Published on: 01 Dec 2020
Reading time: 9 minutes
The entire digital marketing cost structure looks somewhat like this:
The USA International Trade Commission states that SMEs earn annual revenues in the range of $7 million. Let's assume businesses tend to spend nearly 10% of their revenues on marketing budgets. It would be safe to assume that these businesses spend almost $700k in marketing annually. Out of this, the typical retainer for a small agency tends to be anywhere around $12k to $24k annually.
While that number has been popular for smaller and specialist agencies, larger ones can charge more than that. And since this is the retainer, businesses have to pay additional fees for all the other services they consume for campaigns.
Google Ads remains to be one of the best platforms for generating leads. Businesses from all industries and scale-based strata tend to depend on Google Ads to generate leads in conjunction with their agency. The category and geography the business caters to have a significant impact on the budget the firm has to allocate for Google Ads.
Small businesses generally spend $2k-$3k every month on Google Ads. The customer acquisition cycles can often last for longer than one month in some industries. That said, the range of $2000 to $3000 is not unrealistic for small businesses to spend on Google Ads every month.
Several small businesses run into is that they have to look for dedicated agencies when they need specialized services. Since these agencies tend to cater to a more niche segment, their services can often be more expensive than the mainstream agencies. Given the economics of such services, businesses tend to spend more on tools to help them take care of such services.
You might not need niche services throughout the year. In addition, the tools that tend to streamline these services are often quite expensive.
For instance, if a business tends to take the enterprise subscription for the leading email marketing*, social media management*, creative production*, A/B testing*, and landing page design services*, it can expect to spend a total of over $10,000 annually – in addition to the fees paid to the creative team designing and executing the campaigns.
If the campaigns are generating high returns, the incremental expenses might get justified. The problem is that most digital marketing campaigns have a gestation period. Here, they underperform while the team is optimizing the campaign and collecting data on ad performance. As the agency and the brand understand the audience better, the campaigns become more cost-effective.
As per data published by Mediapost, over 40% of media spends gets wasted. For digital marketing spends, the situation is even direr. AlixPartners conducted a study covering over 1,100 consumer product company executives across six countries. As per their published data, over 50% of their digital marketing spends was sub-optimal. It results in an aggregate loss of over $50 billion globally per annum.
Generally, Google doesn't impose monetary penalties on brands. There are two forms of penalties or strikes that a publishing website or ad can witness – algorithmic or human-flagged. Algorithms like Panda and Penguin have programmed rules to impose penalties.
Penalties flagged by humans have a recovery procedure. The publisher or advertiser is asked to submit a report, and then Google decides the penalty. In both cases, the pinch is felt when, despite the ad spends, your ad does not get the expected or any traction.
Cumulatively, these costs can add $70k or more in annual advertising expenses. This is without accounting for the cost of producing each creative and the cost of promoting ads on social media. Loss of traffic and penalties further add to the diminishing returns. Suppose the brand is working with an agency that uses multiple platforms. There is a probability that the costs will go up as the subscription and implementation costs for different online tools will increase.
Landing pages are central to each lead generation campaign. Everything from the link of the landing page to the layout of the page's elements has to be aligned with the offer. Yet, each page has to be dynamic enough to be personalized for each viewer.
Creating responsive landing pages has been a major expense for many brands and agencies. By using Airtory as the key ad creation platform, agencies can produce responsive landing pages without having to hire dedicated HTML5 resources. The Airtory LP Builder comes with different customizable layouts that help you optimally arrange the 15 most important elements on the landing page.
Rich media ads are single-handedly one of the best ways to optimize campaign expenses. From the outset, rich media ads can deliver 75% higher CTRs than other ad formats. This helps you get more clicks and higher probabilities of conversions by just changing the ad formats. Rich media ads tend to use interstitial, expansive, push-down, Google Lightbox, and VPAID formats to help you garner incremental traction.
However, not every creative resource can help you produce rich media ads. These ads require motion-graphic and should comply with Google's webmaster guidelines. Hence, you might have to look for dedicated resources to help you put these together. Airtory can reduce those costs to a fraction of what they are for hiring dedicated creative resources to make rich media ads.
You can use Airtory's over 350 high-impact templates to create rich media experiences and save up to $3,000 in production costs. This way, you can get the benefits of using rich media ads without allocating the additional capital for it.
Teams that use different ad platforms for agencies may get their choice platforms till the free trial period lasts. However, once they have to start their subscriptions, the costs add to another line of expense items for each campaign. The more users you have, the higher the subscription costs tend to be.
Sharing preview links is the common way to get approvals or feedback from executives and brand managers without burning valuable space on the cloud. But preview link generation and creation tools can be expensive. Airtory is designed for publishers, brands, and agencies, covering hence the entire value-chain. The platform and its features fulfill the needs of some best-known brands/agencies. This is why tools like QR code and preview link sharing systems are already available on Airtory.
On top of this, Airtory Studio allows users to freely experiment with different rich media ads for configurations, formats, and alternatives. Only the ads used by the advertisers are included in the cost calculation. This lends greater creative freedom to campaigns and controls operational costs.
AlixPartners' claim that 50% of digital marketing spends are getting wasted annually. You can approach this challenge by using the necessary KPIs at the right time to optimize your campaigns.
Rich media campaigns tend to have a large set of performance indicating metrics. Going through each metric for each ad property across each ad group and campaign can be very challenging. Plus, more important than that, you need real-time analytics.
If you plan to replace each ad creation platform for agencies with Airtory, you are headed in the right direction. Airtory has designed an intelligent set of trackers that can help you get real-time insights on your rich media ads' conversion and impressions. You can detect fraudulent traffic early in the process and avoid it to mitigate costs. Additionally, you can use dwell-times and other commonly-used trackers to highlight which ads are performing better. By pushing these ads a little more and controlling your spending on underperforming ads, you can easily optimize your campaign spends and ROI.
Every time you try to focus on a new lead, you have to practically start attracting to converting all over. This can mean showing the potential lead a series of ads, with the probability of the lead not converting, still looming on your campaign.
Retargeting solves this problem with a simple solution. Instead of targeting new audience members, why not target the audiences that have already engaged with your website or ads in the past? Focus on the traffic that has interacted with your website in the past or has a hand abandoned cart on your e-commerce platform. You can increase conversion by 150%.
Airtory Experiments helps you execute retargeting campaigns without making you use a separate ad creation platform for agencies in every task. You can use the same Airtory platform to produce rich media creatives, optimize campaigns, and retarget audiences across the websites they visit.
Real-time analytics is a great way to filter the high performing creatives. They show you the fact that a certain media property generated good performance. They do not show any causal analysis.
Airtory can help in understanding why an ad is working or the other way round. Using a unique ad creation platform for agencies for each task can be expensive. You often have to pay extra subscription fees for sophisticated A/B Testing platforms. Airtory Dynamic Tags let you conduct your A/B Tests on the same platform where you are producing your rich media ads and landing pages. Single ad tags save your subscription costs, streamlines your analytics processes, and reduces testing times outside the experiment's tenure.
Forrester's research forecasts that over $10 billion will be lost by the digital marketing and advertising industry in ad frauds. For campaigns running on a tight budget, this can cause a severe leak in the overheads. Ad frauds take up your resources and do not generate any returns. Hence, you lose the advertising dollars you have spent and the potential business you could've generated using the same capital.
Airtory pays special attention to detecting ad frauds. The platform's trackers have been specifically designed to help you detect fraudulent traffic. You will be actively able to highlight and block the source of fraudulent traffic in one go.
While creative production may seem to be a major expense line for the campaign, there are several other costs involved in running a campaign. While ideas like optimizing, retargeting, and A/B testing have been designed to optimize your costs, in isolation, they can generate limited value. Airtory brings all of it together on one platform. It unlocks value in terms of cost-effective creative production, campaign optimization, A/B testing, and several other features. To know more about how the platform can generate value for your campaigns, visit this page.
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