A prospective client very recently used the title of this post to describe that “oh so fun” time in the discussion about what the budget for online marketing services is…or in this case (and in the case of many of these discussions) should be. It goes something like this:

Client: “We really liked what we heard from you guys and think you are the right firm to help us with our online marketing strategy.”

Digital Marketing Salesperson: “Great; what budget do you have allocated for this effort?”

Client: “Right. Budget. Well, you see, we may have a budget, or we may not. It depends. If I tell you what my budget is – if I have one that is – then you will just tell me that is how much your fees for service are, right? How about you tell us what the low, medium and high budget ranges for our project could be?”

Digital Marketing Salesperson: “Right. The challenge with that is there are a vast array of possibilities within the various tactical implementations of online marketing that make it difficult for me to give you such ranges without knowing some idea of where your comfort level or reality lies. I could tell you what we suggest you allocate if you have a tangible objective. That objective will then drive a strategy, which of course drives the tactical execution. Do you have a business objective defined? If you had a budget, what would it be?”

Client: “Right…let me get back to you on that.”

The problem with online marketing is this: it isn’t something you can really see or touch or in most cases even grasp how long it takes to produce the work. In my experience, clients often have a perception that this work is fast, easy (if you know what you are doing) and somehow less valuable than “creative” or “brand” services, for example. According to the American Association of Advertising Agencies, this is exactly the opposite. In fact, this guide claims that “the high-volume, low-dollar, high-complexity nature of Digital programs makes it the most labor-intensive medium in the advertising industry.”

To make matters worse, pricing for these services ranges WIDELY dependent upon whether you are working with an individual freelancer, a new, about-to-conquer-the-world start up agency or an older, wiser-from-mistakes-made-along-the-way, more experienced agency. It would be so much easier for everyone (albeit quite counter to our very capitalistic society) if we in the United States had a similar industry standard rate card for many online marketing services as they do in the United Kingdom. Without something such as a rate card to go off of, then, how is a client to best judge what they should be paying for maximum results?

First, you get what you pay for. Any experienced agency knows what it costs to hire the best talent to execute this work and what they must charge to run a profitable business. Ask for client references. Negotiate. Just know that an agency that believes in their work product, talent and is operating their agency like a real for-profit business will not likely have much “wiggle room” on the initial fee for service they provide without removing aspects of the scope of service. Think of it as if you go in to buy a car – do you want/need the one “fully-loaded,” or are you willing to manually roll down the windows?

Avoid the Cluegy Woogy dance. Be as direct with a potential agency partner about your budget or lack thereof. If they are going to be a good partner, they will help you determine the right budget range to effectively meet your objectives. If you already have a budget, they will give you a fair proposal on how best to engage their talent to accomplish those objectives.

What input do you have, as an agency or client, about the best way to handle the budget conversation? How can we do this more effectively to and efficiently so that there is always a win-win outcome in the future?

*Photo credit: borman818 (Flickr)

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