Whenever the subject of digital advertising comes up, the most common question that we always ask is, how much does it cost? There isn’t a definite answer to this question given the fact that digital advertising costs typically depend on the size of your business, your target audience, and how much money you have at your disposal to spend on advertising.
Arguably, the most incredible thing about digital advertising costs is the fact that you can work even with the smallest budget. Therefore, digital marketing is an excellent option for small businesses, which have been priced out of traditional advertising methods such as running TV and newspaper ads.
For small businesses, a dollar saved in operating costs is a dollar earned. However, an extra dollar invested in advertising could be crucial to the growth of your business. Investing in digital advertising is one of the best decisions that you can ever make. Digital advertisement can help you reach thousands of targeted customers in a matter of hours.
Many businesses remain apprehensive as far as the incorporation of digital advertising in their marketing campaigns is concerned. In traditional advertising, costs are often fixed. This isn’t the case in digital advertising whereby you decide on the price that you wish to pay for your advertising. Before starting a digital marketing campaign, you need to set aside a budget. Here are some digital advertising costs that you need to know about for budgeting purposes.
Google Ads Cost
Google has become synonymous with digital marketing. Its AdWords and Pay-Per-Click campaigns can help your business make the most of the opportunities that abound online. PPC ads are priced on the cost per click basis. This implies that you will be charged every time someone clicks on your ads.
The cost per click of ads is typically calculated on the fly each time your ad pops up. This process is known as ad auction. The process helps Google to decide which ads should be displayed when Internet users perform a keyword search. Ad auctions similarly help Google to determine the order of ranking the ads, and the amount that online advertisers should pay per click.
The competitive landscape in part determines your cost per click and ad position. Similarly, your maximum bid (the maximum amount you are willing to pay per click), and the Quality Score of how good your ads are, also determines how much you will pay.
A higher Quality Scores raises your rank thus lowering your cost per click. To run a Google AdWords campaign, you need a budget of SGD 500 to SGD 5,000. The cost per click in these advertising campaigns is between SGD 2 and SGD 15.
Facebook Advertising Costs
Facebook is one platform where every advertiser wants to be. Studies indicate that advertisers spent SGD 33.75 billion on Facebook ads in 2017 alone. The perception that Facebook ads can give your business means that you should factor it when coming up with your digital advertising budget.
Numerous options are available as far as Facebook advertising is concerned. The following are some of the Facebook campaigns that you should incorporate in your budget.
Your page and posts will get likes from Facebook users. Nonetheless, it is hard to tell whether those who like your page and posts are really interested in buying whatever you are selling. Facebook Like campaigns will help you pinpoint users who like your page and are also interested in your business.
When budgeting for this campaign, keep your budget low, starting with around SGD 50 for three or four-day runs. You spend a total of SGD 50 per campaign with the expected cost per like being SGD 1. A Like campaign will boost engagement on your Facebook page as well as ensuring that whatever new likes that you get translate to business opportunities.
For your Facebook campaigns to be successful, your posts must reach as many people as possible. Relying on organic reach alone may not give your posts the visibility that they need. Boosted posts come in handy since they enable your posts to be seen by almost everyone who is within your reach.
You should limit your boosting to your fan base. Targeted people that are outside your current fan base can be reached through traditional Facebook advertisement. When you incorporate boosted Facebook posts in your digital advertising, expect to spend an average of SGD 10 to SGD 30 per boosted post.
Traditional Facebook Advertising
When it comes to traditional Facebook advertisement, it is good practice to start small before you gradually increase your advertising budget. Throwing a large amount of money towards Facebook advertising can end up costing you even more for every lead.
Facebook advertising allows you to test different target groups and ads gradually with less money before increasing the expenditure on those that seem to work. If you decide to incorporate traditional Facebook advertisement in your digital campaigns, you should allocate at least SGD 10 to SGD 20 per day towards it. You can allocate even more money if your budget allows. In traditional Facebook advertising, the expected average cost per lead is SGD 3 to SGD 5.
Instagram Advertising Costs
Instagram has morphed into one of the most essential digital advertising platforms by virtue of being among the most popular social media networks. If you are trying to reach new followers and users, Instagram offers you a way of doing so. Since Instagram is Facebook-owned, its ads cost almost as much as Facebook ads.
You should follow the same strategy and budget that you used on your Facebook ads to advertise on Instagram. Expect to spend an average of SGD 10- SGD 20 per day on Instagram ads. For optimal reach, slowly increase your budget by $5 or $10 daily depending on your budget and timeframe of your campaign.
Pinterest Advertising Costs
Pinterest is arguably one of the most underrated and underutilized advertising platforms. Nonetheless, it can be perfect for small business. Most people think that Pinterest advertising is too expensive and therefore, unsuitable for small business.
If you choose to undertake Pinterest advertising as part of your digital marketing strategy, you should first test how useful it is to you. In this regard, start with a small budget before increasing it accordingly.
For a start, plan on spending an average of SGD 20 to SGD 30 per day. A Pinterest advertising campaign is likely to cost you between SGD 100 and SGD 500. The expected cost per click in Pinterest advertising is between SGD 0.2 and SGD 1.
SEO Advertising Costs
SEO entails improving the ranking of pages on your website in search engine results. The more your site gets optimized, the more you will attract interested visitors and prospective clients. Unless you have previously managed an SEO campaign, it is recommended that you hire a digital marketing agency to manage your SEO campaigns. SEO can cost anything between SGD 500 and SGD 5,000 per month. This will depend on the number of web pages that you wish to optimize.
Budgeting for Your Digital Advertising Campaigns
When coming up with a digital advertising budget, you should think of the entire project as an investment. Your digital advertisement spend should have a definite impact on your company’s profit margins and revenue growth.
You should keep in mind the fact that in a digital advertising campaign, everything is linked to performance. For instance, in pay-per-click ads, you will only be paying for results. This means that in case nobody engages with your ads, you won’t incur any costs.
When formulating your digital advertising budget, you should always start small. This way, it will be easy to garner benchmark data about the effectiveness of your campaigns. Similarly, you minimize potential risks if you start with a small advertising budget.
You should budget for at least ten clicks per day for a minimum of one week. Even though you can plan for a lower number of clicks, ten clicks per day will enable you to get the initial data that you need to foretell and make the most of your future digital advertising campaigns.
Most networks take several ways to approve ads and consequently rank clicks and impressions. Therefore, the one-week minimal ensures that your digital campaign is up and running before it gets ranked.
Even though you can reduce your budget after the initial trials with paid advertising, it is advisable that you wait until you have achieved the statistical significance, (which comes with 70 clicks during the trial week) before making changes to your keywords. This way, you will have an idea about the most suitable keywords that you should use. It will also be easy to refine your digital advertising campaigns.
Budgeting for Clicks
To determine the cost of clicks campaigns, you should multiply the average cost of each click by your campaign duration and daily click target. If you are using Facebook advertising, the average cost per click is SGD 1.72. Therefore a one-week campaign will cost $1.72 × 10 daily clicks × 7 days = $120 per week.
For Google Ad Words campaigns, the average cost per click is SGD 2.32. If you are looking to incorporate these campaigns into your digital marketing strategy, you need a minimum weekly budget of SGD 2.32 × 10 daily clicks × 7 days = SGD 160 per week.
Generally, these numbers are just averages since some businesses are likely to have higher costs, especially those that are in competitive industries and niche target markets. To give your campaign the best shot of success, you should always have a large initial budget. This will prevent a collapse of your campaigns in instances where you experience shortfalls.
How Do You Optimize Your Campaigns for Profitability?
After you have let your campaign run for at least seven days, you will get some interesting data points that can help you evaluate whether digital advertising is sensible for your business. Likewise, it helps you set your budget in a manner that enables you to optimize niches in the market.
If your perceived gain from digital advertising outweighs the costs involved and supports customer growth, it will make sense for you to invest more in your digital advertising efforts. The U.S. Small Business Association recommends that you allocate 7% to 8% of your total business revenues towards digital advertising.
If you fail to see the desired results from a digital advertising campaign or fail to get to that point where your campaign doesn’t support an increasing customer base, it makes sense to dial down your campaigns to a sustainable level. For instance, you can dial down to 5 clicks per day compared to the usual 10.
Unless it is apparent that your digital ads are not working, it will be appropriate to leave on some baseline advertising spend so that you can maintain brand awareness as well as continuously test your product offering and messaging.
When it comes to budgeting for digital advertising, you should always learn from doing. Always lean toward your instincts and do what you feel is right for your business because ultimately, each campaign will perform differently. You should leverage the power of digital advertising, which lies in its flexibility.
In digital advertising, it is easy to dial down your expenditure or even substitute keywords that are not providing the desired results. The flexibility of your budget means that you can set your budget according to the needs of your business rather than figures that are set by ad platforms.
Your digital advertising should result in more business opportunities. Therefore, you should strike the right balance between advertising expenditure and results. This is why you should come with a budget that suits your business needs and aspirations to ensure that your digital advertising campaigns result in increasing returns for your business.
The first few days of running the digital campaign will undoubtedly be tricky and challenging. Nonetheless, you will see a clear picture of how far your budget can go and the number of new customers that you can attract with your digital ad campaign.
We, MediaOne, can assist you with digital advertising costs estimation and budget as well as create a robust campaign that will catapult your business to the next level. Get in touch with us for more details about our Singapore digital marketing services.