Pharma SEO Spending Plan: Key Strategies for Budgeting
A consistent vertical pattern in SEO spending shows that advertisers understand the job SEO plays in aiding forthcoming clients track down their contributions. In 2020 alone, US organizations contributed an estimated $79.3 billion to expand their natural footprint.
How Much Should You Spend on SEO?
However, regardless of whether you know how crucial SEO is to your advertising, determining how much to spend is another inquiry. While there's no single formula to set an SEO budget, here are some strategies you can use to find a number that is appropriate for your business.
1. Separating Your Marketing Budget
Late data suggests that B2C organizations spend an average of 5% to 12% of their revenue on marketing, and B2B sets aside around 8% to 9%. Out of that total spend, as reported by Forrester Research, businesses dedicate an average of 50% of their marketing budget to online strategies like SEO, direct email, social media, and data analysis.
2. Test SEO Budget Breakdown
According to the 2021 CMO Survey, nearly 74% of organizations invest in SEO. Each business has specific needs, and the amount you should budget depends on your business model and niche. However, it can still be helpful to look at some models to guide your decision.
5 Key Strategies to Determine SEO Spending
You have options when budgeting for SEO, ranging from rough estimates based on total revenue to more precise calculations based on marketing metrics:
1. Allocate a Percentage of Your Overall Marketing Budget
How it works: Set aside a portion of your digital marketing budget based on how much you rely on website traffic to generate sales. For example, an e-commerce business would likely spend more on SEO than its physical counterpart.
Remember, assigning a fixed percentage of your marketing budget doesn't account for your specific SEO needs. If you're basing your SEO budget on what you can afford, you might not be spending enough to see significant results.
2. Match Your Competition
Businesses with competitors aggressively targeting industry keywords need to invest more in SEO to maintain their share of organic traffic. Compare your current search engine rankings with your competitors and evaluate the opportunity cost of losing customers to them.
3. Consider Your Marketing Objectives
Think about your SEO goals within the broader context of your marketing objectives before allocating a specific dollar amount to your SEO budget.
4. Calculate Your Budget Using Customer Lifetime Value (CLTV)
The benefits of organic traffic extend beyond a one-time purchase. This strategy determines the value of a web page based on CLTV—the amount you can expect to earn from a customer long-term.
5. Measure SEO Effectiveness Against Paid Search Spend
Many companies are comfortable allocating budgets for PPC and tend to spend more on paid ads than SEO. However, SEO typically generates twice as much traffic, with organic search accounting for an average of 53% of site traffic.
Why You Should Increase Your SEO Budget
As you begin calculating how much to spend on SEO, you may arrive at higher figures than you initially expected. Be aware that budget partners may not fully understand the benefits of investing in SEO.
Low-budget SEO won't deliver significant results. Backlinko found that clients who invested more than a minimal amount were 53.3% more likely to be "extremely satisfied" compared to those who spent less.
SEO is highly effective compared to other channels, offering various stats that you can share with stakeholders to highlight its high ROI potential.
