Being in the business of building and working on websites, people are always asking what it will cost to build a new or redesign an existing site or web presence. Some people understand the costs, others fall out of their chair. It’s easy to understand the origins of these two responses — it generally goes back to whether an organization has anticipated the expense and adequately planned for an annual online marketing effort, or if there’s a sudden need to improve online marketing without an identified annual budget. It’s a mindset of developing as much website as a business can afford versus the least one can spend.
In short, it takes time to sit down with an organization, discuss and understand business goals, create an information hierarchy, go through a design process, develop custom software, test and implement technologies, and train employees on how to manage a site from day to day and keep it “on-brand” over time. To be clear, by real web presence, we’re talking about something other than a “me-too,” cookie-cutter, “upload your logo into the corner and paste-non-professionally-written content into the blanks” template site that’s guaranteed to frighten away potential customers, or online donors in the case of non-profits. Professionally developed sites generally require the time of one or more salaried designers, writers, and programmers over the course of a few weeks (up to a few months for larger sites) annually to create and maintain a professional web presence. So how do successful small and medium-sized businesses (SMBs) budget for and approach a professional website?
Websites typically exist as line items on corporate and non-profit marketing and development budgets. Where marketing funds were once allocated to Yellow Pages adverts, local, regional, and national print, radio, or television ad campaigns, print brochures, etc., today most organizations recognize their website as their absolute number one sales, marketing, awareness, promotion, and/or fund-raising channel. Successful businesses certainly treat their online business presence as such. Given your company website is likely the most important element of your brand image and sets the pace for your conversion process, you need to continually budget for the full scope of this branding initiative—not for “just a website.” So how should you budget for online marketing? Grab a calculator — let’s look at some known data and explore the numbers.
According to Counselors to America’s Small Business (SCORE) and U.S. Small Business Administration (SBA), the average SMB total marketing budget is calculated as a percentage between 2% and 10% of sales while consumer packaged goods companies may spend up to 50% of sales for introductory marketing programs. In other words, if you’re a $3 million company, you should set a budget somewhere north of $60,000 (2% of sales) and up to $300,000 (10% of sales) pending your industry and other factors. Another approach according to SCORE is to estimate what your direct competitors are spending online and try to at least match that amount. Schoenfeld & Associates did a study outlining ad dollars as a percent of sales for various industries. The following are a few examples:
|Industry||Advertising as % of sales|
|CATALOG, MAIL-ORDER HOUSES||3.3%|
|REAL ESTATE AGENTS & MGRS||4.6%|
|AMUSEMENT & RECREATION SVCS||4.8%|
|APPAREL & OTHER FINISHED PDS||5.1%|
|DISTILLED AND BLENDED LIQUOR||15.6%|
A less formal way to think of marketing budgets is in terms of salaries. If you’re a SMB and budget less on your corporate web presence than your lowest-paid employee, you’re probably out of the game. Is it time to visit the CFO to correct the web marketing budget?
If all you can do today is build a template-based website and drop in home-brewed web content from Tim in sales, I get it. That’s fine, but understand it’s not the same as a professionally planned, designed, written, programmed, and managed web presence. It’s not what the competition is doing. Do what you can for today, but start to plan ahead — consider how you can get from point A to point B. The success of your brand and SMB or non-profit organization depends on it.
Author | Brian McNitt
Brian’s career path zigzagged from pre-med at Purdue University to bike racing and a career in sales and marketing for Schwinn and other bicycle companies. That was until the inception of the World Wide Web, when he took his science and marketing background full force into web design. He was a founding member of Montclare Technologies—one of the first and hottest interactive agencies in the U.S. In 2000, he founded TrendMedia, a San Francisco-based web design and interactive agency. Brian is now one of the leading experts in web technology and social media, and is a recognized authority in web accessibility, WordPress and SEO.