What does effective marketing realistically cost?
There seems to be a huge disconnect in the mind of the average business executive between what they should be spending on marketing and what marketing actually costs. This, unfortunately, can lead to internal marketing teams being held accountable for impossible results on a shoestring budget.
On the flip side, many business leaders feel that the sum they’re investing in marketing is significant, and they ought to be seeing some real results from that money – and that’s perfectly understandable.
Let’s have a discussion, then, around what effective marketing realistically costs and what you should expect to budget for it.
How Much Should You Budget for Marketing?
of total revenue
It’s important to be very clear on this up front — before we can recommend a budget, we have to understand what you’re trying to solve for. The tactics that are used to achieve your business goals are highly dependent on what those goals are.
Please understand that this should be true no matter which agency you choose to work with. Even if you do your marketing in-house, your marketing team should be adjusting their strategy to meet your business needs.
That being stated, most small- to mid-sized businesses invest 3-10% of their total revenue in marketing.
Out of that percentage, a typical business will allocate upwards of 50% to digital marketing.
This means that if you’re a $20M company, it’s not unreasonable to spend $1M a year on marketing, with $500k of that going into the digital side… and this is if you’re not in heavy expansion mode.
For a company that has just hit $1M a year and is looking to grow substantially in the next year, a reasonable marketing budget looks like $80-100k a year, or between $7-9k a month.
The Labor-Intensive Nature of Digital Marketing
Do the numbers above give you sticker shock? Don’t feel bad — you’re not alone.
You went into planning your marketing budget with no real idea of the work that goes into moving the needle in the online space. How would you know? You’re an expert in your industry — you’re not an expert in ours (that’s why you’re shopping).
What is important to understand is that there are so many facets to successful digital marketing, and each tactic takes hours to strategize, execute, analyze, and repeat. When you’re paying an agency full of experts, that agency has to make a profit on the hours they invest in your business — and you wouldn’t expect anything less, right? An agency is not gouging you by putting a high price tag on their services. If they engage with you, they will legitimately be investing significant man-hours into your business… and they’re providing you with a ton of value!
Now you might be thinking at this point that you’d be better off to hire a marketing team to do all your marketing in-house, and maybe you would be. However, consider this: to hire enough people to do the work that an agency executing full-blown implementation of your digital marketing strategy can pull off, you’re probably going to need to hire 4-5 people. You need AT LEAST:
- A graphic designer
- A content writer
- An SEO specialist
- A paid ad specialist
- And maybe a web developer
To execute well, you also need a higher-level manager or director to build and oversee strategy, as well as to analyze results. How much will this team of people cost you per year? Now the cost of an agency doesn’t seem so high, does it?
One final note: we meet with a lot of marketing managers who are the only people in their company wearing the marketing hat, and they are expected to produce results. One person cannot possibly do all the work necessary to market your business successfully. Your marketing manager needs help. If you’re putting all that on one person, you’ve set them up to fail.
We are thrilled to come alongside your existing Marketing Director and help out wherever they need it. Bringing an agency in to support this person does not edge them out of their job — on the contrary, bringing in extra support sets your Marketing Director, and therefore your whole company, up to succeed.
What You Can Expect to Spend with Waypost
We don’t offer pre-packaged solutions, as every business we encounter has different needs. However, it’s important to us to be transparent with our pricing, so here are some ballpark numbers.
Partially Engaged Client
What this looks like: We’re working with you on strategy, doing a little site management, and executing a couple of tactics that will help kickstart your growth, like managing your paid ads and doing a couple of email campaigns.
Monthly budget range: $3,000-5,000 (Note: Direct paid advertising costs are not included.)
Fully Engaged Client
What this looks like: We’re fully engaged with you on strategy, brand development, content marketing, marketing automation campaigns, and the full suite of digital marketing tactics (SEO, social media, paid advertising, and email campaigns). You’re getting a complete, outsourced marketing team. On the higher end, we’re working with you on video production and marketing.
Monthly budget range: $5,000-10,000 (Note: Direct paid advertising costs are not included.)
The cost for project-based work can vary greatly. However, here are some ranges for common projects:
- Website Design — $15,000-$30,000
- HubSpot On-boarding — $2,000-$5,000
- CRM Implementation — $3,000-$10,000
Partner with Waypost.
If you’re serious about growing your business, expanding into new markets, and creating prosperity for your employees, Waypost wants to partner with you to get it done. Whether you need a fully outsourced marketing department, or you just want to figure out how to stop spinning your wheels with what you’re currently doing, let’s talk. Give us a call at (864) 288-6162 or request a consultation online.