It is now known that advertising on the Internet is more important in many industries than in the analog world. How much they can cost and how the cost should be shared properly, however, is less clear. What resources are needed, who will implement the measures and how important are they in the overall calculation? Let's do a review.

 

There is no industry today that can do this completely without professional online marketing. There are many more industries where this advertising department plays an important role. Accordingly, the costs of countless companies for online marketing systems continue to rise. It occupies a large part of the marketing mix and in terms of total expenditure. An annual survey by the Digital Association on Marketing in the ICT Industry found that, for the first time, more money is being spent on online activities than on any other marketing system for 2021.

 

Surveyed companies have invested about 40 percent of their total budget in advertising on the Internet. In the current year 2022, more than half of companies expect to increase spending on social media and SEO systems. In most cases, the reason may be the correct scalability that goes with such national marketing tools in the online section. Also, it is more targeted than print products, classic ads on TV or radio. But how does a company sensitively calculate its online budget?

 

Starting point: define key figures

In many ways, it can already lead to the success of online performance. What these should be for the company concerned can be determined by setting specific target values. Before a new marketing measure goes online, it can first be measured using approximate or experimental standards to fix budgets and earnings. At the beginning of the campaign, actual purchase or click numbers are measured and analyzed in regular reports. From this, more realistic goals can now be defined where the measure should be developed in the medium term. Or at the time of the first reporting, it became clear that it would not pay in any way. Measurements should also be consistently removed from the marketing mix.

 

Which key figures are particularly appropriate, of course, depends on the relevant advertising medium. But there are some basic things to look for when selecting yours. For example, when an ad banner appears on a homepage that leads to a particular company's online shop, the following statistics are final:

 

●      Impressions: Reveal how many visitors to a homepage have even seen the banner

●      Clicks/click rate: The net number of clicks corresponds to the number of people who clicked on the banner; Click rate is related to impressions and clicks.

●      Cost-per-click: Indicates how much the advertising company has to pay the publisher's homepage operator for each click on the banner.

●      Conversion/conversion rate: The net conversion number refers to the number of purchases of a product in the store behind the banner. Conversion rate corresponds to clicks with conversions.

 

Sample calculation for the advertising banner

Suppose Company X publishes its banner as an advertisement on a newspaper portal. Of the 1000 impressions, 100 were actually clicked by users of the newspaper portal, who then landed on Company X's homepage. The clickthrough rate of the banner is therefore 10 percent. For example, if a newspaper publisher charges 1 dollar per click, Company X must pay 100 dollars. Through 100 visits to Company X’s homepage, they can understand two sales, which match the conversion rate of 2 percent. Against this background, the turnover earned or the margin entered can now be offset against the cost of advertising.

 

It became clear that Company X's banner ads were valuable. Perhaps the cost per publisher per click newspaper was too high then or the conversion rate was too low with low product prices. Through such initial experience, young companies, in particular, can gradually move toward a healthier cost-benefit effect of online advertising and set the criteria: What will my ads achieve per click? And what is the maximum cost per click?

 

If both reasons are correct and there are still insufficient sales, it is probably less due to online marketing tools. But more for the higher price of the product, a missing market, or the wrong target group. Incidentally, in addition to the cost of external online advertising, you need to consider the overall performance of your own website, for example, a webshop. Even if certain conditions can be deducted from the tax for a commercial company’s website, they should not be too high overall to not hurt sales.

 

Hire an agency

Companies of all sizes can still implement relatively simple personal measures such as hand-held advertising banners. Marketing campaigns take longer and look different when more precise knowledge is needed. Especially small companies that don’t already have their own marketing department when they reach their limits in terms of massive social media campaigns or sophisticated search engine optimization. Joining an agency that specializes in online marketing can be rewarding. How expensive it is is very individual and depends on the billing type of the agency and the goals of the corporate client. In principle, however, these costs can be cheaper for most companies if they desperately try to implement measures for which they lack the time and skills. This often causes significantly more damage.

 

To be able to reliably include a company’s costs in the marketing budget, a flat rate fee based on the monthly rate is certainly optimal. But, these are not provided by all agencies and cannot be counted for all arrangements. A study in New Business Magazine found that it is more common for agencies to bill on an hourly or daily basis on a project-by-project basis. The hourly rate applies to small systems that need to be applied once and is not monitored later. Since agencies need to create more capacity for this and cannot necessarily rely on more employment, the rate per hour is usually higher. It is not uncommon to be less than three digits.

 

The daily rate for a certain minimum period is more profitable for corporate customers. Another billing method is revenue sharing: if a corporate customer earns a certain amount of revenue through his webshop. For example, through the agency’s successful SEO measures, the agency receives a commission from it. Similarly, most agencies using this pattern can only serve their customers who can achieve high-quality products or high sales for wealthy customers. Finally, of course, an agency’s current order situation and its awareness often determine the price.

 

Get support from influencers

The use of influencers who advertise a company and its products in their YouTube videos, blogs, or podcasts is becoming increasingly popular in the online marketing mix. It has already been proven many times over that this method of internet advertising can pay off. The cost of popular mood makers increases with their reach or popularity. The more followers you have on your network, the more money influencers you can ask for. It is important to look for influencers who are associated with advertising agencies and who bring the right audience with them. Searching can be time-consuming but ideally, save money. If anyone can get acquaintedwith an influencer company, they will be happy with a few dollars cheaper advertising - the bottom line is that it is a great brand.

 

The exact price does not depend on at least the platform and is included in the thousands of contact prices specified. Extrapolated in subscribers or views, for example, a post on Instagram can cost up to 10 dollars, while an Instagram story averages 25 dollars. Depending on the length of the integration into a YouTube video, the cost can be up to 100 dollars. The industry from which the company comes also plays a major role here. Since companies in the financially strong sector usually pay more to their influencers, each company should actually position itself in the market. In this way, you will be able to quickly see if there is an effective collaboration within the budget for online marketing.

 

Self-sufficient through marketing automation

Automation helps if a company does not want to rely on external factors such as agencies or influencers or does not want to invest much in marketing, including high staff costs. With the right software platform, a company can easily control its online marketing performance itself. Whether it's about delivering content across specific channels, about social network examples, or analyzing customer data and the number of viewers - everything is supported. With the right software, the workflow of marketing can be made more efficient, saving time and money.

 

As a result, spending on marketing automation tools can pay off quickly for yourself and is a good solution for small companies. If a company already uses CRM from Salesforce, the automation equipment of this supplier can be easily booked. Otherwise, most of the other providers have thousands of communication costs, which vary depending on the desired scope of the automation software. So there should be something even for small budgets.