Two agencies and very different fees: how to compare
Normalise two marketing proposals that differ by several times in fee, so you compare scope per rupee instead of guessing which number is fair.
Two proposals and a gap nobody can explain
One agency has quoted a figure. The second has quoted something close to three times as much. Both decks use the same vocabulary. Both promise strategy and creative and performance marketing and monthly reporting. Neither document contains a number you can divide by anything.
The gap is almost never dishonesty. It is that the two firms have quoted for different amounts of work and neither has written down how much. Until the scopes are expressed in countable units the fees cannot be compared and the decision defaults to whichever presentation felt more confident.
What a fee excludes before you compare anything
Agency fees exclude media spend in almost every case. They also commonly exclude tool and platform licences, stock imagery, influencer payments, shoot production, printing and translation. GST at 18% applies to the service fee and is frequently quoted separately or omitted from the slide entirely. Confirm which of these sits inside each number before you place them side by side. Tax treatment in your own situation should be confirmed by a qualified professional rather than assumed from a proposal.
Then look at how the fee itself is constructed. A flat monthly retainer and a percentage of media spend behave very differently as budgets grow. A percentage model that looks cheap at a small spend becomes the larger number later and it quietly rewards the agency for recommending a bigger budget.
Who should hire which and who should hire neither
The lower fee usually suits a business that has somebody internal who can direct the work. A marketing manager who writes the brief and approves creative and chases the follow-up turns a lean retainer into good value. Without that person the same retainer produces activity nobody has time to use.
The higher fee is worth paying when you genuinely have no internal capacity and need the thinking as well as the execution. It is not worth paying to feel safe. A business doing under a few lakh of monthly revenue with an untested offer should hire neither agency yet. At that stage the work that moves the needle is talking to customers and getting the offer right and no retainer substitutes for it. Spending a large fixed fee to find out whether anyone wants the product is the most expensive possible way to run that experiment. Anyone selling you a full programme in that situation is selling you something you cannot use.
How to normalise two proposals
Build one sheet with the proposals as columns. Rows for countable things only. Number of campaigns managed. Number of creative variants produced each month and who shoots them. Number of articles or pages and their length. Reporting frequency and whether a human presents it. Named people with their seniority and the hours they are committed to rather than a list of departments.
Add rows for the terms that matter later. Who owns the ad accounts and the analytics property and the creative files. Notice period and what happens to work in progress. Whether the fee changes when spend changes. Then divide each fee by the units. The cheaper proposal is often cheaper because it contains a third of the work and sometimes it is cheaper because the other firm has priced in overhead you are not using. Both answers are visible on the sheet and invisible in the deck.
This comparison problem is also the reason some buyers skip it. A fixed published scope such as a full growth programme states the disciplines covered and the rate on the page, which removes the normalisation exercise rather than solving it.
What tells you the choice was right
After a quarter the number that matters is cost per qualified enquiry including the fee and the media and the tax. Agencies prefer to report performance on media alone. Include the fee or you are measuring half the cost.
The flattering metric is deliverable count. A proposal listing forty assets a month looks generous and says nothing about whether any of them were used or whether anybody read them. Impressions and reach belong in the same category. They rise with budget and they reward nobody's judgement.
The common mistake
The expensive error is choosing on the monthly figure rather than scope per rupee and then discovering the gap three months in. The cheap retainer turns out to cover one campaign and a report. Extra work arrives as change requests and the effective cost overtakes the proposal you rejected. Nobody renegotiates at that point because switching feels worse than paying.
The second error costs more and is harder to undo. Businesses let the agency create the ad account and the analytics property under agency ownership. When the relationship ends the history goes with it. Conversion data and audience lists and years of learning restart from zero and the replacement agency begins at a disadvantage you paid for. Every account should be created in your own name with the agency granted access.
This guide explains how something works. It is not legal, tax or financial advice, and rules change. Confirm anything regulatory with a qualified professional before you act on it.