Business Strategy
What Does a Digital Marketing Agency Do?
|
A digital marketing agency plans, executes, and optimises online marketing campaigns to increase visibility, generate leads, and drive revenue for businesses. Core services typically include SEO, paid advertising, content marketing, social media management, web design, and marketing automation. UK businesses typically invest £3,000–£15,000 monthly depending on scope and objectives.
The UK digital advertising market reached £35.5 billion in 2024, with online formats now accounting for four in every five pounds spent on advertising, according to IAB UK research. For B2B companies navigating this landscape, the question isn't whether to invest in digital marketing—it's whether to build capabilities in-house or partner with a specialist agency.
This guide explains exactly what digital marketing agencies do, what services they offer, how much they cost in the UK market, and how to determine whether an agency partnership makes sense for your business. Whether you're a marketing director evaluating options or a business owner considering your first agency engagement, you'll find the evidence-based insights you need to make an informed decision.
Core Services Digital Marketing Agencies Provide
Digital marketing agencies offer specialist expertise across multiple disciplines that would be difficult and expensive to replicate in-house. The most common services fall into several interconnected categories, each contributing to a cohesive marketing strategy.
Search Engine Optimisation (SEO) improves your website's visibility in organic search results. According to First Page Sage research, SEO delivers average returns of 702–1,389% depending on industry, making it one of the highest-ROI marketing investments available. Whitehat's SEO services combine technical optimisation, content strategy, and authority building to drive sustainable organic growth.
Pay-Per-Click Advertising (PPC) delivers immediate visibility through paid placements on Google, LinkedIn, and other platforms. While PPC provides faster results than SEO, costs have risen significantly—UK Google Ads CPC increased from £1.35 in 2019 to £2.10 in 2024, a 9.2% annual increase. Effective PPC management requires constant optimisation to maintain returns as competition intensifies.
Content Marketing attracts and engages prospects through valuable, relevant content. Companies that blog regularly generate 55% more website visitors according to HubSpot research, while content marketing costs 62% less than traditional marketing whilst generating three times as many leads.
Marketing Automation and CRM Implementation connects these activities into a measurable system. Platforms like HubSpot enable lead nurturing, email automation, and attribution tracking that proves marketing ROI—critical when only 52% of CMOs successfully demonstrate marketing value to their boards. As a HubSpot Diamond Partner, Whitehat specialises in implementations that connect marketing activity directly to pipeline and revenue.
Answer Engine Optimisation (AEO) represents the newest frontier in digital marketing. With Gartner predicting that 25% of organic traffic will shift to AI chatbots by 2026, optimising for AI-powered search engines like ChatGPT, Perplexity, and Google AI Overviews has become essential. Whitehat's AEO services help businesses get cited and recommended in AI-generated responses.
UK Digital Marketing Agency Costs in 2026
Agency pricing in the UK varies significantly based on scope, expertise level, and geographic location. Understanding current market rates helps you evaluate proposals fairly and avoid both overpriced and suspiciously cheap options.
| Service | Monthly Retainer | Typical Scope |
|---|---|---|
| SEO | £1,000–£5,000 | Technical, on-page, content |
| PPC Management | £1,000–£3,000 + ad spend | Google Ads, LinkedIn Ads |
| Content Marketing | £1,200–£6,000 | Strategy, production, distribution |
| Full-Service | £3,500–£15,000+ | Integrated marketing programme |
London agencies typically command a 30–40% premium over regional competitors, though this gap has narrowed to 15–25% as remote working has expanded access to talent. Agency rates have increased approximately 62% compared with 2023, reflecting both inflation and the growing sophistication of integrated marketing programmes.
According to the Gartner 2025 CMO Spend Survey, marketing budgets now average 7.7% of company revenue, with B2B companies investing slightly more at 8.4%. This benchmark helps contextualise agency investment—a company with £5 million revenue might reasonably allocate £385,000–£420,000 annually to marketing, with a significant portion potentially directed to agency partnerships.
Agency Partnership vs In-House Team
The decision between agency partnership and in-house capability depends on your specific circumstances, but the economics often favour agencies—particularly for SMEs. A four-person in-house marketing team (manager, SEO specialist, content writer, paid media specialist) costs approximately £320,000–£380,000 annually when you factor in salaries, employer National Insurance at 15%, benefits, tools, training, and overhead.
An equivalent agency retainer delivering comparable services typically ranges from £60,000–£180,000 annually—a potential saving of 40–70%. Beyond cost, agencies offer faster time-to-results (2–4 weeks vs 3–6 months to hire and onboard staff), access to specialist tools worth £30,000–£75,000 annually, and the ability to scale up or down without redundancy considerations.
Statista research shows that 46% of UK companies now outsource some marketing functions, with B2B companies slightly more likely to outsource (50%) than B2C (41%). This figure is expected to exceed 50% in 2026, partly driven by increased employer National Insurance costs making in-house teams comparatively more expensive.
Whitehat's B2B marketing services are designed specifically for companies seeking agency partnership that connects marketing activity to measurable business outcomes—pipeline generated, deals influenced, and revenue attributed.
Choosing the Right Digital Marketing Agency
Selecting an agency partner requires careful evaluation beyond impressive pitches and creative portfolios. The UK hosts over 8,500 digital advertising agencies according to IBISWorld, making differentiation challenging. Focus your evaluation on these critical factors:
Relevant certifications and partnerships signal genuine expertise. HubSpot partner tiers (Gold, Platinum, Diamond, Elite) indicate demonstrated client success and platform expertise. Google Partner and Premier Partner status requires minimum ad spend thresholds and certification. These credentials can be verified directly through partner directories.
Industry-specific experience matters significantly. An agency that understands B2B SaaS sales cycles, biotech compliance requirements, or professional services buying behaviour will deliver results faster than a generalist learning your market from scratch. Ask for case studies from similar clients with quantified results.
Transparent reporting and attribution separates strategic partners from order-takers. Agencies should connect marketing activity to business outcomes—pipeline generated, not just traffic and impressions. With only 29% of CMOs successfully proving marketing ROI, choosing an agency that prioritises attribution is the difference between budget growth and budget cuts.
For detailed guidance on the evaluation process, read our comprehensive guide on how to hire a digital marketing agency.
Warning Signs When Evaluating Agencies
Certain agency behaviours should trigger immediate caution. Recognising these red flags can save significant time, money, and frustration:
- Guaranteed rankings or viral results: No legitimate agency can guarantee specific Google positions or viral outcomes. Real digital marketing requires testing, iteration, and time.
- Ownership of your assets: You should retain full admin access to all accounts—website, Google Ads, Analytics, social media. Agencies reluctant to provide this are creating dangerous dependency.
- Long lock-in contracts with high exit fees: Quality agencies retain clients through results, not contractual barriers. Seek 30–60 day notice periods rather than 12-month lock-ins.
- Reporting only vanity metrics: Traffic and impressions matter less than leads, opportunities, and revenue. Demand attribution to business outcomes.
- Too-good-to-be-true pricing: Quality marketing requires expertise and time. Suspiciously cheap services often indicate offshore outsourcing, inexperienced staff, or corners cut on delivery.
The best agency relationships feel like partnerships where both parties share accountability for results. Agencies should push back when they disagree with your approach and tell you what they think you should do based on their experience—not simply execute whatever you request.
How AI Is Transforming Digital Marketing Agencies
Artificial intelligence has fundamentally changed how digital marketing agencies operate. According to the Marketing AI Institute's 2025 research, 88% of marketers now use AI daily, with 74% of CMOs rating AI as critically or very important to their function—an 8-point increase from 2024.
The most significant shift is the rise of AI-powered search. ChatGPT now has over 800 million weekly active users—double the figure from early 2025. Google AI Overviews appear in 16% of search results, and 79% of AI search users believe it offers a better experience than traditional search. This creates both challenge and opportunity for businesses.
Forward-thinking agencies now offer Answer Engine Optimisation (AEO) alongside traditional SEO—ensuring clients get cited and recommended in AI-generated responses, not just ranked in traditional search results. Whitehat has been at the forefront of this evolution, developing AEO methodologies that help B2B companies maintain visibility as search behaviour shifts toward AI assistants.
When evaluating agencies, assess their AI capabilities carefully. According to SparkToro's 2025 State of Digital Agencies survey, the differentiator isn't AI adoption itself—91% of agencies now use generative AI—but how effectively they balance AI efficiency with authentic human creativity whilst proving business impact.
Frequently Asked Questions
How much should a small business spend on digital marketing?
UK businesses typically allocate 7–10% of revenue to marketing, with digital representing the majority of that spend. For a company with £1 million turnover, this suggests a marketing budget of £70,000–£100,000 annually, with agency retainers often representing £24,000–£60,000 of that total.
How long before digital marketing shows results?
PPC advertising can generate leads within days of launch. SEO typically shows meaningful results within 3–6 months, with positive ROI achieved at 6–12 months. Content marketing compounds over time, with peak results often occurring in years two and three of consistent investment.
What's the difference between a digital marketing agency and a traditional marketing agency?
Digital marketing agencies specialise in online channels—SEO, PPC, social media, email, and content marketing. Traditional agencies focus on offline channels like print, TV, radio, and outdoor advertising. Many modern agencies offer integrated services spanning both, though specialists typically deliver stronger results in their core discipline.
Should I hire a specialist agency or a full-service agency?
Specialist agencies deliver deeper expertise in their focus area, whilst full-service agencies offer convenience and integrated strategy. For most B2B companies, a full-service agency with proven expertise in your priority channels offers the best balance of specialisation and coordination.
What ROI can I expect from a digital marketing agency?
ROI varies significantly by channel and industry. Email marketing delivers £36–£40 per £1 spent. SEO returns 702–1,389% over three years depending on sector. PPC averages 200% ROI. A good agency should provide realistic projections based on your specific situation and track attribution rigorously.
Taking the Next Step
Digital marketing agencies help businesses navigate an increasingly complex landscape—from traditional SEO and PPC to emerging channels like AI-powered search. The right agency partnership delivers not just marketing execution but strategic guidance, specialist expertise, and measurable business results.
Whitehat is a London-based HubSpot Diamond Partner helping UK B2B companies transform marketing from cost centre to revenue engine. We combine SEO, answer engine optimisation, HubSpot implementation, and paid media into integrated programmes that connect every campaign to pipeline—so you can prove ROI to your board, not just report on activity.
References
- IAB UK (2025). Digital Adspend 2024: UK's Overall Digital Ad Market Hits £35.5bn
- Gartner (2025). 2025 CMO Spend Survey
- IPA (2025). Bellwether Report Q4 2024
- Statista (2024). Share of Companies That Outsource Marketing UK
- First Page Sage (2025). SEO ROI Statistics
- HubSpot (2025). 2025 Marketing Statistics, Trends & Data
- Marketing AI Institute (2025). State of Marketing AI Report
About Whitehat
Whitehat is a London-based HubSpot Diamond Partner and full-service digital marketing agency. Founded in 2011, we run the world's largest HubSpot User Group and help B2B companies generate qualified leads through integrated SEO, AEO, and marketing automation programmes. Learn more about our team.