunities listed by agencies are, in this order:
1) Up-selling and cross-selling of services
2) Opportunities from emerging markets
3) Increased exposure to blue chip clients
4) Increased spending by current clients
5) Opportunities afforded by social media
 The most frequently cited challenges listed by agencies are, in this order:
1) Staff recruitment and retention
2) Recession / credit crunch
3) Reduction in client spend
4) Increasing competition
5) Demonstrating ROI

3.3 Charge-out Rates
 Survey respondents were asked to rank the effectiveness of a number of ways

of maintaining or increasing charge-out rates. Overall, “increasing
specialisation of skills” and “improving the perceived value of the skills” are
regarded as the best approaches.
 The availability of rate cards, both for internal use by agencies and for clients,
has substantially increased relative to 2005.
 Two thirds of agencies are prepared to offer a discount of up to 20% on their

standard daily rates.

3.3.1 Summary Table - Average Daily Charge Out Rates by Job Role
(In descending order of daily rate)
Rank Job Role 2008 average 2005 %

daily rate average increase
daily (since
rate 2005)
1 Director/Partner £919 £798 15%
2 Group Account Director/Regional AD £809 £759 7%
3 Senior Consultant/Strategist £808 £783 3%
4 Senior Head of Media/Media Director £788 £782 1%
5 Senior Technical/Development £783 £724 8%
Director
6 Senior Creative/Art Director £781 £664 18%
7 Strategic Brand Planner £755 £680 11%
8 Head of Production Services £737 £664 11%
9 Business Analyst £736 £658 12%
10 Online Marketing Planner £725 £693 5%
11 Senior SEO Consultant £724 £618 17%
12 Senior Account/Project/Operations £723 £678 7%
Director
13 Usability/User Experience Consultant £708 £631 12%
14 Information Architect £694 £610 14%
15 Customer Insight Specialist £699 £687 2%
16 eCRM Consultant £691 £705 -2%
17 Training £689 £597 15%
18 Mid-Consultant/Strategist £688 £678 1%
19 Senior PPC Consultant £683 £608 12%
20 Accessibility Consultant £675 £605 12%
21 Mid Technical/Development manager £666 £611 9%
22 Audio/Video producer/editor £657 £526 25%
23 User Interface Specialist £650 £591 10%
24 3D Modeller £650 £583 11%
25 Mid-Design/Creative Manager £647 £569 14%
26 Storyboarding/Wire-framing £643 £565 14%
27 Content Management Specialist £642 £572 12%
28 Production Manager £639 £573 12%
29 Mid Media Planner/Buyer £630 £621 1%
30 Mid-Account/Project/Ops Mgr/ £628 £605 4%
Producer
31 Web/Metrics Analyst £623 £581 7%
32 Email Marketing Manager £617 £554 11%
33 Animator £615 £562 9%
34 Research/Market Analyst £614 £613 0%
35 Database Manager £606 £580 4%
36 Copywriter £605 £532 14%
37 Mid SEO Consultant £600 £533 13%
38 Illustrator £593 £527 13%
39 Data Analyst £589 £543 8%
40 Testing/QA £590 £533 11%
41 Mid PPC Consultant £581 £517 12%
42 Traffic Manager £576 £497 16%
43 Junior Programmer/Developer £552 £495 12%
44 Affiliate Manager £551 £571 -4%
45 Junior - Designer/Creative £527 £459 15%
46 Junior Media Planner /Buyer £513 £483 6%
47 Junior-Account/Project/Ops Executive £506 £483 5%
48 Junior SEO Consultant £498 £439 13%
49 Junior PPC Consultant £482 £411 17%

3.3.2 Summary Table - Average Daily Rates by Category of Job Role
Job Role 2008 average 2005 average % increase

daily rate daily rate (since 2005)
Commercial and Strategic Roles

Director/Partner £919 £798 15%
Senior Consultant/Strategist £808 £783 3%
Strategic Brand Planner £755 £680 11%
Business Analyst £736 £658 12%
Mid-Consultant/Strategist £688 £678 1%
Project and Account Management

Group Account £809 £759 7%
Director/Regional AD
Head of Production Services £737 £664 11%
Senior £723 £678 7%
Account/Project/Operations
Director
Production Manager £639 £573 12%
Mid-Account/Project/Ops Mgr/ £628 £605 4%
Producer
Junior-Account/Project/Ops £506 £483 5%
Executive
Creative
Senior Creative/Art Director £781 £664 18%
User Interface Specialist £650 £591 10%
3D Modeller £650 £583 11%
Mid-Design/Creative Manager £647 £569 14%
Animator £615 £562 9%
Illustrator £593 £527 13%
Junior - Designer/Creative £527 £459 15%
Content and Usability

Usability / User Experience £708 £631 12%
Consultant
Information Architect £694 £610 14%
Accessibility Consultant £675 £605 12%
Audio/Video producer/editor £657 £526 25%
Storyboarding/Wireframing £643 £565 14%
Content Management Specialist £642 £572 12%
Copywriter £605 £532 14%
Technical
Senior Technical/Development £783 £724 8%
Director
Mid Technical/Development £666 £611 9%
manager
Database Manager £606 £580 4%
Data Analyst £589 £543 8%
Junior Programmer/Developer £552 £495 12%

Job Role 2008 average 2005 average % increase (since

daily rate daily rate 2005)
Media Planning & Buying

Senior Head of Media/Media £788 £782 1%
Director
Mid Media Planner/Buyer £630 £621 1%
Junior Media Planner /Buyer £513 £483 6%
Traffic Manager £576 £497 16%
Online Marketing, eCRM, and Market Research

Online Marketing Planner £725 £693 5%
Customer Insight Specialist £699 £687 2%
eCRM Consultant £691 £705 -2%
Research/Market Analyst £614 £613 0%
Affiliate marketing, Email marketing & Web Analytics

Web/Metrics Analyst £623 £581 7%
Email Marketing Manager £617 £554 11%
Affiliate Manager £551 £571 -4%
Search Engine Marketing

Senior SEO Consultant £724 £618 17%
Senior PPC Consultant £683 £608 12%
Mid SEO Consultant £600 £533 13%
Mid PPC Consultant £581 £517 12%
Junior SEO Consultant £498 £439 13%
Junior PPC Consultant £482 £411 17%
Quality Assurance & Testing

Training £689 £597 15%
Testing/QA £590 £533 11%

4. Profile of Responding Agencies
4.1 Year Company Founded
Figure 1 shows how the sample of agencies is split in terms of their longevity in the
market.
Almost 30% of agencies were founded more than ten years ago, pointing to a strong
bedrock of agencies who have come through the lean years and shown their
continued ability to flourish in the digital marketplace.
Just over a third of digital agencies surveyed (35%) have been around for five years or
fewer. The number of new agencies setting up has been generally declining since
around 2004, probably because there are fewer gaps in the market for new agencies
to exploit.
Figure 1
Base – All Agencies Responding (328)

4.2 Average Number of Employees
Figure 2 shows the size of the average agency, according to the number of employees.
The comparison with 2005 data (in red) shows clearly that the average agency has
significantly grown in size since 20051.
The proportion of agencies with more than 50 employers has increased from only 6%
in 2005 to 17% in 2008. One in 11 agencies surveyed now has more than 100
employees.
As well as organic growth in many cases, this reflects a high level of consolidation in
the sector, with numerous mergers and acquisitions taking place as the major players
have jostled for position and, in many instances, integrated smaller, specialist
agencies.
Less than half of those surveyed (44%) now have 10 or fewer employees, compared to
an equivalent figure of 63% in 2005 and 71% in 2003.
Figure 2
Base – All Agencies Responding (2008 = 324; 2005 = 328)
1
When E-consultancy carried out its last rate card survey.

4.3 Projected 2008 Turnover
The consolidation and growth of this sector is even more apparent in Figure 3 which
shows projected turnover for 2008. The proportion of agencies expecting to earn
more than £3 million in revenue in the current year has increased dramatically from
10% in 2005 to 24% in 2008.
The increase is also clearly apparent in the £1.5m-£3m bracket, with the number of
agencies in this turnover band more than doubling from 7% in 2005 to 16% in 2008.
Only 17% of agencies expect to have revenues of less than £150,000 this year,
compared to 28% in 2005 and 41% five years ago when the industry was much more
embryonic.
At the top end of the scale, it should be noted that these companies include media
agencies where the turnover includes the cost of all media bought by the agency on
behalf of their clients. This means that their turnover can look artificially high
compared to agencies whose turnover comes only from billed fees.
Figure 3

4.4 Geography
The chart below shows the geographical distribution of agencies surveyed.

Unsurprisingly, London is home to more agencies than any other region, with 42% of
participating companies based in the capital [Figure 4].
The combined proportion of those agencies located in London and the South-east
(63%) is similar to 2005 when the equivalent figure was 64%.
A fifth of agencies (21%) are based in the South-east (outside London), with a “long
tail” of agencies spread across other regions. Excluding London and the South-east,
the North-west is biggest hub for digital agencies, with 8% of responding
organisations based in this region. Manchester and Leeds in particular are home to a
number of well-established digital agencies.
Figure 4

5. Business Confidence
5.1 How optimistic are you for your business over the next 12 months?
Despite growing fears over the economic downturn, the encouraging news for this
sector is that 90% of agencies surveyed said that they were “quite” or “very”
optimistic about the future of their business over the next 12 months.
This is a very positive picture although the equivalent figure in 2005 was 96%, when
55% said they were quite optimistic (compared to 51% this year) and 41% said that
they were very optimistic (compared to 39% now).
The proportion of agencies who say they are “not very optimistic” has increased from
3% to 9%. This may reflect the credit crunch and the continued uncertainty
surrounding the economy, combined with factors such as salary inflation.
Many analysts believe that the digital marketplace may be shielded from the impact
of a downturn or recession, as companies shift advertising budgets away from
traditional media channels into the more measurable digital sphere.
However, the significant increase in the proportion of agency respondents who are
not very optimistic suggests that some clients may already be cutting back their
investment slightly, or threatening to do so. But there are also other challenges being
faced by agencies, such as increasing competition and recruitment difficulties.
Figure 5

5.2 Projected year-on-year growth
On average, digital agencies report that they will experience 28% year-on-year growth
in 2008. This compares to 31% year-on-year growth in 2005.
Four in five agencies (84%) estimate that their 2008 revenue will outstrip their
income for 2007. The equivalent figure in 2005 was 83%.
The percentage of agencies expecting growth of 100% or more has decreased from
11% in 2005 to just 5%. This reflects the maturation of the digital marketing sector
and growth of agencies to a level where it is much harder to keep doubling in size
during a single year.
Figure 6

5.3 Opportunities for growth within the digital agency marketplace
We asked respondents “What are the greatest opportunities for growth for your
business?” An analysis of company verbatim answers shows that the most commonly
cited opportunities were:
(In order of frequency of citation)
1) Up-selling and cross-selling of services

2) Opportunities from emerging markets
3) Increased exposure to blue chip clients
4) Increased spending by current clients
5) Opportunities afforded by social media
Respondents cited a wide variety of opportunities for growth, but up-selling and
cross-selling of services was mentioned much more than any other factor.
Other opportunities also included growth through expanding into new

geographical regions and attracting more work both from existing clients and
new business from blue-chips. Social media2 and, more generally, expanding into
new service areas, were also cited by a number of companies.
Voice of the Agency: Greatest opportunities for growth
“What are the greatest opportunities for growth for your business?”
“Cross-selling and up-selling of services, to be perceived as consultants adding

value.”
“Growth in digital video online offers potential for cross-selling skills.”
“Emerging countries, specifically Eastern Europe.”
“Specialisation of our service offering, and ability to acquire blue chip clients.”
“Greater contracts from existing clients. Full service sell - design and build and
online marketing, and expanding resource to cope with inbound opportunities.”
“Growth of key skills and extending our offering to offer more strategic services.
International growth. Increasing client focus on delivery of measurable value/ROI
will translate into an increasing spend on digital marketing over traditional. We
will be focusing on delivering measurable business benefit to our customers as well
as outstanding creative (and technical) solutions.”
“New media and social media marketing; corporate blog coaching; media
workshops.”
2
“Commercial
Readers SME/Governmental
may be interested in the following, freeagencies with
E-consultancy lessabout
report than £100k
Social Mediaspend per project.
Expansion into Asia & expansion of social media analytics and consulting work.”
http://www.e-consultancy.com/publications/social-media-roundtable-briefing-june-2008/

5.4 Challenges
We also asked agency respondents “What are the biggest challenges your business
faces?”
The most commonly cited challenges were:
(In order of frequency of citation)
1) Staff recruitment and retention

2) Recession / credit crunch
3) Reduction in client spend
4) Increasing competition
5) The challenge of demonstrating ROI
Given that there is a skills shortage in digital marketing as a whole, it is perhaps

unsurprising that the biggest challenge faced by the majority of responding agencies
is recruiting staff with appropriate skills.
Voice of the Agency: Staff Recruitment and Retention
“What are the biggest challenges that your business faces?”
“Difficulty in finding skilled staff, particularly strategists and programmers.”
“It is difficult to recruit experienced creatives generally but rich media specialists
are in particularly short supply. Pitch work, as ever, impacts the bottom line as
well as a sense of being involved to simply make up numbers in some cases.”
“Staff, Staff, Staff! Absolutely the single biggest issue we have ever faced,
recruiting quality permanent members of staff, particularly on the development
side.”
“Finding good skills and often poor (but slowly improving) client-side
understanding of skills needs and production processes, sometimes low
recognition of skills shortages, and hence reluctance to accept that good skills cost
money.”
A significant portion of respondents also cited the credit crunch and associated
economic uncertainty as a threat to their business. Some analysts have predicted that
a downturn or recession will lead to a shift in advertising budgets from traditional
channels to online, which could help to insulate the industry from any serious threat
that the credit crunch poses.
Despite this, some respondents have reported an overall reduction in client

spend.

Voice of the Agency: Fear of Recession and Reduction in Client Spend
“Credit crunch, and firms / consumers tightening their spending over the
foreseeable future.”
“Talk of a recession is a slight concern but the accountability of search marketing

means we expect investment in search to continue even if a recession takes hold.”
“General economic difficulties resulting in less spending by clients, and less new
clients looking to spend.”
“The credit crunch poses it own challenges but we hope this won’t cause too many
issues.”
“Impact of credit crunch/global economy - particularly on financial sector clients

this year and forecast [impact on] other client sectors from 2009.”
“Possibly the credit crunch having a knock-on effect on the economy. Also, the
market is becoming very competitive with more companies.”
Respondents also cited increasing competition, due to low barriers to entry, as

well as difficulty in demonstrating ROI. Social media is often particularly
difficult to measure in terms of return on investment.
Voice of the Agency: Increasing competition and Demonstrating ROI
“Understanding of online ROI and benefits within our market sector and
increasing competition.”
“Demonstrating ROI of online - particularly newer areas such as social media

marketing.”
“Continuing differentiation with cheaper competitors and ensuring clients focus on

the majors. Managing clients’ online marketing expectations reasonably (and
profitably!).”
“Increased competition is an on-going battle as barriers to entry are so low, new

start-ups are inevitable and [they] often start by trading on price.”
Other factors also included lack of client knowledge, unrealistic salary

expectations, and over-dependence on a few select clients. Some
respondents felt that the lack of client knowledge contributed to many projects being
won on the basis of budget alone, without clients taking into account the quality of
the agency involved.

6. Charge Out Rates
6.1 Analysis by Job Role
NB: For each role average rates are shown for all agencies (i.e. the overall average)
and then for agencies in the following turnover bands: £0-£300k, £300k-£1.5m,
£1.5m+. See summary tables in Section 3 for all 2008 and 2005 averages.
6.1.1 Average Day Rates for Director / Partner
The average daily charge-out rate across all agencies surveyed for a director /
partner is now £919, an increase of 15% from £798 since 2005.
For those agencies with an expected 2008 turnover of more than £1.5 million, the
average daily rate is now £1,158 [Figure 7].
For comparison, the 2005 average for the largest agencies was £1,015. It should be
noted that, for the previous survey report, we included any agency with a turnover of
more than £500,000 in the largest turnover band.
The largest agencies are now charging 75% more than the smallest agencies for their
most senior employees‟ time. The gap has closed slightly since 2005 when there was
an 86% difference.
Figure 7

Average Day Rates for Director / Partner – London, South-East and non
South-East
Figure 8 shows that there is a significant weighting in terms of what London agencies
are charging for their most senior employees compared to their counterparts outside
the capital.
On average, the daily rate for a director / partner at a London agency is £1,054, a
26% premium on what agencies elsewhere in the South-east are charging and a 31%
premium on agencies outside the South-east.
London agencies, of course, generally have higher costs for staff, offices and other
general overheads. The average daily charge-out rate for a partner at a large London
agency is just under £1,300.
This “London weighting” is apparent across all the turnover size bands.
Figure 9 shows a more granular regional breakdown. After London, the highest daily
rates are to be found in the North-west and South-west (an average of £942 and £941
respectively).
In the North-west, the average for the largest agencies (£1,363) is even higher than
for London.
Figure 8

Average Day Rates for Director / Partner – Detailed Regional Breakdown
Figure 9
Region All £0 - £300k £300k - £1.5m £1.5m+
London (135) £1,054 £739 £925 £1,286
North West (25) £942 £680 £600 £1,363
South West (18) £941 £700 £1,000 £1,029
North East (21) £879 £600 £760 £975
Midlands (15) £823 £725 £775 £940
South East (67) £802 £642 £821 £1,017
Northern Ireland (2) £800 N/A N/A £800
Scotland (16) £700 £533 £800 £1,000
East Anglia (14) £680 £525 £733 £833
Wales (6) £600 £100 £800 £700
Other (5) £800 £1,000 £600 £800
Base – Shown in brackets for each region

6.1.2 Average Day Rates for Commercial / Strategic Roles
The increases since 2005 in average daily charge-out rates for strategic brand
planner /consultant (+11%) and business analyst (+12%) have been higher than
for senior consultant / strategist (+ 3%) and for mid-level
consultant/strategist (+1%).
Figure 10 shows that the average daily rate for a senior strategist is now £808, but
this goes up to an average of £959 for the largest agencies.
The rates for strategic brand planner / consultant and business analyst are
similar.
Figure 10

6.1.3 Average Day Rates for Project / Account Management Roles
Figure 11 and Figure 12 show the average daily rates for a number of project and
account management roles, covering different levels of seniority from group
account director / regional account director to junior account / project
executive.
Figure 11
Group account directors, on average, command a daily rate of £809, rising to

£929 for the largest agencies [Figure 12]. The rate charged for production
manager is similar to mid-account project / operations manager.
Figure 12
Base –Agencies Responding (328)


6.1.4 Average Day Rates for Creative Roles
The day rate for senior – creative / art director has gone up by 17% since 2005,
which makes this role one of the biggest climbers since 2005. The best creative talent
is in very short supply and therefore charged out accordingly.
The day rate for senior – creative / art director is now £781 on average, rising to £914
for the larger agencies. The day rates for mid – design / creative manager and
for junior - designer / creative have gone up by 14% and 15% respectively.
The average day rates for user interface specialist, illustrator, animator and
3D Modeller have all gone up by around 10%.
Figure 13
Figure 14

6.1.5 Average Day Rates for Content, Usability and Accessibility Roles
Of the content, usability and accessibility roles shown in Figure 15 and Figure 16, the
most valued are information architect and user experience consultant which,
on average, are charged out at £694 and £708 per day respectively.
The rate for copywriter has gone up by 14% since 2005 but this speciality is still not
perceived as being as valuable as others in this category, probably because this is a
skill which is slightly less scarce than others shown in these charts. The importance of
rich media is growing exponentially, and this is reflected by a 25% rise in the average
daily rate for audio / video / producer / editor.
Figure 15
Figure 16
Base – Agencies Responding (328)

6.1.6 Average Day Rates for Technical Roles
Senior technical agency employees continue to be highly valued across the

industry, with charge-out rates to reflect this. The average day rate for a senior
technical/ development director is £783, an increase of 8% since 2005. The
average charged by the bigger agencies is now £942 [Figure 17].
In the 2005 version of the report, we suggested that there could be downward
pressure on charge-out rates for junior and mid-range technical roles, with non-
strategic technical work increasingly being outsourced to countries where
programming skills can be bought much more cheaply.
However, there is no evidence of such a trend. The average daily rates for mid-
technology / development manager and junior – programmer / developer
have gone up by 9% and 12% respectively since 2005.
Figure 17

Database Managers and Data Analysts
Database Managers are charged out for slightly less than mid-range technical
staff. Data Analysts are valued at less than database managers but more than junior
technical staff/programmers.
Figure 18

6.1.7 Average Day Rates for Media Planning and Buying
Within this media planning and buying section, the biggest level of inflation is for
traffic managers, whose daily charge-out rate has gone up by 16%.
The daily rates for senior - head of media / media director and mid - media
planner / buyers are now £788 and £630 respectively. Surprisingly, the former is
virtually the same as 2005 while the latter has only gone up by 3%.
It is notable that these rates have actually decreased in real terms. It may be because
of increased competition among agencies for this work.
Figure 19
As with other areas of digital marketing, there is a vast gulf in charge-out rates
between senior and junior staff because of the value associated with the best and
most experienced people.

6.1.8 Average Day Rates for Online Marketing, eCRM and Market
Research
Online marketing strategists/consultants, eCRM consultants and

customer insight specialists are all charged out, on average, for around £700 per
day.
The rates for all the job roles in Figure 20 are similar to 2005 which shows that they
are still highly valued but have not been subject to the same inflation as some areas.
Figure 20

6.1.9 Average Day Rates for Affiliate Marketing, Email Marketing, Web
Analytics
Web analyst/ metrics analysts (£623) command the highest average rates of
these three roles, followed by email marketing managers (£617) and then
affiliate managers (£551).
According to the Online Measurement and Strategy Report 2008 3, only 19% of
organisations say that web analysts are “definitely sufficiently valued” within their
organisation. About half (49%) say that this is “somewhat” the case.
Just over a quarter of both company and agency respondents (26%) say that web
analysts are “not at all” sufficiently valued.
The average daily rate for web analyst has gone up by 7% since 2005.
Figure 21
3
http://www.e-consultancy.com/publications/online-measurement-and-strategy-report-2008/

6.1.10 Average Day Rates for Search Engine Marketing
Average daily rates for search engine optimisation (SEO) specialists are slightly
higher than for PPC, according to Figure 22 and Figure 23.
The average daily rate for senior SEO consultant has gone up by 17% since 2005,
which underlines the value associated with natural search knowledge. The rate for
senior paid search/per-per-click (PPC) consultant has gone up by 12%. Day
rates for each of these search roles have gone up by at least 10% since 2005,
highlighting the continued importance of both SEO and PPC.
Figure 22
Figure 23


6.1.11 Average Day Rates for Testing/Quality Assurance and Training
The overall average charge-out rate for quality assurance/testing is £590. The
largest agencies, on average, charge £627 a day.
The overall average charge-out rate for training is £689, and £760 for the £1.5
million+ agencies. The 15% rise in training day rates since 2005 is not surprising,
given the skills shortages across the industry and thirst for knowledge as companies
realise that they need to bridge the skills gap.
Figure 24

6.2 Change in Day Rates
6.2.1 Change in average daily charge-out rate since 2006
The average digital agency daily charge-out rate has gone up by 17% “in the last two
years” (i.e. since 2006).
This average is derived from a specific question about the percentage change since
2006, rather than by taking an average for all the day rate changes for every job role
since our last survey.
The biggest increases have come from the smallest agencies (i.e. those with an
expected 2008 turnover of less than £300,000). For these agencies, the average
increase since 2006 has been 21%.
This compares to an increase of 18% for mid-tier agencies (those with a turnover of
between £300,000 and £1.5 million) and 13% for the £1.5 million+ agencies.
Figure 25

Figure 264 shows that almost 30% of agencies said that their average charge-out rate
has stayed the same since 2006. Just 6% of respondents say that the average charge-
out rate has decreased since 2006.
Figure 26
Almost 67% of respondents said that their average charge-out rate had increased
within the last two years, with 58% saying it was either 10%, 20%, 30% or 40%
higher5. Of these, a quarter said their daily rates had increased by 10%, and a fifth
said their rates had increased by 20%.
It is clear that for many agencies daily rates have not really gone up since 2006,
which shows that these companies face a real challenge in trying to improve their
financial performance.
4
Respondents were shown a drop-down box with percentage changes in 10% increments from -100% to +100%.
These percentage bands have been aggregated into groups.

6.2.2 Expected change in 12 Months‟ Time
On average, the projected average increase for all agencies in 12 months‟ time is 9%.
This shows that agencies are planning to increase their charge-out rates well above
the rate of inflation in spite of some fears around the economic climate and
increasing competition.
The increasing cost of recruiting and retaining staff is likely to be a major factor
behind the increase in daily rates charges by agencies, as well as the knowledge that
clients will pay for the best people and skills.
Figure 27 shows that the smallest tier of agencies (below £300,000 turnover) are
planning above-average increases to their daily rates.
This may be because the smaller agencies often have specialist skills and realise that
they can increase their rates accordingly.
Figure 27

Some 59% of all agencies surveyed said that they expect their daily rate to be higher
in 12 months‟ time [Figure 28]. A third of agencies said that there would be a 10%
increase, just under a fifth said there would be a 20% increase and 4% said there
would be a 30% increase6.
A small minority (6%) of respondents said that they expect the charge-out rate to be
lower, whilst 36% of all agencies surveyed anticipated that the daily rate would
remain the same. Given inflation, this actually reflects a decrease in real terms.
For comparison, when E-consultancy carried out this research in 2005, 52% of
agencies anticipated that their charge out rates would be higher by 2006.
Figure 28
6
Respondents were shown a drop-down box with percentage changes in 10% increments from -100% to +100%.
These percentage bands have been aggregated into groups.

6.3 Maintaining or Increasing Charge-Out Rates
Survey respondents were asked to rank the effectiveness of a number of ways of

maintaining or increasing charge-out rates [Figure 29].
Overall, increasing specialisation of skills is regarded as the best approach, with

38% of respondents ranking this as the most effective.
This was closely followed by improving the perceived value of skills, ranked as
the best by 37% of respondents.
What is the most effective way to maintain or increase charge-out rates?
Figure 29
Maintaining and increasing charge-out rates:

Effectiveness of different approaches
Percentage of agencies regarding

most important
Increasing specialisation of skills 38%
Improving the perceived value of skills 37%
Having more solid and recognised 12%
benchmark industry rates
Refusing to reduce discount rate 6%
A significant number of respondents cited other factors as being important. Other

ways to maintain or increase charge-out rates include:
 Improving client understanding of the production process and explaining the

added value more clearly.
 Greater transparency with the client regarding overheads, employment costs

and agency margin.
 Delivering excellent results to the client and demonstrating tangible business

benefits.

6.4 Rate Card Availability
The availability of rate cards, both for internal use by agencies and for clients, has
substantially increased relative to 2005.
Three-quarters of agencies (76%) now make sure that a standard rate card is available
internally compared to 64% three years ago.
Similarly, many more agencies now have rate cards which are available for external
consumption (54% compared to 44% in 2005).
This trend again reflects the maturation of the industry as agencies attempt to
introduce more transparency around charge-out rates both internally and for clients.
Figure 30
2008 2005
Proportion of agencies
with standard rate card 76% 64%
available internally
Proportion of agencies
with standard rate card 54% 44%
which is available to
clients

6.5 Average Discount Offered on Rate Card
Figure 31 shows that two thirds of agencies are prepared to offer a discount of up to
20% on their standard daily rates.
Around a 30% say that they don‟t offer any discounts.
Figure 31

6.6 Reasons for Variances in Charge-Out Rates
The most important reason given for variances in daily charge-out rates by agencies is
the volume of work carried out for the client [Figure 32].
Agencies are typically more willing to reduce their fees if it means that they get a
significant and sustained level of work from a loyal client.
The amount clients will pay and the historical relationship are deemed to be
the most important reason for rate card variances by 27% and 21% of agency
respondents respectively.
Figure 32
Reasons for variances in charge-out rates
Percentage of agencies regarding as

most important
Depends on volume of work 46%
Varies according to what clients will pay 27%
Depends on historical relationship 21%
Of those who cited other reasons, the analysis of verbatim responses shows that many
agencies offer discounts because they work with charities, as well as profit-seeking
clients.
The strategic importance of the work is also a key reason for variance in the
daily rate. Many agencies are willing to be a lot more flexible with their charge-out
rates if they are looking to expand into a new sector or if they want to build a long-
term relationship with a new client.

6.7 Method of Time Tracking
Slightly more agencies are now using software to track their projects (52% compared
to 46% in 2005 and 41% in 2003). Just 8% of agencies currently don‟t use any
tracking at all.
Figure 33
6.7.1 Software Packages
Of those agencies using software packages, the most frequently cited resources were
Microsoft Excel, Basecamp and bespoke software designed in-house.
Basecamp was mentioned by 15 respondents, and Microsoft Excel by 11 respondents.

15 respondents said that they used bespoke/internally built software packages.
Other software packages included Concept, Harvest, Paprika, Synergist and Traffic.

7. Nature of Work
7.1 Retainer versus Project Work
The proportion of work carried out by agencies which is done on a retainer basis
has not changed much since 2005 (27% now compared to 26% in 2005). It is
surprising that agencies have not been able to establish a higher percentage of
retainer work, and possibly disappointing in some cases because of the security this
reliable source of income can give a business.
Figure 34
Approximate percentage of total billed work done as part of ongoing

„retainer‟ arrangements as opposed to project work
NB: The average percentages are shown for all agencies (the bottom right quadrant)
and also for agencies in these turnover bands: £0-£300k, £300k-£1.5m, £1.5m+.

7.2 Work done by Contractors versus Employees
The proportion of work now done by contractors / freelancers versus

employees (20%) is similar to 2005 and 2003.
The smallest agencies (with a turnover below £300,000) are the most reliant on
freelancers.
Figure 35
Approximate percentage of total billed work done by freelancers /

contractors as opposed to employees

7.3 Fixed fee versus „Time & Materials‟
The percentage of work done on a time and materials basis rather than a fixed
fee basis is also similar to 2005 (36% compared to 35%). Most work is still done on a
fixed fee basis because clients generally prefer to work on a fixed budget.
The on-going challenge for agencies is to ensure that they have a detailed
understanding of time and resources expended on fixed-fee projects so they can price
projects realistically and understand what kind of work is most profitable.
Figure 36
Approximate percentage of work done on a fixed fee basis versus „time

and materials‟

8. Contact
If you have any questions about this survey please contact:
Linus Gregoriadis, Head of Research, E-consultancy
Tel: + 44 20 7681 4052
Email: linus@e-consultancy.com
Web: http://www.e-consultancy.com

Agency Rate Card Survey 2008

Transféré par

Informations du document

Description originale:

Copyright

Formats disponibles

Partager ce document

Partager ou intégrer le document

Options de partage

Avez-vous trouvé ce document utile ?

Ce contenu est-il inapproprié ?

Droits d'auteur :

Formats disponibles

Agency Rate Card Survey 2008

Transféré par

Droits d'auteur :

Formats disponibles

E-consultancy Digital Agency Rate Card Survey 2008

Digital Agency Rate Card

Copyright © E-consultancy.com ltd 2008 – not for distribution to non-

Other E-consultancy Survey Reports:

Online Measurement and Strategy Report 2008

UK Search Engine Marketing Report 2008

Email Marketing Census 2008

1. About E-consultancy .............................................................................. 2

Comments? Call +44 (0)20 7681 4052 or email linus@e-consultancy.com

E-consultancy.com, an online publisher of best practice internet marketing reports,

E-consultancy also provides a range of public and in-house training programmes

2. About this survey

Comments? Call +44 (0)20 7681 4052 or email linus@e-consultancy.com

The report also contains sections on business confidence and projected

Comments? Call +44 (0)20 7681 4052 or email linus@e-consultancy.com

3. Executive Summary and Highlights

E-consultancy‟s Digital Agency Rate Card Survey 2008 is based on information

Comments? Call +44 (0)20 7681 4052 or email linus@e-consultancy.com

Other Survey Highlights include:

3.1 Profile of Responding Agencies

 The proportion of agencies expecting to earn more than £3 million in revenue

3.2 Business Confidence

 The percentage of agencies expecting growth of 100% or more has decreased

Comments? Call +44 (0)20 7681 4052 or email linus@e-consultancy.com

3.3 Charge-out Rates

 Survey respondents were asked to rank the effectiveness of a number of ways

 Two thirds of agencies are prepared to offer a discount of up to 20% on their

Comments? Call +44 (0)20 7681 4052 or email linus@e-consultancy.com

Rank Job Role 2008 average 2005 %

Comments? Call +44 (0)20 7681 4052 or email linus@e-consultancy.com

3.3.2 Summary Table - Average Daily Rates by Category of Job Role

Job Role 2008 average 2005 average % increase

Commercial and Strategic Roles

Project and Account Management

Content and Usability

Comments? Call +44 (0)20 7681 4052 or email linus@e-consultancy.com

Job Role 2008 average 2005 average % increase (since

Media Planning & Buying

Online Marketing, eCRM, and Market Research

Affiliate marketing, Email marketing & Web Analytics

Search Engine Marketing

Quality Assurance & Testing

Comments? Call +44 (0)20 7681 4052 or email linus@e-consultancy.com

4. Profile of Responding Agencies

4.1 Year Company Founded

Base – All Agencies Responding (328)

Comments? Call +44 (0)20 7681 4052 or email linus@e-consultancy.com

4.2 Average Number of Employees

Base – All Agencies Responding (2008 = 324; 2005 = 328)

Comments? Call +44 (0)20 7681 4052 or email linus@e-consultancy.com

4.3 Projected 2008 Turnover

Base – All Agencies Responding (2008 = 324; 2005 = 328)

Comments? Call +44 (0)20 7681 4052 or email linus@e-consultancy.com

The chart below shows the geographical distribution of agencies surveyed.

Base – All Agencies Responding (2008 = 324; 2005 = 328)

Comments? Call +44 (0)20 7681 4052 or email linus@e-consultancy.com

Base – All Agencies Responding (270)

Comments? Call +44 (0)20 7681 4052 or email linus@e-consultancy.com

5.2 Projected year-on-year growth

Base – All Agencies Responding (276)

Comments? Call +44 (0)20 7681 4052 or email linus@e-consultancy.com

5.3 Opportunities for growth within the digital agency marketplace

(In order of frequency of citation)