In this blog, we will focus on finding out how much the cost of digital assets really is and what components form the price. Next to the costs of creating assets in the first place, it turns out that in reality the costs of reworking assets and recreating and retrieving lost assets outweigh the initial costs significantly. Find out how you can increase efficiency of content creation and management to lower costs.
When it comes to finding out the precise value and cost of creating digital assets, we thread on tough terrain. We all know that getting the company name and product out there with marketing is a basic business need. And in order to push out quality messages and marketing campaigns, we need accompanying video, animation, pictures, banners or infographics to make our message stand out.
We also know that creating anything comes with a cost. If you want to read more on why investing in digital assets is important for your brand, check out this post on brand consistency. In this blog, we will focus on finding out how much the cost of digital assets really is and what components form the price.
You probably know how much you paid the agency that created your latest explainer video, but do you know what else goes into managing and using assets? Having a good overview of the full cost of digital assets can help you optimize your marketing budget and hopefully reduce some spend in areas where it’s not necessary or not a priority.
Let’s view the different cost factors with some real-life examples derived from conversations we’ve had with brand leaders.
Creating digital assets
The first cost component is, quite naturally, creating an asset. Actually, the first cost comes from planning/commissioning and creating briefs for assets but let’s try to keep this simple. Creating an asset can be anything from a logo variation to a banner image to a brochure or an animated video. The cost depends on the format, length and many other things like whether the asset is created in-house or by an agency.
For this example, let’s consider two scenarios. Most (mid-sized) companies have several big campaigns, and even more smaller ad experiments, running a year. An ad campaign is a larger scale effort. It is generally required when you, for instance, release a new product and then promote it with different assets proactively through paid tv and radio ads. An experiment could be A/B testing different versions of LinkedIn ads for your target audience. Both are advertising your company but the approaches, and costs, are very different.
Let’s say Company X runs 6 larger scale campaigns a year and 30 smaller scale experiments a month on different social ads. For the 30 experiments, Company X uses 20 different banners to see which works best.
Now we can calculate at the yearly cost that comes from creating these pieces of content.
20 banners x 12 months = 240 banners
Each banner takes an hour of the designer’s work. The average designer is paid approximately 30€ an hour. The price of new banners for social campaigns is thus
240 x 30€ = 7200€
Agency campaign videos and images:
There are several methods that agencies use to define a price for its customers. Some charge per project, some per asset and some per hour.
We have estimated that one campaign will cost you at least 15.000€ if the campaign is relatively simple and doesn’t involve a lot of travel or need for special permits. The price quickly goes up with the complexity of the project. High-end campaigns with famous actors can cost up to hundreds of thousands or even millions of euros but for this example, let’s keep it at a small scale.
15.000€ x 6 = 90.000€
As you can see from these two examples, the cost can vary a lot depending on your needs and vision.
Reworking and customizing assets
Creating something once and being done with is something that almost never happens in the real life of a marketing or branding department, unfortunately. There will be adjustments, where for example the color of the font or the picture is tweaked, or maybe different versions of an asset have to be created for different markets.
Coordinating, reworking and adjusting newsletters, banners, images, landing pages, and email templates is, most likely, someone’s full-time job at your organization if you work in a medium-sized company. Or maybe you’ve hired an agency to do these adjustments for you.
The cost of adjustments ranges from:
44.000€ a year of a designer’s salary
220.000€ a year for agency hours (1 full-time employee)
Recreating lost assets
Sometimes assets are just permanently MIA. Probably not right after you’ve received them for a new campaign. But in two years when you are trying to find that ‘cool animation that highlights the 2018 launch’ and would be perfect for reusing in a new campaign, you can’t find it anywhere. It might have been on a hard drive that was maintained by a colleague who switched jobs 8 months ago? No one can find the source file which means that the asset needs to be recreated. And paid for again.
Approximately 20% of old assets are lost, which would make the recreation cost somewhere between
90.000€ x 0.2 = 18.000€ (campaign videos from the first example)
7.200 x 0.2 = 1.440€ (in-house banners)
Retrieving and using assets
This cost comes from all your internal and external stakeholders looking for assets and preparing them for use. The stakeholders include the (global and regional) marketing teams, communications and branding teams, salespeople, event organizers, PR officers, some executives and their assistants as well as advertising, consulting and production agencies. Think of everyone who needs access to your logo files, fonts, brand guidelines, etc.
Surprisingly enough, this cost is also the largest single component that is tied to your assets. A real money suck. It’s mostly because coordinating and retrieving assets is constant, everyday work for up to hundreds of professionals in and out of your workplace.
It is estimated that the average professional spends about 25% of their working day in the quest for finding the assets they are looking for. Now add together all your colleagues who work with content.
Did you get to at least 100 to 150 people? Maybe even more? Let’s assume that some of them are juniors or interns and approximate the average hourly rate at 20€.
150 employees x 2120 working hours in a year x 0.25 time spent coordinating/seeking content
x 20€ an hour = 1,440,000€
And let’s take a quick look at agency spend. The assumption here is that all your external teams combined (PR, consulting, advertising, branding, production) equal 10 full time people every month, on average.
10 employees x 2120 working hours in a year x 0.25 time spent x 150€ agency hourly rate
Total spend including internal and external stakeholders: 2.235.000€
Your organization’s numbers may look different from the ones above given that these are just estimates based on discussions we’ve had with branding and marketing leaders. Every company is unique in their digital asset needs and there are a lot of factors that go into your full budget.
The purpose of this exercise is to get you thinking about where your spending goes. Does it go to creating new assets or recreating ones that were not properly stored? Should you hire someone with the technical skills to create assets like films or is it best to order them from an agency?
However, it is a fact that your company spends a good chunk of people’s time and potential in back-and-forth email conversations, scuffling through image Drives and folders and redoing their formatting because they got the branding wrong because they were working on based an old version of the Brand Style Guide.
Even if you don’t recognize your company’s budget in the examples above, the ratio of creating new assets and not creating anything new are the same. Basically, your people end up spending a lot of time on things that don’t add any value to your company.
When you think about where you want to focus your budget, I’m going to make an educated guess and say it’s creating new things that will move your business further. Recreating assets that you already commissioned or spending a huge portion of the day just looking for things is no one’s unique strength.
Ask yourself: What could your teams achieve if they could focus a bit less of their work time coordinating a little more on creating?
Okay, now we know that most of your marketing spend and people potential goes to coordinating assets instead of creating them. You can do the calculations yourself if you know the amount of people working with assets and can estimate their salaries or hourly cost.
You want to make cuts to your costs and enable your people to work on what inspires them and what they are best at. Lytho customers estimate a 70% cut in time spent on operational tasks because they are working with a digital asset management platform that helps to control their assets in the most efficient way.
Schedule a demo with our experts and they can give you personalized advice on how Lytho can help your organization optimize budgets and give more time to your team to work on creating new ideas. It's free and online, and takes up no more than about 20 minutes.
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