When business owners and marketing professionals consider employing a digital marketing agency, potential costs become a critical consideration. Like any other business expense, digital marketing costs need to be managed effectively, delivering desired results while staying within your organization’s budget. However, price is far from the only factor; the most expensive agency you can employ will manage to waste both time and money by failing to deliver results.
No matter the size of your business, getting consistent returns on your digital marketing efforts is critical to your success. To help get you started, here’s a breakdown of the typical costs of a digital marketing agency.
The Cost of Digital Marketing Agencies
A digital marketing agency’s services can cost between $30,000 and $145,000 annually. Specific costs will vary greatly depending on numerous factors, including:
- Size/experience of the agency. In the digital marketing world, businesses can expect to get what they pay for. Large, established agencies can command higher fees than smaller firms working to build their reputation, while a proven track record of digital marketing success usually comes with premium pricing. This isn’t to say new, unproven agencies are incapable of producing results for your business; however, an experienced firm with a reputation for consistency is well worth the upfront costs.
- Size of your company. It should go without saying that companies of different sizes will have varying digital marketing budgets. If you’re a small business, your needs will be unique compared to those of a multinational corporation. The right agency will understand this and charge the appropriate amount depending on the size and scope of your digital marketing efforts.
- Digital marketing tactics. Digital marketing is not a one-size-fits-all endeavour; the strategies and tactics agencies use to fulfill business’ objectives will vary, as will associated costs. While some companies may benefit from online advertising and its immediate return-on-investment, others may seek long-term results that search marketing tactics can provide. Every digital marketing tactic requires a different amount of time and labour, and therefore has a different cost associated.
- Growth goals & expectations: In addition to the size of your company, your growth goals play a large role in how aggressive or conservative you may with so be with your marketing spend. Agencies apply strategies which match these expectation best, but your budget will usually scale with your goals. Typically businesses spend between 5% and 30% of total revenues on marketing budgets depending on how much of a role the marketing success is related to the business’ growth goals.
Most digital marketing agencies structure their pricing using either project-based fees or a flat monthly retainer for their services. The pricing structure employed by an agency is mainly dependent on its approach to digital marketing. For example, marketing agencies that focus on one-time campaigns and short-term projects tend to stick to traditional “billable hours” fee structures. In contrast, agencies seeking to develop consistent performance and growth using long-term strategies tend to employ retainer-type structures for their services.
A critical difference between project-based fee and retainer structures is the potential cost variability between payment periods. Many digital marketing strategies are incredibly labour-intensive in the setup and launch phases and gradually taper off over time. In a traditional “billable hours” model, this means that costs will be considerably higher at the beginning of a project before (hopefully) levelling off over time. In contrast, a monthly retainer should remain consistent throughout the contract; in effect, a retainer structure amortizes the upfront costs into a regular, predictable payment over time.
Digital marketing agencies (Atrium included) employ variations on these two basic models to best suit their clients’ needs. When considering using a digital marketing firm, consult with both the agency and your accounting team to determine whether the agency’s payment structure will work with your current business model.
Like any good B2B business, a solid digital marketing agency will seek to work with its potential clients to determine their goals, offering products and solutions that support their business objectives. While most agencies offer a variety of services to support a range of targets, not every program will be the right fit for your business. An experienced firm can help you determine what your business needs to drive consistent performance, and won’t try to sell you a product that doesn’t support your organization’s goals.
Further, a digital marketing agency will be able to clearly articulate its services’ value in terms of return on investment. Regardless of the cost or payment model they use, an experienced firm will be able to connect their services to deliverable results that will serve to drive business performance over time.
Looking for a Digital Marketing Agency?
With over 20 years’ experience in the industry, Atrium Digital offers a unique approach to digital marketing engineered to provide consistent results for its wide range of clients. Our Marketing Systems Engineering approach allows us to build platforms and optimize routines to help our clients achieve consistent marketing results, allowing them to prepare for growth and invest in their business with confidence.
Contact us today to learn more about how Atrium can help your business build a reliable digital marketing system.
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