What’s the cost of a digital marketing agency?
Sooooooo, you’ve stumbled across this article by searching the question “What’s the cost of a digital marketing agency?”
You’re looking for a dollar figure, right? Something to write into the next budget or a quick understanding of whether your business can afford us or not. Let’s not beat around the bush. In 2023/2024, you need a budget of approximately $2,500-3000 AUD per month as a minimum if you’re serious about getting results from a digital agency. And let’s just note that almost almost half of that digital marketing cost goes to Google or Meta.
Yet let’s not assume that all businesses are the same. This estimate is for the most basic of businesses and a simple stepping-stone into lead generation. For an eCommerce business, or if you’re wanting to tackle organic reach, it’s a completely different animal.
In this article, we’ll explore in today’s terms what businesses should expect to pay and why. We’ll explore different marketing strategies and businesses they might apply to. We’ll look at various models of digital agency, the pros and cons of each, and how to ask the right question to determine which digital marketer is the right fit for your business.
Understanding Digital Marketing Agency Costs
In the world of digital marketing, there’s pushing & pulling.
You can push ads towards an audience, either interrupting the audience in their social feeds, or as they search a service on Google. We call this kind of marketing campaign PPC advertising. That’s Google ads, Meta ads, and the likes.
Pulling is where we’re writing content, just like this blog, that people stumble across when they’re searching a question, or a term. We pull the audience in with optimised content either in a blog, or on the content in your website page, the content in a YouTube video, organic social media posting or similar.
But here’s the thing. Pulling organic traffic takes time. It requires a longer term investment and sometimes it’s not needed, or cost-sustainable for a business.
Pulling can take years to come to fruition, depending on the industry, but it is the holy grail of marketing. Imagine turning all of your Google and Meta ad spend off, yet the leads keep rolling in.
You see, pulling, unlike pushing ads, doesn’t cost you a cent when someone clicks on your links.
Basic Digital Marketing Agency Costs To Consider
Here’s a quick breakdown of the most basic of service.
- – You’ve got to pay the agency for their services.
- – You’ve got to pay Google, Facebook (Meta), Instagram, etc. for the ad spend.
- – It’s likely you’ll want remarketing.
- – You’ll need Google analytics and tagging set-up to measure accurately.
- – It’s likely you’ll need a citations service.
- – Miscellaneous.
Above is what we refer to when we say we’re pushing. Estimate a full budget, including ad spend as a minimum of $35,000 per annum. Note: this varies by industry and it’s best not to get locked into an agency contract. Choose an agency that you can cut-off if the results aren’t coming within 3-6 months.
Premium Digital Agency Cost Considerations
Here’s a quick breakdown the most basic of service.
- Pay the agency their service fee.
- PPC costs, Google, Facebook (Meta), Instagram, TikTok etc.
- Remarketing costs
- Google analytics and tagging set-up
- Citations service
- Email marketing platform
- SEO services
- Organic social media posting service
- Video production / content creation
Above is what we refer to when we say we’re both pushing and pulling.
The list of services goes on. For example, we could be engaging a PR agency, engaging a LinkedIn strategist, or buying digital billboards and paid advertorials.
The real cost of a digital agency is determined by the return, but don’t make the mistake of measuring this within a year. Unfolding the strategy and creating a stronghold that competitors can’t surpass can take years.
The Digital Agency Pricing Model
Thinking about the cost of agencies isn’t the question. It’s all about how much value can you’ll get and the way the agency is structured makes a difference.
- Cars & fancy presentation screens
- In-person meetings
- Remote workers
- Contractor Collaboration
- Boardroom hire when required
- Video communication
- No need to advertise
Above, we refer to contrasting structures for the way an agency is set-up, and there are pros and cons to how each are set-up. Below are comments to consider.
Additional cost that will be built into the cost of the service you receive, however a central hub can provide good collaboration.
Employee mentality can equate to mediocrity in many cases.
Cars & fancy presentation screens
Additional cost to impress you that will be no doubt be built into their margins.
Mass Inefficiency, although in-person contact from time to time can be extremely valuable.
More clients per employee required to meet overheads.
A good agency shouldn’t have to advertise unless they’re still establishing themselves. Success breeds success.
In contrast, structure two is very 2023.
Happier workers with flexibility in operating hours. Although the wrong people can get distracted and achieve less, so good management is required.
No travel time to work, more efficient. Isolation can occur, so good communication and management is essential.
Everyone is responsible for their own incomes and therefore cares more than an average employee might. Their income depends on the performance of their work.
Contractors are usually specialists.
Boardroom hire when required
No overheads, but professionalism when required. Fewer clients are required to be profitable. Potentially less collaboration between marketers, but often deep thinking and focused solitary is essential in this industry.
Video call communication
More efficient, no travel time, but it’s just not the same as face-to-face. Therefore there should be a mix.
No need to advertise
Good digital marketers don’t need to put their brand on the radio, in magazines or on billboards. This tells you they’re chasing their overheads, or trying to expand. Expansion often means dilation of the quality of service.
Summary of structures.
Ask yourself if any of the additional costs in structure #1 will add value to your business. But also be aware of structure #2 and whether the people you’re engaging are the real deal or not. There are plenty of smoke and mirrors in the digital marketing space, so ask yourself, How savvy are they? If structure #2 does stack up, then it’s most likely that this is where you’ll get the most value. It’s a simple equation.
Sum = Digital marketer divided by the amount of clients they handle. That’s the key question you need to ask, outside of each individual’s talent.
Scope of Digital Marketing Services
Agencies all have different skill-sets. You could easily end up chatting to a branding agency who sells you on sending all the right messages, and they’re not wrong. An important observation though, is that IKEA is a 38 billion dollar company with a logo that looks like it was made in the 90’s with Microsoft word. A brand is not a logo. A brand is a culture and this takes time to transform into ROI. In fact, it’s unlikely you’ll ever be able to measure a branding exercise with pin-point accuracy. Anywho, enough said on that.
If you want a fast return. You’re going to want a digital marketing agency includes or focuses on PPC Lead Generation. Paid ads. The best digital agencies will run PPC alongside medium and long-term strategies. For example, posing on your social channels will increase your organic following if done well, but you’d neb mad to think that when you release your first post, then the sales will start instantly rolling in. You’re building an audience, increasing familiarity. It’s a vehicle for branding.
SEO Marketing Team
Then you have Technical SEO specialists. These are often the tech-geeks that abide by Google’s forever changing website rules. They’ll keep you up to date, sending all the right messages. They’ll make sure your content is being read as “rich snippets” which Google loves to serve up as key answers to people searching for questions. This stuff is really important if you want your business to be found, but most people don’t understand it. Again, this is a long-term strategy and ideally results in ranking you in the top 3 in search results. The beauty of SEO is that you’re not paying per click like you would when a user clicks an ad.
Customer journey is an essential ingredient in your recipe for success. A good agency will have emphasis on customer journey. How will the customer interact on-page, and once they leave the site, will you stalk them around the internet in a passive, non-creepy way? Once they convert into a lead or sale, are you delighting them with exceptional communication? If an agency doesn’t talk to you about this, there’ a high chance they’re leaving a lot of conversions on the table. Getting this right could be the difference between a few more leads per day that, when added up, converts into a mountain of lost revenue.
Content creation or content marketing is a broad term. It ranges from ad creation to copy writing of ads, blogs and web pages, and then it can also translate into video. This is where an agency can show off their aesthetic skills. Ask to see some examples of previous work, but don’t get caught up in aesthetics, because painting pretty pictures doesn’t necessarily get results. If your’e shown a case study, ask to see the campaign results. Specifically, cost per conversion and make sure you’re looking at Google Analytics results. Not the social platform you’re advertising with.
Social Media Marketing
Social media marketing is usually referring to organic posting. This is a lot of work for an agency and costs usually tend to start from $1500 a month for the most basic service of visiting your business on-site, snapping interesting photos and then writing captions and scheduling the posts appropriately. But that’s not where it ends. Users will comment and ask questions, so a social media marketer is usually glued to their phones. Of course, a marketer never knows your industry as well as you do, so they won’t be able to convert leads into sales as well as you could. It’s best to work in tandem in answering comments, but the key here is to follow up on those comments, and make sure you stick to the planned strategy set out by your specialist. Following up comments in the B2B world is the key to LinkedIn. Social agencies often undercharge because clients often don’t see the amount of effort this person in going to. Thinkroom has partnerships with specialist organic social media experts, local to the sunshine Coast and also in other parts of Australia.
Another digital agency might be very video heavy and there are some very good reasons for this.
Firstly, Google owns YouTube, so any content loaded on YouTube gets priority. Google Ads employees that coach agencies recommend that videos will get better results than static images. In our experience, Thinkroom has observed this repeatedly as well. Videos are more engaging as PPC ad content. Buy loading a video and throwing it on a website is a completely different usage. So this begs the question, are you creating a branding video? Or one to be used in ads? A branding video is nice, and valuable in the right places, but it doesn’t mean you’re going to get a tangible ROI. A high-quality video set’s a great impression and can be used in a variety of ways. If you do head down the line of a branding video, make sure that your PPC marketers can get the raw files and it’s filmed in both vertical and horizontal format. PPC marketers want to chop it up into various clips for advertising. Ideally, you can use video content on all different social channels for 6-12 months.
Wrap Up – Hiring A Digital Marketing Agency
Of course there are many other avenues to marketing, but to wrap this article up, really think about what your agency is proposing and what your cash flow can handle. If you’re taking a punt on digital marketing and need a return within 3-6 months, then make sure on PPC is in the mix.
If an agency is flashing around aesthetics and money, there’s a high chance that they’re not results focused. They’re selling to your ego. It’s an easy trap to fall into.