How to Set SEO Budget and What Does It Depend On?

How to Set SEO Budget and What Does It Depend On?

Without a shadow of a doubt, pricing is one of the key factors when you decide to start cooperation with an SEO agency. Wondering what’s the cost of SEO activities? In today’s entry, we’ll spill the beans and tell you why prices offered by various companies differ and what aspects affect this state of affairs. Keep reading!

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When it comes to money, we want to know as much as possible. Why are services priced in a specific way? What determines the costs of SEO activities? Why is the SEO market known for such significant discrepancies? Most SEO services are provided based on the B2B model, therefore, transparency and mutual understanding are the keys to success. Especially when talking about the prices.

Let’s sum up the most important pieces of information. This entry is prepared mainly for entrepreneurs wondering whether it’s worth investing in SEO, not for SEO specialists. When considering SEO, its price is frequently the deciding factor.

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SEO pricing – which settlement model to choose?

There are two main settlement models – subscription and performance-based SEO. When it comes to performance-based SEO, you’re charged only if your website reaches the determined position (e.g. being displayed in the top 10 for a specific phrase). On the other hand, in the case of a subscription, you have a fixed amount paid monthly to the agency, independent of the SEO effects.

Some agencies offer a hybrid settlement model which combines both of the abovementioned solutions. Then, an agency usually receives a monthly fee for its SEO activities and additionally gets bonuses depending on specific, assumed results achieved by the website.

Performance-based SEO seems beneficial from the client’s point of view and a few years ago it was an unquestionable standard. However, the situation today differs a bit and it’s not the most optimal and advisable solution. Why? There are two main reasons:

1. On the one hand, SEO effects are highly affected by Google (the most popular search engine) and modifications implemented by its algorithms. To comprehend what the problem is all about, it’s worth remembering that Google isn’t particularly keen on SEO. Consequently, from time to time it updates the algorithms so that positions of websites ranked high, thanks to “unnatural” activities, are decreased – in many cases Google categorizes the effects of SEO activities as such unnatural activities. Changes introduced by Google can strongly affect search results.

2. The fact that performance-based SEO makes achieving high positions over a short period of time the main motivation of specialists is another issue. Although such an approach may satisfy the client, this incentive increases the risk of choosing techniques that aren’t appreciated by Google, like link farms. In this case, it’s the client that bears the risk. If a filter is imposed on your website (check if your page was penalized by Google), the site is removed from the search results which may mean a lack of profits for your business. However, before this happens, the website may actually be ranked in high positions for some time and the agency will be receiving remuneration for this effect under the contract.

In a nutshell, although subscription and hybrid models seem to be more expensive, the situation is completely different in the long run. Choosing them will protect you against specialists applying aggressive SEO techniques which may be considered black hat SEO.

To learn why performance-based SEO isn’t always as beneficial as it might seem, go to our entry: Why is it better to stay away from performance-based payment for SEO?

Expert Comment

Nowadays, we don’t encounter performance-based SEO so frequently. This model isn’t particularly beneficial mainly because of the fact that the search engine is constantly changing and the results are fluctuating. Moreover, contracts based on this model frequently include low (or zero) volume phrases. In this case, being displayed even in the top 3 won’t bring you any benefits or traffic because nobody enters such phrases into the search engine.

Gosia Tarnawska Delante
Gosia Tarnawska
SEO Team Leader

How much is SEO? Factors affecting prices

Before we move on to discussing specific factors, see the elements of an SEO process. Knowledge in this field can be truly valuable, especially at the stage of determining whether you want to cooperate with a given SEO agency. Factors affecting the prices are one thing but knowing what you’ll actually be paying for is another. The chart below shows (in a rather general way) what the division of SEO activities looks like at Delante.

Delante SEO Workflow - graph
If you would like to scrutinize this subject closely, go to our entry: What are the top 10 elements of an SEO process?

SEO is an ongoing and complex process that takes quite a long time but brings long-term results. See the effects after the first few months of performing on-page SEO activities:

SEO effects

The crux is that the extent to which the factors listed below affect your SEO pricing ultimately depends on the contract you sign with the agency. We’ll do our best to point out crucial elements and explain why they’re so vital. Let’s get it started!

1. Current position of keywords

Meaning positions of selected keywords – are they located outside the index, in distant positions, or near the top? This matters if you select performance-based SEO which indicates that the higher the website position, the greater the fee for the SEO agency.

The price of SEO increases as you climb up the ranking. If the phrase has been chosen well, the higher visibility of the page should translate into more traffic. Additionally, an improved conversion rate usually means increased turnover.

brand keyword ranks seo pricing factor

2. Popularity of phrases in the search results

It shows the complexity of a given phrase. It’s relatively easy to be ranked high for a phrase such as “criminal lawyer Boston”, the task gets more difficult when talking about “legal aid Massachusetts”. So, if you, as a client, want to reach top positions for popular phrases, you may expect the agency to charge you more. This is due to a large amount of time the company has to spend working on improving the position.

2.1 Cap – a way to protect your budget in performance-based SEO

Cap – a predetermined limit of maximum bonuses for the achieved results.

This solution protects the client in a situation when the agency achieves unexpectedly good effects (e.g. the client’s page is displayed in top 3 for each phrase) but for some reason, the profits from the business don’t increase at the same rate.

In this case, the client isn’t obliged to pay a premium for each phrase, according to a simple algorithm, but will pay a maximum of a certain predetermined amount. Thanks to it, the cooperation between the SEO agency and the client is more comfortable, makes it easier to plan the budget and develop long-term business relationships.

3. The country and market where SEO activities are performed

More and more frequently, it’s possible to see offers of SEO services tailored to specific countries. We also provide such services – check out how we can support your international SEO. We perform SEO for our clients in 21 countries and we’re ready for more!

Delante's international experience
Delante’s experience on the international market

If you want to learn more about the technical (and non-technical) aspects of this issue, we’ve prepared a comprehensive guide discussing international SEO. It’s worth checking it out if you aren’t sure how to prepare your business for SEO in a foreign country.

international seo guide

You can expect SEO pricing for certain overseas markets to be higher. The SEO budget may be determined by the competitiveness of the given regions. Let’s take the UK market as an example – here, the cooperation between a webmaster and an SEO specialist is a standard, and it begins already at the stage of developing a company website.

Consequences? Pages are well optimized and competing with them involves more effort that can be followed by a higher price.

4. Type of SEO – long tail vs. short tail

Long tail SEO takes its figurative name from the fact that keywords you perform activities for are longer and their combination resembles a tail. They consist of several words, are more detailed and precise; sometimes they include a word describing the geographical region where you want to reach top positions. They precisely define the user’s needs – thanks to long tail phrases visitors are able to quickly find what they are looking for.

Long tail SEO makes it possible to choose a lot of converting key phrases. Website traffic acquired thanks to long tail phrases is particularly valuable as it means that the page is entered by users who know precisely what they’re looking for and are probably interested in a given type of service.

long tail keywords competitiveness

Settlement based on long tail keywords may be a bit different than a standard model as usually complex phrases aren’t highly competitive. This means that being ranked in top positions for relatively many phrases after only a few months of performing SEO activities isn’t something uncommon.

Therefore, you may expect that bonuses for reaching the top 10 positions for long tail phrases will be lower than in the case of standard SEO.

However, there is one main disadvantage of long tail SEO. The client’s website is accessed mainly by people who are familiar with the type of products or services they are looking for. The problem is that many potential customers may start their search by typing more general phrases that will allow them to learn the subject. There’s a risk that the first page they visit will provide them with satisfactory information and consequently they won’t decide to enter a more precise long tail keyword.

5. Industry

There are certain industries that are particularly demanding in terms of SEO. As an example we can take some financial products (the so-called payday loans) – doing SEO for a website that wishes to be a dark horse of this industry is quite a challenge for the specialists. In this case, you may expect higher prices.

6. Market rivals

In simple words, your SEO pricing may also be determined by your market rivals and their activity online. This translates mainly in the estimated time needed to reach high positions. In this case, it’s important to constantly monitor your competition and draw relevant conclusions that will allow you to detect your mistakes and refine your SEO strategy. Want to find out how to analyze your Google competition? Check out our blog post!

7. Website quality

Although specialists introduce certain modifications to your website code as part of on-site SEO activities, they aren’t able to change everything. When ranking a page in the search results, Google takes into account factors such as its loading time or responsive design. The latter one is becoming more and more important. Of course, Google cares about numerous aspects – learn about Google ranking factors.

8. Domain history

It affects the length of the SEO process. For example, if your website was penalized by Google, robots won’t perceive it as trustworthy and will consequently rank it lower. In such a situation, reaching top positions will require more time and work, therefore, you can expect that SEO costs will be higher (although it’s not always the rule).

Expert Comment

SEO pricing is affected by a number of factors – apart from the ones mentioned above, it’s a good idea to predetermine your expectations (in terms of the effects) and things you want to achieve thanks to SEO. Talk about them openly.

Gosia Tarnawska Delante
Gosia Tarnawska
SEO Team Leader

SEO budget – the takeaway

There isn’t one answer when it comes to SEO costs. When negotiating the terms of the contract with an agency, you can benefit from the list discussed above. Ask about aspects that strongly affect SEO pricing and are vital for most entrepreneurs.

FAQ

Of course, it is! Without a shadow of a doubt, SEO has plenty of advantages and may turn out to be a really profitable investment. With its help, you can take care of:

  • website visibility,
  • organic traffic,
  • conversion rate,
  • brand recognition,
  • your position as an expert in the field.

It depends ;). There is no one right answer to this question. SEO pricing is a highly individual issue. The budget is affected by a number of factors and differences in prices offered by various agencies aren’t unusual.

Would you like to get a free quote for SEO services for your website? Contact us!

SEO pricing is affected by a wide range of factors, including:

  • current positions and popularity of keywords in the search results,
  • competitiveness of the country and industry you operate in,
  • type of SEO you choose (long tail vs. short tail),
  • online activity of your market rivals,
  • domain history (age, quality).

When it comes to settlement models, there are three available options:

  • subscription,
  • performance-based SEO,
  • hybrid model that combines the abovementioned solutions but isn’t particularly popular.

We highly recommend the subscription model. Although performance-based SEO used to be extremely popular not so long ago, today it’s not beneficial anymore. Performance-based SEO frequently tempts specialists to apply black hat SEO techniques which have a negative impact on the website and its positions in the search results. Last but not least, Google algorithms aren’t predictable and nobody is able to guarantee that your website will reach a specific position in the search results.

Usually, the first effects of SEO activities are noticeable after 3 months from performing on-site activities. The organic traffic improves over the subsequent 2 or 3 months, whereas the conversion rate increases later on.

However, it’s crucial to keep in mind that SEO is a continuous process, not a one-time activity. If you expect long-term results, you need long-term actions.

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Delante is an online marketing agency specialized in generating website traffic from search engines and paid ads (SEO / SEM). Over 80% of our clients are from rapidly growing e-commerce industry.

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