There is a great report out by the 4 A's "Understanding the Economics of Digital Compared to Traditional Advertising and Media Services" By Joe Burton - it explains in great detail why Interactive Ad Agencies charge what they do for our services. It highlighted the importance of understanding the labor costs that go into SEO, Web Site Development, eMail Marketing, Video Advertising and Social Media Marketing and how the critical talent is scare to do the job well.

One key point was that in Traditional Advertising, media equals 73% of all spending with your agency partner but with an Interactive Media Agency you should expect 52% to be media and 45% to be agency services fees. This is critical when doing channel shifting from one medium to another.

So it is very important if you are going to make the move from direct mail to eMail or from broadcast to display media or PR to social media that you understand the costs and the ROI before jumping into the fray.  But the rewards are worth the effort.