There are many ways to acquire customers. Online marketing has been added to the advertising mix for several years. How much does such advertising cost? More on that in the post.
Introduction
Marketing via the Internet only existed for a short time. The Internet only became popular around 1995. And only much later did it become interesting for the traditional advertising agencies, which preferred to deal with the media of newspapers, television, banner advertising, flyers, brochures, copywriting, mailings, and the like. However, that has changed significantly in recent years. The share in the turnover of a classic agency in the field of online marketing has increased rapidly. Advertising on YouTube, Google search engine, Instagram, Facebook, and other social media channels is becoming increasingly important because of the high range that can be achieved. In addition, the ROI (Return on Investment, return on the capital that you have invested) is easier to calculate.
Since you can sometimes easily track where the customers came from, where they clicked, how much this click cost (CPC = Cost per Click, German for costs per click), and what the goal was (for example, selling a t-shirt ) has been reached. For newspaper advertising, the ROI may be more challenging to calculate. On the other hand, online marketing measures can also be implemented much more precisely. On Facebook, for example, you can filter according to many criteria, and you can target groups of buyers. For example, Women between the ages of 30 and 35 living in Hamburg who love dogs and watch content related to “dog products” from time to time. In this way, targeted campaigns can be carried out. For example, you couldn’t advertise that precisely with television advertising. But what are the costs of online marketing? More on this.
Where To Advertise
There are many different platforms on which you can advertise. Here are some of them
- Facebook: It is the largest social network and is number 1 in this area in almost every country in the world. FB currently has around 2.895 billion active users. That’s almost half of the world’s population. The number of active users is around 42.8 million. That is more than half of the population.
- Google: Google is the most important search engine in almost all countries. It is estimated that more than 95 percent of all searches on the Internet go through this search engine (only a few countries like Russia, where Yandex is popular, or China, where Baidu is used, are different).
- Instagram: Instagram is also widely used and owned by Facebook.
- Youtube: Youtube is the largest platform for video content. Here, too, the number of users is extremely high. The platform belongs to Google.
How To Advertise
There are different ways to do online marketing. Here are some of them:
Cost Per Click (CPC)
Here you pay per click on an advertisement. This option is available on almost all platforms, such as Google Ads (also Google Adwords, the provider’s advertising platform), Facebook Ads (Facebook’s advertising platform), and similar. Here you pay an amount per click. For example, on Google Adwords, you could enter that when a visitor enters the term “smartphone.” The advertisement with a link to your website or online shop is at the top of the number one. However, the term “smartphone” will be contested.
A bidding system selects who is allowed to advertise the term first. Whoever is willing to pay the highest amount in euros is given this opportunity. The problem, however, is that in recent years the CPC prices have become higher and higher. Because more and more corporations are bidding on these important terms. The demand, and with it the prices, have risen sharply here. However, placing CPC ads can still make sense if you plan properly. This means: choosing the right terms, doing good copywriting, and the target website is well optimized (keyword: conversion rate optimization).
Cost Per Thousand Or Cost Per Mille (CPM):
Cost Per Thousand refers to the cost of the ad per thousand impressions (ad viewed 1000 times by web visitors). This is particularly worthwhile for companies that want to build up a brand or bring it to mind. A brand like Coca-Cola could do well here. Instead of installing advertising banners on highways, one could create Internet advertising banners distributed via CPM on the Internet. You can also use it to get traffic/visitors to your website. Because if the ad banner is interesting, people will click on the link and go to the website. CPC is certainly more worthwhile for smaller companies since you can advertise more specifically here.
Cost Per Acquisition (CPA)
Cost Per Acquisition or CPA is new for “cost per acquired new customer.” The calculation works as follows -> campaign costs/ conversions = CPA This is an important metric as it shows the positive effects of marketing campaigns on sales.
More Options
There are other advertising options in online marketing. For example, the following:
- Search engine optimization (SEO): Here, you try to be found high up in the organic search results, for example, on Google, with the right texts and SEO measures.
- Social Media Marketing: It is possible to create images, videos, and content that ideally create a viral effect on Facebook and social media channels.
- Web development and app development: A website for a new product or an app with a game can also be a way to do online marketing.
Agency Costs
In not uncommon cases, an online marketing agency is turned on to implement the advertising campaigns because you need a lot of experience to run successful CPC, CPM, or CPA campaigns. There are different payment models:
Percent Of Total Budget Per Month
For example, the customer has a monthly budget of 10,000 euros. The agency takes 15 percent of this per month as their fee for placing the advertisement. In this case 1’500 euros per month.
Success-Based
A profit-sharing agreement is agreed upon here. For example, you can do search engine optimization. If an article is found high up in the organic search engines like Google, for example, in places 1 to 5. Then an amount x per month is required for as long as the article is in these high places on Google. This amount can differ depending on how important the term is, how much traffic/Internet visitors it generates, and possibly how much sales can be derived from it.
Per Hour Or A Quota Of Hours Per Month
It makes sense to agree on an hourly rate. And then book 40 hours a month for online marketing, for example. So you can count on fixed costs per month. And can check the ROI from time to time. For example, if the hourly rate is 100 euros per hour, you get 4,000 euros per month (40 hours times 100 euros). The costs for the Google campaigns are then calculated separately. During this time, texts for SEO measures can also be written, or social media campaigns can be created. For example, flyers for your own Facebook page.
Prices For Websites And Online Shops
Here one can also speak of web development services. A website has a price of around 4,000 to 25,000 euros. An online shop is around 15,000 to 50,000 euros. There are no limits to the imagination regarding websites and web shops. And so it can certainly require a higher budget.
Own Employee
You can also implement online marketing with your employees. However, the problem is that you have to factor in a full-time salary and overhead costs of around 50 percent. So you get a salary of around 3500 euros monthly, plus around 1750 euros in overhead costs. In addition, this employee may need to be fully utilized. Because the marketing measures can be implemented in a few hours a month, the commissioning of an agency can be useful here.
DIY
“Do it yourself” can also be an option. Here the entrepreneur himself places the advertisements on Google and Facebook. This is possible nowadays because there are many tutorials on Youtube and similar platforms where you can learn it relatively quickly. Here, too, one should check the return on investment. Because placing the advertisements is then “free” because you have spent your time. However, the activation of the CPC campaign costs a monthly fee. Here you should see how effective these advertisements are. Because if the CPC campaign costs 10,000 euros, but the additional turnover is only 5,000 euros, then the ROI could be better.
Also Read: How To Create A Social Media Marketing Plan
