Budgeting For Digital Marketing: What does digital marketing cost?

This is the season where marketing managers and CEOs draw up a digital marketing budget for the upcoming year and the question that usually comes up at a time like this is: what should digital marketing cost?

And what must be included in next year’s budget?

For many C-suite managers, an exact figure and the risk analysis is all they are waiting for. This exact amount can easily be filled into the blank spaces in the budget template.

Unfortunately, it is not that easy! Because , there isn’t a fixed cost. The cost of digital marketing depends on a lot of variables. For clarity sake, I will outline the platforms, the variables involved and estimate for you a range of costs for each one. That way, you can decide what to budget in line with your marketing objectives and what your organisation can afford.

What Does Social Media Marketing Cost?

The average cost for an Agency to manage your Social media pages can range from N250,000 (Two Hundred and Fifty Thousand Naira) and above depending on:

1. The number of platforms – Would you like to be on Instagram, Twitter, Facebook, Pinterest, YouTube, Snapchat, etc.; or only a few of them?

2. The frequency of posts – Would you like to have three posts per week or three posts per day?

3. The kind of posts – Will the Agency be developing videos, GIFs, or only text and graphics

4. The Scope of work – Will this cover community management?

It must be noted that this does not include media cost that mostly goes to the platform owners for advertising and post sponsorship. Nor does it include the fee for Influencer marketing. Those will have to be treated separately and budgeted for accordingly when the need arises.

The cost of engaging an influencer usually depends on the popularity or brand equity of the influencer and the scope of work required. It can range from N20,000 per post to N300,000 and can go as high as 1 million naira if the Influencer is creating the content.

For Social Media advertising cost, you can budget an average of $0.30 per click for Facebook; $0.50 for Instagram, and $2.50 for LinkedIn. Yes, I can see you rolling your eyes ?, LinkedIn is super expensive.

But the truth is, it gives more quality leads than Facebook, Twitter and Instagram combined. However, it also depends on the industry of the brand that is advertising.

What Does Email Marketing Cost?

The basic cost of email marketing is divided into two;

1. Email Marketing Software cost – Your email marketing software is the main engine behind email marketing and every business needs a reliable software to run email marketing campaigns. There are several email marketing software solutions but the average cost can range from $9 and above for 1,000 contacts. However, as your email contacts increase, so will your software subscription cost.

Also, there will be a consequential increase if you would like to move your email marketing a step further to marketing automation, A/B Testing etc.

1. Email Content Development Cost – while the software is the engine that runs email marketing, the content is the lubricant that ensures the engine moves accordingly. Good content will increase your open rate and ultimately your click-through rate. You can budget an average of N250,000 per month for email marketing content development. This can get you an average of 4 email campaigns and slightly higher if this includes email sequences which is an important part of marketing automation.

Good content for each email campaign will include:

• The email copy
• The title
• The Call-to-action
• The preview text

What Does Google Advertising Cost?

Google Advertising is divided into two:

• Google Display Network which shows graphic Ads across several websites
• Google Search Network that shows text ads when someone searches Google for relevant keywords.

The average cost-per-click (CPC) for Google display network ranges from $0.40 – $1.20 while the average cost per click (CPC) for Google Search Network is $1 – $5 depending on the keywords you are bidding for, the industry, the location, and the google optimisation score.

In addition to the media budget, you will need to pay the Agency you are partnering with for the PPC Management. PPC Management is charged at a percentage of the Ad budget.

The fee charged for PPC management can range between 10% to 25% of the Google Advertising budget depending on the relationship between the Client and the Agency and the amount of work required.

In some cases, you may need to also budget for a PPC software that is used for the management of PPC campaigns but this is not compulsory.

On average, small businesses spend around $3,500 (Three thousand, five hundred dollars) a month on Google Ads. This is not cast in stone and can be customised to fit the budget that the client can afford.

What does Website Development Cost?

The cost of developing a good website in Nigeria costs between N200,000 and N1,000,000. The actual cost of the website will depend on the following variables:

1. Will the website be developed from scratch or is the developer using a template?

2. Will it be an E-commerce website or an informational website?

3. How many pages will the website have?

4. Will SEO be implemented on the website?

While some people generally advertise that they can build a website for N20,000 (Twenty Thousand Naira), the quality of that kind of website can certainly not be compared to professional websites.

Do note that the cost of developing a website does not include the cost of buying the domain name, the hosting, and SSL. Your domain name is your organisation’s address on the web while the Hosting is the container that holds the domain files. This is where the website will be seated.

All organisations need a domain name to have a website. Your domain name is www.yourcompanyname.com. Both the domain name and hosting are usually provided by a hosting provider like Hostgator.com, Godaddy.com, whogohost.com etc.

The average cost of a domain name can range from $9 to $15 depending on the kind of domain name. In some cases where the domain has been parked (bought by someone else who is willing to resell), the domain name can sell for as high as $50,000 (Fifty thousand dollars) – Yes, this isn’t a mistake – Fifty Thousand Dollars?!

Some domains are also classified as premium and command a higher fee than the average domain cost.

While the cost of building a website is a one-off cost, you will need to renew your domain and your hosting annually. This fee will need to be paid to your hosting provider.

In some cases where the business does not have a dedicated Brand/Marketing Manager or Writer, you may need to pay for Website Content Development as your website needs good content to communicate your brand equity and generate leads for you. This cost can be included in the website development cost if discussed at the inception of the project.

Once the website has been completed and handed over to the organisation, there is a need for the organisation to retain the services of a website Administrator to manage the website continuously. This person will be responsible for updating plugins, updating content, publishing posts, etc. This person needs not be a staff, he/she can be a freelancer or an Agency that manages websites.

The website developer can also be retained as the Website administrator but will need to be put on a monthly retainer for this as the cost of building a website does not include continuous website management.

What Does Search Engine Optimisation Cost?

This is perhaps the most straightforward one. The average cost of optimising 10 keywords is between N100,000 and N300,000. This includes both the on-page and off-page SEO which covers listing, meta tags, PDF submission, Social bookmarking, article promotion, etc. As the number of keywords increases, so does the cost.

It is important to understand that organic SEO is a long-term project and requires between 4-6months of constant work to rank selected keywords. This doesn’t mean that work stops after 6 months, organic optimisation requires consistent work to reach the first page and stay there.

Now that you have been introduced to the various elements of digital marketing and their cost as stand-alone platforms; the next question is whether you have the personnel in-house to achieve the goal…and you may then wonder what the cost of getting an Agency on retainer to provide integrated digital marketing services covering all platforms relevant for your brand will be?

What Does Integrated Digital Marketing Cost?

Individual digital platforms are great to reach your target audience but to get tangible value out of digital marketing, you need to focus on integrated digital marketing which uses the integrated approach to generate awareness, engage with your prospects, generate leads, and build brand equity.

For example, you want to incorporate Blogging, Social media, Google Ads, Email Marketing, Marketing Automation, Search Engine Optimisation, etc. for your brand.

In this case, you will need an Agency that will dedicate a team with experience in the different areas of digital marketing to manage your brand. Businesses sometimes make the mistake of hiring one person to perform all digital marketing roles – Content development, design, website management, PPC Management, SEO, etc. Check out our blog post on building a digital marketing team here.

The average cost for full strategic digital marketing monthly retainership ranges from N800,000 – N5 million depending on the scope of work and the number of personnel required to implement it.

In addition to the Agency retainership fee which is paid monthly, you will need to set aside a media budget for third-party platforms like Google Ads, Facebook Ads, Yahoo Ads, etc.

You will also need to set aside a budget for marketing software as these are the tools required to implement your digital marketing strategy. While there are different software for the different aspects of digital marketing, there are also several full-stack marketing software that covers all areas of marketing and one subscription will take care of your email marketing, Landing page, Chatbots, SEO, PPC, etc. An example of this is HubSpot.

The average full-stack marketing software costs between $250 to $5000 depending on the platform, the number of contacts, the number of users, the capability of the platform, etc.

The Advantages of Digital Marketing

Budget Flexibility – While the costs for the various platforms have been listed, it is important to note that you can decide how much to spend on digital marketing as the budget is very flexible. You can program your Facebook Ads to run for $50 and once the budget is exhausted, the Ad stops.

Real-Time Analytics – You can also get real-time analytics which tells you which platform is doing great and which one needs to be fine-tuned or stopped altogether.

Not Dependent on Company Size – Implementing Digital Marketing is a fantastic marketing decision irrespective of the business size and industry as it has varied platforms and tactics. A one-man organisation can implement digital marketing just like a 500-man organisation.

Looking for help with implementing digital marketing for your organisation? Book a free consultation with any of our consultants to learn how your brand can create awareness, engage with prospects, and generate leads.