Wednesday, May 20, 2009

How Much Does a Website Cost?

I know at first glance a column about how much a Web page costs isn't exactly a "Leading Edge" kind of thing. But for those of us in the day-to-day slog of building these things, on the leading edge of the business if you will, what we should charge is pretty darn important. If you're on the client side, the cost of a Web page is pretty important too, particularly if you're don't want to get caught with your virtual pants down when it comes to establishing and holding to a budget your boss assigned you.

As a public service, then, I'll break it down and help you, dear reader, understand exactly what things cost. There are a lot of assumptions in here: assumptions on profits, assumptions on hourly rates, assumptions on overall time to complete the project I'll describe. I've tried to ground them in some solid, verifiable averages and reasonable expectations that tend toward the conservative side.

For example, the salary numbers come directly out of the AIGA 2006 salary survey, which may have questionable numbers (they seem a little low to me) and questionable job titles (they don't always match up with what I've seen people in these positions called). At least it represents national numbers of a significant scale. In terms of calculating the hours people work in a year and how those hours translate into reasonable billing rates, I turned to an excellent article on the subject by Neil Tortorella. It seems to have reasonable assumptions. As for the project I'm going to describe, estimating is always a black art, but the numbers seem to make sense when you break them down. They match well with my 12 years of experience on getting these things done. Could the job be done in less time? Perhaps, if you've got the most efficient shop in the world, a client who doesn't know the concept of revisions, and a structure in which your account person, or "senior producer" as the AIGA calls him, never has to talk, e-mail, or meet with clients.

Yeah. Right.

Here's the situation: you're launching a new campaign that will use a combination of tactics: banners, text links, search marketing, and e-mail. The actual mix is irrelevant because what we're really looking at is where all these things point to: a landing page. The landing page is a one-page form with a couple paragraphs of copy, some images, and a form that integrates with a lead-capture database following a client-side validation to ensure all the information has been entered correctly. After the lead data are captured, the user gets a thank-you page and can move on.

Simple, right? Probably something we've all dealt with a gazillion times. It's simple and relatively uncomplicated so no one needs to get down into the weeds of all the variables that go into making a full-fledged Web site or rich media campaign. It's a page. With a form. Period.

Most clients would look at this and say, "Hey, it's just a page! That should take about five hours to build, right?"

Not even close. Here's why.

The team that builds this page is made up of the usual suspects:

* A "Web strategist" who might be an owner-level person offering strategic guidance: $80,000 a year

* A "senior producer" who's the account manager: $54,000 per year

* A "creative director" who leads the creative development: $80,000 per year

* An "art director " who does the heavy design lifting; $61,000 per year

* A "Web designer" who puts the page together: $48,000 per year

* A "Web developer" who's really the programmer who makes the form work and integrates it with the database: $60,000 per year

* A "copywriter" who writes the copy for the page: $65,000 per year.

Those numbers come from the AIGA, and the team seems like a reasonable mix to get the job done. The salaries seem low to me but represent median salaries across the country for these positions. Your mileage may vary.

How much do these people need to be billed out at to make a decent profit? If we assume the average reasonable billable time for people is 1,428 hours per year (the Tortorella article offers detail), agency overhead amounts to about 67 percent of salary (again, a reasonable number according to Tortorella), and a 25 percent profit is reasonable (an assumption, but a percentage many of us shoot for), then following billing rates make sense for the positions above:

* Web strategist: $107.56 per hour

* Senior producer: $49.85 per hour

* Creative director: $73.85 per hour

* Art director: $56.31 per hour

* Web designer: $44.31 per hour

* Web developer: $55.38 per hour

* Copywriter: $60.00 per hour

These numbers seem conservative, but they're what we've got for this exercise. We'll assume an average hourly rate of $63.89, just to keep things simple and conservative.

Now let's look at the tasks necessary to get this single page completed. There's the concept phase, when the page is planned. We need account management of the project, page design, page production/layout, copywriting for the page, inquiry form production, and the programming that goes into the form. Makes sense, right?

There's not enough space here to go into all the details of individual tasks and hours, but let's assume these are reasonable numbers for the tasks if you include client meetings, a couple revisions, and the usual back-and-forth that always takes place:

* 5 hours of creating the concept = $319.47

* 5 hours of account management = $319.47

* 6 hours of design = $383.36

* 7 hours of production/layout = $447.26

* 12 hours of copywriting = $766.72

* 7.5 hours of form production = $479.20

* 4 hours of form programming = $255.57

* 46.5 total hours x $63.89/hour = $2,971.05

There you go. Nearly $3,000 for a page and about nine times the number of hours the client assumed when they first heard about the project. Amazing, huh? You may quibble with some assumptions, but I've tried to be pretty conservative. The hourly rates are probably about half of what most companies I've encountered actually charge. Heck, when's the last time you ran into a creative director at a midsized to large agency who only makes $80,000? If you have, please have him contact me. I may have a job for him.

The bottom line is Web development is expensive, involves lots of people, lots of management, and lots of back-and-forth with the client. Except in the rarest of cases, none of us ever builds just pages but complicated applications and Web presences that often involve hundreds of pages, databases, multimedia, tons of content, multiple forms, and lots and lots of client meetings and approvals. Unfortunately, few of us walk our clients through really understanding the process (and the hours) that make it all happen

The next time you encounter someone with sticker shock when handing him an estimate, don't dismiss him. Walk him through what needs to be done and see if he still thinks that page can be whipped out in a couple of hours. It's an educational opportunity that shouldn't be missed.

By Sean Carton, ClickZ, Mar 19, 2007

1 comment:

mark said...

I’ve been reading many blogs related to this topic. But I feel your blog tops them all.


Logo Design Bakersfield