Traditional Agencies vs. Self-Serve Advertising Platforms

Advertising agencies often charge a management fee for their services because they provide a range of services that can be time-consuming and complex. Traditional agency management fees go towards employees working for the agency who build and optimize advertising campaigns, manage the campaign budgets to ensure the campaigns are pacing correctly throughout the day and month, conduct market research and competitor analysis, and providing strategic guidance and consultation.

The main reason that agencies charge higher fees for their services is that they are offering a more comprehensive and hands-on approach to the client, while self-serve platforms are more focused on providing the technology and tools for users to manage their own advertising efforts.

Here are some potential costs associated with operating an advertising agency:

• Management fees: Agencies typically charge a fee for their services, which can vary depending on the scope and complexity of the work.

• Salaries: Agencies will have staff, including account managers, strategists, creatives, and analysts, who need to be paid for their work.

• Rent: Agencies will need office space to work from, which will come with a monthly rent cost.

• Tools and technology: Agencies will need to invest in tools and technology to support their work, such as software for market research, campaign management, and data analysis.

• Other overhead costs: There may be other costs associated with running an agency, such as utilities, insurance, and office supplies.

These are just some examples of the potential costs associated with operating an advertising agency. The actual costs will vary depending on the size and scope of the agency, as well as other factors.

Self-serve advertising platforms are typically designed to be more user-friendly and require less involvement from the platform provider. As a result, self-serve platforms typically charge lower fees than agencies (such as management fees), since they are not providing the same type of hands-on service like a traditional agency.

There are many different types of self-serve advertising platforms available, each with its own features and capabilities. Some examples of existing self-serve platforms include:

• Search engine marketing (SEM) platforms: These platforms, such as Google AdWords, allow users to create and manage pay-per-click (PPC) advertising campaigns on search engines like Google and Bing.

• Social media advertising platforms: These platforms, such as Facebook Ads and Twitter Ads, allow users to create and manage advertising campaigns on social media platforms.

• Display advertising platforms: These platforms, such as Google Display Network and AdRoll, allow users to create and manage display ads that appear on websites and other online platforms.

• Video advertising platforms: These platforms, such as YouTube Ads and Vimeo, allow users to create and manage video advertising campaigns on video-sharing platforms.

Whether you choose to go with a traditional advertising agency or a self-serve platform will depend on your specific needs. Oftentimes, small business and enterprise will have a strategy that encompasses both solutions.