Finding the right SEO budget is a tall task. The thing that makes things even more challenging is that business owners are generally skeptical about search engine optimization. Some of them think that SEO is a scam, which prevents them from realizing its true value.
Whatever the case might be, boosting your existing search engine rankings is the best marketing strategy for increasing online sales. This is especially true if you manage to rank for lucrative money keywords. By driving more visitors to your site, you can also increase brand awareness and help other marketing efforts.
On the other hand, if you wish to get the most from SEO services, make sure they’re within your current digital marketing budget. Overpaying for any promotion can severely hinder your daily operations and potentially stifle your growth.
Basic considerations
If you’re serious about SEO, you should put a large portion of your overall marketing budget into this activity. This type of online advertising can provide massive benefits to your brand, but only if you can reach the top spots in Google.
The thing you should always remember is that you’re not alone on the market. Google search engine rankings are constantly shifting, and new players enter the field almost daily. Given such a dynamic environment, the best way of surviving is by keeping up with the trends and continuously increasing your marketing spend.
Before we get to other sections, here are a few main things you need to keep in mind:
- SEO is a long-term marketing approach. It takes at least three to four months to see any results. Ideally, you should wait for at least one year to assess the results.
- Short-term fixes usually don’t work. In fact, they can cause a Google penalty leading to additional problems.
- Hiring a reputable SEO agency doesn’t come cheap. While you can find smaller packages at $1,000 to $2,000, you must be prepared to spend $5,000 to $10,000.
- Your spending is almost always affected by outside factors such as competition and the industry.
- Creating an in-house team might be good in the long run, but it sets back all your marketing efforts for several months back. Even then, there’s no guarantee that having an in-house team will provide better results than paying for an external SEO professional.
Factors that affect your SEO spending
According to a survey from 2021, 74% of companies invest in search engine optimization. By comparison, an older survey states that 45% of small companies invest in paid ads, specifically Google ads.
Obviously, companies would much rather spend on SEO than any other digital marketing channel. The enormous benefits that optimization provides overshadow both PPC and SMM. To make the most of this approach, you should consider several things during SEO budgeting:
Website traffic vs. other types of traffic
First off, you need to make sure that the organic traffic from search engines is really the best way to go. Despite being an inferior approach, paid search generates enormous value for certain brands. Social media, on the other hand, also has its advantages.
Generally speaking, organic search is the optimal promotional method for online shops. Certain queries are tailor-made to drive highly-converting visitors to the site.
The current state of the website
Your future spending will be affected by whether you used SEO strategies in the past. In other words, websites that have already used SEO marketing in the past will need much lower investment. These platforms already have some website content and have previously invested in link-building.
On the other hand, sites that have Google penalties or/and have never used content marketing services will require a major investment. The hardest thing about optimization is getting a brand off the ground. Once you perform some basic SEO marketing and saturate your pages with quality content, things should be much easier.
Competition
Most marketing experts won’t tell you this, but your SEO efforts are heavily affected by the competition. It’s really hard to reach the top spots in Google for popular phrases or to overtake websites that have been in the business for a long time.
Although you can still dominate a competitive industry, you’ll have to apply an actionable SEO strategy and increase spending. Before embarking on such an endeavor, we suggest that you revise your existing digital marketing budget. Putting a measly $500 or $1,000 won’t help in these situations.
Brand awareness
Companies that have high brand awareness don’t have to invest as much money in SEO. They’ve already built a name for themselves, so it’s much easier to penetrate the Google rankings. If there’s name recognition, other bloggers are much more willing to link to your pages. Similarly, readers are more likely to share your posts on social media.
Other marketing efforts
Increasing your SEO spend makes much more sense if you’re an entirely web-based business or if you already use other digital marketing channels. Despite having different marketing goals, all these strategies eventually aim to increase your profitability.
So, when deciding how much to invest in SEO, you should also consider your social media and Google Ads budget. These marketing strategies usually work in cohesion, and putting more money into one of them usually benefits the other two.
6 Methods for finding the right SEO budget
Your SEO marketing efforts can generate enormous value for your brand. However, spending money blindly can stifle your daily operations. This is why you need to find a proper balance that would allow for optimal growth.
After sharing some basic tips, let’s take a deeper dive into SEO budgeting!
1. Reroute your marketing budget
Let’s presume you already have a well-diversified marketing budget that involves several promotional channels. If you wish to add search engine optimization, you’ll have to cut the funding for some of these approaches.
For example, let’s say you’re spending 40% of your budget on Google Ads, 30% on Facebook, and 30% on email campaigns. Obviously, your main priority so far was paid search, given that this is your biggest investment. In this case, it might be good to reduce your social media and email spending in favor of SEO.
Before pulling the plug, perform a thorough ROI analysis. Although your priority is paid ads, it might turn out that the other two methods are more lucrative. You should also consider broader marketing objectives. For example, certain marketing efforts generate high brand awareness despite low ROI, so it’s still worth investing in them.
2. Assess prices
To have a better understanding of SEO, company prices, and potential returns, you should get quotes from numerous agencies. Create a spreadsheet with several reputable providers and compare their pricing.
Although each company has its plans that specify a certain number of articles/links, try to compare those plans with what other brands offer. Of course, the number of links shouldn’t be your only consideration. You also need to consider that reputable brands usually provide better results while providing the same number of links/articles.
3. Consider the service you need
There are numerous services that fall under the SEO umbrella. Besides packages that provide a little bit of everything, you can also pay for link building, keyword research, content creation, and website audit.
Sometimes, it’s much better to pay for individual services than get a plan. For example, if you have lots of fantastic articles on your site, you probably shouldn’t invest in content creation. Instead, you can just pay for links to boost existing pages. On the other hand, if you received a Google penalty, you should tackle the issues before anything else.
Here’s how much you’d have to pay for individual services:
- SEO audit: $650 to $14,000
- Blog writing: $5 to $50 (Can go much higher depending on the type and quality of the post)
- Link building: $100 to over $1,500
- SEO consulting: $50–$350 per hour
- Keyword research: Usually a part of packages or content writing
The good thing about optimization is that it gives you a lot of leeway for experimenting. If you’re strapped for cash, you can simply focus on a specific task that would help you boost performance.
4. Analyze PPC costs
PPC analysis can provide an approximation of how much your traffic is worth. For example, if it costs $1 to advertise in Google for a particular keyword, that means you should pay $1 for each visitor your drive via organic traffic. By following this logic, to get 1,000 visitors via organic traffic, you should be prepared to spend $1,000.
Of course, the calculation is much more complex than that. When you get a certain number of monthly visitors, you can rest assured you’ll get similar traffic the following month. In other words, you get continuous benefits with optimization, so $1 spent on PPC and $1 spent on SEO aren’t the same.
The thing that makes PPC analysis so great is that it helps you approximate competitors’ marketing budgets. Of course, this is only for paid advertising, so you can’t say for certain how much they spend on search optimization. However, it can at least tell you in which ballpark you should operate.
5. Calculate purchase value and conversion
Another way to calculate traffic value is by calculating page traffic, conversion rate, and purchase value.
Start the analysis by checking how much traffic a particular page gets. You can utilize AhRefs, SEMRush, or Google’s tools for this particular task. Keep in mind that the traffic values are often underrated, so they could be much higher than the tool indicates.
Once you know how many visitors the website gets, it’s time to analyze conversion. There isn’t any specific tool that can help you with this task. Instead, it’s best that you use industry data. On average, online shops have a conversion rate of 2.5% to 3%. The general rule of thumb is that higher-value products have lower conversion and vice versa.
After that, you need to find the value of an average purchasing order. According to the latest global data, a person spends $93. These figures are higher in economically developed countries such as the US, the UK, and Japan. So, you might have to tweak the data accordingly.
When you get all the info, it’s time to make a calculation. For example:
- 10,000 page visitors at a 5% conversion rate make for 500 purchases.
- Each purchase is valued at $100, which gets us to $50,000 page worth.
In theory, you should be prepared to invest this much in SEO to overtake the top page. Keep in mind that simply reaching the top spot might not be enough. You also need to have a landing page and products that can convert visitors.
6. Calculate the customer lifetime value
Another thing you should consider during SEO budgeting is the CLTV of customer lifetime value. Instead of going with a single purchase assessment, we try to assess how much each client is worth to our brand over its lifetime. So, let’s apply this to the previous calculation:
- 10,000 page visitors at a 5% conversion rate make for 500 clients.
- Each client has a lifetime value of $1000, which gets us to $500,000 lifetime page value.
Bear in mind there are several issues with this model. First off, we can’t tell for certain whether all these purchases are made by unique clients (unless they’re made through our site). So, instead of 500 customers, a site might’ve received 450 unique clients during the month.
Furthermore, we don’t know if we can retain the same placement in Google for a longer period. We might get these figures for the next two or three months, but we won’t be able to squeeze the entire lifetime value from each person.
In theory, these people will return to our site even if we’re no longer the first result in Google. However, if we drop in rankings and the customers primarily use Google search to find products, there’s a good chance they’ll eventually switch providers.
If you wish to hire a premium SEO services company, look no further than MiroMind!