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How Much Does Search Engine Marketing (SEM) Cost — and Why?

January 23rd, 2024 | 3 min. read

By Kim Kovelle

Fingers on a keyboard reaching for letters that spell out,

When people Google for your business, you want them to find you. SEO, or search engine optimization, helps. But paid SEM — aka search engine marketing — gives a big boost.

But how much does SEM cost, and what goes into it? The average cost is $4,050/month here at Zoe Marketing & Communications. We have experience managing SEM for dozens of small to mid-sized clients. But more generally, costs can reach as high as $10,000+ a month. It all depends on factors ranging from your industry to your goals.

Your marketing dollars are valuable, and you have a right to understand how they’re spent, whether you work with an agency or DIY. In this blog, we’ll shed light on:

  1. The time commitment of SEM
  2. Management fees for SEM pro services
  3. Optimizing your campaigns
  4. Balancing cost and results

You’ll gain a better understanding of what goes into SEM costs. And, from there, you can decide whether it makes sense for your marketing needs.

SEM Costs-15 Hours Week Time Investment1. The time commitment of SEM

Search engine marketing happens mostly through Google Ads. The goal is to boost your website’s visibility on Google’s result pages. To do this, you bid on keywords related to your business. And you tell Google how much you're willing to pay per click — which is why SEM is also called “PPC.”

Depending on how many keywords you target, an agency managing your campaigns puts in:

  • 5-15 hours for initial set-up, including keyword research, campaign structure, creating text/display ads and creating landing pages
  • 5-10 hours per week for maintenance, including monitoring performance, making small adjustments, reviewing keyword effectiveness and managing the budget.

For business owners to effectively do this themselves, it takes about 15 hours/week. This can be a big lift, especially given the other critical business tasks they must complete.

If you’ve struggled with it, you’re not alone.

“Most anyone can do SEM, but not everyone can do it well,” says Michele Potts, Zoe’s sales director. “Most clients hire us after realizing this firsthand — usually after experiencing frustration after campaigns spend too much money without the desired return.”

SEM Costs-35 Percent Management Fee2. Management fees for SEM pro services

Because of the time it takes to manage SEM, agencies charge a “management fee” for their work, tools and expertise. It can range from 15%-50%. The Zoe management fee is 35%.

So, if you were to spend $3,000 on actual Google Ads bidding costs, a management fee of 35% is an additional $1,050. And the total for your SEM is $4,050.

These fees can vary based on the agencies’ reputation, level of service and the complexity of your campaigns. 

It’s also important to note that your agency may not solely recommend SEM. Zoe’s pricing plans, for instance, use multichannel marketing. In other words, you’d use SEM plus another 1-3 tactics to meet your marketing goals, which adds to the cost.

Regardless, when working with an agency, you should get a clear picture of their management fees — or “fees added to each click,” in some cases — before committing.

SEM Costs-50 Keywords3. Optimizing your campaigns

An agency’s job is to optimize your SEM campaigns for the best results. In particular, keyword research is critical — and can be complex. Each campaign can range from dozens of keywords to hundreds. Zoe’s Google Ads campaigns have a minimum of 50 keywords.

It requires a variety of skills to identify and fine-tune those keywords. This includes analyzing search volume, competition, relevance and performance metrics. Experts also harness Semrush, Google Keyword Planner, AI tools and more to refine results.

A/B testing SEM ads is also essential; it can increase conversions 25%-300%. So, ad copywriting is critical — as is monitoring performance data to make tweaks as needed.

Finally, optimizing also applies to the landing page your SEM ads send people to. Plus, it involves constantly adjusting bids and making strategic decisions based on analytics.

SEM Costs-Average Monthly With Zoe4. Balancing cost and results

Let’s go back to Zoe’s average example, which, with management fees, is $4,050. Zoe — and any agency — consistently balances your “spend” with your campaign’s effectiveness.

This includes:

  • Setting a realistic budget based on your business’s goals and competitive landscape. Some fields have more competition for keywords, such as insurance and attorneys. “If it’s a popular, crowded industry, you will likely have a higher ad spend to beat the competition,” Zoe sales director Michele Potts explains.
  • Understanding and regularly optimizing your cost-per-click (CPC) — which is an average of $2.69 for search and $0.63 for display
  • Continuously analyzing and adjusting strategies based on performance metrics

Your agency does more than manage your SEM spend. It refines your campaign to ensure every dollar meets your goals — whether brand visibility, lead generation or direct sales.

How to decide your next SEM marketing moves

Search engine marketing can effectively drive clicks to key landing pages on your website. However, optimizing it takes time and expertise. And the price can be higher for certain industries with more competition.

That’s why SEM costs are thousands of dollars per month, in addition to management fees of 15%-50% — along with potential costs for other key marketing services.

If you’re looking for some agency insight, talk to us. Zoe has 15+ years of digital marketing experience. Based on your goals and budget, we’ll give you a realistic picture of your costs for SEM and other services.

If you’re still researching, get a clearer sense of how to prepare for exploring any agency with these next steps:

Kim Kovelle

As Zoe Marketing & Communications’ content manager, Kim Kovelle brings nearly 20 years of writing and editing experience in metro Detroit. She has strong roots in community journalism and a knack for making complicated topics make more sense.