How much do you have to invest in digital marketing to get results? Is digital marketing even worth it? These are important questions to ask if your business is considering implementing a digital marketing campaign. We’ll answer these questions in a bit. Today, marketing has evolved from traditional offline channels to the digital world, and the good news is that the costs have dropped. The case can also be made that digital marketing is much more effective than its predecessors, which mostly consisted of print advertising, TV and radio ads, and direct mail.

Many businesses are interested in adopting digital marketing to spur their business growth but are not sure how much they would have to pay for it. If this description is accurate, read on. This digital marketing pricing guide will help you. It will give you an idea of how much you can expect to invest in digital marketing and what you can expect in terms of pay-off, whether you work with an outside marketing firm or DIY. Your business is unique, so a one-size-fits-all digital marketing approach won’t work. Several factors that will determine your investment:

  • Business size
  • Marketing objectives
  • Marketing budget
  • Timeline

If you have a small-to-mid-sized business, plan to spend roughly 10-20% of revenue on digital marketing. This estimate is supported by a study conducted by Brafton, which shows the average percentage of revenue that businesses spend on digital marketing is 11.2%. A small business’s needs for advanced SEO operations obviously are less than those of a large multinational company like Starbucks or GM. Small businesses typically have fewer webpages, whereas a large company may need to optimize more than 1000 web pages. For example, OfficeDepot.com currently has roughly 600,000 pages indexed by Google.

https://lh6.googleusercontent.com/cYieNv8KpWedIVbztZlyvoDsrQNnktL5ZcU3bsR27w2hGMc1938P8lFzMEbI6JhhdJfKhJ4kfAysjNaY3g9-N0VW_P7cC77NEZrTO_Hxa9K1mkycyF1To_1wTI6FZ_tn6ZMxtadS

The top three components of digital marketing that you are probably most familiar with are search engine optimization (SEO), social media advertising, and pay-per-click (PPC) advertising. Digital marketing also includes email marketing, content marketing, influencer marketing, and affiliate marketing, among others. Let’s focus on the “top three,” since they are the most commonly used and often, yield faster results. A rough estimate of their costs are:

  • Search engine optimization: $1,000-$7,500
  • Social media advertising: $4,000-$7,000
  • Pay-per-click advertising: $9,000-$10,000

Let’s break down each of the digital marketing services and what their costs entail.

 

1. Search Engine Optimization (SEO)

Search engine marketing (SEM) is one of the oldest forms of digital marketing and can either be in the form of search engine optimization (SEO) or paid search. SEO—website optimization, webpage structuring, keyword researching, search intent, content development, content optimization— is completely free. You don’t have to pay the search engine anything. You do it all yourself if you have the expertise to do it well. Otherwise, you should outsource the SEO implementation to a professional SEO expert or agency. Always verify the claims of a freelancer or agency. Interview them, ask for references, and check for online reviews. Insist that they prove they can “walk the talk.”

According to data from Moz, an agency specializing in SEO, here’s the average cost of SEO services, if you decide to outsource:

  • Hiring a professional freelancer for SEO costs about $80-$130 per hour
  • Hiring a digital marketing agency costs about $750-$1,500 per month
  • One SEO campaign or project costs about $1,000-$7,500.

Whether you decide to use an agency or DIY is the way to go, do your homework. Have a concrete plan, timeline, and means to measure effectiveness. Otherwise, all of your efforts (and expenditures) could yield disappointing results.

I’ll talk about paid search a little later in the article.

 

2. Social Media Advertising Costs

Social media marketing (SMM) includes social media optimization (SMO) and social media advertising. As with SEO, if you or your marketing team is skilled in this area, then you won’t have to spend much or any money on SMO besides what it costs to build and retain your team.

Social media platforms like Facebook, Twitter, and LinkedIn offer advertisement options like sponsored posts. There is no set minimum and costs can range from as little as $100/month to $10,000/month. However, it’s common for social media advertising costs to fall between $3,000-$7,000 per month, depending on the platform, the target audience and its size, and the frequency of posts/ads.

Why should you pay that much to advertise on social media if it is free for everyone? SMM goes beyond just sharing images and coining hashtags; it involves paying the social media platform to get your posts or ads to your target audience. If you have a small following with little brand awareness, you’ll have difficulty reaching the people you want. Advertising on social media channels helps you increase your reach and grow brand awareness.

Social media platforms like Twitter, Instagram, Facebook, and LinkedIn can give you access to huge audiences. Facebook alone has more than 2.4 billion monthly active users. They also offer ways to precisely target your ads so that the right people are viewing them.

https://lh4.googleusercontent.com/8LM8YF0OKz6ASSId3j8SN7zmtdtZYQr3n13UvSrY7WrqoolEhqnUvXoRMgE7yCxW-rFgk2uNHm0A6deOOyIfvvLhAczM18jAGLli5qENi9OE2LgPrAzMONU71Z8-TM8E7MXki4FU

This sure sounds great, but before you go throwing money at Facebook, Twitter, or Instagram, you need to have a strategy. You need to take a holistic view and have a plan and the means to review the analytics to see if it’s a worthwhile investment. It usually takes a little trial and error and tweaking of campaigns before you know if social media marketing makes sense for your business.

To better understand how social media marketing service cost works, let’s consider these two giant social media platforms–Facebook and Twitter.

Facebook Ads

Facebook Ads operates on either cost-per-click (CPC), where you pay Facebook for each click on your link by your audience or cost-per-thousand (CPM), where you pay Facebook each time your post or ad is seen by 1,000 users. A CPC campaign usually costs between $0.50-$2.00 per click, while the average cost of a CPM campaign is about $11.

Here’s a Facebook ad example from FreshBooks:

https://lh5.googleusercontent.com/NK3KmwNbxaZX5wNw6-G8ax11LEVQDwVGEn9oB6-FBYyYlE7fls9776zfjbRc08rL_b7DuJOckBscpQYjK89iomsC7c91DnRJzW8ZCWG-NMuWQYenMcQXY4x33IfMOLaBgT2eR--G

Twitter Ads

Twitter Ads work similarly to Facebook Ads in that you can target an audience that isn’t following your profile. When you run a sponsored tweet campaign, your tweets will appear in their Twitter feed. Twitter Ads offers a CPC campaign, where you pay an average of $1.35 each time a user clicks, replies, or retweets your tweet or ad. The reason why the cost of CPC varies is that CPC operates like an auction; the more competitors you have, the higher your bid (i.e. you’ll need to bid more money than your competitors to have your ads rank higher).

Here’s a good example of a Twitter ad from Spotify:

https://lh5.googleusercontent.com/Jh_vg_9agI5fq1bgTh7haiPUKOREIio1yDGIkF2nNOVOhqgkP4uiCA5y5hDhlkv4LxRbzuWf9CpxFkhw_SGqTT2haGIAVxVqKAqeMI909agZomYm354HOkVkXQ3Z9lP7KgdWPWZn

Twitter Ads also offers a feature where you can promote your business to gain new followers, and for each new follower you gain, you pay Twitter between $2-$4. You can also promote a hashtag or trend relating to your brand to encourage users to talk about your business. This feature costs a flat rate of $200,000 per day and is meant for businesses with a large marketing budget and established online presence.

 

3. Pay-per-click (PPC) Advertising Costs

Pay-per-click advertising is a marketing strategy where the advertiser pays for ad clicks or impressions. One of the largest PPC advertising platforms is Google Ads. It was formerly called Google AdWords, which you may be more familiar with. This PPC online advertising platform allows advertisers to display their ads on Google’s search engine network. Bing is another search engine that also offers PPC advertising. Bing Ads has been renamed to Microsoft Advertising. These ads are similar to Google Ads and appear on the search engine results page (SERP).

As you know, people head to a search engine when they have a question. Advertising on the search engines gives you the ability to reach people at the precise moment they have a question or need.

Within the search engine advertising platform, you place bids to secure better visibility and position for your ads. The following is an example of two retailers, The Tie Bar and JoS. A. Bank, that ranked first and second in a Google search for “pocket squares.”

https://lh3.googleusercontent.com/qPLSn7j8KfGCyYnjykWGSWc3D1vaJPPk0MqHMvZm9VlcWkmWL3aP3QRn4shzJ2_a96WUf4WMk0T93YOnY9p9xuigwhb9bcP3m2xpH0-n74P8Bnzb0x-ZJGPuYLgbX44lNw09K8FD

If you’re not familiar with PPC advertising or Google Ads, I discuss how they work in more detail in this blog article.

Google Ads and Bing Ads are very customizable and you can tailor your campaign to your marketing goals and budget. On average, small to medium-sized businesses spend between $9,000 to $10,000 monthly (that’s $100,000 to $120,000 per year). The average cost of an ad on Google’s network is about $1 to 2$ per click. Don’t be scared by those numbers; as I said, there’s a lot of variability in costs. Give this article a read to learn more about how much Google Ads cost.

Here’s an example that demonstrates the effectiveness of Google Ads. Aliera Healthcare reached its target audience by advertising on Google and Facebook. It generated 8,779 leads at $0.73 cost per lead (CPL) and acquired 3,973 leads from social media.

https://lh5.googleusercontent.com/MpLXU_NG0Dkf6zLOvWITu987cXOBG3zbJG7T-InuFLwMztNiUdmFPWRxadoXZ930Ei1tk3Kd3DQPeuVpcx7EfsDkcL_bYy_ypDM-sZ5ZGeAx36fP1T1UnPSZOUxndijV-KRhptFz

 

4. Email Marketing Costs

Email is another cost-effective and time-tested digital marketing strategy. Email marketing helps businesses build brand awareness and brand loyalty, which leads to increased lead conversions and sales. When done effectively, email marketing can give businesses an ROI of about 4,300%. Dell adopted this strategy and realized an increase of about 109% in revenue.

https://lh5.googleusercontent.com/ykr4WZvNiQJyhsIyMLjzWlqAuinG_piAS38nz6wG9qD1AYLF8uU1hGWvaWXDx7iqqf-_4ocWZ4M1knsu9pCfsnAEheMbRpIE2tJRQXTXXUp1TiTdeFPMlrZrJVt-zrOKx8moM6NA

Email marketing is versatile because it can be easily integrated with other digital marketing strategies. For instance, if you’re investing in content marketing or video marketing, you can repurpose your content or video and include it in an email marketing campaign. For example, your latest eBook could be broken down into a 5-step email course.

This digital marketing strategy costs between $300-$2,000 monthly if you use an outside agency. This cost includes extras to enhance the email marketing campaign, such as a customized email template design. It can be even cheaper if you do it in-house. Email marketing providers like MailChimp offer a free monthly plan and other plans start at $10/month. Then, it’s just up to you to develop your email marketing strategy, maintain your email list, and write your emails.

 

5. Video Marketing Costs

Video marketing is another digital marketing strategy that can fuel business growth. Video marketing is similar to content marketing in its ability to increase brand awareness, engage audiences, and influence purchasing decisions, because it involves creating valuable, informative, and engaging content for the audience.

Investing in video marketing can increase your conversion rate by more than 85%. This would subsequently lead to an increase in leads/customers and, in turn, increase your sales revenue.

https://lh3.googleusercontent.com/XQMQHeItHRou1I6dv84d-eMgTNOV35CuxSjV8lBkDrhXqI6vzhVTAk9BOggByBVF-QjVWj2Skf8D7ESaHkYD21TiqV0CTkTGIHZOSb8Nnt-VVbBfo4NX41R8pX5gBmPktYJ2Hb6o

If you’ve already implemented content marketing, you can easily complement it with video. Blog articles, white papers, and eBooks can be repurposed into video content. Turn your latest eBook into a video tutorial. Adapt your case studies to create testimonial videos.

Tubular Insights showed that 64% of buyers purchased products or services after watching branded videos and business owners who use video marketing grow profits 49% faster than those who don’t. You’ll notice an upward trend in conversions just by incorporating video into your digital marketing campaigns.

If you’re considering video marketing, then earmark between $1,200-$50,000 of your marketing budget. Professional videography services can be expensive, but DIY is also an option. Cell phone cameras are increasing in sophistication and quality, which means you can create videos in-house if you have a good cell phone. These types of videos are especially well suited for social media channels like Facebook and Instagram, where you can create live videos to connect with your followers.

 

6. Voice Search Optimization (VSO) Costs

Voice search optimization (VSO) is a new and growing digital marketing strategy. Just like SEO, VSO focuses mainly on tweaking your featured snippets with relevant keywords to enhance voice search. VSO is growing in demand because of the increasing use of voice-activated assistants, such as Google Assistant, Apple’s Siri, Microsoft’s Cortana, and Microsoft’s Alexa.

https://lh3.googleusercontent.com/Xxd1joQdE068m5AoXXBTsqQmw1x4JOPZEGVj0gHBxfsDzhuHrl4rC-6sZlhW45bu7uZzFAwvCZ809zqVRMbaFZOO4Mh6_GL2xHsSKIZ6Q5rBV7ocJ4VFqIZEVEZmo_uN2i1y5J7b

Voice assistants use featured snippets to answer vocal queries. For instance, if a user asks in Google voice search, “Google. how do you respond to negative reviews online,” Google Assistant would respond, as shown in the snippet below:

C:\Users\Apostle Tim\Downloads\images (1).jpg

With more than 20% of all web searches done with voice searches each day, VSO is becoming more valuable to savvy business owners. Investing $600-$2,000 a month in VSO can give you an advantage over your competitors and help easily connect with both new and returning customers.

 

Expect to Spend 10-20% of Revenue on Digital Marketing

Digital marketing is more effective and affordable than the traditional forms of marketing. But, it’s important for business owners to know the costs involved before deciding to use it to drive their business growth and success. Businesses should expect to spend about 10–20% of their revenue on digital marketing, but, if done correctly, it can increase revenue by more than 109%.

Keep in mind that digital marketing is an ongoing strategy and your budget may change as your business grows. So, if you are interested in learning more how digital marketing can grow your business, you’ve come to the right place. Speak with one of our digital marketing experts today.

 

Alex Membrillo Cardinal CEO

 

Alex Membrillo

Founder and CEO

Alex Membrillo is the CEO of Cardinal, a digital marketing agency focused on growing multi location companies. His work as CEO of Cardinal has recently earned him the honor of being selected as a member of the 2018 Top 40 Under 40 list by Georgia State University as well as 2015 and 2016 Top 20 Entrepreneur of metro Atlanta by TiE Atlanta, Atlanta Business Chronicle’s 2016 Small Business Person of the Year,and the Digital Marketer of the Year by Technology Association of Georgia (TAG).