Understanding The Cost You Pay For Digital Marketing

The world of digital marketing is a landscape as vast as the Internet itself. In an era of increasing connectivity, the term digital marketing encapsulates everything from social media campaigns focused on sparking conversation to targeted display ads that help elevate awareness of a brand.

It would take pages and pages to discuss all the various types of digital marketing, so in this blog, we’ll focus on four specific solutions that we offer at Federated Digital Solutions: SEM, SEO, programmatic display ads, and Over-The-Top/Connected TV (OTT/CTV).

AGENCY VS MEDIA COMPANY

First, it’s important to understand that what you pay for digital marketing can vary depending on whether you’re dealing with an agency or directly with a media company.

Some agencies will charge you a monthly management fee and then pass the direct cost of marketing on to you. However, other agencies may roll in the cost of marketing with a markup, which is similar to how most media companies generally bill.

Whoever you’re partnering with for your digital marketing, make sure you ask if you are being charged a monthly management fee or if the cost you’re seeing will be the only thing on your invoice.

SEM AND PROGRAMMATIC DISPLAY ADS

It’s fair to think that if you were to run SEM and programmatic display ads on your own you might save yourself some money. It’s certainly true that you can run ads yourself through the Google AdWords Network and avoid paying a management fee to an agency, but you’ll be paying for ads at a retail rate.

Because most agencies handle multiple — sometimes dozens or hundreds — of clients, they are most likely paying a wholesale rate for ads for purchasing in bulk. While you may have avoided paying a management fee by doing it yourself, the retail rate simply can’t compete with the wholesale rate for SEM and programmatic display ads. You may not end up saving yourself money in the long run by doing this yourself.

OTT/CTV

When it comes to OTT/CTV, it’s important to understand the product that you’re buying. For example, the cost of quality targeted OTT inventory is likely going to cost you $35-$50/CPM. If you’re currently paying $20-$25/CPM, then the chances are high that you may not be getting what you’re expecting.

At the lower rate, you may have purchased OTT/CTV ads on streaming video content, but it may not be programmatic, or the sites it’s being delivered on may have little to no targeting capabilities. Make sure you ask your marketing partner about the targeting capabilities of the ads you’re buying.

UNDERSTAND WHAT YOU’RE PAYING

Ultimately, when it comes to digital marketing, you need to stop and ask yourself if the price seems too good to be true — because chances are, there’s a reason you feel that way.

Before beginning any marketing campaign, make sure to perform your research so you can make an informed decision about the solutions you’d like to use. Doing your research will better prepare you to ask questions of your digital marketing partner, which they should be able to answer for you in detail! 

As you’re looking into different digital marketing solutions, here’s a quick overview of the costs you can expect to pay:

• SEM: The average management fee can be anywhere from 30% to 45%
• SEO: Local SEO can run $800 to $2,000 depending on the geolocation, keywords, and targeting used
• Programmatic Display: This ranges from $8 to $14/CPM, with the lower end usually doing a lot of impressions
• OTT/CTV: Expect to pay between $35 and $50/CPM for targeted programmatic ads.

 If you need a hand implementing digital marketing strategies for your business, Federated Digital Solutions can help! Contact us today to find out how we can help you maximize your ROI with your digital marketing campaigns.