Is your SEO budget causing you trouble? You’re not alone. Many businesses face the challenge of either overspending or underspending, which results in ineffective outcomes.

Given that SEO is a long-term investment, determining the right budget and effectively allocating resources can be tricky. In this guide, we’ll help you navigate your SEO budget by outlining everything from evaluating your business needs to managing your SEO expenses:

1. Understand What Makes Up an SEO Program

To create an effective SEO budget, it’s essential to understand the components of a solid SEO program. While you can prioritize certain aspects, a well-rounded strategy will include a balance of the following:

• Technical SEO: A thorough technical SEO audit is a critical first step, revealing issues that hinder website performance and user experience. Since audits take time, they may require a higher initial investment. After the audit, improving the site’s performance may demand most of your budget, but this will likely decrease once the site runs smoothly.
• Content Creation: Quality content forms the backbone of any successful SEO campaign. Creating content is often time-consuming, with costs for writers, editors, and multimedia experts. While AI tools can aid the process, high standards are crucial. Content creation should be seen as an ongoing expense.
• Link Management: Securing high-quality backlinks requires both time and resources. Content creation is the first step, followed by building relationships and managing your backlink profile. This process involves continuous effort and cost.
• SEO Tools: Investing in the right SEO tools is essential for tracking and optimizing your strategy. These tools range from affordable options to more advanced, enterprise-level solutions. According to the CMO Survey, companies are projected to allocate about 19% of their marketing budget to marketing technology in 2024. However, it’s important to note that only 56% of these tools are actively used, which highlights the potential for wasted spending. In addition to purchasing the right tools, you’ll need to dedicate time to reviewing and analyzing the data they provide in order to make necessary adjustments to your SEO strategy.
• Other SEO Activities: Specialized areas like local SEO, eCommerce SEO, and international SEO each have distinct budget needs.

Tip: Follow the 80/20 rule—dedicate 80% of your budget to proven strategies and reserve 20% for testing innovative approaches. Early investments in technical SEO audits and fixes will lay a strong foundation.

2. Figure out the costs of SEO in-house vs. agency vs. consultancy

Next, evaluate whether your budget allows for an in-house team, an agency, a hybrid approach, or a consultant. Research reveals the following average costs:

• Agencies: $3,209/month
• Freelancers: $1,348/month
• Retainers: Up to $50,000, though this is not common
• In-house roles: SEO analysts earn around $45,000, while heads of SEO can make up to $82,000.

These figures provide a useful frame of reference, though prices will vary based on location and expertise.

Tip: Understand your internal capabilities and SEO goals before deciding on external help. A hybrid model can be both cost-effective and efficient for many businesses. If an agency sounds like the right choice, check out my guide on how to hire an SEO agency.

3. Identify the Key Factors That Influence Your SEO Budget

When setting your budget, consider the following:

• Business Size: Larger companies with ambitious goals tend to allocate more to SEO, with SEO becoming a major line item in their marketing budget. Smaller businesses may spend less, but quality should never be compromised.
• Revenue: Your SEO budget should align with your business goals. Typically, businesses spend anywhere from $500 to $20,000 per month on SEO. A good rule of thumb is to allocate 5-10% of your revenue to SEO, or around 25% of your paid advertising budget.
• Competition: Understanding your competitors’ SEO efforts is crucial. Investigate their technical SEO, content quality, optimization tactics, and backlink strategies. Your budget should reflect the resources required to outcompete them, and the pace at which you want to see results.

Tip: Regularly assess your competitors’ SEO activities to ensure your budget is competitive.

4. Align with Stakeholders and Track Your Wins

To ensure continued SEO budget growth and approval, keep these points in mind:

• Know Stakeholder Goals: Understand the objectives of those controlling the budget and tailor your SEO plan to meet their expectations.
• Educate Stakeholders: Not all stakeholders may be familiar with SEO terminology. Make sure to explain the value of SEO and back your proposals with data from search engines like Google.
• Report Progress: Demonstrating tangible SEO results, especially in key performance indicators (KPIs), is key to securing ongoing support.

Tip: Use visual tools such as dashboards or charts to clearly communicate SEO progress to stakeholders.

5. Prioritize Your SEO Initiatives

Just like you wouldn’t embark on a road trip without a map, avoid planning your SEO budget without clear priorities. Identify which goals matter most—whether it’s building brand authority, driving seasonal sales, or expanding into new markets.

Remember, not all SEO tasks are equally costly or time-sensitive. Separate your efforts into:

• Short-term Wins: Quick actions that provide immediate results.
• Long-term Investments: Strategies that require ongoing effort but deliver significant returns over time.

Start by conducting an SEO audit to identify your quick wins and long-term investments.

Tip: Focus on SEO initiatives aligned with your business goals, and revisit your roadmap regularly to adjust as needed.

6. Adjust Your Budget Based on Performance

Being flexible with your budget allocations allows you to capitalize on successful strategies and shift away from underperforming tactics. For example, if a particular keyword loses traction or a content strategy proves effective, adjust your spending accordingly.

Regularly review performance data and be willing to shift funds to the areas that deliver the best results.

Tip: Create a flexible budget, allocating a portion of funds each quarter for reallocation based on performance.

7. Plan for Unforeseen Costs

SEO is constantly evolving. Factors like algorithm updates, changing competition, and unforeseen events can all impact your strategy. Having flexibility in your budget for these scenarios is vital.

For instance:

• A Google algorithm update might require content or technical adjustments.
• A new collaboration could provide a significant boost.
• A security issue might need immediate resolution.

Consider setting aside 10-15% of your SEO budget for emergencies or opportunities.

Tip: Stay proactive by incorporating ongoing education into your strategy, so you can anticipate industry shifts before they happen.

8. Measure the ROI of Your SEO Investment

The ultimate goal of any SEO effort is a measurable increase in organic traffic. Avoid focusing solely on task completion (e.g., “I edited eight pages this month”) without evaluating the impact on performance.

Tip: Use cohort analysis to compare SEO-driven leads or customers to those from other channels over time, assessing their long-term value.

Effectively managing your SEO budget requires a delicate balance. Over-investing without results can waste resources, while underfunding can leave you trailing behind competitors. By viewing your SEO budget as a flexible tool focused on results, you can stay competitive and adapt to any challenges that arise in the digital landscape.

At SEO Guru NYC, the best SEO company in New York, we specialize in helping businesses like yours optimize their SEO strategies and budgets to drive tangible results. Whether you’re looking for expert advice on your SEO investments or need a tailored strategy that suits your unique needs, we’re here to guide you every step of the way. Contact us today to learn how we can help you enhance your SEO efforts and stay ahead of the competition.