Online Platform Costs:
How much does it cost to develop a professional online platform

Anyone looking to launch a new online platform is in for a comprehensive project. There are many important decisions to be made, such as choosing the hosting provider or deciding on the appropriate CMS (Content Management System). It is essential not to lose sight of any details, which is why it always pays off to develop a detailed plan in advance. The development of a professional online platform can prove to be quite complex, as it offers numerous functionalities and interactions and therefore requires more sophisticated features than a standard website. Additionally, the creation of an online platform is technically so demanding that various specialists should be hired to maintain quality while keeping costs under control.

The Most Important Points in Brief

What is the Cost of Developing an Online Platform?

The costs for the development of an online platform depend on its scope of functionality. Generally, the costs range from €12,500 for a basic platform with fundamental functionalities to €25,000 for a platform with complex processes.

1. Two Approaches to Online Platform Development

The first approach to creating a functional online platform is to develop it using a so-called Content Management System. The other possibility is custom programming, which should be carried out by an experienced IT professional. Each of these approaches has certain advantages, but also disadvantages that should not be overlooked or concealed. It is also a matter of cost which method is preferred. Those who opt for a CMS model can implement the online platform more cost-effectively. The operator only pays for the technical development, as well as for extensions or the purchase of plugins. However, those who want to launch an online platform developed from scratch must expect significantly higher costs. Depending on the scope and features, the costs for this start in the five-figure range.

1.2 Content Management Systems

The CMS software is installed on the operator’s own server or in their webspace. Once installed, the operator has a fully built website that can be used immediately. Additionally, the operator is offered various options for personalization as well as adjustments to their specific needs. For example, the operator can adjust the new online platform in size or expand it as needed and use every available function. Furthermore, the most well-known CMS programs such as Drupal, WordPress, or Joomla are available free of charge. However, the costs here lie in the personalization and customization of the software. A custom design or extensions must either be paid for expensively or added by a specialist. Another advantage of CMS software is its special flexibility. The drawback of the free version, however, is that such a system may eventually reach its limits in terms of scalability. Therefore, personalization can sometimes become challenging, although in most cases the CMS programs prove to be entirely sufficient in their offerings.

Taboola, an online content marketing platform developed with Drupal.

1.3 Custom Development

The custom programming of an online platform is as labor-intensive as it is complex and requires a high degree of flexibility, which is why it is primarily used for particularly complex projects. In these cases, the available CMS software programs do not offer the desired level of functionality or future expandability. For completion, an agency should then be consulted—one that is knowledgeable in both web development and web design and has experience in developing online platforms. Most online platforms today are created in HTML, JavaScript, or CSS. Additionally, mySQL, ASP-net, or PHP is used. In newer platforms, you may also find mySQL combined with Ruby on Rails and PHP.

Soundcloud is a custom-developed online platform based on Ruby on Rails.

2. Technical Perfection of the Online Platform

2.1 Programming

Depending on how complex an online platform is, the corresponding costs can increase. For example, many features on an online platform built with CMS software result in higher costs. The choice of software also has a significant impact on both cost and quality. Programming in WordPress might entail lower costs, but in practice it proves to be less effective or expandable than Drupal. Generally, the more individuality and customization is demanded from the software, the higher the costs become. Furthermore, neither Drupal nor WordPress were designed to enable laypeople to implement a CMS online platform effortlessly. Therefore, every operator must expect higher costs as soon as more functionalities than the basic package are desired.

Certain typical functionalities that an online platform inherently requires make the difference from a simple website. A good example is a matching function that connects providers with demanders based on complex algorithms. This core functionality ensures that users are segmented according to various variables and then suggested to one another. Behind this lies an elaborate programming that requires a multi-layered structure. This is why the cost for developing such a functionality increases.

Another functionality is a search mask with multiple filter options and complex algorithms, ensuring that users always receive the relevant results. The search mask should be able to include at least the following variables:

• Name
• Category
• Location
• Date
• Price

This also includes the integration of an interactive map, which is extremely important for some platforms such as Uber, where the geographical location of providers and demanders plays a significant role. The implementation of the map functionality is usually developed using the Google Maps API.

Immobilienscout24 offers an extensive search functionality with multiple filter options.

An online platform is also useless without a user profile, as users with similar interests are often meant to be brought together. Without detailed profiles, this is not possible, and on many different online platforms it is primarily the user profiles that determine the platform’s success, as is the case with a job platform. On a job platform, user profiles should absolutely include important information such as the type of education or existing work experience. Thus, the user profiles must always be tailored to the purpose of the respective online platform. Online platforms such as social networks, which are also considered matching platforms, are particularly popular. Nevertheless, these communication platforms require many additional functionalities, and the more functionalities there are, the more successful the online platform becomes. Additionally, this online platform requires, in addition to user profiles, a newsfeed that displays individually curated news for each user. For this, several variables need to be interconnected, which in turn increases the costs for development.

2.2 Speed

Load times are nowadays one of the decisive success factors in determining whether a website will succeed or not. Long load times are considered a no-go by most users and lead to the website being abandoned. Therefore, fast load times for an online platform are very important to secure visitors’ dwell time. Additionally, this can attract visitors coming from similar websites with long load times. Thus, the conversion rate increases with the speed of the website.

2.3 Security

Security is another important factor that an online platform should guarantee its visitors. Since personal customer data is also stored on an online platform, security cannot be taken seriously enough. In addition, there are very strict data protection regulations (GDPR) in Germany that must be adhered to. Therefore, the best possible encryption for the data should be chosen from the start, although this may increase the costs.

2.4 Hosting Plans

Anyone who wishes to use a hosting provider should thoroughly research the services and costs provided before signing a contract. It is essential to pay attention to a healthy price-performance ratio to ensure that the costs fit within the budget. Usually, there is an affordable basic package, and the more support an operator needs, the more expensive the service becomes. The basic package is available from around 50 euros per month for a managed hosting server, which, however, includes very little service for a website. For a successful website, comprehensive support is needed for speed, a secure cloud, appropriate capacity, and scalability. 

Additional costs in this area include, for example, the purchase of a domain, which is relatively low compared to the other types of costs.

3. Design

Many platforms have a large collection of themes, templates, or design layouts that they can use for free. Often, however, these preset themes are not sufficient to create a professional brand impression. Although they are free and easy to use—thus providing an ideal solution to save time and costs—such designs do not differentiate themselves from competitors and are quickly recognized by users.

Even though these design themes are more affordable than having a design created by an agency, it is always recommended to have a custom design created so that your online platform becomes unique. This helps with the long-term establishment of your brand.

Teachable is an excellent example of a modern and attractive online platform design.

4. Mobile

Having an online platform is no longer enough nowadays; it must be optimized for mobile devices. If an online platform is difficult to access with a smartphone or tablet, it severely limits visitor numbers and the development of the online platform would no longer be cost-effective, as a large portion of internet usage occurs on mobile devices. Therefore, after development, one can consider creating apps for iOS and Android to secure a better position in the market. However, caution is advised with iOS and Android apps, as development can be quite costly and must be justified by a meaningful added value.

5. Marketing

Unfortunately, creating an online platform is only the first half of the work. The second half is almost just as challenging, as it involves marketing. Every online platform requires massive marketing, and the costs for it should be factored into the budget from the start. This means that this line item cannot be too limited if the platform is to stand out from its competitors. Although this item is often neglected in favor of investing in development, it is here that the greatest hope for ROI (Return on Investment) lies, which is why good marketing can pay off handsomely.

Among the most important marketing measures are the following:

• Content: A content strategy is indispensable for any online platform in its early development phases. This includes the costs for running a blog, creating high-quality articles, videos, and other content, as well as promoting them.
• SEO: Can be quite cost-efficient and almost always delivers positive ROI in the long term, though it takes some time to take effect (3–6 months).
• Email Marketing: Email marketing is among the most cost-effective marketing measures.
• Paid Advertising: Can be quite expensive, especially if managed by inexperienced individuals. It only pays off if you have a sufficient budget. This budget can greatly depend on keyword competition and the industry, but it should be at least 5,000 EUR for a two- to three-month campaign.
• PR: Can be as expensive as paid advertising. It is best not to try to buy placements, but rather to promote your online platform with high-quality content. Create a press release and send it to online media.
• Guerrilla Marketing: Guerrilla marketing encompasses relatively low-cost and innovative marketing strategies that are considered extraordinary and can be groundbreaking for the success of an online platform. One example is the social network Twitter, which many years ago during the Super Bowl in the USA displayed users’ tweets in real time on large screens. By the end of the day, the number of Twitter users had quadrupled. Although the investment was not cheap, this tactic has contributed enormously to Twitter’s success today.

Cost Overview

And finally, a somewhat detailed overview of the costs for the development of an online platform:

Conclusion

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