SEO and SEM Strategy: Guide to budgeting

Before you embark on planning your search marketing strategy, you might ask: “How much should I budget for SEO and SEM?” The truth is, there is no magic number that will work for all businesses. But, you can take certain factors into consideration to come up with a number that is appropriate for yours. 

How much you should be spending on your SEO and SEM strategy will depend on three factors: the size of your market, the potential profit you are expecting to raise, and the competition. If you are a small- or medium-sized enterprise (SME) delivering nationwide, then your budget should logically be higher than an SME with a local reach (say a brand available on an online marketplace versus a mom-and-pop coffee shop. The more competitors you have, the more difficult it may be to rank. Your current ranking will also affect how much you need to spend. Moreover, your total budget will be composed of the SEO and SEM services that you need. 

Here are the activities to take into consideration:

Content creation, on-page and off-page optimisation

Often, companies are after quick results, or they do not know how to track SEO conversions, so they spend more on search marketing ads. Despite the fact that 75% of search traffic is attributed to SEO traffic, only 15% of the marketing budget is allotted for it. Meanwhile, SEM accounts for 25% of all search traffic, but it usually takes up to 80% of SEM campaign budgets.

A lot of marketing experts argue that 50% of SEO and SEM services spending must go to quality content creation. As we’ve mentioned in the past, SEO and content overlap, therefore in creating a holistic search marketing strategy, it is important to create valuable blog posts.  

However, creating quality content in the context of SEO is both an art and science. It must combine writing prowess, relevance, and also on-page optimisation, off-page optimisation and further optimisation techniques to lead to higher traffic and conversions. 

At the end of the day there is nothing to click, read or share if your content is not worth your audience’s time. In this context, content creation should take up a significant part of your SEO and SEM strategy budget. 

Keyword search volume and CPC

Keyword research is the process of discovering any relevant topics, subjects, and terms searchers enter into search engines. The number of searches for a keyword within a certain period is referred to as search volume. It is used to assess the potential search engine traffic for a given keyword.

Search volume is important in the context of SEO because if you’re only targeting keywords with an extremely high search volume, it will be difficult to compete with top sites. Moreover, in SEM, search volume matters because when you place ads, high-volume terms will tend to be more competitive. When a keyword is more competitive, its CPC or cost per click, the amount that you pay a publisher when your advertisement is clicked, will be more expensive especially if it has a commercial intent. 

Competitors’ ad spend and keywords targeted

Marketing is about capturing the attention of your audience. It is important in your SEM strategy that you know what your competitors — who are also vying for the attention of your audience — are doing. 

There are a plethora of tools that can be used to do competitive analysis so you can gain a crucial advantage over other businesses in your industry. Competitive analysis can allow you to take a look at their strategies, strengths, and weaknesses which you can use to leverage your own campaign, and enhance your profitability.

By using these tools, you can pinpoint the top performing keywords used by your competitor, their most effective ad copy, their strengths and weaknesses, what kind of threat you are facing from your competitors, and how much their estimated ad spend is every month. This can be a benchmark you can refer to for your own campaign.

Keyword Mapping

Which keywords should you prioritise? As many businesses have limited resources to invest in search rankings, it helps to determine which search rankings, as well as organic and paid traffic to target that will have an impact on your business’ success. 

For cases where there is high competition, have a specific set of keywords to prioritise first, second or third. A rule of thumb is to start with the easy wins first — low search volume — then work your way through the more challenging keywords — high search volume. 

However, for cases where the competition is low, there is no need to start with low search volume keywords. You can target both low and high search volume keywords at the same time.

Once you have determined your search strategy, you can create a small budget that you can use to test your campaign. This will allow you to make more informed decisions on which tactics will give you a better return on your SEO and SEM strategy investment. As you go along, set goals and monitor your progress and results, and use our tips on further optimisation to make the most of your campaign budget. With the right calculation, you’ll be surprised at how far your budget can go.