But for every one of these clients, I have countless more that have turned down proposals due to cost. While this is routine, especially when working with budget-restricted small businesses, it still surprises me. The irony is that while smaller companies and teams should be even more discerning with how they spend their time, they tend to simply have a knee jerk reaction to spending money – opting to do things in-house that make more sense financially to hire out.
Balking at the cost of a quote without taking the time to do a thorough price comparison is never a wise decision. So, let’s take the time to look at how much your content actually costs.
Some copywriters will just give you a total price for the project without any mention of how long it is expected to take or how many revisions are covered, but others will break down the cost on an hourly basis. Always try to find out how long the copywriter is budgeting for the project so that you can perform an accurate cost analysis comparison.
Let’s say you get a proposal to have a piece of content written by a freelance content marketer. The quoted cost is 4 hours of work for a price of $160 ($40/hr).
How much will it cost for your team (or yourself) to produce the same content?
Since your employees are probably paid an annual salary instead of an hourly rate, the first step is converting their salaries into hourly amounts. Take a salary and divide it by 2,080 hours worked per year.
Let’s say that the person responsible for creating content in-house is paid $50,000/year. That works out to a rate of $24/hr.
Based on this information, hiring the professional looks unnecessary. Afterall, your team can produce the same content for $96, right? Some business owners stop here and choose to write their own content for “cost-savings,” however, this is a highly flawed comparison. Find out why…
Actual Hourly Rate
That $24/hr is a misleading figure, because employees cost more than just what an employer pays them. Employers also incur expenses for benefits, employment takes, and other items. These costs inflate the price of an employee by about 30%, meaning that hourly rate is more like $31.20.
But even the actual hourly rate doesn’t tell the whole story.
In an office, employees aren’t spending 100% of their time working on an individual project. There’s significant time-loss around creating content from attending meetings, checking and answering emails, and so on. In most companies, employees lose about 30% of their day doing these administrative tasks that don’t add any value to the content process. Therefore, your in-house employees are only spending about 70% of their time on content assignments. This loss changes the actual hourly rate for producing content to $40.56.
A copywriter, however, is spending dedicated time working on content. That means that if a project is quoted as 4 hours, you can be sure that a freelance copywriter is spending all 4 hours working solely on your project.
Furthermore, this assumes that the employee creating content is in a primarily content-based role. In smaller companies where there are fewer people, each employee is wearing more hats, which means that spending time on content also has a hidden cost of taking time away from other unrelated functions. While this cost can’t necessarily be calculated, it shouldn’t be overlooked.
Lastly, a professional copywriter is an expert at creating content, which means he/she will be more efficient than an employee who has other strengths and responsibilities. Therefore, a project that will take an experienced copywriter 4 hours to complete could take an in-house employee maybe 6 or 7 hours to do.
At a rate of $40.56, the in-house cost to produce the same content rises to around $264.
The output from a copywriter may also be more professional, easier to read, and more on-brand than your team is able to produce in-house. Obviously, this will depend on the skill-level of your specific team. While that doesn’t figure into a cost analysis directly, it is another factor to consider.
In the beginning of this analysis, the inexperienced business owner would have compared the assumed cost to produce a content project to a freelancer’s quote of and turned down the proposal. An incomplete cost analysis comparing a $96 in-house cost to a freelancer’s $160 rate made the decision easy, albeit rash.
However, after figuring in added employer costs, time loss, and productivity inefficiencies, it’s clear that opting to do the work inhouse for $264 instead of paying a professional $160 to take the work off your team’s plate is a wasteful decision.
Kate Pierce is the owner of LionShark Digital Marketing LLC, a West Michigan internet marketing company. Her areas of expertise include Paid Search, Search Engine Optimization, Business Blogging and Web Copywriting. She lives in the Grand Rapids area with her husband and two children and enjoys cooking, watching sports, and spending time together as a family. Like a true digital marketing expert (i.e. geek), she loves talking about current marketing trends… so don’t say you weren’t warned!