Content marketing is one of the most popular forms of digital marketing these days, and for good reason: it’s a powerful tool for building web traffic, brand awareness, and increasing sales. Increasingly businesses are spending more on content marketing, which includes strategies like search engine marketing and display advertising. In fact, CMOs are expected to spend nearly $119 billion on content marketing by 2021.
And you can see it happening in real time: WordPress users alone publish 82.6 million posts per day, signaling an age of data explosion, in an effort to connect, engage, and convert audiences into paying customers.
So why does it matter for your business? And how much should you spend?
Increasing your content marketing budget will be key to the success of your company. A 2018 study from Content Marketing Institute (CMI) found that 89% of B2B organizations committed to content marketing considered their overall marketing approach to be effective; however, there are many variables that go into deciding how much you should spend on it.
Keep reading below to find out what kind of budget will work best for your business, and why you may need to spend more on producing quality content.
<div class="tip">Outsourcing your content needs can help simplify your content marketing budget and save you thousands of dollars. Find out how by downloading The Content Strategist's Playbook, Compose.ly's free content marketing ebook.</div>
What is content marketing, and why should I spend more on it?
Before we dive into budgets, it’s important to define what exactly content marketing is and how it differs from digital marketing.
According to CMI, content marketing is “a strategic marketing approach focused on creating and distributing valuable, relevant, and consistent content to attract and retain a clearly defined audience—and, ultimately, to drive profitable customer action.”
Essentially, content marketing is just one of several types of digital marketing. Let’s take a look at the differences between digital and content marketing, and examples of the approaches to it that you can use for your own business.
Digital Marketing vs. Content Marketing
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The methods you choose will depend on your business goals. For example, if you want to focus on brand awareness, then television and radio ads to keep your business at the forefront of your customers’ minds are more appropriate strategies. On the other hand, businesses focused on user engagement will find blog posts, webinars, and livestreams effective in creating relationships with their audience and attract comments. A blog with consistent and high-quality posts that users love to engage with will be easily picked up in search engines and increase traffic to your site.
Not sure which one to move forward with? Learn more about about the difference between digital and content marketing to help you decide which one is better for your business goals.
Content marketing methods
Hopefully by this point, you know who your audience is, what type of content they tend to consume, and where they tend to consume it. If you don’t, we highly recommend reading our piece on creating user personas, as that will help you to narrow down the type of content you need to create.
The next step is figuring out how you should create the content—and by proxy, how much you should spend on it.
There are several methods you can use to create content, but at the highest level, you’ll need to decide between using in-house or outsourced methods. Below, you will see an overview of different types of options, as well as the advantages and disadvantages of each one.
Who you can hire
In-house Staff: These are writers that work directly for your company. Hiring in-house writers and social media coordinators is not the most affordable option if you’re operating on a low budget, but it can lead to significant results in achieving your business’s marketing goals. Benefits of in-house staff include being able to work consistently with someone face-to-face, and more certainty that you’ll be receiving quality work—but that doesn’t mean freelancers, when properly vetted and hired, can’t do the same for you at a more affordable rate.
Freelancers and Contractors: Working with freelancers or contractors are great options for businesses that already have an effective in-house marketing team and/or need additional help with content creation. Although it can take a while to find the perfect writer, using freelancers and contractors will save you time and money in the long run.
Content Writing Services: These are platforms that receive content requests from companies and assign it to writers managed by the service. For those looking for a cost-efficient model, this is the best way to go. On the down side, it can be difficult to monitor the writers with these services, and you may have issues with keeping a consistent quality and voice in blog posts. Hiring writers from content writing services doesn’t have to be difficult if you make your expectations clear and follow the right steps.
Agencies: If your business is lacking in the content creation area, then outsourcing is a great option for small companies. Essentially, the agency will operate as another branch of your own marketing team, which in turn gives you the flexibility that working with contractors and in-house staff doesn’t have. Like freelancers, contractors, and content writing services, agency writers will have more clients than just your business—your company’s needs might not be their number one priority.
Why should I spend more on it?
Your business is more likely to achieve its target goals if you put more of your marketing budget towards content production. Research has shown that there’s a correlation between effective content marketing programs and higher spending. In the same CMI survey referenced above, the most successful B2B marketers spent 40% of their marketing budget on content marketing—higher than the average 29% most business put towards it.
Besides the proven success rates, there are other benefits to increasing your content marketing budget. Business with strong strategies and higher budgets will find it easier to engage with their audience and increase their web traffic. If you’re looking to add exposure to your product or service, investing more in content marketing is crucial for building social traffic.
Content marketing also has a longer lifespan than traditional advertising. Excellent evergreen content can exist on the web and generate traffic for years, but once a business stops paying for an ad campaign, it immediately ceases to be in circulation.
Finally, one of the greatest aspects of content marketing is its universal value—any company, no matter the industry, can use content as their leading strategy to make the product more relevant and attainable to customers.
After figuring out whether you’ll hire in-house or outsource your content creation, you need to decide how much to spend on it each month.
How much does content marketing cost?
The quality and complexity of a content marketing service will affect the price. There are other variables that determine the cost of content creation, such as the amount and type of content you need. Here are some common forms of content marketing and the average price ranges for how much they will likely cost your company if you choose in-house or outsourced.
- Market Research: Market research can be a huge investment for your company because of the cost and amount of time it takes to complete. Detailed and in-depth market research reports go for between $15,000-$35,000. For basic top level reports, the average cost is $100-$1,000.
- Rebranding: There will be big price tags that come along with rebranding your company’s website and online presence, and there’s no simple answer as to how much you should spend on it. Much of the cost will be contingent on how long your company has been around, how many customers you have, your timeline, and budget. A basic rebranding can be $40,000 whereas an extensive and long-term overhaul goes beyond $250,000.
- Entry Level writer: $40,000
- Mid-Career writer: $51,000
- Experienced writer: $55,241
- Expert writer: $69,468
- Blogging: Blog post prices depend on a variety of factors. Are you paying full-time or freelance, per post or flat rate, or based on experience? You can expect to pay a blogger with good SEO and backlink knowledge $0.15-$0.50 per word for a well-researched, error-free post. For an expert writer that can do all of that and also has a proven track record, the price can be .30+ per word.
- Website Landing Pages & Ad Copy: Again, how much you’ll pay your website content writers will largely depend on their experience and service. Content writing prices can greatly range depending on the type and size of the content—landing pages, email messages, and link bait posts are a few examples. Companies can spend $50 on a link bait post or more than $5,000 on a multi-page web content project.
- Email Marketing: For businesses with low budgets, email marketing is a more affordable option with high ROI benefits. Professional services that specialize in email marketing offer packages typically starting at around $500, but if you’d rather take the DIY approach, MailChimp marketers can send unlimited emails for as low as $10 a month.
- Social Media Posts: A large business’s social media marketing spending can exceed $20,000, but your business can do well with much less than that. If you want to outsource your social media marketing, it can be as low as $500 per month. Hiring in-house experts in social media will put you at around $1,000-$5,000 monthly.
- Press Releases: For a high-quality press release written by an experienced, professional writer who knows the target audience well, the cost can range from $500-$2,500; however, some agencies will charge over $3,000 for a press release.
Cost of Outsourced Content Marketing Based on Experience
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- Entry level: 0-3 years looking to build a portfolio
- Mid career: 3-5 years with a good portfolio
- Experienced: 5-10 years with strong portfolio, has experience with projects and brands
- Expert: 10+ years, SEO and backlink knowledge, influencer
Advertising & Promotion
- Social media paid ads: Prices for ads on social media can be based on clicks, likes, impressions, views, or conversions. Another way to pay for ads on social media is through bidding, which allows you to set your own maximum price. In Q1 2018, ads for LinkedIn had the most expensive cost per thousand (CPM) at $16.99, with Facebook at $5.12 and Instagram at $4.20.
- Influencer marketing: You’ll need to pay to play in the influencer marketing game, as a significant portion of business who do use it are increasing their budgets each year. That doesn’t mean you can’t do it without dropping hundreds of thousands, though. For $1,000 or less a month, you can use influencer marketing software like Grin to start your own influencer programs.
Design & Technology
- Development & Technical SEO: Where content marketing ends and where technical SEO and development begins is a very fine line. In some industries, you can get away with a cookie-cutter WordPress template. In others, you’ll need a fully customized website. A strong Wordpress developer costs between $70-$100 per hour. You can get away with less (but probably no less than $45-$50), but be prepared to spend lots of time doing QA testing and perhaps work with a website that’s under-optimized for performance.
- Design: Having a unique, branded, and beautiful website goes a long way to increasing engagement and return visits. For a 3-4 page template website (home page, article pages, product landing pages), you’ll be looking at a $5,000 price tag for a website design from scratch by a high quality agency. You can estimate down from there based on whether you can find freelancers, or already have your own wireframes.
When it comes to content marketing, the real question isn’t how much it costs, but rather how much you are willing to spend on it. After you decide what the primary forms of content your business will produce and how much money you can put forward, it’s time to move on to budgeting.
How much of my budget should I allocate towards content marketing?
Unfortunately, there are no hard rules for how much of your budget you should allocate towards content marketing. You’re going to have to assess your own business goals, and your own appetite for risk.
We provide two approaches to thinking about the problem below:
Rule of Thumb Approach
Generally, a business spends between 25-30% of their marketing budget on content marketing. As of February 2018, 7.9% of the average company's total revenue goes towards the overall marketing budget. In our business size examples below, we calculated budgets with a range of 5% to 10% using the following formula:
- [$ annual revenue] x 0.050 x 0.25 = [$ annual content marketing budget]
- [$ annual revenue] x 0.10 x 0.30 = [$ annual content marketing budget]
The minimum marketing budget (5%) is how much your business would need to spend to maintain its current presence in the market, while the maximum marketing budget (10%) is how much needed to spend in order to grow and dominate in the market.
Individual making $100k in revenue per year
Startup making $500k in revenue per year
Small business making $1 million in revenue per year
Mid-size business making $5 million in revenue per year
Large business making over $10 million in revenue per year
The rule of thumb above can help you assess whether you’re way over or under the average (which, again, is not necessarily a bad thing if you have a strong strategy). However, the smarter way of approaching the budgeting issue is to reverse-engineer what a successful competitor does in order to determine what they spend, and then allocate your budget accordingly.
Here’s a real life example analysis.
Example: How much would you need to spend to rank for the keyword "Job Description" with a volume of 27,100 searches monthly?
For a basic analysis of how much you’ll need to spend for an SEO keyword, you simply need to take a look at who’s ranking for the keyword and assess what their content strategy is.
In this case, the websites that rank for the first two positions for the keyword “job description” are the following:
You’ll notice they have something in common—an extensive list of job descriptions by industry and job title. To have any hope of beating them, you’d need to offer what they have, or more.
So, let’s make a quick calculation:
BetterTeam has a library of 132 different job descriptions on their main landing page. We’re going to assume you’d need at least that many to steal position #1 from them. Taking a job title at random, Customer Service Job Description, it has 437 words in the main content area. However, we’ll go with 450 words on average to keep things even.
Now, let’s use the data from our content pricing table to assess how much it would cost. You decide to hire a mid-tier freelancer at 11 cents per word because you want to do minimal editing, and ensure that you’re providing quality content to your readers (or else, you’ll never rank anyway.)
Step 1: 437 words x 132 pieces of content = 57,684 words
Step 2: 57,684 words x $0.11 dollars = $6,346.24
There you have it. At minimum, you’ll need to spend at least $6,000+ dollars to get the raw materials to compete for a 27,100 volume keyword. So, how much should you budget for that? It depends on how much money you’re willing to spend, and how fast you want it to get done!
The analysis doesn’t stop there. Here’s a list of other processes and factors that make that page rank, and you’ll need to take into consideration:
- Someone has to put all of that content up into your content management system (CMS). Who, and how much will you pay them?
- Your content will never rank without backlinks. Will you hire a linkbuilder, a guest poster, or a PR representative?
- BetterTeam and Workable only rank because they also provide a piece of Applicant Tracking Software that ties in to their content. If they have a lousy product, they will not rank.
Technical & Design
- If your content looks lousy or loads slowly, it’s tough to rank. In many cases, a cookie-cutter WordPress template just won’t cut it when you’re competing for high volume keywords. You need a customized website to elegantly tie your product and content together in a way that is UI/UX friendly. And that will mean money.
Resources for Your Content Marketing Budget
Making your argument for a higher budget
Need help convincing higher-ups to increase spending? The first thing you need to figure out is the cost. Your managers may have differing opinions on budgeting, but the bottom line is that if they see content marketing as too expensive and aren’t convinced it will bring a high ROI, you might have an uphill battle on your hands.
It doesn’t need to be expensive, though. There are a couple of options for you to consider when you argue for increasing your company’s content marketing budget. Using your in-house employees (sales staff, account managers, and customer service representatives) is a great source of content ideas and can give you insight into what your customers want without having to hire additional staff.
Using SEO tools
You’ll need to invest in additional tools and marketing software, but this doesn’t require a large investment, either. Google Analytics and Hootsuite are some of the big ones, but there are tons of other free or low-cost SEO tools out there for you to use.
To get your plan off to the right start, knowing how to use the right SEO resources will be a huge advantage to your marketing department. Google's Keyword Planner is an excellent free tool that helps businesses with keyword research.
By now, you should have a clear idea of how much you need to spend in order to ramp up your budget and planning. Content marketing shows no signs of slowing down, so there’s no better time than now to invest more in it.
Have any questions or suggestions about content marketing budgets? Let us know your thoughts in the comments section below.