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How much does digital marketing cost?

The cost of digital marketing services are a constant question amongst companies, from small to midsized businesses all the way up to global companies. How much should you be actually spending on it? Should you be using an in-house team or letting a digital marketing agency take care of all of your digital marketing needs for you? The questions around this are endless. Especially in this time where businesses operating in the UK are feeling the squeeze of the economic downturn we’ve been seeing and cost of living is at an all time high.

Why should I spend on my digital marketing?

First things first, we should say that digital marketing has never been more important than it is now. You want to be able to connect to your customers and improve your reach. In spite of tough times, your marketing budget shouldn’t be the first thing to go. It can be a bit of a risk to maintain or increase it during periods of economic downturn, but if you’re thinking about cutting back, your competitors likely are too.

With your competitors cutting back, it leaves space in the market for you to capitalise on and capture their audience. There’s a widely cited example between Post and Kellogg’s, two cereal companies in the States, from the 1930’s. When the Great Depression hit, Post pulled back on their marketing budget in order to ride out the economic downturn. Kellogg’s did the complete opposite and doubled their marketing budget. As a result, their profits rose 30% in a period of extreme economic turmoil.

Obviously this is an extreme example of what could happen, but it helps to illustrate how important digital marketing budget is and why you shouldn’t cut back.

But that’s not the only reason to maintain your digital marketing spend. Ensuring you have a budget for digital marketing services means that you can more easily achieve your business growth goals. Business growth only comes with getting your company out there. If you’re not showing to anyone, how can they interact with your company and purchase your goods or services?

While there is still some room for other traditional marketing channels, the majority of the time, your company’s marketing strategy will come in the form of digital marketing. We’re all on the internet more and more these days, so without putting a chunk of spend into ensuring your business has a substantial online visibility and digital presence, you’ll likely fall behind your competitors.

How much should my digital marketing cost?

Digital marketing services can vary widely depending on the digital marketing strategy you choose to employ or the agency you choose to go with. Ultimately though, you need to determine your business goals before setting a budget. The best place to start is with a percentage of your company revenue.

We’ve found that in order to simply maintain your position with your competitors, most companies spend between 6-9% of their revenue. However, if you’re looking to grow your market share, it’s advisable to spend anywhere from 10-15% of your revenue.

The actual number amount will grow and change over time, depending on what your revenue is. But if you maintain the budget that you had when you first started employing a marketing strategy, you’re unlikely to be reaching any more customers than you would have been at the beginning and your competitors will begin to outpace you.

So what does digital marketing encompass?

Digital marketing services can range from agency to agency, but depending on your business’ marketing strategy, you can choose a digital marketing agency that can help you determine what you should be spending your budget on.

In general though, digital marketing services can range from:

Search Engine Optimisation

Market average: £750 to £8,000 per month for ongoing service

SEO is the process of improving a website’s visibility on search engine results pages. Google and Bing are examples of search engines, our job, as SEO experts, is to help make sure that your website appears higher than your competitors when someone searches for what you offer. While this may seem like a trivial or vanity thing to do, it helps increase your organic traffic which drives more customers to your website and ultimately can lead to more revenue.

Within SEO, there’s also typically a content marketing strategy in place. Content marketing involves delivering content, like a blog article, to your audience in order to build a trusted relationship with them. This is a part of your ongoing strategy that helps your target audiences understand more about who you are as a business and helps build out an effective online presence. With an agency like ours, we can work together to combine services to deliver results and high quality content that can be used across various channels of your digital marketing efforts.

Social Media Marketing

Market average: £300 to £2,000 per month for paid social

Social media marketing is probably the one channel that business owners are most familiar with in terms of digital marketing strategies. Social media marketing services encompass everything to do with social media platforms, from Instagram, Facebook, LinkedIn, to YouTube, TikTok, Pinterest, and even other niche social media platforms like BeReal. In order to have an effective social media marketing strategy, you must have a coordinated plan in place.

Social media marketing doesn’t just encompass social media posts, content creation, and responding to comments. Social media managers will have to plan posts, help create unique and valuable content for your audience, create a content strategy, think about who your audience is and tailor posts to that without being inauthentic to the brand, respond to comments and DMs, and that’s not even the half of it. They will also likely have a say in your brand aesthetic as this will play a key part in their role and how they present your brand to an audience. Additionally, most social media managers will have to help with content creation, so a deep understanding of your brand aesthetic, vision, and overall marketing strategy is key.

Depending on the social media strategy and size of your account, your manager will likely also do paid advertising on social media. Additionally, your social media manager may be the one to take charge of your influencer marketing strategy, but depending on the business size, that can also be another person or agency. Social media marketing costs can be quite high due to all of the work and effort that goes into a coordinated and well thought out social media strategy. Most small businesses will pay a digital marketing agency for this, so that they can take on the different areas of this with specialised teams, that will make it effective.

Pay-Per-Click Advertising (PPC)

Market average: £450 to £2,000 per month or 10-15% of ad spend

Pay-Per-Click (PPC) advertising is a way of advertising online. With PPC, you pay the publisher of your ad, most often Google, a fee whenever someone clicks on your ad.

PPC ads can be placed as Google Ads in many places. However, you’re most likely to see them at the top of search results. You choose certain keywords, and bid against other advertisers to have your ad appear when a user searches for those keywords. PPC costs vary widely depending on how competitive the keyword you’re targeting is, the more competitive the keyword, the more ad spend you’re going to have to put behind your campaign, but a well run PPC account can help to keep those costs to a minimum through a granular structure and regular, well-informed optimisations.

PPC is one of the most effective means of online marketing. With the right PPC services, you can ensure that your ads are seen by your target audience when they’re already well into their purchase journey. The best way to do PPC is to constantly be doing data analytics and optimising your PPC campaigns to ensure that they are reaching the target audience and converting properly into website traffic and valuable conversions on your website.

Web Design and Website Development

Market average: £15,000 to £40,000 for a simple custom website

A key part of digital marketing is your website. Without an incredible website, you have nowhere for your other digital marketing campaigns to be sending that traffic you’re driving. Web Design is the all encompassing term that’s used to describe the process of website creation.

Building a website takes several stages and skills, that all have to work together to create a high quality website that is responsive and helps you achieve your marketing goals. When done well, web design adds perceived value to your products and services, it helps customers build confidence and brand loyalty. Web design works synonymously with your brand identity to maximise conversions and revenue.

Don’t forget that a website’s sole purpose is to encourage an intended conversion. Whether it’s a blog that wants you to read and learn its content, or an e-commerce site that wants you to shop, both are carrying out an internet marketing strategy to encourage conversion. Whether you’re one of the world’s biggest brands or a small business, you want people to carry out an action on your site that is beneficial to you. Website creation and design is a process for a reason, you want it to all work together to help lead people towards making the conversion that you want them to carry out.

Email Marketing

Market average: £300 to £1,200 for ongoing management

Email marketing is something we’re all familiar with, our inboxes are flooded with newsletters every day. So how does your brand stand out from the crowd? Email marketing is a nuanced form of marketing that requires strategy, analytics, and thoughtful copy and design. Email marketing allows you to connect with your audience in a direct and personal way in order to nurture brand loyalty, promote your products, and drive conversions on your website.

Email Marketing can includes building email lists, creating engaging, high quality content, including the all important subject line, segmenting the audience, automating workflows, and tracking campaign performance. In comparison to some other digital marketing services, email marketing services are typically a cost effective digital marketing channel. It allows you to reach a large audience with low overhead and high ROI.

Plus, you can set up automation with this particular digital marketing service, so that when customers take certain actions, like an abandoned cart, they’ll trigger an email that is proven to help send them over the line with conversion. It also can auto send drip campaigns and personalised workflows to streamline the customer acquisition process, save time (key for small business owners!), and ensure that you’re maintaining communication with your customers and audience. Remember, there’s a reason everyone has a newsletter these days!

Overall, digital marketing pricing can vary widely depending on what services you’re looking for, the amount of digital advertising you want to do, and the agency that you go with. There’s no one size fits all approach, you have to determine the digital marketing services that are within your budget. Plus, finding the best digital marketing agencies that will work with you on your goals, and take a data driven approach to help you maximise your business growth, can be hard. Digital marketing agencies can also vary based on what services they provide, so bear that in mind as you’re researching digital marketing costs.

Over here at Gumpo, we’re a full service agency, taking on all of the above and more. We carry out effective digital marketing services that boost brand awareness and drive conversions through a data driven approach. We can also create assets ranging from 3D models, high quality videos that can be used on both your website and social media posts, website creation and design, and more. Our team can truly do it all.