Marketing Plan Cost: Why You Should Expect a $27k Budget
Last update: 13 March 2023 at 09:52 am
5.00/5Marketing is essential for businesses of all sizes, but creating a marketing plan can be time-consuming and confusing at times. While some companies opt to develop marketing plans internally, others prefer to seek external help from marketing agencies. In this case, the marketing plan will come at a cost.
The exact cost of a marketing plan can vary based on several factors, such as the size of the agency and the extent of the market research involved.
The often-talked-about figure for a marketing budget is anywhere between 5 to 25% of revenue. However, in this article, we’ll delve deeper into:
- The average price of a marketing plan
- The different elements that go into a marketing plan
- How to develop your marketing budget
- How to choose your marketing channels and their average prices
As a B2B platform bringing together companies with marketing agencies since 2014, Sortlist has a large database of information on the pricing trendsof marketing expertises from around the world.
In the last 3 years alone, we have accumulated data from over 80,000 projects and 39,000 agencies, which has given us thousands of points to analyze and report on market trends and prices.
Average marketing plan cost: $26,871
Although conducting a marketing plan internally may not incur any additional costs, a company can opt to get an external opinion on its campaign or overall marketing strategy from an agency. In this case, the marketing plan will come at a cost.
The exact cost of a marketing plan may vary, making it difficult to provide a specific figure. However, you can find agencies that will charge anywhere between $5,000 to $40,000 to sit down and plan out your marketing strategies with you. However, you can find prices as low as $2,000 if you are an SMB or nonprofit organization.
But just like the size and nature of your company, many factors will affect the price of your marketing plan.
At Sortlist, the average cost of a marketing plan developed by an agency is $26,871 (disclaimer: some of these projects included market research as well). However, over the past 4 years, the average has slowly decreased.
But why does it cost this much? The reality is that a plan comes with lots of research in order for a company's objectives to be met. Internal research, competitive analysis, external research...an agency will need to work on various other marketing expertises such as market research in order to cover all the elements of a marketing plan.
Elements of a marketing plan
Without a proper marketing plan, it can be difficult to launch a successful marketing campaign. In fact, companies that plan their marketing strategies in advance are over 313% more likely to achieve success. However, creating an extensive marketing plan can be overwhelming due to the numerous elements involved.
To simplify the process, you should follow a similar approach to the one below:
- Identifying goals
- Figuring out your target audience
- Workshopping or conducting research (based on the overall objectives)
- Creating a marketing budget
- Deciding on channels
- Sometimes, it may need to be pitched as well
Factors that affect marketing plan costs
Here are some factors that can influence the cost of a marketing plan that has been created with the help of an external agency:
- Strategic approach
- Agency size
- Market research
Strategic approach
No two agencies will approach the development of a marketing plan in the same way. Not only will they have a baseline framework they work with, but it will also depend on what they are presented with from the client’s side.
We spoke to Sortlist agency 3manfactory who highlighted their objective-driven approach.
We work on the OKRs method…objective settings. Objectives and key results. What are the objectives that we have for our kind of marketing teams?
Nathaniel Cassidy - Chief Strategist & MD at 3manfactory
Others such as Plant a Flag, like to do in-depth analyses into who you are as a company with various methodologies before getting started on the planning.
Agency size
If you decide to approach a large, well-known marketing agency to design your marketing plan, it’s most likely that your marketing plan will cost much more than a small local agency.
Here is the general trend of works posted on Sortlist by our agencies in comparison to their team sizes. (Please note that these works take into consideration all projects and not just marketing plans).
Bigger agencies may have more people at hand, however, they may also have more projects to tackle at any given time meaning they might not have the time to focus as much on you.
Market research
Lastly, most agencies will want to base the development of your marketing plan on thorough market research. However, the more precise you want your data to be, the more costly the research may result.
The average cost of works posted by agencies that include an element of market research is $44,980
Common marketing research practices include but are not limited to:
- Surveys
- Social media listening
- Focus groups
- Competitive analysis
- Sales data analysis
Marketing budget - Costs of marketing channels based on company objectives
When it comes to planning your marketing budget, it should always be need-based. While an agency can assist with its development, it may be beneficial to attempt it independently to gain a better understanding of the type of agency you would prefer to partner with.
A marketing budget will usually rely on the investments your company is looking to make in different marketing channels. The price of these channels and the campaigns you will run on them will determine your overall expected spending in marketing.
You can build your marketing plan based on the needs that your company is:
- Looking for growth
- In a moment of change or challenge
- Looking to maintain its current revenue, but in a more efficient manner; perpetual motion
To avoid either overspending or underinvesting, you should be familiar with the general rule of marketing budgets.
From a broad pricing point of view, the often talked about figure is anywhere between 5 to 25% of revenue that should be spent on marketing. And that's B2B, B2C.
Nathaniel from 3manfactory
With over 33,000 projects posted on Sortlist's website last year, we were able to compare the expected budgets from client briefs vs the actual price of the works once they had collaborated with our agencies.
We focused on several popular sectors to highlight the disparity between expected and actual costs to provide estimated budgets for each expertise and help you better develop your marketing budget.
Companies looking for growth - $59,371 on paid
If you're a start-up business, scale-up, or even a large organization, and a boost of revenue is what you are looking for, you’ll need to invest in areas that you have yet to explore. Additionally, you’ll need to think outside the box and look at channels that your competitors have yet to explore as well. You’ll have to innovate.
Channels that are usually linked to companies looking for a boost in revenue are:
- Paid media (social media ads, search engine advertising, promoted content…)
- Marketing communication (influencer marketing, event marketing…)
Over the past 4 years, social media marketing and online advertising works averaged $59,371 across all sectors.
Social media marketing - 555% more costly than expected
Social media ads have become a popular means of paid advertising for companies looking to reach certain audiences. The average expected budget of projects however has often been much lower than the actual work.
Over the past 4 years, there has been an increase in the average cost of social media projects.
This may be attributed to the surge in social media usage, particularly during the pandemic, and the presence of large, readily accessible populations that businesses can target.
Companies often undershoot just how much social media ads and campaigns are in order to see a positive ROI. For instance, within the Governmnet and Administration sector, their budgeting for social media projects are typically 591% lower than the actual costs, 36% over the average of 555%.
Online advertising - Only 83% more costly than expected in Management & Consulting
After a company has done all it can with its SEO, it’s time to start looking into SEA (search engine advertising) or general online advertising. You can target more specific audiences and be more in control of your position on the SERPs for your desired keywords.
Just like with social media, online advertising projects have continued to increase in the past 4 years. The market is becoming more saturated and bidding has become more competitive.
Online advertising also comes with the digitalization of companies. Online marketing can give a business valuable insight into its customers.
It can be hard to create an online advertising budget if you are not familiar with its way of working. With pay-per-click management, you may not know how much you would need to bid on certain keywords you would like to rank for. This is why working with an agency can help avoid these disparities in expected budget vs real budget.
Companies in a moment of change or challenge - $44,853 on organic
In moments where growth is not the primary objective, and instead, the focus is on sustaining the business or navigating a crisis, your marketing channel priorities will include:
- SEO
- Owned media (content marketing, videos, customer stories,)
- Email marketing
- Shared media (reviews, social forums…)
- Community
- Partnerships
In such circumstances, it’s essential to optimize channels that demand minimal financial investment but also, ones that will allow you to communicate with your current customers and convey trust signals.
SEO - Average project costs $24,370 more than the expected budget
On average, an SEO project costs $29,062, which is 512% higher than the typical estimate provided by clients. While SEO is often considered a cost-effective channel, it still requires a significant investment to be executed properly.
SEO project prices have slowly decreased in cost in the past 4 years. But not only that, projects have too.
This could be due to the fact that SEO is too volatile of a process and can never guarantee results. Nor can it give them instantaneously. If companies are looking for an immediate reaction to their actions, SEO isn't a channel they can rely on.
Human resources often work with SEO to attract job candidates. Given that 80% of jobs are found online, it is unsurprising that HR companies focus their marketing efforts on this channel. However, their budget predictions are usually much lower than the actual project costs. HR SEO projects tend to be 903% more costly than anticipated.
Content marketing - $49,078 on average per project
Content marketing is the most costly organic marketing channel. Given that content marketing covers any form of content from text to video, depending on the kind of content you are looking to produce, you may need to project a higher-than-expected budget.
Video content marketing is becoming the new trend of recent years.
People no longer have the time to read texts, and instead, are looking for quick, audio, or visual content to get the information they need.
Sports content marketing relies heavily on video content. It is normal then to see that the average works are much more costly than expected. Video requires lots of planning and most importantly, post-production, which can be costly given the equipment, time, and labor required.
Email marketing projects are 213% more costly in real estate than the average
Average email marketing projects cost $38,634. It is a great channel to keep in touch with your existing clientele, gain some insightful data and keep a constant rapport, however, it can come at a price.
The price of email marketing projects has stayed relatively the same for the past 4 years. Although there have been some peaks here and there, the trend can prove that email marketing is not dead.
While the majority of sectors tend to underestimate the cost of email marketing projects, there are two notable exceptions. Non-profit organizations, on average, come closest to budgeting accurately, with a projected cost only 5% below the actual cost.
On the other hand, sports companies tend to vastly overestimate the budget required, with an average projected cost that is 237% higher than the actual cost.
Companies looking for perpetual motion
If your company is not seeking growth or experiencing significant challenges, but rather aiming to improve the efficiency of its marketing campaigns, the optimal approach would be to retain the existing channels and seek external guidance from experts on how to minimize time and potential costs.
Average branding work costs $38,362 - 50% less for Internet companies
One channel you may want to rework is your branding. Perhaps your logo has an intricate design and is quite costly and time-consuming to print.
The average cost of a branding project is currently $38,362, and it has experienced a downward trend over the past few years.
Branding encompasses a wide range of activities that a company could undertake, including logo redesign, positioning, localization, corporate identity, and more. As a highly dynamic expertise, it can be subject to fluctuations.
Like many other marketing expertises, branding is also susceptible to companies underestimating the costs of projects. This is particularly true in the publishing industry, where companies have budgeted an average of 2334% less than the actual cost of completed branding projects.
Keeping things in-house or working with a marketing agency
You may be debating whether to keep things in-house or to work with an agency.
While developing a marketing plan in-house may seem like a cost-effective option, engaging in a collaborative effort or outsourcing the task to a marketing agency could potentially provide a more cost-efficient solution.
Relying solely on an in-house team may result from a limited perspective of your company and the absence of key employees necessary to generate innovative ideas. In order to explore new avenues, boost revenue, and grow, it may be necessary to seek out individuals or agencies with new expertise.
If you're looking for growth, realistically, you need to be able to tap into spaces that you haven't accessed before. You might be looking at breaking into channels that your industry isn't recognized in.
Nathaniel Cassidy
Last year, Sortlist received 4,000 social media projects for its thousands of social media agencies. If your business has yet to experiment with social media advertising and lacks a dedicated social media manager within your marketing team, you may struggle to access this expertise. Without prior experience, it can be difficult to determine whether social media ads are the best strategy to increase revenue.
In a case similar to this one, a marketing agency can provide extensive breadth and depth of knowledge and experience across a broad range of marketing disciplines to guide your business toward its objectives more effectively.
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Find an agency!Building a budget for your target revenue
Alone, it can be difficult to budget just how much you need to invest in different marketing channels in order to see tangible results. If you are looking to explore new grounds, without prior knowledge, you may end up undershooting your budget and not seeing your desired ROI in the long run.
To get a better idea of how companies usually undershoot their marketing budgets, here is the comparison between the average budgets of projects businesses expect to be vs what they really cost once they've sought collaboration with an agency.
Why the gap?
With the rise of digital and self-service channels, anyone can advertise on Spotify's audio platform without prior experience. But self-service tools are like a pencil - anyone can use them, but the outcome depends on the user's skill and knowledge. Despite this, people often assume that such tools are easy to use and the same goes for marketing.
Nathaniel Cassidy of 3manfactory on how agencies can bring more experience to the table
But technological advancements nowadays may help by showing that experience and expertise are essential for achieving successful results. People realize that they don't get the same result when they use these tools compared to someone else, an agency, who has 20 years of experience behind them.
To achieve the desired return on investment, businesses must budget for their desired revenue rather than the one they currently have. This means investing appropriate resources, in addition to considering the experience of the agency.
For example, if a company previously allocated 5% of its budget to marketing and achieved a modest ROI, it may be necessary to increase the investment to up to 15% of company revenue to attain the next level of growth.
Conclusion
The cost of a marketing plan will first and foremost depend on whether you decide to develop the plan in-house or with a marketing agency. If you are looking to outsource the task, costs can vary depending on the size and nature of your company, the objectives, the channels, and the agency you decide to hire.
While it may be tempting to keep marketing in-house to save costs, working with an external agency can provide a more cost-efficient solution, particularly for companies that lack the necessary expertise and experience in certain areas. They can also prove beneficial when coming to budget different marketing channels.
