How much does it cost to create and execute a digital media plan?
Experts agree that creating and executing a digital media plan is far more expensive than traditional media, but no one could put a number on it. We quickly realized that the topic intrigued a lot of people and set out to find out how much it actually costs in terms of time and money.
As we surveyed industry pros, we consistently were told “it depends.” Which wasn’t unexpected since the cost of a digital media plan is not fixed and contingent on a myriad of factors such as:
- Compensation structure of the agency (i.e. project fee, hourly rate, commission, etc.)
- Agency structure and assignment of roles and responsibilities to each position
- Salaries for each position
- Experience level of each person within each position
- The efficiency of agency operations process and workflow
- Changes in objectives, strategy, and campaign parameters
- Account management demands dependent on client
- Amount of research that needs to be conducted
- Number of teams/agency partners involved (i.e. media, creative, promotions, CRM, etc.)
- Size and number campaigns and the number of sites / placements considered
- Complexity of deal structure (i.e. banners vs. custom integration)
- The number of creative executions and formats
- Implementation errors caused by media vendors
- Tracking requirements, reporting needs, analytics, etc.
We went back to the drawing board and narrowed the scope of our inquiry to “How much does it cost to create and execute a digital media plan where the client budget is $500,000 and will be spent on guaranteed buys on 10 websites with an average of 10 placements each with standard iab ad units?”
Answer: it costs more than $40,000 per campaign
With the new scope, we returned to the media pros and asked “now how much?” After gathering and analyzing the responses, the numbers showed us that it costs more than $40,000 to create and execute a digital media plan.
$40,000 seemed high. So, we cross-checked to validate the number. Considering the scenario of a $500,000 budget, the cost ends up being about 8 percent of spending. We heard that a typical rule of thumb for digital is 10-12 percent of media spending, getting lower as the budget goes up. That means our number is actually at the low end of the spectrum.
Download the media planning workflow cost calculator
We realize that there is no “typical” situation in advertising and every organization has a different structure, process, and tools. To calculate your costing, download the Digital Media Planning Workflow Calculator. It’s an Excel-based workbook that’s easy to tailor to your unique situation.
This study would not have been possible without the help of many digital media experts. A special thanks goes out to:
- Michelle Burnham and Jason Burnham of Burnham Marketing for providing job descriptions, typical rates, and typical hours.
- Hollis Thomases of Web Ad.vantage for validating the costing model
- Dave Smith of Mediasmith for sharing his 17 variables of media plan costing
- Carl Fremont of MEC for validating that the bottom line number
- Brian Ramirez, our summer intern from the Tuck School of Business, for his work to define and refine the costing model
We love doing this kind of research, but we commissioned this study for a reason. Bionic is building the next generation of media planning tools and wanted to get a solid understanding of the before picture. Frankly, we think we can do a lot better as an industry and are excited to be part of the solution. This baseline enables us to measure and prove the value of the solutions we deliver.