How Much Does Advertising Really Cost?

February, 01, 2017

You’re mulling over your business budget and trying to figure out how much to spend on advertising. That’s when the question hits you: How much does — and should — advertising really cost?

As you might guess, there are too many factors involved to come up with one specific answer. But that doesn’t mean you can’t investigate the premise.

You can break down all the elements that go into determining your bottom-line advertising cost by knowing the answers to the following questions.

  1. What Type of Advertising Do You Need?

Businesses sometimes tend to group all advertising into one category, but doing so doesn’t tell you much. Some advertising is naturally more expensive than others are. For instance, Facebook ad spend tends to be higher than Google AdWords ad spend, although that isn’t set in stone. Much of it depends on how often you run the pay-per-click ads, as well as your bid.

Make a list of all the advertising you feel your company needs. Then, you can allocate resources to each advertising platform accordingly.

  1. When and Where Are You Going to Advertise?

In some cases, seasonality can play a role in determining an ad’s cost. Although the Internet is often considered a place without seasons, it isn’t necessarily true. Ads for ecommerce products will naturally cost more during the end-of-year holiday season because competition for space is so high.

You’ll also want to take into account where you plan to advertise. Want to run a banner ad on a highly popular website? You’re going to pay a premium. That isn’t to suggest it isn’t worth your investment, though. You just have to decide if the money is well spent in the one area or if it should be allocated across several platforms instead of one.

  1. What Are Your Hidden Advertising Costs?

The “hidden” costs are all the costs that go into producing any type of ad work. For instance, let’s say you’re going to promote your company’s new product with a stellar video that you hope gets traction. You’ll first need to produce and edit the video, which is going to cost money. Even if you do it in-house rather than outsourcing the project, you’ll spend dollars.

These are advertising costs that usually go unnoticed until the budget is thoroughly examined. Rather than being surprised at the end of your next campaign, be sure to add these figures upfront. Otherwise, you could end up eating into your profit margin too deeply to pay for your advertising.

  1. Are You Advertising With an Agency?

There are pros and cons to working with an outside digital advertising agency. The pros include peace of mind knowing that your advertising is being handled by professionals. Plus, you can probably get better optimization and placement.

The biggest con? You’re going to pay for expertise. However, it will free you and your team up to focus on converting prospects to customers.

  1. How Long Will Your Campaign Go On?

If you’re just trying to figure out the advertising cost for a single campaign, you’ll need to know the length to get a baseline figure.

Advertising campaigns can take place over months, weeks or even days. The shorter your campaign, the more frequently you’re apt to run your advertising. However, it still may be considerably less costly than a drawn-out advertising campaign. Neither is better than the other is. They both are applicable in specific circumstances. You’ll just need to realistically add up the advertising costs based on the timeline.

  1. Is Your Advertising Falling Under the Category of SEO?

Let’s say you’re just starting out, and your main advertising is search engine optimization (SEO) through your website. Congratulations! You’ve discovered one of the lowest per-qualified-lead advertising cost sources. Of course, that doesn’t mean you spent nothing to set up your SEO.

However, if you do it the right way and keep up with SEO measures, you can stretch your budget pretty far. That will give you more money to spend on other digital advertising opportunities.

So how much will your advertising actually cost your business? Get out your pen and pencil, or start a new spreadsheet, and begin crunching the numbers. You may just find that it’s less challenging to figure out than you originally thought.

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