‘How much does SEO cost?’ is a perfectly valid question, and one that I get asked a lot. After all, it’s only right that businesses should wonder how much of their budget to set aside.
However, much to the disappointment of those seeking a simple answer, there isn’t one. In fact, it’s this focus on cost, rather than returns, where many businesses fall short.
Think of it this way – your investment in SEO (or any marketing for that matter) should correlate with the potential opportunity that comes down the track.
Rather than asking how much SEO should cost, consider instead what it’s worth.
This isn’t to say that cost doesn’t matter. It does. Rather, it’s important to understand that the amount you spend will be commensurate with the value of the opportunity and the work required to realise it.
Sizing Up The Competition
Before thoughtlessly launching your entire marketing budget at SEO and wondering where your money went, you need to determine the time and resources required to obtain a strong ranking. Doing so requires an objective understanding of (a) your current position and (b) the strength of your competition.
Your site’s current ranking in the search engine results pages (SERPs) determines how many positions you’ll need to jump before reaping real rewards. Perhaps you’re already on page one, looking to climb those last few places into the top three or, as is often the case, somewhere on page two, hungry for a more lucrative position on page one.
With a clearer understanding of your own search positioning, you can assess the strength of what lies between your business and position one. Who are your primary competitors? What kind of money are they investing in SEO? Is overtaking them realistic, given your size and budget?
How Much Is SEO Worth?
In order to determine the worth of SEO for your business, an agency will look at the potential search market opportunity from the associated increase in search engine visibility (incidentally, if your agency isn’t looking at this kind of thing, then are you with the right agency?)
Calculating this worth requires a somewhat holistic approach, some general rules of thumb and a bit of basic maths.
We start with the products or services you wish to sell, the means through which you wish to sell them and their value or lifetime value (in the case of retained services). Coupled with an understanding of key metrics, such as clickthrough rate (CTR), traffic, estimated conversions and client lifetime value, it becomes possible to give a broad estimate of the value doing SEO will have for your business.
Once you understand this then how much you should be investing suddenly becomes a lot clearer (if the monthly returns are six figures or more, do you think a few hundred quid retainer is really going to get you anywhere?).
Below, we’ll break these elements down and explore the ways in which they can be used to inform your decisions.
Click Through Rate & Search Volume
As you’re probably aware, clickthrough rate (CTR) refers to the number of people clicking on your website from a given SERP. It goes without saying that CTR is much higher at the top of Google page one than lower results or subsequent pages.
At the time of writing, the CTR for pages occupying position one of Google’s SERPs is just shy of 40%, with positions two and three at 19% and 10%, respectively. This means that the top spot receives more than double the number of clicks as position two, with an average CTR of 23% across the top three positions.
If a keyword has a search volume of 10,000, and your site ranks first, that’s 4000 visitors clicking on your website and viewing your services every month.
With an awareness of the potential traffic generated by a strong SERP position, it is then possible to calculate the estimated number of conversions this ranking will bring. This is done by multiplying your combined search volume, the average CTR from ranking in the top three positions (23%) and your conversion rate (or the average for your industry, if you don’t know it).
Average Order Value
Once you’ve calculated the estimated number of conversions that a high-ranking SERP position would generate for your business, all that is left is to multiply this by the average value of a single order or the lifetime value of an average customer if you know it.
Let’s say your site ranks first for a keyword with a search volume of 10,000. With the 40% CTR associated with position one ranking, that’s 4,000 visitors per month.
With a conversion rate of 2.5% that would equate to an additional 100 sales per month.
If, then, your average order value is £100, that’s an additional £10,000 in revenue from organic search traffic every month.
Establishing Monthly Budgets
All that is left is to establish how much you would be willing to invest in SEO to reach these high ranking positions and realise the forecasted market opportunity. Essentially, this comes down to two things:
- Your ideal return on investment (ROI)
- The speed at which you wish to reach this point
It’s worth noting that the faster you start moving up the search engine results pages, the sooner you’ll reach your ideal ROI and your investment will start paying off. The rub of course, is that returns are not instant with organic SEO, so there will be a period where you’re seeing nothing to little return on your investment.
Here lies the importance of setting realistic budgets. High-quality SEO is neither cheap nor quick, but an unrealistic budget will never deliver the returns you want.
Often, the slower returns associated with organic SEO make it harder for smaller businesses and startups to finance their investment. In instances such as these, an integrated approach proves incredibly effective.
By investing in PPC services, businesses are able to generate short-term returns very quickly. This increase in revenue can then be reinvested into organic SEO, effectively funding your long term digital marketing strategy, at least for the first months and years, for free. At Superb Digital, we call this Cost Neutral SEO.
Of course, digital marketing is by no means a set-and-forget affair. In order to maintain and increase momentum, it’s important to proportionately level up your investment with revenue growth. Introducing a multi-channel approach, by incorporating email marketing, social media, other paid advertising and PR will increase touchpoints between you and your market, pushing up returns further.
Cheap SEO Is Expensive
The bottom line is that there is no such thing as ‘cheap’ SEO. Sure, there are plenty of snake-oil agencies and so-called ‘experts’ peddling their wares for prices that blow the competition out of the water but, as the old saying goes, if it seems too good to be true, it probably is.
In reality, ‘cheap’ SEO is often anything but. Low-quality content and poorly executed campaigns will make you a prime target for Google penalties, knocking your site further down the SERPs.
Here at Superb Digital, we believe that great SEO is all about transparency and communication between you the client and us the agency. It’s about partnerships based on trust and a deep understanding of just what SEO is worth and what it takes to realise this.
Whether you’re looking for SEO, PPC or an integrated approach, we don’t deploy any smoke and mirrors or cut-and-shut solutions; just real outcomes and real returns. Book a discovery call to find out more.