How to plan and budget for enterprise SEO

In an ideal world, your CMO would plan a budget that would allow you to build your strategy without having to prove the return on your investment.

It’s an ideal situation. It’s not quite realistic.

CMOs are usually focused on brand strategy. Search Engine Optimisation is a new marketing channel for enterprises. They are left to their own devices

It can be hard to make a business use case when you have to plan an enterpriseseo budget. It’s a hard experience.

How do you make a budget for the internet?

I have had the luxury of spending countless hours in meetings and spreadsheets to help the C-suite understand why they need to spend a budget on search engine marketing.

My process for building anseo budget is below.

1. Understand the business model

This is the first step in the process of developing an enterprise company’s website.

The business model tells you how much money a project gets. Business models can change your organization.

If you understand your company’s business model, you can build a budget to match what the business wants to do.

You need to get below the surface if you want to operate at an executive level. The answers to these questions can be found by you.

• How do customers behave? How do they find us? What do they click on?
• What percentage of revenue comes from each business unit? 
• What revenue metrics are we reporting on (LTV, CAC, margin, etc.)?

The business model is the basis of your strategy. The different business models will affect what you do with the internet.

Some examples can be walked through.

The business model of Rover is based on lead generation. There is a map with dog walkers on it. Users need to be attracted to this page to input their information.

The business model of Yelp is based on sponsored listings. To support the spend of the advertiser, the pages have to be structured.

2. Correlate SEO to revenue

You cannot speak to the C-suite executive team unless you mention revenue.

Pretend you are giving a presentation to a CEO. The CEO would like to propose that we do X, which will achieve $ZZZ and cost $0. How would you write something down?

Matt McKinley is the Webmaster for Revolt Media and TV.

“X would represent one of the biggest projects from the SEO roadmap that’s needed to drive traffic/revenue. ZZZ is measured by the potential increase in traffic x average order value. Y would be the cost of resources needed for the project such as tools, other team’s time (developers, designers, editorial, etc.), additional SEO headcount, etc.” 

Adidas was embarrassed by the Boston Marathon email debacle because they didn’t mention revenue when they pitched to the executive team.

I think it’s difficult to recover from that.

If your analytics are broken, it’s hard to tie revenue to the internet.

If we improve our page speed score by 10 points how will that affect revenue? It’s a long way from connecting a page speed to a revenue increase. We need to back into it.

There is a correlation between the number of good mobile URLs and the impact on organic traffic and revenue.

You can say something like this.

“Each indexed Good Mobile URL is worth $10. If we improve the number of Good Mobile URLs by 50%, we can estimate a $5 million additional value.” 

Are you able to smell that? The smell is BS.

This is how executives operate. The back-of-the-envelope calculations can be used to frame the potential value of a project.

It doesn’t have to be perfect. Executives are interested in seeing that you are looking beyond the traffic.

You need to expand the resources in order to create a series of buying guides.

To sell this to the executive team, you would want to lead with the estimate of the guides’ worth.

You need to look at historical data to get this information to work up to $20,000. Before and after scenarios of an increase in revenue after publishing a guide.

There are categories you can look at. After you launch the buying guide, you can pull data from the category sales.

Another example can be walked through. I was working on a request for more writers.

I used hypotheticals to turn them into return on invested capital.

We have the ability to make $2,910,000 from the blog each month. The assumptions provided below are used to arrive at this.

1. 160 hours per month for [LIST TEAM MEMBERS] to manage the blog (80 hours per person per month) 
2. $23,720 per month in labor costs to manage the blog 
   1. $18,720 per month for [LIST TEAM MEMBERS] to manage the blog ($117 per hour)
   2. $5,000 per month for freelance writers (this is our current budget for the 20 blogs we are producing today)
   3. $5,000 additional cost per month for new freelance writers) 
3. $500 per month in technology costs (hosting, maintenance plugins, Semrush, etc.). This is a guesstimate. 

We have to pay $29,220 a month to manage it.

30 people sign up every month after visiting the blog.

If we sell a house for $150,000 and earn a net commission of 2%, we’ll make $3,300. If we complete more transactions between listings, sales, and other things, we will make more money. If the family is well connected and can send us two $3,300 transactions a year for 15 years, that’s $99,000 in revenue. The bridge to the total client lifetime value is $3,300.

We know that our company’s expenses are $29,200 per month. The majority of the money comes out for expenses. That adds up to $92,030.

Let’s assume our customer lifetime value is $92,000.

We would be making $2,760,900 from the blog each month.

The program has a monthly revenue of over $2 million and a monthly investment of over $2 million.

You can get a link to my example document by clicking here.

It doesn’t have to be accurate. The data is what makes these assumptions.

Search marketers rely on daily newsletters.

3. Forecast SEO traffic

We need a forecast for the future of search engine rankings. This is a question I get from a lot of people.

Understand the business model before you can forecast traffic.

If you have a good understanding of the business model, you can segment your forecasts based on the structure of the business.

I was working on a project from Brother USA. I began to prioritize by type.

I was able to give a better forecast once I understood the business model.

You can begin to build your budget spreadsheet once you know what areas of the website you are forecasting for.

Jori Ford is the CMO at FoodBoss. Ford shared something.

“I outline existing traffic. Then, determine a projected lift based on SEO activities. After, I align that lift to the existing conversion metrics to show projected conversions. Next, I apply the overall value of those conversions as it relates to the business to do a rough range of potential financial gain whether that be revenue or just “value” vs. “cost.””

It’s all based on hypothetical scenarios.

Think about four different scenarios to give your executive a decision.

• Scenario 1: Baseline (if we do nothing) 
• Scenario 2: Conservative
• Scenario 3: Average
• Scenario 4: Optimistic 

If Best Buy wants to expand its buying guides, you can split the investment into two parts.

If you would like to learn more about financial models, I recommend Tom Critchlow. There is an amazing article written by Tom Capper on the subject of forecasting.

If you are an agency, you can change your route. The CEO of Searchpilot gave me insight into how his agency goes about this for enterprise companies.

“We start with the trend from Google of on-site SEO being more unpredictable and less rules-driven than ever before, and the growth of their use of AI/ML continuing that trend. That, combined with the biggest problems large organizations face with SEO is in getting it done and proving the results lets us make the case that their on-site strategy should be built around SEO testing. From there, we build a budget case based on an ROI model that assumes a certain testing cadence, percentage of positive tests, and typical uplifts.”

It’s not appreciated in enterprise companies. You can make a better case for the benefits of an A/B test if you have the flexibility.

Before you present your enterprise SEO budget to your executives

Get eyes on the overall marketing budget

The golden rule of company budgets is that 10% of revenue goes towards marketing.

There is a split between online and offline.

According to the report, online channels will account for over half of the total marketing budget.

You are fighting for a small slice of the pie.

How much should an enterpriseseo company spend on online channels?

If you want to ask for something above the marketing budget, you need to have a good look at the marketing budget.

Compare your SEO budget to your PPC budget

You have about half of the marketing budget going to the internet. You have to compete against other online channels for budget.

The online channel marketing budget is allocated according to the report.

• 10.1% to social advertising
• 9.8% to search advertising
• 9.3% to digital display advertising 
• 8.8% to digital video advertising
• 8.1% to partners
• 8.1% to digital audio advertising
• 8.5% to SEO 
• 7.8% to content and messaging

It isn’t normal. Out of the total marketing budget for online channels, CMOs are allocating less than 9% to search engine Optimisation.

Here is what it might look like for you.

You need to figure out what percentage goes to technical, content and link building.

A rough idea of the budget you could aim for comes from knowing the marketing budget.

Embrace the suck of enterprise SEO budgets

It may seem like a pointless task to prove the return on investment in the internet.

We have to accept the suck as a professional.

It seems like B.S. to you. It may sound like an alarm that you’ve been screaming. You speak the business language to your executives.

Talking about traffic and pageviews is not the right way to talk about revenue.

There are budget spreadsheets that aren’t sexy. Assumptions are free.

It’s not about an accurate method. It’s about connecting with the C-suite.

I align the projected lift to the existing conversion metrics to show projected conversions. I apply the total value of those conversions to the business in order to get a rough range of potential financial gain.

If we increase monthly active users by 20%, we will achieve $ZZZ based on the LTV or first-time purchase value of a user and will cost us $Y to get there over the next ABC time frame.

The guest author’s opinions are not necessarily those of the search engine. There are staff authors here.