Many businesses these days understand the importance of a strong web presence. They know that they need Search Engine Optimization but they have no idea how much it should cost. There are many websites based, usually based overseas, that promise first page placement for $99 a month. So what makes these companies different from the ones that charge $1,500+ a month? First, there is a lot to say for being able to easily contact anyone you do business with. A reputable SEO company generally assigns a specific employee to your account that manages your site throughout the entire process. You can call, email, or even meet them in person. It is important to be able to communicate quickly and efficiently in this industry as many people do not understand the intricacies of SEO.Secondly, not all optimization is equal. There are many shady, “blackhat” techniques that can quickly boost your rankings but will most likely result in your site being “sandboxed” soon after. When this happens, your site is deindexed from the search engines. Meaning all that money you spent is completely wasted. Search Engine Optimization, similar to car repair, is an industry where you want to find someone reputable and reasonably priced. Most of the time you get what you pay for.
So what should SEO cost? First, it is important to understand that optimization is a form of advertising. The only point is to bring you more business. For many local businesses, search engine optimization pays for itself if it can bring in 3 more customers a month (based on Customer Lifetime Value or CLTV). When compared to other forms of advertisement, SEO’s ROI (Return On Investment) is much higher. One of the reasons for this is a conversion rate that is exponentially higher than TV, radio, print, and direct mail advertising. Also, the search engine’s algorithms are constantly changing. The learning curve for SEO is very steep and consultants must keep up daily with the changes. This knowledge takes a lot of time and effort to attain and therefore, like doctors and lawyers, the hourly rate for an expert is higher than a typical employee.
Below is an infographic from AYTM that shows the result of a survey of 600+ SEO firms on their pricing structures. Here is a synopsis from SEOMoz.org:
- Hourly SEO Costs Vary Across Countries, but $76-$200/hour is Most Common
With the exception of India (the only developing region that was well-represented in our survey), hourly costs of $76-$200 (representing three responses) covered 50%+ of all firms. It was highest in Australia/New Zealand at 62%, followed by 58.1% in the US and 56% in Canada. Granted, this is a wide range, but it provides the answer to a frequently-asked question from those seeking SEO services for the first time.
- By-the-Project Pricing is Popular and Most Commonly $1,000-$7,500
70.1% of respondents said they offer project-based pricing (the most common pricing system selected in the survey). 43% of consultancies were represented by the four price ranges: $1,001-$1,500, $1,501-$2,500, $2501-$5,000 and $5,001-$7,500. Obviously, there’s a wide variety of prices here, not surprising given that the types of projects offered may be quite diverse.
- Monthly Retainer Pricing Has the Widest Distribution
While both hourly and by-the-project rates do have a wide range of pricing, monthly retainers are certainly the most distributed of the price questions asked in our survey. The two most common were $251-$500/month (13.8%) and $2,501-$5,000/month (11.3%).
- The Death of Hands-On SEO Has Been Greatly Exaggerated
There’s been plenty of hand-wringing over the past few years from both bloggers and SEO clients complaining that consulting firms don’t provide enough “hands-on” help. Yet, in the survey, 88.5% of respondents said they offer “hands-on SEO changes to sites” and 79.1% provide “hands-on link building.” Clearly, hands-on help is still very popular.
- Inbound/Organic > Pure SEO
Pure “SEO” consultants/agencies may be fading as broader “inbound marketing” services firms (offering SEO, social, content, conversion, analytics, etc) rise. The data showed 150 respondents (25%) saying they were primarily focused on SEO while a slightly greater number, 160 (26.7%), offered a broader range.
- Web Design/Development Agencies do a Lot of SEO
The third most popular type of respondent was a web design/development agency offering SEO services. In the UK, these types of firms were better represented than either SEO-focused providers or broader inbound/organic firms.
- Employees:Clients/Month Ratio is Between 1-2
The screenshot below takes advantage of SurveyMonkey’s crosstab feature, which enabled me to look at the number of monthly active clients broken down by the quantity of employees a consulting firm has (you can only choose 5 responses at once, but the data’s still revealing).
- Vast Majority of Consultants Service Small-Medium Businesses
This may seem mathematically obvious, but it’s not always top of mind at many of the marketing conferences I’ve attended, nor the blogosphere in general. A disproportionate amount of attention is often focused on top brands, but in the world of consulting, most firms service relatively small businesses. Even those who do serve larger businesses (perhaps aspirationally) often offer services to small and medium businesses. 41% of respondents offer consulting to small, hyperlocal businesses, e.g. the restaurant around the corner.
- Though Project-Based Pricing is Most Popular, the Majority of Consultancies Also Offer Monthly Retainers and Hourly Rates
Early in my SEO career, project-based pricing seemed relatively rare (though quantifying this is hard since no formal surveys I’m aware of collected this info). Today, it was the top response, offered by 70% of the participating firms. Monthly retainer pricing was next, offered by 60%, followed closely by hourly rates (55%).