Fixed-fee valuations of marketing, advertising, media and PR agencies across Australia.

A marketing agency is worth the maintainable profit its fee income supports, after pricing the risks a buyer takes on: how much income sits on signed retainers rather than one-off projects, how much depends on a few clients, and whether those clients stay when the founder steps back. Media spend passed through to publishers is not the agency's income, so value is built on fees and gross profit. Agency Valuations prepares an independent written report at a fixed fee: $1,495 + GST for agencies turning over under $2 million, delivered in 2 business days.

How is a marketing agency valued?

Most marketing, advertising, media and PR agencies are valued on capitalised maintainable earnings. We adjust your financial statements to what a new owner could expect to keep earning: owner salaries are reset to a market wage for the roles actually worked, one-off items are removed, and related-party arrangements, such as rent paid to a family trust, are restated at market rates.

The adjusted profit is then capitalised at a rate that reflects risk. Signed retainers, a spread of clients and a second tier of managers support a higher value for the same profit; project income, one dominant client and a founder who holds every relationship support a lower one. The report shows that reasoning instead of applying a rule of thumb.

Why doesn't media spend count as agency income?

Agencies that buy media for clients often put large sums through their accounts. That money belongs to the client and goes to publishers and platforms. What the agency keeps is its fee, any mark-up and any media rebates or volume incentives, so we value the agency on that retained income and its gross profit, never on billings.

Rebates and incentives get their own test: whether they are written into agreements, whether client contracts require them to be disclosed or passed back, and whether they would continue under a new owner. Income resting on one media owner's annual deal is treated as less durable than fee income under contract.

What moves a marketing agency's value up or down?

These factors usually separate two agencies with the same profit:

• ·Retainer share: the portion of fee income under signed retainers, the remaining term and the notice a client must give to leave.
• ·Client concentration: the share of gross profit from the largest client and from the top five, and how long each has stayed.
• ·Founder dependence: who holds the senior client relationships, who wins new business and who leads the strategy and creative work.
• ·Staff and freelancer margins: salary cost against fee income, how much work goes to freelancers, and whether fees have kept pace with wages.
• ·Work in progress and prepayments: unbilled time on live projects, and client money received for work not yet done.
• ·Owned IP and tools: methods, data, templates and brand assets the agency owns outright, as opposed to ones licensed or held by staff.
• ·Platform and partner standing: media or platform partner status, and whether it belongs to the agency or depends on particular people.

Retainers or projects: does the revenue mix change the value?

Yes, and it is often the biggest single factor. A retainer with a fixed term and a meaningful notice period gives a buyer income it can count on after settlement. A month-to-month arrangement gives almost none, even if the client has stayed for years, so we read the retainer letters as well as the invoices.

Project income is valued on its repeat pattern. Clients who return every year for campaigns, launches or events show durable income without a retainer. A pipeline of quoted but unsigned work is noted, not treated as earned.

What transfers when a marketing agency is sold?

In a share sale the company keeps its contracts and employees, although a client contract with a change-of-control clause may let that client walk away. In an asset sale, client contracts usually need to be assigned or replaced, and employees who move across fall under the transfer of business rules, which affect the leave and service the buyer must recognise.

Intellectual property needs checking either way. Copyright in work an employee creates under their employment belongs to the employer, but work made by a freelancer belongs to the freelancer unless it has been assigned, and an assignment of copyright has no effect unless it is in writing and signed. Many client contracts also hand campaign assets to the client. We value what the agency can show it owns.

When do marketing agency owners need a valuation?

• ·Selling the agency: a supportable value before you negotiate, or a check on an offer.
• ·Buying an agency or merging two: an independent view of what the earnings support.
• ·A partner or shareholder exit: a value for the buyout under your shareholders agreement.
• ·Staff equity: shares or options for key staff need a market value to work out any discount under the employee share scheme rules.
• ·Restructures and related-party transfers, where tax law looks to market value.
• ·Small business CGT concessions: market value for the asset threshold tests when you sell.
• ·CGT reform: from 1 July 2027 the 50% CGT discount for individuals, trusts and partnerships is replaced by cost base indexation and a 30% minimum tax for gains accruing after that date, so a valuation at 30 June 2027 may be useful.
• ·A dispute between owners: an expert report for negotiation, mediation or court.

What do we need from you?

• ·Financial statements for the last three years and year-to-date management accounts.
• ·Revenue and gross profit by client for three years, split between retainer and project income.
• ·Media billings and pass-through costs shown apart from fees, with any rebate or incentive agreements.
• ·The main client contracts or retainer letters, including term and notice clauses.
• ·A staff list with roles, salaries and start dates, plus freelancer and contractor spend.
• ·Work in progress, unbilled time and client prepayments at the valuation date.
• ·Owner salaries, personal costs run through the business, and your shareholders agreement.

How much does a marketing agency valuation cost?

Fees are fixed and set by your agency's total annual turnover, excluding GST. A Small Business Valuation is $1,495 + GST for turnover under $2 million, delivered in 2 business days. A Medium Business Valuation is $2,495 + GST for $2 million to $3 million, and a Large Business Valuation is $3,495 + GST for over $3 million to $10 million, each delivered in 3 business days. Above $10 million the fee is quoted in writing before work starts, with the delivery date agreed before commencement. An expert report for a dispute or court is $4,495 + GST, with the delivery date agreed before commencement. Each extra past valuation date is $495 and each additional entity is $795. Delivery time starts once payment and all required information have been received.

Every report follows the guidelines of APES 225 Valuation Services and is signed by a suitably qualified business valuer. We value agencies; we do not broker or sell them.