Market Reality
Whether you work with an agency, are weighing one, or have wondered what you'd be paying for, here's what sits behind the price.
Agencies are being pushed to cut fees and do more. Many now serve clients with fewer, less experienced people, and make up the difference in ways most clients never see. Here's where your money goes.
42.6%
of the total marketing budget goes to in-house staff and agencies. Paid media gets 30.6%. (Gartner, 2025)
39%
of CMOs planned to cut agency budgets in 2025 by dropping agencies, trimming rosters, or renegotiating scopes. (Gartner, 2025)
9 in 10
marketers question whether agency-owned media serves their interests. (ANA, 2026)
Where the Budget Goes
Paid media is the part of the budget most businesses watch closely. In Gartner's 2025 CMO Spend Survey, it made up 30.6% of the total marketing budget, which covers media, technology, in-house people, and outside agencies. In-house staff and agencies together took 42.6%. In 2026, paid media rose to 31.4% and in-house staff to 24.5%, while marketing technology fell to 19.4%.
Share of the total marketing budget, 2025
Paid media
30.6%
Marketing technology
22.4%
In-house marketing staff
21.9%
Agencies
20.7%
In-house staff and agencies combined
42.6%
Percentages are shares of the total marketing budget, which averaged 7.7% of company revenue in 2025. The remaining 4.4% falls into other categories. Outside creative, production, and PR firms typically fall under agencies; in-house creative teams under in-house staff. 2025 is the most recent year Gartner has published the agency share. Sources: Gartner 2025 CMO Spend Survey of 402 marketing leaders in North America, the UK, and Europe, mostly at companies with more than $1 billion in annual revenue; 2026 figures from the Gartner 2026 CMO Spend Survey of 401 marketing leaders.
How Agencies Price People
Agency fees are built on people. Each employee is typically billed at two to three times their salary to cover benefits, overhead, and profit. As fees come down, the people on your account are often fewer, more junior, and stretched across more clients.
$100K
~$295K
What the agency employee is paid
What your business is billed for them
What's inside the billed rate
Agency profit
~$30K
The average operating margin for marketing services companies was 10.2% in 2025. (Moore Kingston Smith, 2025)
Agency overhead
~$120K
Office space, leadership, support staff, and internal technology, spread across client accounts. Creative agency overhead typically runs 80% to 120% of billable salary costs. (TrinityP3, updated 2025)
Benefits and payroll taxes
~$45K
Benefits make up 31.3% of total compensation for management and professional roles, about 45% on top of salary. (U.S. Bureau of Labor Statistics, Dec. 2025)
Salary
$100K
What the person doing the work is paid. This example uses a $100K salary.
Billed to your business
~$295K
Illustrative example based on a $100K salary. Sources: U.S. Bureau of Labor Statistics, Employer Costs for Employee Compensation (December 2025); TrinityP3, The Importance of Overhead in Agency Compensation (updated 2025); Moore Kingston Smith, Annual Survey on the Financial Performance of Marketing Services Companies (2025). Actual costs vary by agency, role, and market.
What's Changed
Agencies have spent years under pressure by clients to lower fees while delivering more. Something has to give, and it's usually the service your business receives.
As fees come down, agencies cut costs on the people side: fewer people on each account, lower pay, and more junior staff doing the work.
Search, social, streaming, retail media, creators, and AI tools all compete for your budget, while fewer senior people are left to make sense of it.
To protect their margins, agencies have added fees and markups in the places most clients never look.
The Squeeze
Marketing budgets have fallen as a share of company revenue, and CMOs are cutting what agencies get paid. Under that pressure, agencies make up margin in places most clients never see.
The squeeze
Total marketing budget as a share of company revenue
2020
2023
2024
2025
2026
A drop of nearly 30% since 2020, and flat for three straight years.
2021 (6.4%) and 2022 (9.5%) are not shown, since pandemic-era swings distorted budgets in both years.
The pressure on CMOs
56%
say their budget isn't enough to execute their strategy (Gartner, 2026)
39%
plan to cut agency budgets (2025)
39%
plan to cut in-house labor costs (2025)
The shift
Seven ways margin moves when fees shrink, and how visible each is to your business
Practice
Evidence
Client visibility
More junior teams
Senior people win the business; less experienced people do the work
20.7%
agencies' share of budgets, down from 2024 (Gartner, 2025)
Hidden
Partial or unfilled roles
You pay for full-time team members, but roles sit open or people are split across other clients
No public benchmark
Hidden
Tech and data fees
Platform, data, and measurement charges layered into buys
$26.8B
in programmatic value lost a year (ANA, 2025)
Varies
Principal media
Agency-owned inventory resold at a markup
58%
of marketers' companies used it (ANA, 2026)
Varies
Rebates and volume bonuses
Payments from media owners back to the agency
46%
of contracts don't address rebates, or marketers don't know (ANA, 2026)
Hidden
Commissions on specialty spend
Influencer and other channels billed through the agency
~30%
average agency share of influencer spend; 39% of deals transparent (ANA, 2026)
Varies
Fee fragmentation
Small separate charges that add up past the headline fee
No public benchmark
Visible, but scattered
Hidden: rarely disclosed
Varies: depends on your contract
Visible: on the invoice
Sources: Gartner CMO Spend Surveys 2024, 2025, and 2026 (budget share of revenue, CMO plans, agency share); the ~11% 2020 figure as reported by MarTech.org (2024); ANA Programmatic Transparency Benchmark Q2 2025; ANA, The Continued Acceleration of Principal Media (March 2026); ANA client-side media transparency survey (May 2026); ANA, Influencer Marketing Agency Compensation (February 2026). Visibility ratings reflect typical practice and vary by contract.
A Different Model
Strategy Butler isn't an agency. Here's how the model differs, and why it matters for your business.
Traditional agency
StrategyButler
How they're paid
A fee agreed in writing, determined by your budget and often a share of your spend, staff hours, and markups
A fee agreed in writing before any work begins
Who does the work
Senior people in the pitch, junior teams after
A senior executive, in every engagement
What you pay for
Full-time employees (FTEs) based on a 40-hour week. Roles often sit vacant during turnover or hiring challenges. Hours reports are self-reported and not verified.
Strategy you can act on right away. You know what you'll receive before you pay. No self-reported timesheets or hours utilization reports to take on faith.
Media and technology
Often resold to you with added margin
Nothing to sell or resell
Fees
Initial fee agreement; additional fees are hidden and spread across media, technology, and data
Agreed in writing before work begins. No hidden fees.
Recommendations
Often tied to the agency's revenue or support of 'preferred' partners with business arrangements
Tied only to your business needs
Before You Sign
Most businesses never ask. In a 2026 ANA study, more than a third of marketers said their agency contracts don't address agency-owned media, or they weren't sure. These questions bring hidden costs into the open.
If your agency resells media it bought in bulk, it's a seller as well as an advisor. You should know which role it plays in every purchase.
Ask for technology, data, and platform fees to be itemized, not folded into a single rate.
Ask for names, roles, and how many other clients each person supports, not just who will be in the pitch.
Understand how staffing plans are developed, who is dedicated to your business 100%, and how hours utilization reports are developed. Refuse to pay for any roles that are vacant or open amidst turnover or while hiring.
If a lower CPM helped win your business, ask how it will be measured and audited after the contract is signed.
Commissions, hourly rates, and performance bonuses all shape recommendations. Know which ones apply to your business.
Ready When You Are
Independent, senior-led marketing counsel, customized to what your brand needs. No commissions, no markups, no upsells.
Senior marketing counsel, without the agency overhead.