How Much Money Should High-Tech Companies Budget for Their SEO Program?

How much should a technology company pay for SEO? In other words, what should be my SEO budget as a technology company?

This perhaps is the wrong question to ask because it really depends. If you Google this and peruse through the top links, you are going to get various articles that reach the conclusions I have outlined below:

$1000 per month offers are generally not a good idea. These agencies do all sorts of tactics to raise your rankings, but there is a good chance that your domain may land in trouble with Google.

Most reputable agencies with above board SEO practices will charge you between $3K to $5K per month. And this seems to be a price point that most online articles are converging on. I also agree that this is pretty much the sweet spot. Obviously, this figure is going to change if you are a colossal business with a zillion products and web properties.

You may also see something called thought leadership SEO that runs upwards of $7K per month. Frankly, this offer makes no sense to me. If your products or services lead the market, there’s a good chance that you will own thought leadership in that space by default. You could in theory shape people's opinions using such a strategy, but it's not going to get tied into revenue anytime soon.

Additionally, here are a couple of empirical budgetary data points that you might want to consider. Per Sirius Decisions, a B2B marketing budget benchmark indicates an average spend of 4% of the total marketing budget on SEO, but it is old data. A more recent estimate puts it at 8% or 9% of the total budget. It would be safe to assume a number somewhere in the middle.

What then is your marketing budget? While chip companies have been operating at about 1% of the revenue for their marketing budgets, startups that are out of the stealth stage are going to need to spend far more money in order to stand out.

You can extrapolate this to your specific case and generate an annual spend number. For example, if you are a chip company and your yearly marketing budget is 1% of your revenue, your SEO costs could be between 4% and 9% of that 1%.

In this fairly recent article in the Wall Street Journal, Global Foundries alluded that they are bringing their own marketing spend to ~1% of revenue. Assuming an annual revenue run rate of $8Bn, 1% of that is $80Mn. Per the benchmarks above, GloFo can in theory spend anywhere between $3M to $7M on search engine optimization, a number that sounds extremely excessive. 

Now that we have gotten the numbers out of the way, let’s look at the right question to ask, namely, how do you value what your SEO is offering you? I will talk more about that in the next post.

Do reach out to me here on LinkedIn if there are questions/comments.

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