Business owners and executives considering adding inbound marketing to their marketing plan wonder how much to spend each month. What is a reasonable budget that will yield results justifying your program and meeting marketing objectives? As always, it depends on the goals of your marketing strategy. For businesses seeking to increase sales through online marketing, we are starting to understand the costs and benefits of inbound and social media marketing. Here is a framework for creating a solid budget for your company.
One of the common urban legends about inbound and social media marketing is that they are inexpensive. While fixed costs may be lower than traditional advertising and marketing, labor costs are higher. Our estimated budget is for labor costs, which is by far the largest component of any inbound marketing/social media program. Other fixed costs, such as software, hardware and subscriptions will need to be added. Let's break it down by the disciplines required for increasing sales leads through inbound marketing:
You will want to spend at least 2 hours per month on strategy, analysis of results and planning with an experienced strategist in inbound and social media marketing. One of the key principles of inbound marketing is review, analysis and adapting your strategy to improve results. While top level consultants often charge more than $300 per hour, you could probably negotiate this as part of a larger package deal for around $500 per month.
A recent study by HubSpot of over 760 companies engaged in inbound marketing found that "leads started to grow once blogs offered a critical mass of articles, on the order of 20 to 50 articles" per month. Although it's certainly possible to write a blog post in a few minutes, most bloggers will tell you that if you account for idea creation, research, copywriting, SEO on-page optimization, and social media promotion, we're looking at 1-2 hours per post, perhaps more, depending on the blogger's experience level and familiarity with SEO and social media. According to HotGigs.com, average hourly rates for bloggers are about $30 per hour. This gives us a range of $600 - $3,000 to budget for blogging each month. According to ReadWriteWeb, a reasonable budget for most companies would be about $1,500 per month.
You will need someone to oversee and execute your search marketing strategy. This includes keyword research, on-page and off-page search engine optimization for your website, social media optimization for your social networks and pay-per-click campaigns. I'm not including on-page SEO for your blog, since you paid for that in the previous section. The amount of time required depends on the amount of content your site contains and the amount you add per week. If your company is somewhat active (and you should be to improve online lead generation), let's assume 1-2 hours per day is reasonable. According to SEOmoz, mid-level SEO consultants charge $100-200 per hour. At a minimum you're looking at $2,000 per month. Again, you could probably negotiate that down to $1500 per month as part of a package.
This is a more difficult area to quantify, because the nature of social media interaction involves a variety of activities, including listening (monitoring), engaging (commenting and conversing), and creating (new comments, tweets, etc). According to Chris Brogan, "two hours a day is a minimum for MOST efforts". Many business people would find it hard to invest that much time each day, but the activities could be divided up among several employees or outsourced. Assuming that a good social media strategy and plan is in place and we're budgeting for daily activities, if we take 2 hours as our minimum for social media activities, that's an average of 40 hours per month. If you hired an agency to do your social media marketing for you, for example a HubSpot Partner, you would pay at least $75 per hour for these services. At 40 hours per month, that translates into a budget of $3,000 a month. You could probably negotiate a lower rate or package deal, so let's put our stake in the ground at $1,500 per month.
Regular blogging, seo and social media activities will get you well down the road to improving brand awareness, web traffic and leads, but there is no substitute for high impact content, like webinars, videos and whitepapers and the social media campaigns to promote them. Your content team can produce some of these special projects as part of their regular activities with personal video cameras and publication software, but more sophisticated content with professionally produced video, music and graphics will cost extra. Costs for these types of content and campaigns vary considerably, but count on $2,000-$10,000 per campaign.
Routine Inbound Marketing: $5,000 per month
Special Projects: $2,000 - $10,000 per month
Budget Range: $84,000 - $180,000 per year
If you can generate enough sales from your inbound marketing program to exceed the budget (and you don't overspend the budget), you have achieved a positive ROI. On a monthly basis, can you generate $7,000 to $15,000 in sales? If not, should you consider a scaled-back program? Remember that your lead volume and conversion will most likely drop accordingly.
Consider the costs of hiring experienced people who can perform the above tasks. Here's our summary of costs involved with building your own inbound marketing team. You may find that it's less expensive to at least start with an inbound marketing agency, build up your current team's experience with time, and avoid new hires.
What's your experience budgeting for inbound marketing? We'd love to hear from you.
Please feel free to contact us to discuss your inbound marketing program.
