How much should I spend on SEO?

The other day, I ran a poll on Twitter asking eCom founders what their biggest questions & concerns are when it comes to investing in SEO.

I received a question that I in fact despise:

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“What ratio of my marketing budget should be allocated to SEO?”

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Here are my thoughts:

If you Google that same question, searchengineland.com will recommend that you allocate 5-10% of your revenue on SEO. 

Here is why I hate this question – it puts every single company in the same box. 

Amazon did $513.983 billion in revenue in 2022. 5-10% of that would shake out to roughly $25.7 - $51.4 billion. 

That’s A LOT of backlinks. 

Now, let’s go to the opposite end of the spectrum. A DTC brand makes $1 million per year, so 5-10% of that would be $50,000 - $100,000. I work with several brands in this range, and most of them are at or around the $50k mark.

Their margins wouldn’t allow them to spend $100k per year. 

Now, let’s say you launched your brand yesterday and your revenue is $0. This should be obvious, but you should spend 100% of your money on paid ads & inventory. Don’t spend any money early on in SEO. 

There's not a templated answer to this question, it varies, and no person outside of the brand could know their financials better than themselves.

And if you’re asking me how much you should spend on SEO then you’re already in a terrible position. 

How am I supposed to know how much you spend on SEO? I don’t know what your model looks like🤷🏻‍♂️

That’s a question that you have to answer for yourself. 

Instead, you should be asking yourself these questions:

- Is there a demand for my product on Google? aka are people actually searching for it? Many founders incorrectly believe that everyone wants to buy their product - This is not true and is why most eCommerce brands fail.

- If there is a demand for your product then how much? If you sell a $25 product but <200 people search for it each month (on average), you probably don't want to spend on SEO... it's a waste of your time. But if 2,000 people are searching for it, a very different story. 

- Let's assume you've also validated SEO as a channel (aka it would add $10,000+ to your MRR by being in the 1 spot), are your paid ads competitors ignoring SEO? If so, you should spend a ton of money on SEO because this is where you can beat your competitors. You may not be able to outspend them on paid ads, but you can win the organic spots. I work with a few brands that share the exact same mindset. 

- How do my margins look? If you’ve got 20% margins then it might be pretty hard to do SEO for the long term, but if you’ve got 60%, 70%, or 80% margins, then you should invest in SEO. 

- Will reducing your reliance on paid ads help you actually grow your business instead of continuing to light money on fire with Meta & Google ads?

- Are you willing to go the distance? You can't invest in SEO for 3 months and then decide that it's not "for you." If you think this will happen, allocate exactly 0% of your budget to SEO.

If you’re willing to go the distance then investing in the right SEO team plays a key role in outranking your competitors and increasing your organic MRR.

Here’s what happens when you invest with the right SEO team. We grew this brand from $12,000 to $30,000 Organic MRR with SEO.

Until next time,

Kai Cromwell