Determining Your SEO Services Budget: A Guide

  • July 7, 2024
  • SEO
No Comments

Digital marketing has emerged as the primary marketing channel for many businesses, offering unparalleled reach and targeting capabilities.

However, many business owners and executives still face challenges when it comes to budgeting for online marketing initiatives.

Budgeting for SEO (Search Engine Optimization) can be particularly complex, influenced by factors such as project scope, industry competition, and the specific services required. There is no one-size-fits-all calculator for estimating costs.

This article delves into the essential components of SEO pricing and offers guidance on how to calculate and plan your SEO budget effectively.

What Businesses Don’t Understand About Investing In SEO

SEO is a field where the adage “you get what you pay for” holds true. Adequate investment in SEO services can significantly enhance your online presence and drive business growth.

Recent data reveal that over half of SEO professionals work with monthly budgets ranging from $500 to $5,000. Notably, 28.6% report working with budgets in the $1,001-$5,000 range.

Image from Search Engine Journal, May 2024

Many business owners hesitate to invest in SEO, often due to a lack of understanding of search marketing mechanics and being too preoccupied with day-to-day operations to learn about SEO intricacies.

While many industries follow standardized, step-by-step processes to achieve specific outcomes, many business owners mistakenly treat SEO as a commodity, expecting similar straightforward results.

This misconception often leads them to fall for low-cost offers, such as $99/month “guaranteed page one” services from disreputable vendors, which never yield meaningful results.

The Cost Of Cheap SEO

In numerous internet marketing groups on platforms like Facebook, it’s alarming how many inexperienced individuals present themselves as SEO professionals and take on clients.

Common questions include, “I just landed a client who wants to rank for [keyword x] – what should I do?” showing a lack of expertise.

Additionally, some neophytes engage in link schemes, such as using private blog networks and third-party pages known as parasite SEO, without explaining the associated risks to clients. Occasionally, they generate content using AI without proper fact-checking.

However, when used ethically, AI can be a powerful tool in SEO, aiding in the automation of data analysis, pattern identification, and content creation, which helps reduce SEO costs.

While hiring an incompetent SEO might seem like merely a financial waste, the collateral damage of “cheap SEO” can be more severe. It can lead to a Google penalty and significantly reduce a website’s visibility on the web.

Business owners must remember that they are ultimately responsible for any SEO work performed on their site. Therefore, they should discuss specific tactics with service providers before entering into agreements.

Managing Your Resources

With Google utilizing over 200 (and likely many more) ranking factors, it’s easy to feel overwhelmed.

The good news is that focusing on just three core factors can yield significant success, regardless of your niche:

1. Information Architecture

Your site’s structure should be user-friendly, ensuring easy navigation and accessibility for both users and search engines.

2. Content

Your site’s content should adhere to best practices as outlined in the Search Quality Ratings Guidelines, with a strong emphasis on expertise, authoritativeness, and trustworthiness (E-A-T).

3. Backlinks

  • Backlinks must be natural. Avoid prevalent link schemes like private blog networks (PBNs) and paid guest posts. Instead, focus on building genuine links from topically relevant websites with high-quality content.
  • Quality is crucial: A smaller number of high-trust, high-authority, relevant links can outperform a larger quantity of lower-quality links.

You Manage What You Measure – Set Goals

Before establishing a budget, it is essential to define specific goals for your campaign.

Your goals should include measurable outcomes, a defined timeframe, and clear metrics for success.

Success was once measured solely by keyword rankings. Although SERP rankings remain an important metric, they are not the most critical.

The crucial metrics are those directly impacting the bottom line. Metrics such as organic sessions, goal conversions, and revenue are paramount.

Set goals like improving organic sessions by X%, increasing conversions by Y per month, or boosting revenues by Z%.

Keep your goals achievable. Stretch goals are fine, but overly ambitious targets can serve as a disincentive.

Equally important is allowing the campaign sufficient time to work.

According to Google,

“In most cases, SEOs need four months to a year to help your business first implement improvements and then see potential benefits.”

Developing A Budget

Your goals will determine the necessary tactics for success, setting a framework for developing an action plan and the corresponding budget.

This completes the circle of positioning and prioritizing the factors that drive results.

The answers to these questions will set priorities and determine the volume of work required to reach your goals.

Often, the work performed will be similar regardless of the budget level. The primary difference lies in the volume of work executed.

By adding twice the content and twice the links at a higher budget level, you are more likely to achieve success earlier.

Nonetheless, 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 refine a campaign to evaluate its success.

Remember, the lower the budget, the longer the journey will be.

How Much Can You Expect To Spend On SEO?

To execute a local SEO campaign, you might budget between $1,001 and $5,000 per month, which is the most common budget range among SEO professionals surveyed in 2023.

The budget for a national or international campaign is typically higher. Many SEO professionals work with budgets exceeding $10,000 per month for broader campaigns.

Some firms provide a “trial package” at a lower price without a contract, allowing prospective clients to test their services while minimizing risk.

If retaining a top-level SEO professional is beyond your budget, consider a one-time website SEO audit with actionable recommendations.

Improving your website can often lead to a significant boost in organic traffic. Content development and keyword analysis are other areas where you can hire a professional for a one-time fixed rate.

Another option is to become an SEO expert and manage it yourself.

SEO Cost Calculator – Measuring Organic Search (SEO) ROI

The following calculator is commonly used to measure return on investment for SEO, but it often has flaws.

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 this calculator is that it doesn’t account for the lifetime value of a new customer.

Online retailers thrive on repeat business. By not factoring in lifetime value, the true ROI is grossly understated.

The right way to calculate ROI is to include lifetime value in the calculation.

To accurately determine SEO costs and their 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, including lifetime value makes a huge difference in the ROI calculation.

SEO Campaigns Are Long-Term Investments

Unlike PPC (Pay-Per-Click) campaigns, organic search campaigns won’t deliver immediate results.

A well-rounded SEO campaign combines technical SEO, content marketing, and link-building. Even with flawless execution, it takes time for Google to recognize and reward these efforts.

That said, the traffic generated 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 include 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 influence the overall cost. These factors include the project’s scope, industry competition, and the specific types of SEO services required. For instance, 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. Conversely, an eCommerce company in a highly competitive industry might allocate $5,000 to $10,000 monthly for an extensive SEO strategy that includes comprehensive 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 neglect ethical SEO practices, resorting to tactics such as link schemes or private blog networks (PBNs), which can damage a site’s reputation and rankings. Such methods can attract penalties from Google, severely compromising a site’s online visibility and credibility. Therefore, it is crucial for business owners to exercise caution and diligence when selecting SEO professionals to avoid harmful consequences.

Additional Resources:


Featured Image: pattaraawat/Shutterstock

About BDM

We are a digital marketing firm dedicated to assisting our clients in achieving outstanding outcomes in various crucial sectors.

Request a free quote

We provide expert digital services designed to significantly improve websites' organic search rankings, enabling them to compete effectively for top positions, even with highly competitive keywords.

Subscribe to our newsletter!

More from our blog

See all posts