Ad Agency on Subscription vs Traditional Ad Agency - Why You Should Switch?

Ad agencies have been around for a long time. The first advertising agencies were brokers for space in the newspapers. In the US, the first advertising agency was founded in 1841 in Philadelphia. 

The advertising industry has changed a lot over the years. We saw the rise of radio, television, internet advertising, social media, and programmatic ads.  Ad agencies were generally split into traditional and digital ad agencies. Traditional ad agencies worked with offline promotion methods, while digital ad agencies handled all online promotions.

The way advertising agencies work with their clients hasn’t changed much. Most agencies bill per project, or hourly, depending on where they are from. This is how agencies normally work. That’s why in this post we will call a traditional ad agency every company that bills hourly, per project, or uses retainers.

Now we have a new wave in the advertising industry - ad agencies on subscription. Instead of charging clients per project, these agencies bill their clients one fixed monthly fee for all of their services.

Advertising agencies on subscription are a new concept. Like with any new thing that comes along, there is a bit of skepticism. A lot of people still don’t understand how they work, how they bill, and whether they can trust them. So, in this post, we will break it all down.

How do traditional ad agencies work?

When hiring a traditional agency you will go through a familiar process. First, you will have an introductory call or a meeting where you will meet the agency and their team and you will tell them about your business and your needs.

Then the agency will develop a proposal for you based on your needs. The proposal will detail their suggestion on how they can solve your problem, and how much it will cost you. 

As we mentioned before, traditional ad agencies charge on a per-project basis, hourly, or based on your media spend. Some agencies also require you to pay retainers, although that’s rare these days. 

In the US, an ad agency, depending on their size, experience, and quality, can charge anywhere between 50$ and 300$ per hour. That means for 50 hours per month you can end up with a bill between 2500$ and 15000$. This does not take into consideration your media buying spend. This can result in unpredictable costs, making it challenging for businesses to budget effectively.

When you get onboarded with a traditional ad agency, you will usually be assigned an Account Manager. That person will be in charge of communication with your company. They need to make sure they understand your needs and communicate effectively with the rest of the team working on your account to make sure agency services are delivering results. Unfortunately, this can lead to misunderstandings, ineffective communication, and time delays.

The ad agency business is competitive. That’s why a lot of agencies try to get as many clients as possible while keeping their costs at a minimum. This can cause an agency to be short-staffed, and their team to fail to deliver their work on time.

Lastly, it doesn’t matter how many case studies you read or how many calls with an agency you have. You never really know what you are getting until you hire them. It is very easy to start an ad agency, and there are a lot of options out there. It’s safe to say that there are some traditional ad agencies that deliver amazing work. But, there are a lot of them that charge a lot of money but deliver mediocre results.

Pros and Cons of Traditional Ad Agencies

Now let’s cover some pros and cons of traditional ad agencies. Let’s start with the pros.

1. Expertise and Experience: Traditional ad agencies often have a lot of industry knowledge and experience. In their team, they have professionals with specialized skills in different areas such as copywriting, graphic design, media planning, and campaign management.
2. Full-Service Capabilities: Traditional agencies offer a comprehensive range of services, from market research and creative development to media planning and buying. Clients can benefit from having all their advertising needs handled under one roof, although not all agencies can do that.
3. Established Industry Relationships: Traditional agencies have established relationships with media outlets, suppliers, and other industry partners. These connections can lead to favorable pricing, better ad placements, and access to exclusive opportunities. This is only true when it comes to placements in newspapers, magazines, and television.
4. Reputation and Credibility: Established traditional ad agencies often have a strong reputation and a track record of successful campaigns. 
5. Accountability and Results Tracking: Traditional agencies typically provide clients with detailed reports and metrics to track the performance of advertising campaigns. This is also true for subscription-based agencies.

Now let’s look at the cons of traditional ad agencies.

1. Cost: Traditional ad agencies can be expensive, especially for small businesses and startups with limited budgets. They will often charge you a percentage of the media spend or a fixed fee based on a project. Some even charge hourly. This pricing structure may not be the best for businesses with smaller advertising budgets.
2. Lack of Flexibility: Traditional agencies typically require long-term contracts and commitments. Some even have minimum required ad budgets you have to spend with them. Most agencies ask for a 60-90 day commitment.
3. Communication Challenges: Traditional agencies handle multiple clients simultaneously. That’s why communication can sometimes be a challenge. Delays in response times or miscommunication can become quite often.
4. Limited Control: With traditional ad agencies, clients often have limited control over the day-to-day execution of campaigns. They rely on the agency to make decisions on their behalf. This lack of control can be frustrating for businesses that prefer more hands-on involvement in their advertising efforts.
5. Slower Turnaround Times: Traditional agencies sometimes have longer turnaround times. This can impact the speed at which campaigns are developed, approved, and launched. Sometimes it results in untimely delivery and missed deadlines.

How do subscription-based ad agencies work?

With advertising agencies on subscription, the process is similar. But it’s also different. Different agencies will have their own unique internal processes for how they work with clients. But, nevertheless, most of them will still have an introductory call to get familiar with your business.

The main difference between ad agencies on subscription and traditional ad agencies comes in pricing. Subscription marketing agencies don’t charge you per project, or hourly. They also don’t charge you a percentage of your ad spend. 

Instead, you pay a fixed monthly subscription and gain access to agency services. Some subscription marketing agencies will have different plans that include creative, strategy, and media planning and buying. These plans will also come with different monthly prices.

Presnt is a full service ad agency on subscription. Our clients pay a fixed monthly fee and get access to all our services. Whether you need creative, strategy, or media buying, or all of it, the price stays the same. You can also request unlimited work during that time, but more on that later.

When you want to hire an ad agency on subscription, you don’t have to negotiate or sign contracts with long commitments. You can simply go to the agency website and subscribe with your company card. For example, Presnt doesn’t have a minimum commitment requirement. You can cancel your subscription at any moment. No retainers are needed.

You can check out plans, subscribe, and request work without ever having to talk to a salesperson.

Now let’s look at some pros and cons of ad agencies on subscription.

Pros and cons of subscription-based ad agencies

Let’s look at the pros first.

1. Cost-Effectiveness: Ad agencies on subscription charge fixed monthly fees, providing businesses with cost predictability and control. This eliminates the unpredictability of project-based billing or hourly fees. It allows businesses to budget effectively and avoid unexpected expenses. This is especially good for small and medium-sized businesses.
2. Flexibility and Scalability: Subscription-based ad agencies offer greater flexibility compared to traditional agencies. Businesses can easily cancel their subscriptions, or prolong/upgrade their plans based on their needs.
3. Access to Specialized Expertise: Just like their counterparts, ad agencies on subscription often have diverse teams of experts in various aspects of advertising, including copywriting, graphic design, digital marketing, and data analysis. 
4. Transparent Collaboration: Subscription-based agencies prioritize transparency and collaboration with their clients. Presnt for example offers a customized Trello board to each client. That way clients have full control over their advertising. They can request, track, and manage their work for us.

Now let’s look at the cons.

1. Reliance on Self-Management: With ad agencies on subscription, businesses are responsible for managing their own advertising campaigns to a certain extent. For those looking for more hands-on involvement, this is not a con. However, it can require more time and effort on the client side. That’s why at Presnt, we make a customized dashboard for each client. The board itself can be fully adjusted to your process. You can manage our work, or we can do it ourselves, it’s totally up to each client.
2. Potential Lack of Customization: Subscription-based agencies often operate within standardized plans or packages. That’s why Presnt offers all of our services in each plan. Each client gets access to all our services on their own dashboard which can be tailored to their needs. If your needs are not on the board yet, we can make custom tasks for you!
3. Limited Availability: Subscription-based ad agencies may have a limited number of available slots for clients, especially if they have a high demand for their services. This can result in businesses having to wait for an opening or being put on a waiting list before they can start their subscription. 
4. Potential Limited Industry Focus: Depending on the subscription-based agency, their expertise and industry focus may be narrow. But, this is true for traditional agencies as well. At Presnt, we have a special section of our dashboard where you can drop all the information about your business. That way we can get up to speed on your company, products, target markets, etc. 

Ad Agency Price: Traditional vs Subscription

Let’s look at an example where you need a strategy, ad creation, and media buying services from an agency, and let’s compare a $200/hr agency with Presnt.

With a traditional ad agency, the total will be $10 000 for 50 hours of work. 

With a full service ad agency on subscription, like Presnt, the total will be $2.499/mo. All of the services are already included in the price. There is no limit to how many requests you can make per month. We are only limited by the number of days in a month.

The traditional ad agency will charge you hourly, or a fixed price per project, for each separate thing you need. In the end, you end up paying much more money. Those resources could be better used as a part of your media buying spend.

You know how we said you never know what you get when hiring an agency? Well, you can try Presnt for free. Sign up for our free trial and you can become a client for 30 days without paying a dime. You get all the perks of being a client without paying a dime.

How Presnt works?

Presnt is a full service ad agency on subscription. On our website, you can see all our services, features, and plans.

Getting started with Presnt is super easy. You can pick a plan that works best for you and subscribe directly on our website. 

After subscription, you will get access to your customized dashboard. With each plan you get access to all our services, unlimited requests and revisions, you can add your whole team, and you can cancel at any moment. Presnt doesn’t have any minimum budget requirements either. All of our tasks are delivered in 2-3 business days on average, but for some larger projects, we might need more time.

Read more: How does Presnt full service ad agency on subscription work?

Conclusion

Advertising agencies on subscription are a new concept. They are definitely not for everyone. If you are looking for more affordable and predictable pricing, flexibility, and scalability, then subscription marketing agencies are the right choice for you. However, traditional ad agencies also have some pros, like experience and reputation. You should definitely conduct your own research and see what fits best for your business goals.