How much to spend on SEO: Budget strategies that fit your business

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A new article on reports that knowing how much to spend on SEO can be tricky -- especially if you've been thinking of organic traffic as 'free.'

A steady upward trend in SEO spending indicates that marketers realize the role SEO plays in helping prospective customers find their offerings. In 2020 alone, US businesses invested an estimated $79.3 billion to increase their organic footprint.

The author says even if you know how critical SEO is to your marketing, deciding how much to spend on it is another question. While there's no single formula to set an SEO budget, here are some strategies you can leverage to find a number that's right for your business. You have options when you're budgeting for SEO, with methods ranging from rough percentages of total revenue to more precise calculations based on marketing metrics:
  1. Commit a proportion of your overall marketing budget: Set aside a percentage of your digital marketing budget based on how much you rely on website traffic to generate sales. (An e-commerce business, for example, would likely choose to spend more on SEO than their brick-and-mortar counterpart.)
  2. Match your competition: Businesses with competitors that aggressively target industry keywords have to commit more to SEO to maintain a share of organic traffic. Compare your existing search engine rankings to your competition, and measure the opportunity cost of losing customers to them. This approach helps you decide how much to prioritize SEO, but it may only take you halfway there. The next step is to determine the SEO budget you'll need to outrank your competitors, and you can get a free SEO consultation to answer that question.
  3. Consider your marketing objectives: Think about your SEO goals in the context of your broader marketing objectives before allocating a specific dollar amount to that line in your budget. Where does SEO fit in? Think about your organic search potential with a realistic mindset. Are you relying on organic traffic growth to meet key KPIs like leads or sales? Or are you meeting your revenue goals and looking to expand brand awareness? Make sure you set the right internal expectations for your marketing investment and enough in the channel to achieve the desired results. Remember, it takes rigorous planning to align your budget with your objectives, but this ensures that your funds are distributed in a way that supports your goals.
  4. Calculate budget using Customer Lifetime Value (CLTV): The benefits of organic traffic extend beyond a one-time purchase, especially if you focus on customer satisfaction, retention, and brand loyalty. This approach determines the value of a web page based on Customer Lifetime Value (CLTV) -- the amount you can expect to earn from a customer long-term.
  5. Determine the effectiveness of SEO vs. paid search spend: You can also budget SEO in relation to your PPC ad spend, considering the effectiveness of each marketing strategy. Most companies feel comfortable budgeting for PPC and spend more on PPC than SEO, according to Marketing Sherpa. However, SEO typically generates twice as much traffic. Research shows organic search generates an average of 53% of website traffic, while paid search generates about 15% of traffic. What about e-commerce conversions? Or closed won deals? Look at your own data to compare the ROI across paid traffic and organic traffic, and make sure your comparative budgets are in line with your returns. If SEO brings more high-quality visitors to your site, consider re-apportioning your digital marketing budget to reflect SEO's bigger returns on your investment. Review this comprehensive comparison of SEO vs. PPC.
#budget #business #fit #seo #spend #strategies
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  • Profile picture of the author snake script
    It depends on website income. Mostly 30 to 40% budget is enough to total income.
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