Spending money on SEO now is an investment in the income growth of your company. Find out what to prioritise when choosing your SEO budget.
These days, businesses are investing more and more in digital marketing.
In fact, from February 2021 to February 2022, marketing growth exceeded 10% for the first time in a decade. The most recent CMO Survey Report indicates that marketing expenditures increased by 11.8% over the preceding 12 months. And it’s anticipated to grow even more over the next year, reaching 13.6%.
ImageSource: THE CMO Survey, 28th Edition
The majority of the marketing spend, or 57.1%, is specifically allocated to the digital marketing channel. The same survey projects a staggering 16.2% increase in digital marketing spending over the coming year.
But how much money is spent on search engine optimization in digital marketing?
According to a previous study by Borrell Associates, U.S. businesses spent $73.38 billion on SEO in 2019 out of a total of $776.30 billion on digital marketing, or about 9.5%.
Compared to hiring a consultant and agency, which results in cheaper costs and higher returns, those that handle SEO in-house (at least with local businesses) report higher expenses and poorer returns.
As stated in the report:
“Those that employ third parties give the effectiveness of the third party a higher rating than their internal ability. Notably, the point of third parties is skewed toward SEO and web design/development.
Having stated that, SEO is a financial investment in your company’s growth. Consider this:
Sales are the engine of a firm, and leads are what propel sales.
A website is where digital leaders are received, and a website is discovered by visitors who see it in the search results.
Through SEO, businesses can control the first impressions customers get of their website when they browse the search results. And some industries discover that organic search generates 2x as much income as other channels.
What then establishes your SEO budget? I’ll talk about that later.
Variables that Determine Your SEO Budget
How much of your budget should be allocated to SEO?
Although it’s not clear-cut, the following elements ought to influence your investment decision:
- Your revenue
- Your competition
1. Your Revenue
I advise allocating 5% and 10% of your company’s sales, or $8,000 monthly, to SEO. In an incredibly cutthroat market, you ought to err on the high end, and you will observe this in companies committed to competing.
Spending at least $8,000 per month provides a solid foundation with plenty of professional resources. We have clients at the top end that pay six times that each month.
Also, think about how much you’re spending on paid advertising. For instance, a national company should invest 25% of its PPC budget on organic SEO to attract new customers. The two channels work in tandem.
It’s helpful to suggest that a reasonable estimate of SEO investment for businesses that employ advertisements is 25% of PPC spend, or at least $8,000 per month.
2. Your Competition
Remember that most search engine inquiries return at least one million results. And to even matter, you need to be on Page 1.
Any company that competes in organic search has a tough job ahead of them. However, you may need to work harder and faster if you are in a competitive niche or are up against large companies with more enormous expenditures.
This sometimes necessitates increasing your SEO expenditure. You must be prepared to do this, or else you risk appearing irrelevant in the search results.
How to Decide Your SEO Budget
You are aware that your revenue and your competitors impact your SEO budget. Let’s consider this in context.
We are aware of the fierce competition found in the search results. The question is, therefore, not simply, “How much do you want to spend on SEO?” Additionally, “How quickly do you wish to outperform the opposition?”
This determines your budget. You should allocate 5% to 10% of your revenue, at the very least, to SEO. However, you usually have to invest more to advance more quickly.
That does not entail investing heedlessly in SEO with the justification that more money will yield better outcomes.
You do, however, need resources. You must know whom you are hiring, and they must be skilled and reputable.
Make careful only to hire professionals if you’re hiring an outside SEO agency. Unfortunately, many companies choose to use cheap SEO services. Affordable SEO is a near-death experience that will cost you more time and money to recover from than if you were to make an upfront investment in a sound SEO strategy.
You can learn how to use the resources you have to make the most effective SEO movements if you have a decent budget that allows you to hire a professional expert. You can succeed better if you can modify things faster than the competition.
If you can, profit from downturns when they occur. When the outlook is uncertain, those who resist the urge to cut their budget for digital marketing will have the opportunity to accelerate and surpass their rivals.
Consider Allocating Funds For SEO
Consider allocating some of your marketing budgets to SEO if you have already used up your resources on other channels.
Let’s take the example of spending a lot of money on PPC advertisements. Making 5% to 10% of that available for SEO should be fine.
You will thank yourself later, especially considering how SEO outperforms PPC in terms of average conversion rates. SEO has a long shelf life for your brand’s online exposure. You can’t say that about advertisements because if you stopped running them tomorrow, nothing would be left of your presence in the search results.
Because your optimised web pages can continue to drive traffic for years, SEO is more cost-effective over the long term.
Yes, it would help if you kept leads coming in today (whether they come from PPC or another source). Therefore, I’m proposing you continue doing those things. However, if you have a steady flow of leads, put some cash in for the future; SEO will help you get there.
At DMA, SEO pricings are the lowest in the market. Feel free to check out DMA SEO Pricing to cut costs on unnecessary funds which cut into your budget.