Mercenaries are obviously better for factions that swim in money but might have trouble fielding large armies. Carthage comes to mind as your units take forever to reach Iberia or Syracuse or even Egypt, they also make a lot of money.
For certain factions, being able to recruit units like greek phalanx, hoplites or powerful cavalry is also a welcome addition.
In deep enemy land sometimes you might even hire mercenaries ahead of a big battle.

They supplement your army where the natives fail.