The True Costs of Investing Online Part 3: Deployment and Optimisation

By March 14, 2016Blog, Insights
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In Part 2 of this series, we covered The Production Phase. Next up is Part 3, Deployment and Optimisation.

PART 3: DEPLOYMENT AND OPTIMISATION

Website Hosting

The impact of this cost varies depending on your system’s specific needs. Decisions around provider (e.g. Crucial) and plan type (e.g. cloud server or web hosting) need prefacing by a thorough understanding of your system and therefore assess what its needs are.

Some of the factors around your investment into website hosting are number of visitors to the website, web application or mobile app, security requirements, redundancy and so on. Traffic to your website is the key indicator for server requirements. As a digital agency we have a vested interest in the success of your projects, so we recommend additional, stringent checks and performance testing to ensure your site performs (e.g. fast load times) and stays online during large volumes of web traffic.

Typically, web hosting is a monthly cost and is a mandatory part getting any website, web application or mobile app online. Drawing from our past experience, a cost of $400 per month is typical for a corporate or eCommerce website, which annualised for the purpose of this illustration comes to $4,800.

After adding the annual cost of Website Hosting to the total project costs to date, it brings the project up to $82,300.

Ongoing Maintenance and Management

This cost can have two components (internal and external) depending on your needs and how you intend to use your platform going forward. Most platforms require a basic level of management which can be facilitated by dedicated or part time team members or outsourced to a professional agency. Needless to say, you will need to account for ongoing system management and maintenance in your budget.

This covers activities like:

  • Updating content (changing images, copy, page layouts and adding new page)
  • Ensuring system health is in order (similar to the servicing of a car, you’ll want your system up to date with the latest version of the software and will want to ensure things like SSL certificates have not expired, therefore compromising security)
  • Updates and new features and functionality
  • Third party costs such as SSL certificates

Sticking with the project profile used in this article to illustrate an example of the true costs of investing in a website or web application, let’s assume an average of 50 man hours (or $3,125 at an average salary of $120K) per month (internal) plus agency costs (external) for updates and system health assurance (approximately $10,000 per/annum). Which leaves ongoing maintenance and management at approximately  $13,125 per/annum.

Ongoing Maintenance and Management is often overlooked when scoping the initial project costs, however it may add as much as $13,125 per year, bringing our total up to $95,425.

SEM SEO, PPC & Other Advertising  Products

These are per month (monthly) costs. Any business wanting to generate and drive highly relevant traffic (eyeballs) to their website, web application or mobile application will need to invest in some or all of the activities involved under the SEM (Search Engine Marketing) banner.

The activities here are all in some way connected to the marketing platform being used which is important to recognise to understand the activities required here. Google, Youtube and Facebook are all examples of platforms that SEM activities seek to optimise your customer message for). For example; PPC involves using Google Adwords and advertising your message on their search engine – hence your offering being presented for relevant website search terms.

PPC is a monthly activity because you need to constantly work to understand which search terms are driving results for your business (aka qualified leads). Every month, your campaign needs to be monitored and adjusted for improved generation of website leads and opportunities. SEO and online advertising are much the same in that they all require monthly management.

The web is very much like a real spiders web. Imagine that your website is a spider, SEM activities is your website (spider) expanding its own presence (spiders web). The more your web presence grows (spider web grows), the more leads you catch in it (bugs and other things spiders love). Therefore, it is important to invest in SEM activities in order to grow your web presence. To illustrate these costs we have collated the average our clients spend on SEM related activities and services. This comes to approximately $10,000 per month or $120,000 when annualised.

Advertising and marketing is your voice which allows you to cut through the noise and reach your customers.Over the span of a year, the cost of investing into SEM, SEO, PPC and other Advertising Products is as much as $120,000, taking our total up to $209,425.

THE FINAL WORD

So what does it all mean? Essentially, this article highlights the various points where cost is incurred on any website, web application or mobile app project. Remembering that this illustration is based on a fairly sophisticated, mid budget range project, we see that the true costs of ‘creating a website’ do add up to significant numbers. In this example alone total costs for year 1 can be over $200,000 in total when all things considered. Meaning that a $50,000 website, web application or mobile app actually costs up to 4 times the agency fee required to initially create the system.  

“…a $50,000 website, web application or mobile app actually costs up to 4 times the agency fee required to initially create the system.”

In our experience, a large component of a project budget is often overlooked or not accounted for due to the ‘untracked costs’ listed in this blog series. This ultimately causes issues down the track when in the thick of a project. An example of this is the need for additional funds to source and purchase imagery for use on the site, or scope items that escaped prior thinking and now need inclusion.

Hopefully this 3-part blog series highlight the need for careful, detailed and thorough planning and understanding of the activities and costs involved in creating a website, web application or mobile application.

For those of you who would like more detailed insight as to how we came to the numbers/costs in each section above, view the following Google Sheet housing the breakdowns we used in this illustration:

The True Costs of Investing Online – Costs Breakdown

If you’d like to discuss any of the above with our team, please reach out and get in touch with us using the form below or call 02 9438 1280. We look forward to hearing from you!