As a business owner, the most important thing you look at when hiring a digital agency is its pricing. How much will their service cost?
You want to make sure you’re hiring the marketing agency that fits your marketing budget. If pricing is your highest priority, you might be disappointed with the results produced by the agency of your choice.
Did you know the most expensive agency is the one with the lowest price? It’s because they will waste your precious time with sub-par results.
The good news is that digital marketing services are not as expensive as you think. When you compare digital marketing with traditional marketing, the cost of traditional marketing is 10X to 20X higher than digital marketing.
According to Hubspot, companies that integrate inbound marketing and perform well are the ones with higher marketing budgets. We are not talking about hundreds of thousands or millions here. It’s just that these companies have a higher budget for digital marketing compared to traditional marketing.
So, it’s extremely important to choose the right digital agency to work it. Before hunting for one, you should understand what kind of pricing structures these agencies tend to offer.
Nowadays, many people claim to know whatever they are offering as a service. There are plenty of digital marketing agencies worldwide. Most of them make unrealistic promises with cheap rates just to close the deal. But, you end up getting poor results.
Avoid agencies that charge you a monthly retainer and keep telling you the same old story where it takes a very long time to see results. They avoid sharing their strategies or being transparent with what they are actually doing.
Some agencies offer a money-back guarantee if there are no results.
Let’s be realistic.
You’re not selling a product where the customer is not satisfied and asks for a refund. Digital marketing involves a huge cost. The workload, the tools, and the time taken to implement strategies.
Asking about price is one of the best ways to filter out agencies that offer low-quality services. If you want to choose the right agency that will produce great ROI for your marketing investment, make sure to check out this article:
These are the important elements covered in this blog post:
- Factors That Determines Digital Marketing Pricing
- Types of Digital Marketing Services Offered
- Different Types of Pricing Models For Digital Marketing Services
Before moving on to the types of digital services offered and different types of pricing models, let’s take a look at the factors that influence digital marketing pricing.
- Factors That Determines Digital Marketing Pricing
- Types of Digital Marketing Services Offered
- Different Types of Pricing Models For Digital Marketing Services
Factors That Determines Digital Marketing Pricing
The cost of digital marketing services is influenced by various factors. Let’s take a look at those factors:
Experience Of Agency
Many claim that it’s extremely beneficial to partner up with the most experienced digital marketing agencies. If you’re a big brand you can go with such agencies. With limited marketing budgets, such digital agencies do not make the best choice.
Freelance digital marketing consultants can be expensive too, but there are consultants who work specifically with small and medium businesses. For example, I work with small and medium businesses with their digital marketing efforts.
With more than 7 years of experience in digital marketing, I charge way lower compared to the fresh freelance digital marketers.
When you work with freelance digital consultants, they will fully focus on your digital marketing efforts, unlike digital agencies that have an account manager who manages multiple accounts. The agency will be more focused on clients who have bigger digital marketing budgets.
If you have the budget to hire experienced agencies, go for it. But, always remember that it doesn’t mean if they have years of experience they are the best. Digital agencies tend to offer full-stack digital marketing services which include every aspect of digital marketing.
It’s hard to justify any digital agency to be good at everything. They often have their very own expertise.
Size of Your Organization
If you’re a small to medium business, your digital marketing cost will not be as big as the multinational companies. You don’t want to partner with digital agencies working with big brands. Find digital agencies working with businesses similar to yours.
If you have a marketing team, you can easily hire a consultant to identify what’s wrong with your digital marketing efforts. For example, I offer SEO audits and Action plans for businesses with marketing teams. Upon completing their website audit, I come up with an action plan the marketing team can use for the next 6 months in increasing their site’s organic traffic. This is a service with a one-time payment.
Looking at the size of your organization, it would be better to hire a consultant to perform an audit and train your marketing team in handling the digital marketing efforts. If you don’t have an employee that can handle the digital marketing efforts, it would be better to hire an agency for the job.
The complexity of Digital Strategies
Digital marketing pricing influences the complexity of digital strategies used for your business. If you’re investing heavily in SEO and PPC, you can expect greater ROI in the long run. But it also requires considerable investment to reach your marketing goals. You can’t be expecting RM10,000 in sales by investing RM300. I’m not telling you can’t achieve it but it depends on your industry and the level of competition.
When you hire an agency to manage integrated digital marketing strategies which involve more than one digital marketing aspect, the pricing will be higher. The pricing also depends on the work the agency puts in for your digital marketing campaigns.
For example, I have my very own strategy in increasing organic traffic for sites. It involves both SEO and Content Marketing. Rather than offering web 2.0, article submission, social bookmarking, and other common strategies, I focus on strategies that will future-proof your site to rank higher even search engines roll out with new algorithm changes.
The digital strategies used often influence pricing. If you’re looking for cheap alternatives, you will end up getting services that will show temporary results and vanish over time.
The benefits offered
At the end of the day, you want to look at the tangible results an agency can produce.
What’s the point of ranking high on search engines or have huge followings on social media networks, if there are no sales?
The ultimate goal of every business is to convert online visitors to paying customers. And that’s what you should expect from digital marketers. I’ve seen agencies that only offer lead generation and whether the organization converts those leads or not is up to them.
I feel such digital marketing activity might work for certain industries and not for all. Businesses are looking towards conversion from their digital marketing efforts. They want their visitors to take action on their site. And that’s what a digital agency should do. Target the right audience, bring them to their client site and encourage them to take action.
Digital agencies that focus on conversion will be pricier compared to the “lead generation” machines.
You want to work with someone that can improve your ROI right
Types of Digital Marketing Services Offered
If you’re looking at the cost of digital marketing services, you need to understand the types of digital services they are offering. With tons of digital channels, there are a variety of digital marketing services offered by agencies.
We will look at some of the most popular ones offered by digital agencies.
Search Engine Optimization (SEO)
SEO is one of the main digital marketing services offered by agencies today. So, what is SEO? It’s a digital marketing strategy that improves the online visibility of your business in search engines. In other words, it increases the number of people visiting your site from search result pages.
For example, you’re a dentist offering various dental services. You’d want to rank for keywords or phrases like “orthodontic kl” that your potential customers are searching for.
According to a recent study, 93% of online experiences begin with a search engine. Other than that, 81% of people globally perform some type of online search before making any purchases.
SEO is something that you can’t miss out on.
If you ask me, regardless of what business you’re having, SEO should be integrated into your overall marketing efforts.
SEO services in Malaysia cost between RM 2,500 to RM 12,000 when you partner up with a digital agency. For freelance SEO consultants, it can be slightly lower or higher depending on their experience and skill set.
Pay Per Click (PPC) Marketing
PPC advertising is quite famous in Malaysia. 99% of digital agencies in Malaysia offer Search Engine Marketing (SEM) in the form of PPC. Although PPC revolves around search engines, it’s a paid advertising method.
Your advertisement will appear above the organic search results. Pay Per Click advertising is more beneficial compared to traditional advertising. You need to pay only when a user clicks on your ad.
According to Google, businesses make an average of $2 (RM8) in income for every $1 (RM4) they spend in Google Ads. If you hire the right agency to handle your PPC campaign, you can make a great ROI.
Digital agencies will charge 15%-20% of your total budget for PPC management fees. You can expect to pay RM3,000 to RM5,000 for landing page development specifically for PPC campaigns. Usually, landing page development will be a one-time payment.
The cost for PPC marketing depends on the digital agency you partner up with as well.
There are very few agencies that offer email marketing services in Malaysia. Email marketing requires in-depth research on your potential customers and come up with the best newsletters or drip emails to nurture them for repetitive purchases.
Email marketing is one of the most cost-effective digital marketing services. It offers the highest conversion compared to any other digital marketing strategy. On average, email marketing offers an ROI of $44 (RM 176) for every $1 (RM4) spent.
If you want to leverage other digital marketing services, you need to integrate email marketing as well. For e-commerce sites, email marketing can help them make recurring income from existing customers.
The cost for email marketing is between RM 1,500 to RM 15,000 depending on various factors like email list size, industry nature, email design and the number of monthly emails.
Content marketing is essential for digital marketing. How do you attract more visitors to your site if you don’t have quality content?
Content marketing improves your site’s authority, brand awareness, and conversion. From my personal experience, content marketing, and SEO works together.
You can use paid advertising to generate traffic to your content. But, you don’t want to miss the chance of getting your content ranked on search engines. The best contents are the ones optimized for both users and search engines.
Content marketing is not something you do and forget. It’s a long-term digital marketing strategy like SEO. The quality of content and the consistency in publishing them plays a vital role in digital marketing success. A one-time investment in content marketing never works.
When you partner up with a digital agency, make sure they provide a realistic timeline and expected results from content marketing efforts.
The price range for content marketing in Malaysia depends on the size of your business and the results you want to achieve. For small-medium businesses, the average cost is RM3,000 to RM 50,000. Content marketing is not about articles and blogs posts, it also includes infographics and videos. And you don’t want to add 500 words or 1000 words articles to your site which is not worth your investment and time.
Social Media Marketing
Social Media marketing is consistently growing despite there were some controversial issues with social media sites Facebook. Marketing your business on social media sites is fully focused on increasing brand awareness and brand loyalty. It indirectly increases revenue for your business.
You should appear everywhere your potential customers are spending most of their time. If you’re a B2B business, LinkedIn and Twitter is a great social media platform to dominate.
Most businesses tend to ignore social media sites, as they assume that it’s a waste of time spending on social media platforms where people just like, comment and share. Imagine your business message get’s shared on social media sites. Not only do people get to know your brand, but you might also get sales from it.
The cost for social media marketing depends on the social media sites you’re targeting. Social media sites like Twitter and LinkedIn cost slightly higher than Facebook. But, it depends on what you’re looking to gain from social media marketing. The price for social media marketing in Malaysia is between RM2,000 to RM 10,000.
There are a lot of cheap social media marketing providers in Malaysia. So, be careful with the agency or freelancer you partner with. A simple wrong move on social media can create a negative reputation for your brand.
Different Types of Pricing Models For Digital Marketing Services
There is a wide range of pricing models when you hire digital agencies in Malaysia. Let’s take a look at each pricing model and you will get a rough idea of which pricing model works best for your business.
Hourly pricing model
One of the simplest pricing models used globally by digital agencies. But, it’s one of the least used pricing models in Malaysia. With an hourly pricing model, digital agencies set an hourly rate and charge their clients for every hour worked. Let’s say the hourly rate is RM100 and the agency worked for 10 hours on your marketing campaign, the total cost is RM1,000.
This pricing model works if you have a specific marketing task to be completed within a short period. You don’t want to pay an agency on hourly rates if they need to put in 50-60 hours into your digital marketing campaigns.
The advantages of an hourly pricing model
- Get simple tasks completed fast at a cheaper cost
- Easy to hire the best ones to work on specific marketing tasks
The disadvantages of the hourly pricing model
- If you’re not careful with the duration of the project, you might end up paying more.
The hourly pricing model is best suited for clients who have a clear scope on what needs to get done. If you’re someone who has a tendency to change your mind and require lots of changes and edits, hourly pricing is not a suitable pricing model as you’ll end up paying more as changes will require more work.
Stay away from this pricing model if you’re just starting out and clueless about how digital marketing works. Without prior knowledge about digital marketing, you’ll end up spending a lot if you hire an agency charging by hours.
Project-Based Pricing Model
In this pricing model, digital agencies will charge you based on projects. Project-based pricing only works for one-time digital marketing tasks like SEO audits, Web Development or graphics designs.
Some agencies stick to project-based pricing as they can charge base on their expertise. If you’re looking to hire an agency for one-time tasks project-based pricing model is the best choice for you.
The advantages of project-based pricing model
- Identify the right digital agencies for long-term commitment without spending a huge amount of money
- Best pricing model compared to hourly pricing model if the project duration is long
- You can request unlimited changes and edits to your project
- As a client, you know exactly what to expect from the project, how much it will cost you, and the timeline for the project completion.
The disadvantages of project-based pricing model
- Your project might get outsourced to third-party freelancers for services like website development, graphic designs, and even SEO audits.
You can hire an agency to try out before making a long-term commitment by paying them based on projects. It will help you check the quality of work being delivered.
But, make sure the agency of your choice be transparent with the strategies they’ll be implementing for your site. You’ll be hiring them for one time, so make sure they don’t mess up your site.
Retainer Pricing Model
One of the most common pricing models used by 90% of digital agencies globally. Most agencies in Malaysia offer the services as a retainer. There are two types of common retainers:
1. Retainer with a set number of hours per month
2. Retainer with a set number of deliverables per month
Let’s get started with the hourly-based retainer pricing model. If you choose to go with this retainer, you agree with your service provider on the number of hours they will be working monthly. For example, if you hire them to work on your SEO campaigns which involve 60 hours of work per month at RM150 per hour, your monthly retainer would be RM 9,000.
The other monthly retainer is based on marketing deliverables. This is a result-oriented monthly retainer where you expect to see results on a monthly basis. For example, I offer monthly retainers based on deliverables for SEO service. When I charge RM3,000 per month, I provide the following deliverables:
- Initial Web Analysis Report
- Site Quality Audit
- Competitor Analysis
- Google Search Console Audit
- Keywords Research
- Identify and Fix On-Page SEO Errors
- Project Planning for the following months
- Link Building Methods
These deliverables were offered to my clients for the first month. Onward the following months, the client will be getting the following deliverables:
- Monthly organic traffic report
- Monthly keyword ranking report
- 2x 2k words content developed and published
- 1x guest post published on relevant site
- Link Building opportunities and the number of links acquired
It doesn’t matter how many hours of work are put in for producing the results. As long it gets delivered every month.
As a business owner, you should consider hiring agencies with monthly retainer pricing options. It’s easy to allocate the right marketing budget for your digital marketing campaigns. You also know the exact amount you’ll be paying every month and the list of deliverables you’ll be receiving.
If you’re unable to come up with monthly digital marketing budgets, the monthly retainer pricing model is not the right model for you.
The advantages of the retainer pricing model
- You will get the agreed deliverables every month for your marketing investment.
- You know what you’re spending monthly and the expected results from it.
The disadvantages of the retainer pricing model
- You can be easily deceived by low-quality digital agencies that delay the results especially for digital services like SEO and Content Marketing.
- Need to pay the retainer fees upfront and might not be suitable for businesses with low marketing budgets.
When you choose to hire an agency for a monthly retainer, please do not agree or sign a contract of 6 months or 12 months. At the start, you’re not sure about the quality of work delivered by the agency of your choice. If you signed up for long-term contracts it will be hard to cancel their contract and move on to other agencies.
Hire agencies that are willing to work on your digital marketing efforts without long-term contracts. You can go for 3 months or 4 months contract. Not anything more than that. You’ll be able to see whether the agency is producing results as promised by that time.
Performance-based pricing model
It’s rare to see any agencies offering a performance-based pricing model as their pricing strategy in Malaysia. An increase in sales, increase in traffic, or increase in conversion are some of the results (performance) you can expect from digital agencies that charge by performance.
You only pay them when they achieve “x” results. If they don’t achieve those results you don’t have to pay them at all.
For example, you hire an agency to develop a sales landing page for your business. If they charge you on a performance basis, they would charge a percentage of total sales your company closes from the developed landing page.
The advantages of performance-based pricing model
- You only pay when the service provider achieves the agreed results.
- Suitable for businesses that focus on sales and lead generation
The disadvantages of performance-based pricing model
- If you agreed on royalty or percentage of profit from total sales, you might end up paying more to your service provider compared to other pricing models.
Don’t settle for a performance-based pricing model because you don’t have a sufficient marketing budget. You might end up spending more for the digital agency when your sales start to increase.
Be careful to consider every aspect of your business before hiring performance-based digital agencies.
Value-based pricing model
The last and most unique pricing model – value-based pricing model. You won’t be paying the digital agency for their time or deliverables. Instead, you’ll be paying them for the value they bring to your business.
Some digital agencies have unique expertise compared to others. They provide solutions to specific marketing issues. Let’s say you’re organizing an event for startups to pitch and find investors. You might want to work with a digital agency that specializes in event marketing. As they have the specific expertise you’re looking for, you won’t have the hassle to walk them through the whole process.
You can shell out big bucks for such agencies because you can stay assured that they will bring value to your business.
The advantages of a value-based pricing model
- You can get an expert solution for a specific digital marketing task
- You will get value for the money spent on digital services
The disadvantages of the value-based pricing model
- Extremely hard to find agencies offering unique marketing solutions
- The pricing will be higher than any other pricing model. With a low marketing budget, value-based pricing doesn’t work for your business
The value-based pricing model is not suitable for small and medium businesses. You need to allocate a huge marketing budget if you want to hire agencies that bring value to your business and increase your revenue.
Vayner Media is one of the top digital marketing agencies that offer value-based pricing for their clients. They’ve worked with some of the top brands in the world and hiring them will get your brand to dominate your industry.
So, we have covered different types of pricing models offered by digital marketing agencies.
I’ve covered everything that you need to know about digital marketing pricing in Malaysia.
Is there something I’ve missed out on?
Please share your view on digital marketing Malaysia pricing and your experience working on any of the mentioned pricing models.