Budgeting for Inbound Marketing – How Much Does It Cost?

What’s in Your Professional Service Firm’s Digital Marketing Budget?

Once upon a time, marketers in accounting, consulting, law or A/E/C firms could define their marketing program by the quality and quantity of marketing tactics they were going to use, and then price those tactics.

Let’s see… 5 print ads (ka-ching! sound of cash register); 12 months of a PR retainer (ka-ching!); 4 seminars (ka-ching!); sponsoring the Jazz Festival (ka-ching!). Well, you get the point.

But with firm management demanding ever more accountability and ROI from marketers, this approach has probably seen it day come and go. Today, digital marketing, content marketing, and inbound marketing in particular, is making tactically driven marketing obsolete.

There’s always a point early in the conversation I have with partners and marketing staff about the cost of an inbound marketing program. While it’s certainly a valid question, because inbound marketing is a strategy and not a tactic, it’s a tough question to flippantly answer.

In getting to an answer, here’s a sample of the questions we explore with partners and the marketing team. What we’re trying to determine is what building blocks are in place for inbound marketing,  whether the firm feels it can execute a “do it yourself” program, or whether assistance in the form of consulting is appropriate:

• What are your goals and objectives in terms of new dollars and clients?
• Is what you’re doing right now working to meet your goals and objectives?
• What infrastructure do you currently have in place for an inbound marketing program?
• Does the marketing department have the necessary skills and experience to develop and manage an inbound program?
• Does the marketing department have the necessary time and internal resources to develop and manage an inbound program?
• What’s the level of interest and commitment on the part of partners todevelop content on a consistent basis?
• What tools do you have in place for lead acquisition?
• What tools do you have in place for lead nurturing?
• What tactics and tools are you using for outbound marketing?

Answers to all of these questions are necessary to answer the “how much does it cost” question. But it’s also possible to provide some basic guidance on direct costs you might encounter in your digital marketing strategy:

• Software for running an inbound marketing program (i.e. HubSpot)
• Consulting: Development of an inbound marketing strategy and plan
• Consulting: Set up, development, and maintenance of social media accounts
• Consulting: SEO/Keyword strategy
• Consulting and Design: Website: new design or re-engineering
• Consulting: lead nurturing strategies and set-up
• Consulting: ROI metrics analysis
• Content: blog writing and production
• Content: video, slide shows and other multimedia for on-site thought leadership
• Content: writing and production of offers for lead generation
• E-mail program
• E-newsletter
• CRM systems
• Pay per click advertising

A common misperception of partners is that digital marketing is “free”. As you can see, it is not. But what to spend on digital marketing is a troublesome question for many firms, because it’s a relatively new and unknown strategy representing a departure from old, comfortable marketing habits

A recent Gartner survey (Gartner's Digital Marketing Spending Survey ) showed that, on average, digital marketing budgets will rise by 10% in 2014 following a double-digit percentage increase in 2013. An Advertising Age Survey of B2B firms concluded that average B2B budgets will be 4% of revenue, and of that about 1/3 will be going to digital marketing activities. We know from some recent surveys that CPA firm marketing ranges from about 2.9% to 5% of the top line

So let’s do some more back of the napkin calculations. And just for grins, let’s use 4% of the top line as out starting point for the marketing budget.

That means that a $15 million firm would be spending about $600,000 on marketing

Now truth be told I’m a bit skeptical about how realistic this numbers really is .. and that’s only because I hear the sound of riotous laughter coming from firm budget committees across the nation.

So just to be on the safe side, I’m going to cut this in half to 2% of the top line, and that’s less than the 2.5% identified by a recent Association of Accounting Marketing survey!

Ok, so we’re now at a budget of $300,000, (please stop giggling), and our inbound marketing budget should be about $75,000. You know, if you pick up a $20k/year audit client out of the digital marketing program and retain them for 8 to 10 years, that’s not too shabby an ROI is it?

Please note that these are very rough numbers, but they do provide a glimpse into what your firm might expect in order to complete in a world that’s turning more and more to digital and inbound marketing for creating more awareness, generating more leads, and getting a bigger ROI from their marketing spend.