Understanding Digital Marketing Costs in South Africa

by | Oct 24, 2023 | Uncategorised

As part of any business’s overall marketing budget, it is safe to say that digital marketing costs are usually the most variable and difficult to pin down. This is because digital marketing costs vary widely depending on the industry, target audience, channels used, etc.  So, how much does digital marketing cost in South Africa? Read this article to understand everything there is to know about digital marketing costs in South Africa. 

How Much Does Digital Marketing Cost In South Africa?

According to Starbright, a digital marketing agency in Pretoria, digital marketing prices in South Africa differ widely from the rest of the world. This is because South Africa is an estimated 5 to 7 years behind the rest of the world when it comes to all things digital. 

So, it would not be wise to compare South African digital marketing prices with the USA, for example. A digital marketing package in the USA would cost you between $1,500 to $5,000 per month. If transferred into Rands, it would be R29 000 to R95 000 per month

So, what is the average price of digital marketing services in SA?

If you take a look at Starbright’s comprehensive digital marketing prices, it varies between R10 000 and R 30 000 per month. But, as mentioned, it all depends on the type of industry, target audience, and what types of digital marketing you want to sign up for.

Factors Affecting Digital Marketing Prices In SA

Certain factors, apart from industry type, target audience, and the type of digital marketing used, have an impact on digital marketing prices in South Africa. Here are some of the main factors to consider:

  • Experience and Size of Agency: Agencies with more experience and a larger team tend to charge higher fees for their services.
  • Scope of Work: The more extensive the scope of digital marketing services needed, the higher the cost will be.
  • Geographical Location: Agencies based in bigger cities like Cape Town and Pretoria tend to have higher prices compared to smaller towns.
  • Reputation and Track Record: Established agencies with a proven track record of delivering results will charge more for their services.

What Type Of Costs Are Involved In Digital Marketing?

When it comes to digital marketing in South Africa, there are a few main costs that you need to consider:

Set-Up Fees

A set-up fee, usually payable upfront, is charged by agencies to cover the initial costs of setting up your digital marketing strategy. This includes market research, competitor analysis, and creating a tailored strategy for your business.

Retainer Fees

Retainer fees are monthly payments made to an agency for their ongoing digital marketing services. These fees can vary depending on the scope of work and can range from R10 000 to R100 000 or more.

Ad Spend

Ad spending refers to the cost of running digital advertisements on platforms such as Google, Facebook, and Instagram. This cost is determined by the number of clicks or impressions your ad receives.

Additional Fees

Some agencies may also charge for additional services, such as cost per acquisition (CPA) fees, which are fees charged per lead or sale generated by their campaigns.

What Is the Cost Per Acquisition in Digital Marketing?

Cost Per Acquisition, also referred to as CPA, is, in essence, the amount of money required to gain a customer. It is mostly used when customer acquisition campaigns are being used to gain exposure and convert potential customers.

It is an extremely important part of marketing as it determines what the revenue impact will be per marketing campaign. In other words, it allows business owners to determine whether they can afford a certain marketing campaign and what the long-term financial gain will be.

What is a Good Cost Per Acquisition?

There is no hard and fast benchmark for an excellent Cost Per Acquisition. Depending on the industry and aspects such as margins, prices, and operating expenses that are tied to that industry, CPA can differ. 

It is up to the business owner to determine and calculate what the worth of a client would be in the long term and what a fair CPA would be in relation to customer acquisition.

Some factors to take into consideration when calculating a reasonable CPA include:

The business’s stage of growth: Depending on whether a business is in a phase of growth, stagnation, or decline, an owner will decide what budget can be made available.

The available budget: If the available budget is limited, aim for low-hanging fruit that is easy to achieve conversions with. Once more budget is available, one can expand to more difficult (and expensive) targets.

The marketing and advertising medium used: The type of marketing medium that is used will greatly determine the CPA. Some of the differing marketing mediums include content, Google Ads, social media marketing, affiliate, or display marketing.

How a CRM Can Improve Customer Acquisitions

There are multiple ways in which a CRM (Customer relationship Management) system can improve a customer acquisition strategy and perhaps even the CPA. 

Some of the valuable features that can help consist of:

Improved Targeting: By analysing the data collected and captured by a company’s sales or marketing team, one can determine where a business’s target market truly lies. One can therefore improve the targeting of campaigns.

Personalisation: A CRM allows for the implementation of personalised sales messages and follow-up communication. This will increase the chances of customer conversion.

Increased Lead Response Time: One of the functionalities of a CRM is to send reminders to sales personnel, informing them to follow up on leads that have come in. A fast response time makes a good impression and increases the chances of succeeding in a sale.

Improved Customer Retention: CRMs improve customer retention when used and implemented correctly. The longer a client is committed to a business, the more value they bring to a company. Which improves the CPA in the long term.

Leadtrekker is an amazing CRM system that offers all of the above and more efficiently. This will help towards a better customer acquisition campaign!

Bottom Line

After reading this article, you have a better understanding of the average price of digital marketing services in SA. As well as the factors affecting this cost. And the types of costs involved in digital marketing, with a focus on additional fees such as cost per acquisition in digital marketing efforts.

It is important for you to have an overall view of what and where your money goes when investing in digital marketing!

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