There is a steady upward trend in SEO spending which indicates that marketers realize the role SEO plays in helping customers find their offerings. According to a survey, in 2020, US businesses invented an estimated $79.3 billion to increase their organic footprint.
However, deciding how critical SEO is to your marketing and how much to spend is very important. It is a fact that there is no single formula for setting an SEO budget. Following are some strategies you can leverage to find a number that is right for your business-
Breaking down your marketing budget:
According to a recent study, B2B organizations spend an average of about 5% to 12% of their revenue alone on marketing. B2B puts aside around 8% to 9% of its revenue for marketing spend. However, out of the total spend, the companies devote an average of half of the marketing budget to online strategies such as direct email, data analytics and social media. If your business is entirely web-based, you are more likely to spend a significant percentage of your total budget on digital strategies.
Sample SEO budget breakdown:
A CMO survey conducted in 2021 showed that nearly 74% of companies invest in SEO. Every business has a distinct lead, and the total amount you should budget depends on the business model and the niche.
Following are the five most efficient ways to determine how much to spend on SEO-
Commit a proportion of the overall marketing budget.
You should set aside a percentage of the digital marketing budget based on how much one can rely on the website traffic for generating sales. You can also do the same with a dollar amount. Examine the line items in the marketing budget and also decide what you think you can afford to set aside for the SEO.
It is also essential to remember that allocating a percentage of your marketing budget will not account for your SEO needs. You should not only base your SEO budget on what you think you can afford. In a large-scale analysis of SEO services, a company found a direct correlation between spending and satisfaction. The data also reveals that the ones who opted for a low-budget SEO walked away less satisfied than the ones who invested fully in SEO as a marketing channel.
Match your competition.
The business with competitors targeting the industry keywords must commit more to SEO to maintain a share of the organic traffic. You should also compare your existing search engine rankings to your competition and measure the cost of losing customers to them.
It is the approach which helps you decide how you should prioritize SEO. You should also try to outrank your SEO competitors.
Many people avail of the services of SEO Perth, a digital marketing agency that provides people with different types of SEO services.
Consider your marketing objectives.
You should think about your SEO goals in the context of the broader marketing objectives. It is also essential to consider where does SEO fit in? You should determine whether you are relying on organic traffic growth to meet the key KPIs like leads or sales. You should also determine if you are meeting your revenue goals and also look to expand brand awareness. Set the right internal expectations for all your marketing investments.
It is very crucial to keep in mind that it takes a very rigorous plan to align your budget with your objectives, and it also ensures that your funds are distributed in a way that supports all your goals.
Calculate the budget using Customer lifetime value.
Organic traffic has many benefits, and they extend beyond a one-time purchase if you focus on customer retention, brand loyalty or satisfaction. It is the approach which determines the value of a web page based on the CLTV, which is the customer’s lifetime value. It is the amount you can expect to earn from a customer long-term.
You should keep in mind that if you are using CLTV to determine page value, you should know all the different factors which impact conversion. If the conversion rates figure into the profitability of the SEO efforts, you can amplify your SEO spend by investing in CRO to increase the conversion rates of the site.
Determine the effectiveness of SEO vs. the paid search spend.
Budgeting SEO about your PPC ad spend is also possible. Most companies out there feel comfortable budgeting for the PPC and spend more on PPC than SEO. However, SEO generates twice as much traffic. There is research which shows that organic search generates an average of around 53% of the website traffic while the paid ones generates around 15% of the website traffic.
It is your duty to ensure that the comparative budgets are in line with returns.
PPC can generate faster results and once you stop running ads, your visibility tends to drop. An optimized website which is ranking well can also gain momentum and also continue to drive traffic over the long term.
SEO is very highly effective compared to other channels.
SEO boasts a number of stats that you can communicate to your stakeholders which support prioritizing SEO for creating the highest ROI.
Privacy changes are impacting online advertising.
SEO remains a very strong digital strategy. Google has introduced restrictions on third-party cookies for privacy reasons. This is a move that is expected to reduce the effectiveness of the digital ad strategies.
SEO budgeting that makes sense for the business.
Everyone has a different budgeting process and you can adapt each of the methods for aligning your SEO budget with your goals.
The SEO marketing agencies should provide transparent and goal-oriented SEO strategies which combine the best of technology and people for delivering the business-impacting search ranking results. You should go with the SEO-marketing agencies that are data-driven and focused on giving their customers the best results. You can also do a free SEO consultation to focus your budget and also identify the level of investment needed for creating impactful results.
