Are You Spending Your Online Advertising Dollars Wisely?

Throwing Money Away

Are you getting your money’s worth from your online advertising expenses? That’s the question many business owners should be asking themselves. You already know that having a web presence is crucial and that hiring an online advertising professional is worth the investment—but are you making the right investment for your company? Once you’ve decided to hire a provider, it’s a little more difficult to figure out if you’re actually getting the best return possible.

What Are the Options?

There are advertising options for every budget, and they can be categorized into a three-tier system of pricing.

  • Top-tier providers are suited for large, competitive markets and undefined geographic boundaries, and are therefore very expensive.
  • Mid-tier providers are perfectly serviceable for niche markets and narrow geographic boundaries, and are therefore more affordable than top-tier providers.
  • Bottom-tier providers are entry-level online advertisers who provide one-size-fits-all marketing, and are therefore considerably cheap.

To simplify matters, we’ll use general terms and average rates to discuss the advertising providers in each tier (as specific services and price points vary from provider to provider). Obviously, the tier that you’ll want to use will depend on your company’s marketing budget as well as its needs. At the end of the day, you want to get the best possible online advertising services that you can afford for your business.

Top-Tier Providers

In this tier, clients have a range of advertising options to choose from. However, the two most prominent options are premium outside marketers and in-house marketers. OUTSIDE MARKETERS Premium marketing services from outside providers generally cost around $10,000 per month or more. Not surprisingly, these services are typically reserved for large corporations that have broad national or international campaigns. Regional campaigns (in New England or on the West Coast, for example) with a more focused market will cost maybe half, but that’s still in the ballpark of $5,000. Regardless, let’s use $10,000 as the baseline price. That adds up to $120,000 spent on Internet marketing services in one year. So, what are you getting for $120,000 per year? You’re paying for high-end, 100% customized services from a small firm that only takes on a handful of clients at a time. You’ll get personal attention at all hours of the day. Your hired specialists won’t have tons of data points to work from, given that they typically don’t focus on more than a few clients in a given year, but they’ll still be able to draw on experience from previous and other current clients in order to evolve their approach when necessary. IN-HOUSE MARKETERS The other top-tier option is to hire an in-house team that performs numerous online marketing activities for your company. This will involve hiring at least one promotions specialist on a yearly salary that falls between $50,000 and $55,000. (Keep in mind, costs for in-house employees go beyond salary; you must also account for health benefits, personal equipment, and other overhead costs.) However, if you want an efficient marketing team, then you’ll want to hire a couple of additional specialists, as well. If you hire just two promotions specialists, you’re already looking at a yearly cost of $100,000 to $110,000 in salary alone. What are you getting from your in-house marketing team? You’re getting a team that, by definition, is under your employ and therefore at your beck and call. Attention to your campaign can’t get more personalized than that. However, this team is only working on one campaign, so it won’t have the benefit of A/B testing and multiple data points that come with an outside provider who has many different clients. This means they may not be able to spot trends in updated search algorithms or test new techniques with as much confidence. THE WINNER With the average costs of both options being relatively equal, we’d say that premium services from an outside provider will get you the biggest bang for your buck. However, they’re both viable and effective options.

Mid-Tier Providers

On the other end of the spectrum, mid-tier providers are for local businesses that are marketing to a niche audience in a restricted geographic area. These are plumbers, electricians, handymen, and similar businesses. Prospect Genius is a mid-tier provider. This type of provider may cost between $300 and $500 per month. With these providers, a campaign is roughly 20% customized, with the remainder following a standardized procedure that’s used for all other clients. Although the vast majority of small businesses have similar advertising needs and face similar issues, mid-tier providers will work with clients to tailor campaigns as much as possible within the framework of their program. These kinds of campaigns are effective because small, localized markets aren’t very competitive and don’t require as much legwork to get off the ground. What are you getting for $300 to $500 per month? You get all the online advertising essentials: a fully functional website with custom content, Google+ Local optimization, directory listings, social media exposure, and (usually) performance reports. Mid-tier providers typically work with hundreds and hundreds of clients who all have similar needs, so they’re exposed to a high number of data points that allows for accurate A/B testing. This means they will be able to detect patterns with different search engines and continually test new techniques to create the most effective strategy possible. With mid-tier providers, there’s also plenty of room for clients to grow. Typical mid-tier providers will offer a wide selection of campaign upgrades and add-on features that clients may take advantage of at their own discretion. Popular expansion features include social media updates, blog posts, and pay-per-click (PPC) ads. Clients usually start out paying for the bread-and-butter package, but over time they might like their campaign’s results so much that they want to add to it to make it even stronger.

Bottom-Tier Providers

Otherwise known as “one-size-fits-all” marketers, these providers cater to small, local businesses who don’t wish to spend much money on advertising. You’ll find a lot of snake oil in this tier. These providers usually cost about $100 per month because their services and strategies apply to every one of their clients with little to no variation whatsoever. They sell the same exact product to every single client, which is how they keep their costs down. Some of the better known providers in this category are Yodle and 99 Calls. Well, $100 a month sounds pretty cheap! But what are you getting out of it? You’re getting a one- or two-page website that’s identical to many of the provider’s other clients, as well as written content that’s been outsourced to a non-native English speaker. What’s more, most of that content is duplicated from one client to the next, with only minor details like company name and location changed. (As we all know, Google penalizes duplicate content.) But, in a way, their practices make sense: With $50 of your $100 going to overhead costs, and another $25 going to profit, these providers only have about $25 to actually spend on your campaign per month. They’re doing all they can afford to do. Unlike mid-tier providers, who not only offer room for customization but also room for growth, most bottom-tier providers don’t offer any expansion features. What you see is what you get. The providers that do offer expansion features essentially just upgrade you to a campaign similar to a mid-tier one. In these cases, where they clearly have the resources to provide you with a better service, they should have just sold you the right solution from the start.

Go for the Best 

When selecting an online advertiser, you should apply the same logic that you use when you’re selecting tools for your trade. When you go to the hardware store to purchase a new tool for your plumbing or remodeling business, do you buy the cheapest tools—or do you buy the best tools? You shouldn’t spend beyond your means, but you also shouldn’t skimp on quality, either. Whether you’re currently in the market for a new online advertiser or you’ve been using the same one for years, keep this in mind: You get what you pay for.