Digital Marketing Cost: How to Calculate Your Budget for 2024
Last update: 1 February 2024 at 02:52 pm
Digital marketing has become a widespread phenomenon. Today, every new business owner entering the business landscape knows he/she needs to invest in digital marketing to reach the right customers at the right place and at the right time.
Even though there is an interest in adopting digital marketing services to spur the business growth rate, the lack of digital marketing cost details often leads to business owners taking a backseat. If you are one of such business owners, then fret not; we are here to help!
With the details listed in this digital marketing pricing guide, you will gain an idea of how much your company should pay when hiring an agency or a consultant for digital marketing services.
But first, let’s clarify our basics with –
What Is Digital Marketing?
Digital marketing is a type of marketing strategy utilized to promote and sell services or products online. It is a process of influencing different digital marketing channels, such as social media networks, search engines, emails, etc., to reach the target audience.
As a brand owner, you can use digital marketing to discover people who may like your offerings, interact with them and build brand trust in them.
How Much Should You Spend on Marketing?
Every business, irrespective of its niche and size, has a marketing budget. Everything from advertising to marketing, public relations, promotions, print ads, sponsorship, etc., is included in this budget.
Experts believe that the ideal digital marketing budget depends upon a firm’s existing marketing foundation. However, based on the latest research, one should spend anywhere between 2% and 5% of their sales revenue on marketing.
However, it is important to note that the 5% rule applies to most years of your brand being in the business and not all.
There will be times when you might require spending more to obtain what you want and need. For instance, you wish to build a marketing foundation, such as a performance-based website. You will likely require exceeding your 5% marketing budget.
How Much Does Digital Marketing Cost?
As mentioned before, digital marketing is a process of influencing different marketing channels. The experts utilize plenty of online marketing services to do so.
Listed below are a few of the many impactful digital marketing services –
Search Engine Optimization
Search Engine Optimization is the core of online marketing services in today’s business landscape.
SEO is an umbrella term for various strategies that aim at boosting the online visibility of a brand in search results. In other words, search engine optimization is used to help your brand rank higher on search engines.
Out of the 7.83 billion global population, 4.66 billion are actively using the internet to find answers, products, or services, thereby making SEO an imperative investment.
Plus, it is seen that leads generated from search engines result in a 14.6% closing rate, which is eight times more than traditional marketing’s closing rate.
For SEO digital marketing services, you can pay anywhere between $350 to $2000 a month to the digital marketing agency. A consultant, on the other hand, might charge $80 to $200 an hour.
Pay-Per-Click is yet another popular digital marketing service that focuses on boosting a brand’s digital visibility. However, PPC improves visibility through paid advertisements.
A PPC marketing ad typically appears above the organic search result and has a green “Ad” label at the left-hand corner.
With PPC ads, you only pay when a user clicks on them, making them a cost-effective paid ad option for your business. Besides, PPC allows businesses to make $2 for every $1 invested in the ad.
If you wish to invest in PPC marketing services, expect to pay anywhere between $9000 to $10,000 per month.
Social media marketing
SMM or social media marketing is a process of using social media platforms like Facebook, Instagram, Twitter, LinkedIn, etc., to increase brand awareness and brand loyalty online. Social media also assists in interacting with customers in real time through DMs, comments, etc.
Even though social media offers a massive opportunity to increase conversion rates and overall company revenue, only 26% of companies integrate social media into their business’s marketing strategies.
If you haven’t considered using social media to promote or advertise your brand, then consider this as a sign to get started.
Pricing for social media marketing services can be between $900 to $20,000 per month.
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Email Marketing is one of the time-tested and cost-effective digital marketing services. Besides focusing on building brand awareness and loyalty, an effective email marketing strategy helps in boosting conversion rates and sales.
However, to yield the benefits of email marketing, it is crucial to work with an experienced digital marketing agency.
A specialized agency will charge between $300 to $2500 a month for email marketing. But, additional factors like email design, monthly email quantity, etc., might impact this pricing estimation.
Similar to other services mentioned in this list, even video marketing aims at increasing brand awareness, sales, and conversions.
However, since video marketing is an ongoing strategy, working with industry experts is crucial. A valuable and informational video marketing strategy can improve conversion rates by 86%.
To obtain video marketing as a part of digital marketing services, you might require paying an additional cost between $1200 to $50,000. Also, the scope of the video, length, etc., may impact the price range.
Content marketing is a vital asset of your digital marketing strategy. It improves conversion rates, brand awareness, and revenue.
Content marketing can include anything from blog posts to guides and infographics. Even though each of them has a varying appearance, they end up providing value to the users.
Similar to SEO and video marketing, even content marketing is an ongoing strategy. Hence, while determining the cost, you need to consider the duration of those services.
It is best to work with a trusted content marketing agency that helps in producing quality content regularly and even optimizes it for you.
To obtain content marketing services, you might require paying $1000 to $20,000 a month as an SMB (small to medium-sized business) and even more as a larger enterprise.
Web design and development
Website design and development are quite often overlooked by business owners when investing in digital marketing services.
However, a website has a huge impact on the success of your brand on the internet, including launching a new website as part of your digital marketing strategy. Besides making a lasting first impression, a well-designed and optimized website can boost the rankings on search engine result pages (SERPs).
In most cases, website design might be a one-time investment. But, if you have an eCommerce website or one that needs frequent product or information updates, then regular website maintenance and update might be required.
The cost of designing a custom website can range from $5000 to $15,000, with a maintenance cost that can range from $50 to $2000 a month.
Discover the most relevant agencies for your project based on your own specific requirements.Find an agency!
Factors That Affect Digital Marketing Cost
The cost of digital marketing services can vary hugely due to a variety of factors, such as –
Size of your company
The size of your company significantly influences the type of professional marketing agency you wish to work with.
The scale of such an agency’s services and prices often reflect the target audience, which means you won’t necessarily work with an agency that serves the world’s largest brands.
For the sake of your business and internet marketing strategy, it is worth partnering with an online marketing agency that focuses on your specific business size.
Complexity of the strategy
The complexity of your digital marketing strategy will reflect clearly on your digital marketing budget. For instance, to run an aggressive PPC campaign, you will require paying higher digital marketing costs.
An aggressive strategy is one that requires additional effort and work from the experts.
Similarly, your need for multiple services ranging from SEO to PPC, content marketing, email marketing, etc., can result in higher marketing costs due to the increased quantity of services.
By choosing to work with an experienced digital marketing agency, you aim for experience, expertise, and skills from the providers. Keep in mind all of these features come at a cost, which most times is higher than service providers that lack them.
Even though you might end up paying more for the digital marketing services at an experienced agency, they will shower you with access to the latest tools, a seasoned team of digital marketing experts, and proven and result-oriented digital marketing strategies.
Also, keep in mind that there is only a few hundred-dollar difference between the services of experienced and inexperienced agencies. Don’t expect an exorbitant price difference.
Services offered by the agency
Another factor that might impact the cost of digital marketing is the services provided by your chosen agency. Typically, full-service marketing agencies tend to charge higher rates than agencies that specialize in just a few services.
The best thing about working with a full-service agency is that all your digital marketing requirements are met under one roof. This, in turn, reduces the time and hassle of dealing with multiple agencies.
Agencies that deal with just a few services are best when your digital marketing needs are limited.
The benefit of the agency
Since so many factors impact digital marketing costs, it is worth considering the USP or unique selling point of every agency.
This is because, even though USPs don’t necessarily impact the marketing cost, they can affect your overall experience as a client.
For instance, your partnership with an experienced and trusted agency that offers tangible and real results provide assurance to the company’s decision-makers and the team that the strategies will reach their goals.
Work with an agency that sees your success on the internet as their own. A trustworthy agency will always measure its performance based on the client’s satisfaction and the project’s result.
Pros of Working With a Digital Marketing Agency
Digital marketing is fast-paced, complex, and continually evolving. Without enough knowledge, you might struggle to determine which strategy to employ, which tools to use, and where to begin.
By choosing to work with a digital marketing agency for your next marketing campaign, you can –
Build a potent digital presence
Digital marketing strategies require intense research, no matter how simple they are. The experts at the digital marketing agency have an in-depth understanding of the digital landscape. They know what tools to use and how to make the strategies work effectively.
This understanding helps the agency experts and consultants to build a strong foundation for your brand’s digital presence.
By choosing to work with an expert, you benefit from their knowledge and expertise of the latest trends, best practices, and tools.
Develop strategic planning
Having a strategy in place is imperative for digital marketing success.
A digital marketing agency helps in developing relevant marketing strategies based on your unique business needs, goals, and target audience.
They ensure your short-term goals align with the bigger goals you have. They evaluate and monitor your advertising strategies on a monthly and quarterly basis to address issues with them and make relevant changes timely.
The agility and flexibility of the strategic plan created by the experts often result in the outcomes that you are looking for.
Obtain impactful content
Content marketing is a crucial element of a strong digital marketing strategy. A genuine digital marketing agency will gain an idea of how your audience consumes the content and create fresh and highly impactful content that leads to conversion and sales.
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These experts will also measure the effectiveness of every content rolled out. Does the content generate downloads, clicks, or engagement?
Based on the details gathered, they will then improve the content marketing strategy. All these and more while ensuring the brand message remains consistent across every platform.
Create brand visibility
Social media is an excellent medium for delivering outstanding customer service. It also helps in boosting brand awareness and brand loyalty.
While using social media for personal use might look simple, when it comes to using it for advertising and promoting a business, things can get challenging within seconds.
By choosing to work with an expert agency, you gain access to their expertise in the field. These agencies must have worked on similar social media marketing projects in the past, meaning they have relevant knowledge of creating result-oriented strategies.
They might also know how to tackle errors and issues in the campaign, thanks to their experience.
A reliable agency will help create a strategy that truly resonates with your brand and target audience.
Paid advertisement has become quite important in the past few years. In fact, now more than ever, we have multiple choices of where to advertise our products and services.
From display ads on search engines to social media platforms like Instagram, Facebook, Snapchat, etc., there are various places where you can pay to become visible.
But so many options can cause confusion in determining which one is the best. Thankfully, digital marketing agencies have the right idea. They might take some time to develop an excellent paid ad strategy, but stay assured that their expertise and knowledge will come in handy in driving better outcomes from the strategies.
Up-to-date with changing algorithms
One of the reasons why SEO is an ongoing process is that search engine algorithms change quite frequently.
Without proper knowledge of SEO, you are bound to get lost amid the hundreds, if not thousands, of algorithm changes and updates that roll out. What’s worse? Changing algorithms often have a negative impact on the ranking and visibility of the website.
By choosing to work with experts, you can stay up-to-date with the evolving algorithm changes. Plus, these experts will ensure that your website’s architecture, UI/UX design, and page speed are in sync with the latest search engine algorithms.
Frees up your time
When it comes to digital marketing, you must always work smarter and not harder.
Running a digital marketing campaign with an in-house team can require your involvement to some degree. Also, let’s not forget the cost involved in hiring an in-house team, their salary plus benefits, cost of acquiring tools and licensed software, etc.; not only can creating an in-house team prove to be a costly affair, but it can consume a lot of your time, too.
In today’s competitive digital landscape, time is money!
By choosing to partner with a digital marketing agency, you can free up both your and your team’s time. This saved, valuable time can be used to look after business operations that actually need your expertise. This means you will spend your time doing what you actually do best!
It was evident from the blog that digital marketing cost varies from service to service. Similarly, there are many factors that directly impact the cost of digital marketing, including your company’s size, chosen agency’s experience, digital marketing campaigns complexity, etc.,
However, the benefits offered by digital marketing agencies counterbalance the money invested in hiring them.