Digital is the primary marketing channel for many companies.
Many owners and executives still have difficulty budgeting for online marketing.
Budgeting for SEO can be complex and influenced by factors like project scope, industry competition, and specific services needed. There is no universal calculator for calculating costs.
This article explores key SEO pricing components and how to calculate and plan your budget.
What Businesses Don’t Understand About Investing In SEO
SEO is an area where you truly get what you pay for. Investing adequately in SEO services can significantly impact your online presence and business growth.
According to recent data, over half of all SEO professionals work with monthly budgets ranging from $500 to $5,000, with 28.6% reporting budgets in the $1,001-$5,000 range.
Image from Search Engine Journal, May 2024
Many business owners are reluctant to invest in SEO, often because they lack understanding of how search marketing works and are too busy running their businesses to learn about SEO.
Most industries follow a standardized, step-by-step process to achieve specific outcomes.
Many business owners mistakenly assume SEO works the same way, treating it as a commodity.
This misconception leads them to fall for low-cost offers like $99/month “guaranteed page one” services from spammers and scammers, which never deliver meaningful results.
The Cost Of Cheap SEO
I belong to several internet marketing groups on Facebook. It’s truly frightening the number of noobs posing as SEO professionals and taking on clients.
It’s common to see a question like: “I just landed a client that wants to rank for [keyword x] – how do I do it?”
A close second is people using link schemes, specifically private blog networks and third-party pages known as parasite SEO, without ever explaining the risk to clients. Many use AI to generate content at a scale without fact-checking.
However, AI can be a powerful tool when used ethically in SEO.
AI helps automate data analysis, identify patterns, and streamline content creation and optimization, which in turn helps to reduce SEO costs.
If business owners were just throwing money away by hiring an incompetent SEO, that would be bad enough. Unfortunately, the collateral damage from “cheap SEO” can go much deeper.
It can draw a Google penalty and virtually wipe out a website’s visibility on the web.
Business owners must remember that they’re ultimately responsible for any SEO work performed on their site. They should discuss the specific tactics service providers use before entering into an agreement.
Managing Your Resources
With Google utilizing 200+ (and likely exponentially more) ranking factors, it’s easy to become intimidated and paralyzed.
The good news is that if you focus on just three factors, you can still crush it, regardless of your niche.
Here’s what you need to pay attention to:
1. Information Architecture
Your site should:
- Be crawlable & accessible to search engines.
- Follow Google Webmaster Guidelines for SEO best practices.
- Be optimized for a high-quality user experience (paying careful attention to Core Web Vitals).
- Render cleanly on mobile, tablet & desktop devices.
2. Content
Your site’s content should conform to best practices as disclosed in the Search Quality Ratings Guidelines with an emphasis on:
- Being unique and offering value.
- Matching search queries.
- Satisfying user intent.
- Being of high quality.
- Satisfying the fresh content algorithm.
3. Backlinks
- It must be natural. Avoid popular link schemes like private blog networks (PBNs) and paid guest posts. Instead, focus on building real links from topically relevant websites with high-quality content.
- Quality is key: A lower number of high trust/high authority/relevant links can outperform a large quantity of lower quality links.
You Manage What You Measure – Set Goals
Before establishing a budget, one must define specific goals for a campaign.
Your goals should include measurable results, a defined timeframe, and an actual measurement for success.
At one time, success was measured solely by keyword rankings. While SERPs remain an important metric, they are not the most important.
I would argue that the most important metrics are those that directly impact the bottom line. Organic sessions, goal conversions, and revenue fall into that category.
Goal setting could include improving organic sessions by X%, increasing conversions by Y per month, and/or increasing revenues by Z%.
When setting goals, it’s important to keep a couple of things in mind.
First, they need to be achievable. Stretch goals are fine, but pie-in-the-sky benchmarks can actually work as a disincentive.
Equally important: you need to give the campaign time to work.
“…in most cases, SEOs need four months to a year to help your business first implement improvements and then see potential benefit.”
Developing A Budget
Your goals will determine what tactics are needed for success. This, in turn, sets up a framework for developing an action plan and the budget necessary to support that plan.
This brings us full circle to positioning and paying attention to those factors that move the dial.
- How does your information architecture stack up against competitors?
- How does your content strategy fare as compared to the competition?
- How does your backlink profile stack up against the top-ranked websites?
The answers to those questions will determine priorities as well as the volume of work needed to reach your goals.
In many cases, the actual work performed will be the same, regardless of budget level. The difference is the volume of work performed.
If you add twice the content and twice the links at budget level “B” compared to budget level “A,” you are more likely to achieve earlier success at the higher budget.
That said, the right budget is one you can afford, without losing sleep, for a minimum of 6 and ideally 12 months.
It takes time to properly plan, implement, and tweak a campaign to evaluate its success.
Also, remember that the lower the budget, the longer the journey.
How Much Can You Expect To Spend On SEO?
To execute a local campaign, you could budget between $1,001 and $5,000 per month, the most common budget range among SEO professionals SEJ surveyed in 2023.
The budget will likely be higher for a national or international campaign, with many SEO pros working with budgets exceeding $10,000 per month for broader campaigns.
Some firms offer a “trial package” at a lower price with no contract. This allows prospective clients to test their services while minimizing risk.
There are some options if you can’t afford to retain a top-level SEO pro. The most common is a one-time website SEO audit with actionable recommendations.
Just fixing your website will often lead to a meaningful boost in organic traffic. Content development and keyword analysis are other areas where you can get help from a pro for a one-time fixed rate.
Another option is to become an expert and do it yourself.
SEO Cost Calculator – Measuring Organic Search (SEO) ROI
The following is a calculator commonly used for (incorrectly) measuring return on investment for SEO.
Organic Search ROI Calculation Assuming “One Shots”
| Example: selling blue widgets | |
| Number of new customers acquired via organic search in a given month | 10 |
| Average net income (profit) per order | $100 |
| Total profits from new organic search customers in a given month | $1,000 |
| Monthly marketing budget (expense) | $2,500 |
| Monthly profits from new customers ($1,000) divided by monthly organic marketing spend ($2,500) | ROI = -60% |
The flaw in the above calculator is that it fails to take into consideration the lifetime value of a new customer.
Online retailers need repeat business to grow. By not calculating the lifetime value of a new customer, the true ROI is grossly understated.
The right way to calculate ROI is to build lifetime value into the calculator.
To calculate the cost of SEO and its true ROI use this formula:
Average lifetime profits from new customers acquired in one month divided by monthly organic marketing spend.
Organic Search SEO ROI Calculation Assuming Lifetime Value
| Same example: selling blue widgets | |
| Number of new customers acquired via organic search in a given month | 10 |
| Average net income (profit) per order | $100 |
| Total profits from new organic search customers in a given month | $1,000 |
| Average number of orders per customer over a “lifetime” | 5 |
| Total average lifetime profit | $5,000 |
| Monthly marketing budget (expense) | $2,500 |
| Average lifetime profits from new customers ($5,000) divided by monthly organic marketing spend ($2,500) | ROI = 200% |
As you can see, that one variable makes a huge difference in how the ROI is stated.
SEO Campaigns Are Long-Term Investments
Unlike PPC, an organic search campaign will not yield immediate results.
A comprehensive SEO campaign will involve a combination of technical SEO, content marketing, and link-building. Even when executed to perfection, it takes time for Google to recognize and reward these efforts.
That said, the traffic earned from these efforts is often the most consistent and highest-converting among all channels.
FAQ
How do SEO professionals measure success?
The top metrics used to measure SEO performance are click-through rate (CTR), keyword rankings, and branded vs. non-branded traffic.
What is the most common budget range for SEO campaigns?
The most common SEO budget range is between $1,001 and $5,000 per month, with 28.6% of respondents working within this range.
What are the primary factors that affect SEO budgeting?
Determining the appropriate budget for SEO involves considering several key components that can influence the overall cost. These factors include the scope of the SEO project, the level of competition within the industry, and the specific types of SEO services that are required. For example, a small business in a niche market with low competition might budget around $1,000 per month for local SEO services, focusing on optimizing its Google My Business profile and building local citations. In contrast, an ecommerce company targeting an audience in a highly competitive industry might need to budget $5,000 to $10,000 monthly for a comprehensive SEO strategy that includes extensive link building and technical SEO audits.
What risks are associated with choosing low-cost SEO services?
Opting for low-cost SEO services poses significant risks to a business. These services often fail to comply with ethical SEO practices, resulting in the use of tactics such as link schemes or private blog networks (PBNs), which can be detrimental to a site’s reputation and rankings. Such practices can potentially attract penalties from Google, severely compromising a site’s online visibility and trustworthiness. It is crucial for business owners to be vigilant and discerning when selecting SEO professionals to avoid these harmful consequences.
More resources:
- 5 Reasons Why You Should Avoid Cheap SEO Packages
- How to Do an SEO Audit: The Ultimate Checklist
- How To Secure And Defend Your SEO Budget For Executive Buy-In
- State Of SEO report
Featured Image: pattarawat/Shutterstock
Category SEO
