If you’re interested in adding search engine optimization to your marketing budget, you might be having a hard time budgeting how much of that budget will go into SEO.
However, you’re unlikely to find a website that offers a strict budgeting scheme because not all businesses can successfully follow the same strategy. After all, aside from SEO, there are other marketing strategies you’ll want to budget for – and not all marketing strategies can apply to all businesses.
So, how can you make sure that SEO fits into your marketing budget? Here’s how.
Setting Up a Digital Marketing Budget
As soon as you’ve set up you’re business, you’ll want to establish how much your business can spend for digital marketing. If you’re running a small business, making less than $5 million in sales, and have up to a 12 percent profit margin, you might want to spend up to 8 percent of your gross revenue in marketing.
This rule of thumb is to ensure you’re spending enough but not overspending to the point that you won’t see a return of investment on your marketing. Now, try to compute roughly how much your budget will be. If this seems too small to handle all your marketing strategies, consider dropping the ones that aren’t as effective to leave more budget for those that are more effective.
Next, consider the budget you’re making for digital marketing strategies against offline marketing and advertising strategies. The rule of thumb is that 50 percent should go-to digital marketing, though other marketers may argue that you should be spending more.
Nowadays, building and establishing your business’ online presence is more effective than going out and handing out flyers on the street. Chances are, the people you hand flyers to on the street aren’t your target market. But if you establish an online presence and have an effective SEO strategy, the customers that are looking for your kind of business should find you within your area. And given that almost 75% of in-store shoppers search business online before going to the physical store, it’s important to be seen online. Failing to plan for your digital market budget means failing to reach the potential leads and revenue that await online.
So again, if you feel like you can put more than half of your marketing budget into digital marketing, go ahead.
70-20-10: The Now, Next, and New Rule
While there is no hard budgeting percentage all businesses should follow, a popular budget used in allocating funds is known as the “70-20-10 Rule”. If you feel like you can benefit from this model, consider structuring your budget this way.
Under this rule, 70 percent of your marketing budget should go to “now”: marketing strategies that work and have a return on investment now. This can apply to both digital marketing and non-digital marketing strategies. In short: spend more money on whatever already works. It’s a safe bet to put most of your budget on these because you already know that they have an ROI.
The next 20 percent of your budget should go to “next.” These are the strategies on the horizon that are new to your business but can help your business expand or become more profitable. It can consist of adding new products to your business or adding marketing strategies. Either way, these strategies can help you reach untapped markets, reach new leads, and earn more conversions. However, because some of these strategies can be a hit or miss, it’s best to take a conservative budget like 20 percent to reduce the losses you could incur if your strategy fails.
Finally, your last 10 percent of your marketing budget should be spent on what’s “new,” which is exclusively digital marketing strategies you’ve never tried before. While the other 90 percent of your budget is spent on what works and what could work, chances are that your competitors are doing the same. So you’ll want to spend that last 10 percent on more experimental and emerging strategies to stay ahead of the competition. This is also the biggest risk, so a small 10 percent budget ensures you don’t lose too much to high-risk strategies.
Allocating a Budget for SEO
SEO is one of the more effective tools businesses can benefit from for their digital marketing strategy. After all, it’s not enough to simply rank for your business name, but also for related short and long-tail keywords that lead your target audience to your website. SEO gets you the traffic that you want directed to your website featuring your products and services.
Allocating for the 70-20-10 Rule
If you’re planning on following the Now, Next, and New Rule, here’s how to go about making SEO fit into your marketing budget.
If you already have an existing SEO strategy working for your business, then SEO falls under your Now. This means you aren’t going to start an SEO strategy from scratch, but instead use a portion of the 70 percent into optimizing your current SEO campaign.
This means your SEO agency improving your website for your potential leads such as improving your website’s speed (your website only has 15 seconds to convince visitors they’re at the right page – and only 3 seconds for visitors on mobile), optimizing code, and creating a more user-friendly design. If your SEO strategy is already effective, you should only be polishing up places that can make your customers’ website experience more efficient.
Whether or not you already have an SEO strategy, the next 20 percent of the Next stage can also be used for SEO strategies that are just starting to enter the markets. For example, voice searches are becoming more popular. With Apple’s Siri, Android’s Google, Amazon Alexa, devices like Amazon Echo and Google Home are becoming more common.
In a matter of time, technology will make it extremely easy for people to do a voice search on everyday queries they have. Optimizing your SEO strategy for things like voice technology means that you’re expanding your business’ online visibility to the new ways people can search for you.
The last 10 percent for the New portion is for the experimental ways to stay ahead of the competition. SEO is always changing, and experimental SEO strategies not many businesses want to use today can be the next big thing all digital marketing agencies are doing years from now. Likewise, strategies that were effective a decade ago are now long-dead and unused by all the top digital marketing agencies. Your experimental strategy might fail, but it might also be what sets your business and your competitors apart.
Take, for example, Google’s photo search. Sometimes they’re effective and can get you information on the photo, but other times you can’t really find what you’re looking for. What if one day we have the technology to simply take a picture of something, easily search for it on Google, and then find a business selling it?
For example, let’s say a bride-to-be sees a type of flower she wants to see in her wedding bouquet, but she doesn’t know what type of flower it is. So she takes a photo of it and runs it through Google’s photo search. Google can not only tell her what it’s called but also the nearest florist that sells those flowers. This may or may not happen in the future, but it pays to get a head start in this form of SEO before your competitors do.
Basing It on Digital Marketing Budget
So another way is to divide your marketing budget per strategy. Let’s say that, out of your entire marketing budget, you’ve decided to do 60-40 with 60 percent going to your digital marketing and the other 40 percent to traditional marketing. But how do you portion out how much you should spend on SEO when there are plenty of other digital marketing strategies you also have to allocate funds to?
There are many ways to allocate your budget based on several factors. You have to consider your sales, what your competitors are doing, and the other overhead costs that come with marketing your business. So, really, it all depends on what your business is capable of spending.
The most logical way of budgeting that applies to all businesses, though, is to divide the budget based on what’s the most effective. For example, some businesses may find that their social media marketing drives more business than display ads, so they may want to spend their budget based on what makes their marketing more successful. Either that, or they spend more money to reach the marketing standards of most businesses. This is generally (but not necessarily):
- 40 percent on SEO
- 20 percent on paid search
- 10 percent each on email marketing, social media marketing, display ads, and referral traffic.
However, this is not a hard standard. If you feel like less than 20 percent of your online leads are from SEO, you might have to spend more on it to make your website more optimized to attract leads on search engine results.
It’s important to be smart and strategic on how much you spend on your SEO (as well as the rest of your digital marketing) budget. You don’t want to overspend such that you aren’t getting a return on your investment. But you also don’t want to underspend, waste on your SEO potential, and let your competitors take over in organic search.