How to charge for SEO and SEM services?

Interaktywnie.com report: "Search engine marketing 2018", Author: Wojciech Szymański
26 April 2018

The digital world nowadays does not act as an alternative to the real one, but it is a complex addition to it. Customers more often begin their shopping activities offline and continue them online. They finalize their transaction there or compare the offers and choose the favorite one. That is why it is essential to launch the online promotion that is regular and thorough. The website itself might not be enough. It is important to expose it as well as possible to the users. Here, SEM and SEO activities might help. They generate traffic and provide the opportunity to reach the target group.

It has become apparent that online advertising is one of the most important elements of marketing strategies. This notion can be confirmed by the fact that in the first half of 2017 its value was estimated at approximately PLN 1.4 billion. What's interesting, SEM/SEO activities constitute 34% of this amount.

When you plan to intensify the online presence, you need to consider the selection of an experienced agency and the method of settlement for their work. Unfortunately, there is no single universal method that would work on all projects. Each time, the form of payment is determined individually and depends on the goals and expectations of both parties. The most selected method is the one that would ensure mutual profit – it will generate web traffic and guarantee the satisfactory salary for the agency.

The client vs agency

It is a natural occurrence that  we pay for the job someone has done for us. However, it is not always the case in SEO, because the ways of generating web traffic give many possibilities of charging for completed tasks. It is important to carefully evaluate the goals and the ways of their execution when determining the final method of compensation.

Based on the experience, it is easy to assess that clients expect first of all measurable results that would guarantee their businesses’ success. What they matter the most is the increase in conversion and the boost in sales resulting from it. Another important aspect is the positive brand image that is built thanks to appropriately tailored activities online.

How then agencies relate to clients’ expectations? It goes without saying that they should also care about providing the best results. In this case, there is no such thing as the conflict of interest. Both parties have the same or similar goals – to generate satisfactory results. The client will want to gain web traffic of high quality, while the agency is going to try to expand their portfolio with other successful projects.

The most popular compensation models

Running an agency can be the quite challenging business. In case of the competitive market, only brands, who have a flexible approach to the client and an optimal method to pay for the completed work, might achieve success. There are several models for measuring the results of SEM/SEO performance. They result from the goals established at the beginning of the project and Google sales policy.

The list of methods is long, so let us focus on the most popular ones. In our country, the agencies are charged based on the position in search results for particular key phrases. Such solution is used in 34% of projects. The compensation is paid only when specific results are achieved. In practice, the list of phrases that will be closely monitored is established at early stages of the cooperation. The company will pay the agency for their services if keywords achieve a specific position. The amount is charged daily and is just a small fraction of the monthly payment defined in the contract. This method guarantees the high level of safety for companies that pay only for activities that ensure good results. It additionally motivates the agency to keep up the good work. However, there are certain risks. You have to keep in mind that modern search algorithms take into account factors such as the history of previous queries and the user's location. Individual results do not always have to include expected phrases. That is why both parties should clarify this matter, even before the beginning of the cooperation, and precise exactly which results will be considered in the bill.

The other settlement method is a subscription that ensures the stability and safety of executed works. The fee is always the same and does not depend on achieved results. The client receives a detailed report including implemented activities. This compensation outline turns out to beneficial for both parties. The agency has a steady income that allows to plan the works better, especially in the long term, while the client gets professional services. This method is especially effective when it comes to SEM which involves activities connected to optimization of websites that require steady financing.

The third option is a mixed model that combines the subscription fee with the bonus for achieved results. The cost includes the lower fixed amount, that can be used as a promotional budget, and a bonus for achieving high positions in search results. Such system is a safe solution for the client and motivates the agency to improve the performance. This method turns out to be the most effective way for SEO agencies and their clients.

Of course, the methods mentioned above are not the only ones. We can also list the following options:

  • Percentage of the generated revenue,
  • A compensation depending on web traffic,
  • An hourly rate,
  • Models based on consultancy services.

No matter what compensation method your client will choose, it is important to establish all details, especially financial, at the beginning. It will help to avoid any misunderstandings along the way and build the satisfying relationship.


Author

 

Wojciech Szymański, CEO, Ideo Force

Download full report at interaktywnie.com, 26.04.2018r.

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