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How much does a marketing agency cost? Retainers, hourly and % of ad spend

What marketing agencies charge in Canada, how retainers, hourly rates and percentage-of-spend fees work, what's normal, and what each model quietly rewards.

5 min read

A Canadian marketing agency usually charges one of three ways: by the hour (about $100 to $150 an hour for agencies based in Canada, according to Clutch's pricing data), by a fixed monthly retainer for a defined scope, or as a percentage of your ad spend (typically 10% to 20% of media spend, with a monthly minimum). For a small business spending $1,000 to $5,000 a month on ads, management fees commonly land between $500 and $2,000 a month, on top of what you pay Google or Meta. The number matters, but the model matters more, because each one nudges the agency toward different behaviour.

The three models side by side

ModelHow it worksWhat it rewardsGood fit for
HourlyYou pay for time workedTime spentAudits, one-off fixes, advice
Monthly retainerFixed fee for defined deliverablesAgency efficiencyOngoing ads, SEO, content
% of ad spendA share of what you spend on mediaHigher spendLarge, stable ad accounts

Project pricing, hybrids and performance deals exist too. They're covered further down.

Hourly rates

Clutch's digital marketing pricing guide, updated in September 2026, lists agencies in Canada, the US and Australia at $100 to $149 an hour. Across all agencies on the platform, many of them offshore, the most common rate drops to $25 to $49. Specialist work like SEO, pay-per-click, content and email sits in the same $100 to $149 band for established firms.

What it rewards: time. An agency paid by the hour has no financial reason to work faster. That isn't dishonest; it's just how the incentive works.

Use it for:

  • an audit of your Google Ads account or conversion tracking;
  • training your in-house person;
  • a short engagement where you're not yet sure what's needed.

Protect yourself: ask for an hours estimate up front, a cap that needs your sign-off to exceed, and a task-level breakdown on the invoice.

Monthly retainers

This is the standard model for ongoing work. You pay a fixed amount for a written list of deliverables: say, management of two Google Ads campaigns, a monthly report and a review call.

Clutch's guide puts agency retainers on its platform at $5,000 to $50,000 a month, but those figures skew toward mid-size and larger engagements. A small business handing over one channel pays much less. OuterBox, a US agency, publishes these planning ranges for paid search management:

Monthly ad spendTypical monthly management fee
$1,000 to $5,000$500 to $2,000
$5,000 to $25,000$1,500 to $5,000
$25,000 to $100,000$4,000 to $12,000

What it rewards: efficiency. The agency earns more margin by delivering the agreed scope in less time, which pushes it to build good processes.

The flip side: doing the minimum. A retainer that says "campaign management" and nothing else can mean a glance at the account once a month. The fix is a written, specific scope.

Percentage of ad spend

The agency takes a cut of your media spend, most often 10% to 20%, usually with a minimum monthly fee. Some use tiers: a higher rate on the first block of spend, a lower one above it.

What it rewards: spending more. Every extra dollar you put into ads raises the agency's income, whether or not that dollar brings in customers. So when an agency on this model recommends doubling the budget, ask for the numbers behind it.

When it's reasonable: large accounts where the work genuinely scales with budget, meaning more campaigns, more creative and more testing. For a business spending $2,000 a month, 15% is $300, which rarely buys real work. That's why minimum fees almost always apply.

Other arrangements

Project pricing

A fixed price for a defined outcome: a website, a landing page, a tracking set-up. Clutch reports that the digital marketing projects reviewed on its platform most often cost $10,000 to $49,999, though a focused small-business project can be far smaller. You know the cost in advance; watch for "out of scope" extras.

Hybrid

A fixed base fee plus a small percentage above a spend threshold. For a growing ad account this is often the fairest balance.

Performance-based

Pay per lead or per sale. Attractive on paper, messy in practice. It only works with airtight tracking and an agreed definition of a "qualified" lead; without both, the arguments start in month one.

What's normal and what isn't

Normal:

  • a set-up fee tied to concrete deliverables (tracking, account structure, a dashboard);
  • 30 days' notice to end a retainer;
  • management fees invoiced separately from media spend;
  • a monthly report showing cost, clicks, conversions and cost per lead.

Not normal:

  • a 12-month lock-in for ongoing management with no exit clause;
  • an ad account opened in the agency's name that you can't take with you;
  • fees buried inside your media spend.

On that last point, Google's rules are explicit. Its transparency requirements for third parties say an agency must tell new customers about any management fee in writing before the first purchase and show it on every invoice. Cost reports must use the exact amount Google charged, without the agency's fees mixed in. And the agency must give you your Google Ads customer ID when you ask, so you can contact Google directly.

Comparing two proposals

Put the quotes side by side and answer these for each:

  1. What's the first-year total? Set-up, plus 12 months of fees, plus the minimum ad budget they recommend.
  2. What's included, word for word? Number of campaigns, creative, copywriting, landing pages, reporting, meetings.
  3. Who does the work? A senior specialist, or a junior with occasional oversight?
  4. Who owns the accounts? Google Ads, Meta, Analytics, the domain and the website should all be in your name.
  5. How does it end? Notice period, and what you get handed over.
  6. How will they define success? If the answer is clicks and impressions rather than leads and cost per lead, keep looking.

When not to hire an agency yet

  • Your total ad budget is smaller than the management fee. Start small, learn the basics and hand it over when there's enough volume to manage.
  • Nobody calls leads back. An agency can generate enquiries; if they sit for two days, the spend is wasted.
  • Your website doesn't convert. Paying to send traffic to a slow, confusing page just pays to turn people away. Fix the page first.

How PNE prices it

Our digital marketing work covers Google Ads, Meta ads and SEO, with conversion tracking that ties spend to enquiries and sales. Project work is scoped and priced per engagement, and ongoing management runs on a monthly retainer with no long-term contract: 30 days' written notice ends it. Once the final payment is in, the creative is yours and we transfer platform access, so you're never dependent on us to keep going.

Sources

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