An agency in St. Louis thought they were getting a real bargain for a custom Web site that cost about $2,400. They liked the design, graphics, image-building elements, and navigation the site builder had created. But when the site builder asked the agency for the text files that were to comprise the bulk of the site's content, the agency was taken by surprise and felt blind-sided. "What?" the agency wondered, "You expect us to provide the content after we paid you $2,400?" Obviously, there was some miscommunication in this case, but it illustrates, among other things, that custom Web sites cost considerably more than those low-cost "$595 complete, including hosting" specials that some sources advertise.
Similarly, an agency in Denver was shocked to learn that the Web site they envisioned would cost about $3,200. But the agency also wanted a new logo and other identity and branding elements, had no idea about a Web strategy, and really wanted the site builder to figure everything out, including content development. The agency was willing, however, to let the site builder interview staff members for their input.
An agency in Florida thought they would get a good deal by deciding to keep the Web building project in house. The agency knew the site had problems and even paid for a professional Web site analysis and consultation. But somehow the suggestions and recommendations apparently got lost in the enthusiasm of the anticipated site makeover. The end result does indicate modest cosmetic improvement, but the underlying organization and navigation still exhibit the same weaknesses as before. So, while the actual cash outlay for the makeover was relatively nominal (except for lost staff productivity), not much, if anything, was really saved or accomplished.
When you consider the various planning, development, creative, and technical activities and tasks that go into creating an effective custom Web site — one that actually does something and produces results — thinking in terms of one as low as several hundred dollars is utterly ludicrous! Furthermore, the fee you pay somebody else to build your Web site doesn't end with the invoice. Before that there are, of course, typical set-up and domain registration fees. But the pre-build time and effort your agency must go through before hiring a site builder, and the ongoing work of maintaining the site after it's built, must also be factored into the total costs.
While fees vary among service providers and from region to region, the various creative and technical services that go into creating a custom Web site typically range from about $50 to $150 per hour, sometimes more. If you hire a newcomer to the field of Web design, you could end up paying for his/her inexperience and learning curve, despite a lower hourly rate. Or, you could hire an "HTML jockey" who can whip out a really cool Web site in a few hours, but doesn't know the first thing about insurance, your market, your business strategy, usability, or content development — and may care even less. And finally, experience has shown that Web site projects, despite the upfront planning, seem to be prone to "scope creep," the inevitable "let's-do-this-while-we're-at-it" stuff that ends up as part of the site, but may or may not actually be negotiated before hand.
Let's, then, take a closer look at what it costs to build a Web site, not in dollars and cents terms, but in terms of time and effort. Let's also assume the project is a custom, effective site that actually does something and produces results, not a static brochure site that falls into neglect and is forgotten about. And let's further clarify the effort as one in which multiple agency staff members are highly involved in the different phases of site strategy development, planning, content preparation, and working with service providers and the site builder.
Initial fixed costs
Obviously, if you want a Web presence, you must pay for it. Typically, there are three costs associated with setting up a Web site: domain registration, initial set-up fee, and a monthly hosting fee. There are many available service providers that offer a range of features to choose from.
Domain registration. There's no escaping the domain registration fee — it's how your site is identified on the Web. Dozens of companies, that are licensed to do so, can register your domain, i.e., yourInternetname.com. Fees usually vary from $8.95 (be careful) to $35.00 (the reputable Network Solutions) per year, though you can sometimes purchase several years at once at a reduced price.
One-time set-up fee: Most Web hosts charge an initial set-up fee to cover the time and expense of allocating server space plus connecting you to the various hosted features and tools that will enable your site to function. Fees typically range $20 to $50, but could be more if high-end features are included.
Monthly service fee: The monthly service fee, like rent, allows you to occupy space on your host's Web server. Expect to pay between $25 and $50 a month for a typical Web site, which usually translates into 50 to 100MB (which is plenty) of server space.
Internal strategy and planning costs
The amount of work that an agency does before ever hiring someone to build its Web site can, and should, be considerable. Internal costs in terms of staff time may be the most overlooked and underrated expense in developing a Web presence. When you consider the many decisions that should be made about Web strategy, marketing communications, site content, site management, builder selection, project oversight, site promotion, etc., an untold number of staff hours can be consumed. What's more, when the Web effort is put into the hands of a committee — which we advise — the number of staff hours multiplies. Of course, every hour devoted to the agency's Web effort detracts from other agency tasks and duties, so you need to include that into the overall effort.
Considering these factors, one might wonder whether such an expense of staff time is really worth the effort and is justifiable. In our view, if the initial investment of strategic planning is not made, the Web effort will likely fail to yield meaningful results. The reason most Web sites underachieve is often directly attributable to the lack of forethought and planning before the site is ever built and the failure to monitor, maintain, and "work the site" after it goes live. As we've said before, any serious Web presence must start with a reason, a purpose, and a plan. Overlooking these essential elements is the root of most Web site failures. Ironing out the details of creating a Web strategy takes time and effort, regardless of who does the work. In our view, that work starts inside the agency because it is the agency's business at stake. If an agency isn't willing to do its part in the Web strategy and planning phases, it may be better to not have a Web site at all.
So, how much time should be devoted to the internal strategy and planning phase of the Web site? There can be no set time limit. See the article, "What Is a Web Strategy and How Do You Develop One?" (Sounding Line, August 2002). After you've answered the questions outlined in that article and followed the "how-to" suggestions, you should have a good idea of how complete your internal planning has been.
Creative costs
The creative costs of building a Web site can include expenses that are over and above the actual cost of building the site. For example, if your agency logo is of insufficient quality, the site builder may need to edit it, touch it up, re-scan it, or re-create a new one. Some site builders itemize their creative services so the client can actually know what work is being provided and at what cost. Of course, the agency could avoid that particular expense by providing the logo (and perhaps other artwork or photos) in the format and quality specified by the site builder.
As noted above in the St. Louis agency example, some (perhaps many) site builders do not provide content development and editorial services; instead, they simply build Web sites using the content provided by the client. Whatever you choose to do about content, make sure everyone understands the expectations and honors the agreements.
If your agency staff can produce well-conceived and professionally written content for the Web, you will have more control over this phase of site development. If not, it may be preferable and prudent to hire a copywriter with insurance background. Or, if you can find a Web developer with marketing communications and insurance experience, consider yourself really lucky.
Also consider the degree to which you want to be involved in the site creation process. Some Web designers discourage client involvement, regarding it as time-wasting meddling. Others may welcome the ongoing consultative approach, but factor the extra time into their fee estimate. Whatever your preference, make sure both you and your site builder understand each party's expectations.
Technical costs
Depending on what you want your site to do, you could incur additional expense for technical services. If you are planning a high-functioning Web site that requires specialized custom programming, database integration tools, e-commerce functionality, and the like, these features will come with extra expense and may need to be outsourced.
Most agencies likely will not need advanced technical services, at least at the beginning of their Web presence. However, if your Web effort develops beyond your wildest imagination and you can envision additional Web potential, custom add-ons could be something worth considering once you have established a successful Web presence.
Ongoing costs
Once your Web site is up and running, it will need to be maintained and updated. The amount of ongoing effort depends on how you plan to use or work your Web site. For example, if your agency acquires another agency and now has a new location, that information will need to be added to the Web site. Somebody will have to do the work. If you know how, you could do that in house; otherwise, you will have to pay somebody to do it. If you are paying a monthly maintenance fee, a simple address addition will likely be covered. But if your site also includes a photo and a map of the new location, the creative services for preparing those elements could exceed your monthly fee and may cost extra.
Consider, too, the ongoing effort of monitoring, tracking, and interpreting site usage (see the article, "Too Much Information: Web Site Statistics and How to Use Them,"). Knowing how visitors use your site is critical to maintaining it and improving its effectiveness. Over time, as you observe trends and user habits, you will want to make adjustments to site features and content that provide added value and enhance user experience. In addition to regular adjustments, you will likely need to make periodic modifications and updates or perhaps a site makeover or an entire re-build.
Of course, before you get meaningful site traffic, you need to promote your Web site to attract traffic. Search engine registration, though necessary, has become something of a "crap shoot," with very few assurances. Further-more, search engine registration is no longer a once and done event, but an ongoing monthly or quarterly effort.
But Web site promotion takes on conventional forms as well. A mailed announcement of an agency's Web site entails printing, postage, and handling costs. An agency's printed materials should include the Web site and e-mail address, which means additional expense if you need to re-order letterhead, business cards, and brochures.
Over time, as an agency acquires customer and prospect e-mail addresses, coordinated campaigns using mass e-mail and special promotions residing on the Web site can be developed. Such campaigns can be effective in enhancing the overall marketing effort, but take time, talent, know-how, and cash to develop, create, launch, monitor, and follow up.
Cost versus value
By now, you may think that creating and maintaining a Web site is one big headache of ongoing expense. Yes, there is no getting around it — an effective Web presence does cost time, effort, and money. A custom Web presence easily costs thousands of dollars in terms of cash outlay to third parties and internal personnel expenses. But your Web site is a marketing tool, and your agency is always doing some kind of marketing anyway. Self-promotion is a fact of business life and a Web site offers more marketing potential with farther reach than most any other marketing tool.
Also, if you take the view that a Web site is organic, changeable, and adaptable, your site can take on any form it needs to for enhancing your goals and objectives. The cost of making changes and adjustments is far less expensive than changing and reprinting a four-color paper brochure — and the changes are immediate.
Finally, consider the cost of an ineffective Web presence or none at all — lost credibility, lost opportunity, and lost customers. Agency Web sites are quickly becoming primary marketing vehicles, educational resources, and servicing tools. An agency without an effective Web presence will lose ground to those that have one. Plan for the time, effort, and cost of developing a first-class Web site and, if you maintain and work your site, it will reward you.
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