Where the premium goes
Central London office space, London salaries, and business development teams whose job is winning the next client, not serving you. None of that touches your campaigns. The tools are identical: Google Ads costs the same from Shoreditch as from Sheffield.
When London earns it
Genuine specialisms cluster there: luxury, fintech, big-brand media buying with network relationships. If you need forty people in a room with your board quarterly, or sector connections only a London agency holds, the premium can be rational.
When it's just postcode
For performance marketing, ecommerce growth, SEO and email, output is measurable and location-agnostic. A senior team in Manchester or Sheffield doing the work beats a junior team in London executing a famous agency's process, at two-thirds of the price. The dashboard doesn't know where the desk is.
How to compare fairly
Ignore the address and ask both: who exactly works on my account, what did you change for clients like me last quarter, and what do I own if we part ways? Judge the answers. The city on the letterhead never shipped a campaign.