Yep, I get it. Web 2.0 has changed the interactive world and participant expectations. Then again, it actually changes on a daily basis. Social networking, the blogosphere, microblogging… honestly, it could be a full time job just coming up with all the hip names of web infrastructures. All hail the mighty copywriter!

But, I digress. This post is not about the names, the latest functionality or insight into what’s coming down the pike. Instead, let’s talk about the price of a website. As we’ve discussed in previous posts, advertising agency’s sell “time” and “ideas” as a commodity. That’s the widget exchanged for compensation. There’s a lot of talk about the traditional agency model, but this is about what is happening today, in 2009. I do not claim that this post will be relevant forever, or even in a year.

Determining a fair price for the development of a website can often become a source of contention. This is because there can be a wide range of perceived value and an unclear understanding of the effort it takes to build a great website. Even with the advent of ‘off the shelf’ CMS templates (yes, we love you Joomla), success still rests in the hands of good content, good design, good planning and ultimately, good collaboration.

I’ve noticed a trend of significantly shrinking website budgets with a major increase of functionality requirements. Yes, of course, as time goes on price efficiencies should be expected. That said, wanting to pay $5,000 for a robust website that includes all the bells and whistles such as forums, blogs, multimedia newsrooms, SEO, polls, flash, forms that integrate with a company’s internal sales software, e-commerce and a complete CMS for back end management poses a challenge for anyone wanting to be paid for their time. That’s on top of the text, photography and programming that serve as a bare minimum.

Here’s the issue: At a rate of $85 an hour (which is pretty darn low for anyone who isn’t your cousin) means that you have a grand total of 59 hours to accomplish everything. That’s 7.5 full working days. Yep, about a week and a half worth of work for one person. Considering that a typical agency would, at the very least, have a project manager, copywriter, designer and programmer assigned to it, you’re looking at each person getting just 14.75 hours to do their part. That’s less than 2 days. Uh-oh.

Don’t get me wrong, there are plenty of websites that can be developed in 59 hours. Beautiful brochure sites with limited rich media content and visitor interaction modules can be done rather quickly. It’s just a matter of the end deliverable and having a clear understanding of what it takes to get there.