What is digital marketing?
Digital marketing is a way for you to grow your business through online marketing and advertising. However, there are significant advantages compared with traditional marketing, such as:
- Much lower cost of customer acquisition
- Ability to engage the customer and offer useful content
- Unique use of media to showcase your brand and products in innovative ways
If you are looking to increase brand awareness either to your website or offline event, then you should definitely consider launching a digital marketing campaign. Done properly, digital marketing can also save you time and money (think about automation and optimisation).
The next question we need to address is “How much should I spend?” We’ve written this article to help you get a better idea of the various costs related to digital marketing so that you can determine for yourself the right amount to spend.
We are going to cover all of this in today’s article. Let’s dive in.
How much should my business spend on digital marketing?
Digital marketing encompasses a wide range of marketing channels. Some are cheaper than others, while others can produce results much faster. That doesn’t mean one is better than the other, you will need a combination of various channels to get the results that you are looking for.
Before we figure out the costs, the three main things we tell our clients to take into account when planning their marketing budget is:
- Market and Industry – What is the state of the market and industry of your business?
- Business revenue goals and objectives – What are your revenue goals? What do you want to achieve from this campaign?
- Campaign objectives – What is the purpose of this campaign?
There are statistics that suggest B2B companies typically spend 2-5% of their revenue on marketing while B2C companies spend 5-10%. This may or may not be helpful to you, as ultimately you will need to decide what works for your specific business.
A point of caution, digital marketing is no magic bullet. Spending more does not guarantee better results. It is about setting measurable goals and taking the right actions in order to achieve them.
When we work with clients, we first need to identify campaign goals. This may be the number of leads generated, customers acquired, or number of customers that turn out for a sales event. We want to ensure that our campaigns serve the goals of the business.
What are the costs related to Digital Marketing?
The two parts of digital marketing which we mentioned earlier in this article is online marketing and advertising. Depending on your strategy of growing your business, you can choose from the various channels which are listed below.
The 5 main digital marketing channels:
- Digital advertising (pay per click and banner ads)
- Social Media marketing (Facebook, Instagram, YouTube, Twitter, Tik Tok, LinkedIn)
- SEO and content marketing
- Email marketing
We’ll tackle these one by one briefly to give you a better idea of each of them and how much they cost.
When we talk about digital advertising, that can mean one of two things; display advertising (through banner ads) and search advertising (Google ads). These help you get more awareness and visibility through search results. These types of ads are also known as pay per click, which is obvious from it’s name that you pay for each click a user makes.
After we determine your business goals, we work out the campaign objectives. Here are examples of questions we ask:
- What kind of customers would you like to attract?
- Do you want more subscribers to your newsletter?
- What is the specific action you want your customers to take on your website?
Once we have set out the campaign strategy and objectives, it is now time to start building the campaign.
The costs here will now include:
- Media buying service and optimisation
- Creative work and copywriting
- Advertising budget
The media buying service is often where we can make the most impact on the cost of a campaign. Our dedicated team optimises the ads on a daily or weekly basis. We conduct A/B testing to figure out what works best in the campaign and optimize it to ensure it gets the maximum bang for buck.
Creative work and asset building costs includes everything that is required to build the ad creatives, from working with a graphic designer or videographer, to the purchase of stock images. Some campaigns that require planning a photoshoot or video shoot will also incur some costs here.
Let’s now get into the nitty gritty with some actual examples.
|Campaigns with Reach Objective||A reach campaign to targeting 1,000 people, would cost RM1.50 to RM2.50 for Facebook and Instagram.
A RM10,000 budget would be able to reach 4 million people (a size of audience within the age of 15 – 64 years old residing in Klang Valley)
Our past projects have shown that LinkedIn costs 5 to 10 times more than Facebook or Instagram. The same budget of RM10,000 will be able to reach 400,000 people.
|Cost Per View||Cost per view for Facebook, Instagram and YouTube would average RM0.05 while for TikTok it would be around RM0.01 to RM0.03.
A RM10,000 budget would get about 200,000 impressions on these platforms, while for TikTok it would be roughly 330,000 impressions
|Google ads||Google Search text ads cost RM2.00 per click. Google Discovery Ads is RM0.50. This is assuming the audience is narrow in the campaign.
Social media marketing
There is a common misconception that social media marketing is free. While it is free to set up the accounts and profile pages, you will need to factor in the manpower needed to build content, design creative visuals and to manage the accounts.
Here’s a good tip. You can set up your profile pages across the platforms that are relevant to your business. Depending on which stage or industry you’re in, many would suggest these:
- Entrepreneurs: Facebook, Instagram, Linkedin
- B2C: Facebook, Instagram, Tik Tok, Twitter
- B2B: Facebook, LinkedIn, Twitter
Email marketing remains an affordable and effective way to reach consumers. It can give a ROI of $44 for every $1 spent on it.
We recommend using it to drive traffic back to your website, build awareness and encourage continuous purchase among existing customers. Businesses can also use email marketing to nurture the relationship with their customers through content and education.
The chief factor affecting email marketing costs will be the number of emails being sent out. Email marketing platforms such as Mailchimp can cost up to RM1,200 per month for high volume senders. However, Mailchimp also does offer a free tier for sending to 2,000 contacts up to 10,000 emails a month.
Your business website is the face of your business online. When people search for your brand or products, they inevitably land on your website.
Businesses that see a website as an investment usually are able to use it effectively to grow their business. A good website can act as an online sales representative, selling your products for you while you sleep.
There are various costs that comes with building a website, so let’s explore what they are:
Website build and design
Costs here include the design, building and hosting of the website. Depending on overall features, you are looking at spending RM5,000 to RM20,000 for a good website.
If you are running an ecommerce business, you can use platforms such as Facebook Shop or Instagram Shop. As Facebook works closely with partners like Shopify, BigCommerce, WooCommerce or ChannelAdvisoIt, it’s easy to start an ecommerce shop and move your business online.
Content marketing and SEO
Once your website is built, there are ongoing costs related to keeping content fresh, topical and relevant to ensure a better buying experience for your customers.
Improving the search ranking of the website also helps with discoverability. It is worth hiring an external agency to help ensure the website is SEO optimised and has relevant content to drive organic leads to your website.
Final word about digital marketing costs
Digital marketing is a great way to grow your business. Work backwards from your business goals and priorities to determine the right strategy and how much you should allocate for your marketing budget.
This usually becomes clearer once you have experience running some campaigns, and you can adjust accordingly over time. Be sure to keep track of your cost, assess your marketing budget quarterly and annually,
If all of this seems like rocket science to you, let the digital marketing experts at BRICKS AND CLICKS help you deliver results on your marketing campaigns. Click here to get a free consultation with us.
Here are more useful links: