Project fees vs retainer. Which is best? A digital agency’s perspective.

What is the ‘best’ pricing model to adopt when engaging a marketing agency? A consideration of why we support the retainer if you wish to deliver long term results.

You are reading: Project fees vs retainer. Which is best? A digital agency’s perspective.

Hiring a digital agency for the first time can be like dipping your toes into the sea: good once you’re in! Knowing who to hire is the most common conundrum but knowing how to hire them represents another.

Having been agency side for over twenty years, I’ve seen many projects and retained clients come and go and I can say, without a shadow of a doubt, that retained work produces the best results in the long term. I’ll explain why shortly.

However, I’m also of the opinion that projects do have their place and can be a great way to check the water is pleasant enough.

Retainer and project – what’s the difference?

For the uninitiated, a retainer is a set amount of money to secure an agency’s time and a team of people, for a set number of hours or days each month. A project arrangement is where a client pays an agency for a finite amount of time to produce a specific outcome or to undertake a specific piece of work.

The grounds for hiring on a project basis are usually if a client has a limited budget, needs a specific task doing, or simply wants to test drive an agency. However, if you really want a marketing partner to live and breathe your industry, help grow your business and have common long term goals, I’d argue that a retainer is where it’s at. I will explain why.

Why are project rates higher?

Most agencies set a higher rate for project work than they do for retained work – that in short may be enough of a reason to push some clients towards a retainer. The higher rate is, in part, to try to nudge clients in to longer term thinking: in the case of digital or SEO activity, Google can be slow to react and it could take 3-6 months for work undertaken now to make a significant difference. If the agency was only hired for a 2-3 month period, they may not get the credit for increased blogger awareness or an improved domain authority, which can make it hard for the client to judge whether to continue working together.

Budgets are also higher for projects because the work can be more disruptive to an agency. All agencies worth their salt will overservice massively in the early days of a new client relationship, to get under the skin of the business as well as put in place effective procedural and administrative processes. Whereas on a retained piece of work, the idea is that the activity will settle down and if the agency has budgeted properly, take around the expected amount of time. If you only hire an agency for the short term they need to account for this.

Similarly, knowing there is retained work gives an agency the financial stability to invest in their people and premises, helping to attract the best employees and make it a better place to go to work. It is also very expensive to have staff sitting around waiting for projects to be signed off, so a retainer offers security – both for the agency as a whole and individual members of staff.

Getting to know you

Clients that hire on a retained basis are, as much as possible, guaranteed the same team on their account for the duration, and if everyone is in this relationship for the long term, both parties are more likely to invest time in getting to know each other, which simply makes going to work a whole lot nicer!

Although agencies will always try to be accommodating, that can’t always be said for repeated project work.

And the thing about being given a different team is that, although the way of thinking may still be what you’d expect from your chosen agency, the chemistry might be missing. Let’s face it, most of us thrive on good relationships – sharing in the good times, commiserating in the bad, and client and agency staff need that bond too. There is no silver-bullet formula for marketing success (and not when the sands shift as quickly as they can in digital marketing), but taking joint responsibility for calculated marketing risks and making a fair assessment if things don’t go to plan, is much healthier than a hire and fire approach.

When an agency truly lives and breathes the client’s business, they also become closer aligned with the client’s ethos and over time, they will naturally know what activity will suit them. The client doesn’t need to brief the agency about what the brand stands for before each piece of work and to some extent an agency will be self policing – having the ability to brainstorm for the client with really good knowledge about what will and won’t be acceptable.

Taking that a stage on, a really solid partnership also enables the client and agency to jointly to push the boundaries and do some really creative work, that might not evolve in the short term. A project-based relationship generally focuses on the now and immediate next steps and there is very little wastage in terms of conversations about other areas of the business or interesting asides. These little snippets can sometimes spark a whole new way of thinking or a campaign which wouldn’t have the chance to develop if the entire focus is narrow and only for the short term.

Campaigns don’t fit in boxes

Another truism of a digital marketing agency is that there is always more that could be done; more outreach to pursue, more meta to update, bounce rates to assess, engagement statistics to improve, and often one area has a knock on effect to another.

Take guest blogging for example. An agency might line up a number of opportunities but once they’re completed, it’s not game over. If these leads are followed up again, they can lead to speaker slots, book deals, affiliate marketing, networking, the list goes on. The hard work and efforts of the initial contact would be the same on both a retainer or project but the full extent of the opportunity could not be exploited in the latter.

And what about when the campaign is over? Another joy of having a good agency on a retainer is that they will also understand when the client has potential lulls in activity and will fill those gaps with additional creativity or meaningful technical work to ensure a website is running full steam ahead.


Agencies tend to come in two flavours – a) yes (wo)men and b) those that take an advisor/consultant approach. Admittedly, some clients simply want someone to get on with the job and not question their direction but many prefer to have someone by their side. As a client you’ll get an idea of the types of agencies you’re dealing with during the pitch process. If they don’t question or probe anything about the brief before the pitch, you’ve probably got type a.

Sometimes it takes an external agency to see where internal improvements can be made but it will take agency version b to actually speak up. That requires a mutual trust that the opinion is both sought and valued and that the messenger will not be shot for highlighting a potential issue. Trust is something that develops over time, it is hard for it to be present at the start of a relationship so for trust to thrive, longer term relationships are favourable.


Good digital marketing reporting is usually a mixture of statistical data and written explanation but it comes in many shapes and sizes.

Of course, any project-based work should be reviewed and reported on but over time an agency will be better able to align their monthly reporting with internal client goals. For example, marketing is not an island and so if the board needs a summary of digital results, that could be provided on a quarterly basis, similarly conversion results could be supplied for the sales team’s monthly meetup. This level of coordination usually evolves over many months as a wider number of people and departments tap into using digital marketing data to support their business functions.


Hiring an agency isn’t just about the financial commitment, the best clients invest in the agency relationship and that has implications for the in-house teams’ time too (not to mention the time spent in selecting an agency in the first place.) Therefore, in the rush to win new business, agencies need to make sure they are being judged fairly and in particular, to help potential clients understand how and equally importantly, when success can be evaluated.

Finally a note to those who decide that working on a retainer is the best way forward: like a lawyer or a solicitor, marketing agencies sell their time, but no-one bats an eyelid when a lawyer bills a client based on 15 minute intervals of work. On the whole, most marketing agencies have an over-servicing tolerance that they are comfortable with. They won’t tell you every time you go over your allowance when attending an extra event on your behalf or listening to a late night podcast, just in case it’s relevant. With that in mind, it is okay for an agency to have a ‘quieter’ month. You don’t need to ask for a credit note – it’s just part of the ebbs and flows of working together.

Project work is clearly a great way to try before you buy but if a client really wants good value for money and a great agency partnership, they’re much more likely to find that in a meaningful long term retained relationship.

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