Does Your Business Need SEO – Marketing Cost Comparison Calculator

5 Responses to “Does Your Business Need SEO – Marketing Cost Comparison Calculator”

6 Mar

What are your current marketing costs per website visitor? If you have no idea you certainly need to find out as SEO could be a much cheaper alternative.

As discussed in an earlier SEM post, small business has been slow to take up SEO and SEM as an alternative marketing method.

One of the main reasons for this hesitation is the belief that SEO is expensive which is simply not the case.

Your Current Marketing Costs

To draw some comparison we have to work out your current marketing costs per visitor to your website.

The simplest way of doing so is to divide the amount of money you spend on website marketing in a given month by the number of unique visitors that come to your site in the same month.

Example: $1,000 marketing cost / (divided by) 1,000 unique visitors = $1 cost per visitor.

Work out your own costs using the following calculator.

Cost Of SEO

Although some businesses may have the resources to implement their own SEO campaigns, the following assumptions are based on hiring an SEO firm.

1. In most cases an SEO campaign will take some months to get a return on your investment and initial marketing costs.

2. Once rankings are gained, they usually stay consistent long after the SEO work has stopped.

3. Based on the above and continued sales, the cost of the SEO campaign gradually becomes less per visitor over a period of time.

Example: While the SEO campaign is running over a six month period the cost per visitor is 15 cents. On completion of the SEO campaign, visitor numbers stay the consistent over the next 6 months the cost to gain each visitor decreases to 7.5 cents.

Initially the cost per visitor will vary depending on the following factors.

Your industry, product/service and the competition it has on the search engines.
Whether you chose to learn and do the SEO work yourself or hire a SEO firm.
The SEO firm you choose, their fees being low cost, reasonable or expensive and their SEO experience and ability.

The Final Comparison

As stated, the above factors must be looked at and it is difficult to give exact costs of SEO for any website until the work is being done.

That being said, when done correctly most website owners implementing SEO should be getting visitors to their website at a cost of less than 1 cent or up to a maximum of 20 cents.

Food for thought if your current marketing expenses are above this!

Comments 5 Comments
Categories SEO General
Author Chris Taylor

Simple Calculator

Cynthia 07. Mar, 2009 at 12:07 pm #

This is wonderful, thank you so much for posting this. I have a client that I am working with that needs this as well.

Cynthia
Sara 09. Mar, 2009 at 4:49 pm #

thank you very much for this important formula
very important to know how to calculate cost/visitor to figure out how effective is the current marketing method

Sara
http://www.doubleurincome.com
Paul R 12. Mar, 2009 at 6:15 pm #

I think you have to factor in the future clients that a SEO site will bring into the business. What is the potential market for Product X or Service Y in the local or international market? How many people are currently searching for the service/product? Is it a repeatable business?

Just things to think about in your calculations.
Chris Taylor 12. Mar, 2009 at 10:04 pm #

Hi Paul,

Yes you are correct, that would be another way of working out ROI which I had not mentioned as I was trying to keep the calculation simple.

However I will place here now for those who are interested.

As Paul states, potential future income and profit from each new client can be calculated also.

In this model the assumptions are/can be similar to the following.

From X amount of new vistors, X amount of long term customers will be gained who will on average spend X amount of $’s over a period of X months or years.

Example:

1. SEO increases out traffic volime by 10,000 unique hits per month.

2. From this we gain 1% added to our client base per month – 100 new clients.

3. From our business statistics lets assume that each new client will purchase a number of products totaling $200 nin sales over a two year period.

4. If we also assume that our rankings will stay roughly consistant over a perod of 2 years we can then calculate expect sales.

100 new clients (per month) X $200 X 24 months = $480,000.

5. Once this calculation has been completed we can then subtract our SEO costs, work them out as a % of over sales, against net profit and so on.

In this case let us assume that the SEO campaign was conducted over a 12 moth period and cost $12,000 or $1,000 per month. Of course this again will vary depending on your business budget and the SEO firm you choose, etc.

Therefore the marketing/SEO cost for the sales of the above products is 2.5%

6. Other ways to calculate the figures.

10,000 vistors monthly X 24 = 240,000
$480,000 / 240,000 = $2 of product sold per vistor.

$12,000 SEO costs / 240,000 new viistors = 5 cents per vistor.

Such figures can easily be accessed and calculated if you are using a Google Analytics.
SEO Sapien 23. Mar, 2009 at 6:47 pm #

Really interesting concept and I completely agree with Chris Taylor. At the same time if you use google analytics for highly competitive and searched keywords it would bring the SEO budget way over most companies can afford. We usually quote our seo campaigns based on the competition and work needed. Some keywords might not bring direct sales to the website but could generate $$$$$ on the branding value and it would be impossible to calculate an optimization cost based on expected online sales.