HOW are SEO and SEM Services Billed?
SEO Services are Usually Billed Based on Some Concept of an Hourly Rate.
The actual rate depends on the professional development of the provider, and how much good they can do for a client. Some agencies quote it as per keyword, and or per web page or per blog article optimized. But in the back of their mind, they are thinking in some way or other about hourly rate as this is how they pay their creative or technical staff.
SEM Services are Usually Billed Based on the Ad Spend.
A fee of 1/3, or 33% being pretty normal. For instance, if a client wanted to spend $1000 on Google Ads, then I would bill them $1333 but set their Google ads budget to only spend $1,000.
The rationale for basing the SEM rate on percent of spend is that the skills for this work are ‘softer’ but tracking the result is clearer, so demonstrating value is easier.
Doing SEM right can bring a lot of value. The bigger the spend, the more it makes sense to ‘hover’ over the work, monitor, tweak, run A/B tests, and otherwise continually hone the effort. There is also the idea that SEM services are paid for based on traceable value created, because unlike SEO, the SEM work leaves more “footprints”.
At Some Point, it’s NOT About Time Spent, but About VALUE Delivered.
Do you really care how long it takes somebody to help you generate $1000 in sales from your website? Probably not. If one guy takes an hour and generates only $300 in sales, while another guy takes an hour but generates $1,000 in sales, then which one do you want to hire? What’s it worth when somebody is so good at SEM that they can get clicks, visitors, leads, and orders?
Consider this. An artist friend of mine charges per portrait instead of per hour. He can paint a watercolor portrait of somebody in about half an hour, and do it so well you would swear it was an airbrushed photograph. He charges $300. When he has clients come over for a sitting, and then tells them they can go now, after only a half hour, they usually want to know when they have to come back to finish. When he tells them the portrait is already finished, but he just needs to add a coat of varnish after the paint dries, they get upset. They complain that he didn’t work long enough to earn the $300.
He tells them, I didn’t give you 30 minutes worth of work…. I gave you 20 years experience AND 30 minutes of work.