How Much Does it Cost to Do Inbound Marketing?
If you're a C-suite executive or business owner, chances are you've been talking to yourself a lot lately. The economy is much slower to rebound than we would like. Many of you have been hearing all the buzz about social media and this "thing" called "inbound marketing". Business owners and executives who are considering adding inbound marketing to their marketing plan are wondering how much they will have to spend each month?
As with all expenditures, there is also an expected level of return required. While a recent HubSpot survey, the company who literally wrote the book on inbound marketing, revealed that inbound marketing cost per lead is 60% lower than traditional outbound marketing. That still leaves the question:, "How much will it cost?"
There is an urban legand that organic search results are free. While the click itself is free, as SEO becomes more and more competitive, the cost of getting to that location is costing more and more. While the fixed costs of inbound marketing may be lower than traditional advertising and marketing, the labour cost are higher. The interesting part about inbound marketing is that money alone will not dictate who is successful. Whereas in traditional marketing channels, "he who spends the most, gets the most",with inbound marketing, there really is a greater value placed on developing relevant content and being genuine. This has allowed many smaller organizations to compete with their much larger counterparts.
The following estimated budget is for labour costs, which is by far the largest part of any inbound marketing/social media strategy. Other fixed costs, such as software, hardware and subscriptions will need to be added.
Let's take a deeper look into the costs in each of the key elements of any Inbound marketing strategy.
1. Inbound Marketing Strategy and Analysis
In developing your brand and targeting your ideal clients (personas), you need to take the time each month to analyze how effective your efforts are working. One of the key principles of inbound marketing is review, analysis, and adapting your strategy to improve results. You should spend at least 2 hours per month on strategy, analysis of results and planning with an experienced strategist in inbound and social marketing. According to ReadWriteWeb, while the top level consultants are very much in demand, you should be able to arrange this for about $600 per month.
Blogging is a big part of your inbound marketing strategy. According to a recent HubSpot Study of over 760 companies, companies with blogs generate 67% more leads than those that do not. When comparing the median customers monthly lead number in each category, HubSpot observed that leads started to grow once blogs offered a critical mass of articles - on the order of 20 to 50 articles. Customers with 52+ blog articles generated median leads that were 77% higher than the median result in the "24-51 articles" group. This growth is twice the increase between the prior two groups (30%). While it is 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 Elance, average hourly rates for bloggers are about $25 per hour. This leaves a range of $750 - $1,950 to budget for blogging each month. So a budget of $1,350 per month should be about right.
3. Search Engine Optimization (SEO)
A general SEO strategy needs someone to oversee and execute it. This includes keyword research, on-page and off-page search engine optimization for your website, and social media optimization for your social networks. The amount of time required depends on the amount of content on your site as well as manual link building campaign (don't be fooled by automated systems, they don't work), and keyword research. According to SEOmoz these services would cost $2,600 on the low end and get up to over $16,000 pretty quickly. So a budget of about $3,000 per month would work for most size websites and organizations to start.
4. Pay Per Click (PPC)
While not a part of all inbound marketing systems,PPC campaigns can generate some instant returns as well as provide invaluable information for your SEO work as well. While there are some companies that offer "Do-It-Yourself" type solutions, you pay for what you get and PPC is the most costly for novice users to practice at. A certified professional will start at about $500 a month. Depending on your ad spending, this number can rise quickly, though you should always be able to negotiate a rate of about 10% of ad spending with large enough accounts. Given much of the work on a PPC campaign is done in the beginning, a budget of $500 per month will be fine.
5. Social Media
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 two 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.
6. Advanced Content/Social Media Campaigns
Any strong inbound marketing campaign needs to also include high impact content, like webinars, videos, and whitepapers, plus the social media campaigns to promote them. While you're content team can produce some of these special projects as part of their regular activities with personal video cameras and publication software, more sophisticated content with professionally produced video, music and graphics will cost extra. Developing campaigns such as HubSpots viral "Foursquare Cops" Web Series can get greatly increase your brand, exposure and web traffic. Costs for these types of content and campaigns vary considerably, but count on $2,000-$10,000 per campaign.
7. Lead Nurturing
The secret to successful lead generation, and in turn marketing, in the business-to-business space today is process. This process, that converts more inquiries into qualified leads and qualified leads into sales, is called "lead nurturing". Lead nurturing is all about having consistent and meaningful dialog with viable prospects regardless of their timing to buy. It's about building trusted relationships with the right people. In the end, it's the act of maintaining mind share and building solid relationships with economic buyers. It's not a sales person calling up every few months to find out if a prospect is "ready to buy now." While there are many automated systems out there to help with this process, you still need to develop the content and execute the strategy. While you can use some of your content from other aspects of your inbound marketing strategy, you still should allocate about $1,000 per month for lead nurturing.
Routine Inbound Marketing: $9,450 per month
Special Projects: $2,000 - $10,000 per month
Budget Range: $115,400 - $200,000 per year
While these costs are all at market rates, you could also work with an inbound marketing agency to package these services and be close to the $100,000+ range for a complete package.
For many there is also the option of trying to develop your own inbound marketing team. Things to consider here include:
- Planning and Strategy - Do you have the expertise to do this, or do you need to hire a consultant? Do you have a social media policy in place? When do you plan to start? If you're already active in inbound marketing, where do you go from here?
- Hiring - Who's going to manage the operation? Do you have one or more experienced bloggers? Can they blog several times a week with an eye/aim towards improving SEO results? What about social networking? Do you have a team ready to engage, promote and monitor social media every day? What about putting together Facebook and Twitter campaigns? What about creating graphics and video for your inbound marketing blogs and campaigns? Somebody needs to analyze the results and make recommendations for new content and new strategies. People with these skill sets can be expensive. Here's a resource we put together summarizing these costs.
- Fixed costs - Do you have an inbound-marketing-ready website, complete with blog, calls-to-action, landing pages, seo tools, analytics and reporting? You can do these things piecemeal, but what's the labour cost of compiling and analyzing results from diverse sources? If you purchase an integrated solution, like HubSpot, there's a monthly cost associated with the license. If you use other for-fee resources for webinar, video hosting, video production, or podcasting, you must figure those into your budget as well.
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. You could consider a scaled-back program, start with blogging and gradually build from there as budget allows.
So it's up to you, weighing the short and long-term benefits of inbound marketing versus outbound marketing. Can you revitalize your marketing results using inbound techniques yet save costs at the same time? A growing list of companies of all sizes would answer "yes". Don't take my word for it. Read many blogs, e-books and whitepapers on the subject. Ask lots of questions of agencies like ours and other businesses engaged in inbound marketing. In this new "social media sphere" people are far more likely to share this information with you. At least bring in some outside to help in the planning stages. They can assist you in estimating the costs and benefits of inbound marketing to help you make a more informed decision for your company.
Inbound Sales can help with a no-obligation Inbound Marketing Assessment. You can learn more about your Competitors and make better decisions with your marketing dollars.