Last week David Rodnitzky wrote a blog post criticizing a deal we had run on Startups.com: $2,000 worth of consulting for $39 delivered in a 45-minute session. You can read his post and my response here. The post got me thinking about what marketing is really worth.
We’re at a strange juncture in the history of online marketing. On one hand, there are guys promising quality link-backs for pennies; on the other hand, there are paid search agencies charging tens of thousands of dollars per month. You can get a logo crowd-sourced for a couple hundred bucks or pay millions to a Madison Avenue agency for a re-brand. There are tech companies (again) receiving millions of dollars in funding against little or no revenue, and a seemingly endless cadre of social media marketers who bristle at the word “conversion.”
A number of firms have tried to commoditize online marketing services by rolling them into packages or blocks of time. For pretty much every one of Clever Zebo’s online marketing services, there are dozens of firms and consultants offering every price point from free to a small fortune for a package of deliverables or block of hours. Contrast this to in-house marketing professionals who are paid $50K to 6-figures+ per year to slog it out in an office and usually aren’t paid by the number of links they build, press releases they write, and dedicated ad groups they create. Employees are paid to be there every day and are bonused when the things they do can be tied to company success (or at least should be).
The point is that pricing in online marketing services remains highly subjective, and there just isn’t a good calculator that takes into account all the options out there and spits out the right one for your unique business situation (but that’s not a bad idea for a product). Paying cost-effectively for online marketing is an incredibly hard balancing act. Low-cost firms that make money have hundreds and thousands of customers and hope that repetition creates economies of scale that still generate client results. Silicon Valley agencies follow the big law model – put a couple big names in front of the client and bill out graduates at multiples of their salary.
Ultimately, there is no such thing as the RIGHT price, especially in services businesses, but there is the right match for you. Expense is relative; performance is everything. There is no “real” price tag for the time of an online marketing consult. With price, there’s only the equilibrium point between the results a client expects and the lengths we’re willing to go to make it happen.