Am I Paying Too Much for Digital Marketing?

by Garrett Jackson

Jun 11, 2019


If you feel like you might be paying too much for your digital marketing, but you’re not sure how to confirm your suspicion—you’re not alone.

We speak with many business owners who have invested thousands of their hard-earned dollars in digital marketing only to question the investment. Is it paying off? Am I paying what I should be paying for this service? Is there a better deal elsewhere?

The tips below can help you to evaluate your digital marketing investment and allow you to determine if your efforts are paying off.

Track your results

There’s no real way to determine if your digital marketing is working unless you have a proper tracking system in place.

One of the great (and not-so-great) benefits of digital marketing is that there are literally hundreds of trackable metrics. Some digital agencies overwhelm their clients by providing them with a bunch of meaningless metrics.

Your agency should be reporting campaign success in terms that make sense to you. A good agency will omit digital jargon and acronyms and present your results in a format that is easy to understand and relate to your business.

Let’s say you’re a dentist. The goal of your digital marketing campaign might be twofold: you want to drive new general dentistry patients and you want to increase Invisalign sales.

Calculate your cost-per-lead

Sticking with the dentist example, the agency’s monthly report should illustrate how many leads came in for new patients and how many came in for Invisalign. The monthly report should also include total spend by digital tactic.

For example, let’s say that the dentist is spending $3000 per month on a Google Adwords campaign and $1000 per month on a Facebook/Instagram campaign. The Adwords campaign generated 86 leads and the social campaign generated 32 leads.

These results indicate that the Google Adwords campaign is generating a cost-per-lead of approximately $35 ($3000/86 leads) and the social campaign is generation a cost-per-lead of approximately $31 ($1000/32 leads).

Calculate your cost-per-acquisition

Once you’ve determined how many leads each of your campaigns is generating on a monthly basis, you can begin to calculate the true ROI for each of your digital marketing tactics. This is known as your cost-per-acquisition, or more simply put: the cost to generate a new patient or make a sale.

Let’s say that, on average, the dentist converts 70% of the general dentistry leads that came in off of the Google Adwords campaigns into patients.

For the sake of simplicity, let’s say that the lifetime value of a new general dentistry patient is $4000. The dentist is spending $3000/month on the Google Adwords campaign that is generating 86 leads.

At a 70% close rate, this campaign is generating approximately 60 new patients each month at a cost $50 per patient. The AdWords campaign is clearly forming well if the dentist is able to invest $50 to generate a patient that is worth $4000.

Get data, then decide

Don’t jump to conclusions about your campaign or pull the plug too early. Your agency should work hard to get you the correct data you need to make a smart decision. Once you have that data and understand the agency’s recommendations, move forward with canceling the campaign or finding another vendor.


Get in touch with the Formada Team