No retainer and costly work
If you are not on a retainer, your agency is ripping you off, and if you are
on a retainer, your agency is ripping you off. In the first scenario, you are not getting value for your money (I'll explain why later), and in the second, you are a dumping ground for agency employees who are burdened with having to account for every hour they are in the office.
If you are not on a retainer, you are signaling to your agency that it isn't important. Without a retainer, the agency cannot effectively plan resources. It affects how and when it can bill work, how it can bank income and estimate future earnings for tax purposes, and it has far reaching implications for the agency -- every project, every idea, every time it has to create a "project" and then bill hours toward that project.
At least 40 hours are wasted in the set-up alone of a new project with all of the paperwork involved, and that's not including the hours spent trying to get you, the client, to sign off on it. You end up paying all this money for nothing that is actually moving your brand forward. When you look at all of the time wasted with people scurrying around doing nothing before you even get started on any project, you are dumping money down the drain -- right into the agency. Now imagine that the project is for a banner ad, or a simple print ad, or some other small project. The management aspects of the project are essentially 10 times the actual value of what is being produced. You end up with a system that is massively overpriced for the value it provides. And you complain about it.
But again, this is your fault. Since the agency cannot plan, you get the people who are available at that time to do the work. This is massively inefficient because this is not a team of people. Rather, this is a haphazard assembly of whoever is available, and they will constantly have to spend time getting up to speed on your account. Even if you don't know it, you are being billed for that time. Inefficient meetings, creative that doesn't hit the mark or is not on brand -- it happens in countless ways. The process is massively time consuming, and how are you being billed? Time. In an attempt to "save money," you have contributed to a system that tends to produce inferior work -- and less work, at a much higher cost.
What you may not know is that your agency hates this process. It also understands that you are wasting money on areas where it isn't getting to produce decent work. But the agency is not incented to change if you are stuck in the mindset of "I'm not signing a retainer agreement!" So, although everyone who works on the account hates the process, the agency will gladly take your money.