Digital marketing spending has skyrocketed over the years. 95% of Google’s revenue alone comes from search engine advertising and its AdSense program.
If your business has an online presence in any way, chances are you contribute to digital advertising’s rise with your search engine marketing cost. The internet is a primary marketing avenue for innumerable brands across the globe.
Even so, many business owners and brand managers still find it challenging to budget for online marketing.
Just like any winning business strategy, search engine marketing (SEM) comes with a price tag.
So, how much are SEM costs exactly? How does the SEM pricing scheme work? And what comprises the standard SEM prices?
It comes down to your brand positioning—how your web pages measure up against your competitors.
Table of Contents
SEM Costs
One of the most effective tools for business growth and scaling, SEM is a brand owner and marketer’s strength paving the way for opportunities to get their advertisements out there. These ads are excellent motivators for prospective customers who are waiting to make a purchase.
But how much should search engine marketing cost you?
One-Time Vs. Monthly SEM Pricing
You need to achieve consistency to outrank your competition and succeed in search engines. This is why most SEM services are billed monthly.
Besides algorithms’ preference for consistency, monthly performance enables more efficient planning and suggests proactivity.
Website-building is an exception. Typically, you pay a one-time upfront fee for website creation. It should be all-inclusive—from imagery to copywriting materials. All web elements will be handed over to you well-optimized by specialists.
The option for subscribing to monthly professional web services also exists. It should cover the same features you get from a singular-payment service, plus additional offers for more fortified site performance.
For instance, it can be regular website management and maintenance to ensure cash flow.
A website is a business essential that contributes to consumers’ impression of your brand. 75% of users and online buyers attribute brand credibility to website design. Ultimately, how you present your brand through your business pages will affect traffic and impact sales.
It should be well-developed and structured properly with the help of a technical search engine optimization (SEO) expert. Written content should be provided by a professional content marketer with thorough knowledge of on-page SEO. In addition, visuals should be created by a dedicated graphic designer.
Here is what you can expect from the average SEM pricing:
SEM Basics
The most fundamental of SEM costs $499 to $999 per month. The package inclusions are simple setup services, content creation, and social media services.
You need this if you are getting started with SEM. The search platform component has the biggest share—at 46%—in the digital advertising marketplace.
Since search tools are extremely competitive, a website alone could not guarantee getting a favorable ranking on its own.
Make your business website keyword-optimized for local SEO. This will improve your chances of ranking organically on search engines, appearing on Google maps, and generating leads.
SEM Must-Haves
The essentials of search engine marketing cost $1000 to $1999 every month.
Besides your professionally optimized website for local SEO tactics, you need a growth-focused strategy involving social media and content marketing.
You trigger social signals by creating valuable content and sharing it on your social pages to gain followers. These social signals move your ranking up the search engines as they show that your website is always fresh and updated with new content.
Local Expansion-Focused SEM
Area-focused SEM prices can range from $2000 to $4999 per month.
This service package is ideal for local businesses targeting local markets. It is for your brand if you intend to be found online by audiences who are based within a particular area. This strategy involves advertising via Google AdWords and targeted social media ads.
This plan will get you advanced pay-per-click (PPC) campaigns, social media projects, and sales funnel creation and implementation. It allows your brand to receive more qualified leads and make more sales.
A larger ad budget lets you target more marketing channels for narrowed-down keywords and audiences.
Creating a conversion-optimized landing page can position your company more competitively.
Multi-Location SEM
How much does multi-location search engine marketing cost? It requires higher fees ranging between $5000 and $19,999 every month.
It is excellent for targeting a larger client base in different locations. You will get advanced campaign initiatives, from PPC to multi-targeted social media programs.
SEM targeting multiple areas means greater awareness. It is based on research and keyword optimization pinpointing both paid and organic traffic strategies to help you with search engine visibility.
Competitive SEM
High-level SEM services cost $10,000 to more than $39,999 per month.
Opt for this package if you are in a highly competitive industry. It includes a full digital marketing plan, complete SEO services, social media management services, and PPC campaigns.
4 SEM Pricing Models
These are the four main pricing models followed by the SEM industry:
1. Percent of Revenue
In this SEM pricing scheme, you pay a percentage of the resulting revenue.
While the straightforward computation may seem reasonable and fair, SEM prices under this payment model have a disadvantage.
Since you pay from the profits generated, you do not have an economy of scale.
For instance, if your revenue doubles, it means the SEM costs will double. This strategy is not a feasible long-term payment method and will need regular adjustments.
2. Percent of Ad Spend
Your SEM agency will bill you with the percentage of their ad spend. The rate starts at 5% and can go as high as 20%.
Like the percent of revenue SEM pricing model, this has no economy scale either. The overall SEM costs grow alongside your spending. Plus, the return on investment (ROI) is unclear.
3. Flat Monthly Fees
This is a simple, adaptable, and future-proof SEM pricing model that provides you with economies of scale.
It is an ideal payment method for better control over your budget. Most agencies offer this subscription-based pricing scheme.
4. Flat Project-Based Rate
A project-based rate is adapted to your specific one-time business needs. It is typically used by independent contractors and freelancers.
You can follow this SEM pricing model when updating websites, fixing broken links, or performing basic keyword research.
SEM Costs: Hiring SEM Experts
An in-house SEM analyst’s annual salary starts from $48,000 and can reach $95,000 while a dedicated SEM manager’s pay ranges from $58,000 to $116,000 per year.
The costs of hiring an in-house SEM team are higher than outsourced services. It is financially viable for larger businesses. But for small and medium-sized companies, it is recommended to work with an SEM agency that can offer you more flexibility.
SEM Prices: Investment in Professional Services
On average, a business’s SEM costs $35,000 annually. Search engine marketing costs may reach $80,000 if the services cover mobile ads, display advertising, email marketing, and social media management.
So, how much should you allocate to SEM?
As a rule of thumb, a profitable brand can spend up to 12% of its revenue on search engine marketing and other digital advertising efforts.
Benefits of Search Engine Marketing
This section underscores the benefits and value you get out of SEM costs:
Profits
SEM is a worthwhile investment that generates earnings.
Conversion-Driven Strategy
The marketing tactic plays a critical role in increasing conversion rate. Conversion comes in many forms, such as website signups, email and newsletter subscriptions, and social media contest entries.
Brand Awareness Boost
Brand recognition and recall increase with search engine ads. Whether these ads receive clicks, they still manage to place your brand name in front of consumers to see and recognize.
Accessibility to Startups and Smaller Companies
SEM prices can be high. However, when properly managed, the tactic can double your investment.
Adaptability to Local-Level Marketing
SEM enables you to connect with the local community your enterprise serves. Searches like “laundry services near me” can connect your marketers with business listings and make you more visible on search engines.
Immediate Results
Unlike other marketing formats, SEM delivers results more quickly. It only takes one business day to make and launch an ad and a few minutes for processing approval. You can focus on optimization and maintenance while waiting for clicks. This makes SEM a workable and practical traffic-generating online advertising strategy.
Unique Campaign Flexibility
Search engine marketing offers customization choices, letting you indicate the audience attributes, specify locations, and set ads budget. You can tailor your marketing style with customized ads format for guaranteed outstanding results. This makes a significant difference as there is no one-size-fits-all marketing solution that all businesses.
Takeaways on SEM Costs
SEM is a sophisticated and systematic advertising device. It is a reliable traffic source that can get you to the top of SERPs quickly.
You can choose the network attributes around which you intend to set up your brand’s campaign. You can arrange them based on your goals and needs.
Once you have your campaign initiative ready, you can select the SEM platform to display your ads by evaluating competitors. It involves analyzing if you share similar keywords with other advertisers. Then, you can assess your SEM costs and measure them up against your budget allocation.
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