I have some difficulty assessing the value of the size of our SEO, rather than PPC, budget. While I have a clear feel, whether a house, a car or a glass of wine is big or small and what their respective average sort of  values are, I have no such feel for SEO budgets.

This issue is important in order to take one's business to the right shop. You wouldn't want to buy a high-rise council flat from Harrods Real Estate. Neither would you get a large Surrey pile from Thievesen Cheetz in Lower Tottenham. And a £1300/month PPC budget probably shouldn't be with an agency with only million-buck accounts.

Also, is there any howsoever definable numerical relationship between a  PPC budget and an SEO budget? Our PPC budget is a well trodden path, does this allow to roughly define what I should be spending on improvements to our natural rankings?

My apologies, if this is beginner's hogwash to some, but these are real issues going through my mind.

Thanks for reading,

Chris

A very very rough rule of thumb is that you can expect about 1.5 times the traffic from a #1 natural search position than from the top sponsored link. If you have both slots then it can go up to as much as double the PPC traffic on its own.

That give you the value of that positioning.

What you need next is it's  cost, where unfortunately there is no direct line relationship between your spend and your position, unlike PPC. A rough idea can be gained by looking at things like the age, links and quality of links into your competitors, and what the cost in time, or outsourced effort would be in achieving a similar amount of attention from other sites.

A good SEO firm should be able to give you a reasonably confident answer as to the time & cost of achieving a top position, albeit loaded with caveats.

It's entirely down to how competitive your sector is. I've seen brand new sites hit the top spot in 24 hours for small niches, and convert very well. A targeted local search strategy for your site could work very well like that .

The steps I'd suggest would be:

1. Look at your existing PPC, and use tools like Overture and Wordtracker and see where there is enough volume of searcheson a term to merit the effort involved in creating content and getting links in to your site.
2. Work out the value of these terms using your existing PPC as a guide.
   
3. Look at the competitors for these terms in Google and assess the work involved in getting similar content and links to your site.
4. See what factors other than links might be contributing to the top positions. These might include on-site optimisation, domain names or other factors which could be easy to replicate.

Don't forget the big picture while you are doing this. It is quite likely that in your sector, a few well placed paid directory entries will do more for you than hours of struggling in Google.

SEM consists of SEO + PPC.

These are two DIFFERENT methods of generating traffic to your website.

I would suggest calculating ROI [Return On Investment] for both of them SEPARATELY.

If your PPC brings you a positive return why to stop it? It's just the matter of optimising it and modelling - depending on your business objectives.
Who should run your PPC budget - any agency that can deliver good ROI for yourselves.

With regards to SEO - it is essential to be VISIBLE on search engines for your company's name and key products.

The cost of SEO  [SEO budget] depends mainly on the category you are in - some business sectores [f.ex. mobiles, gaming] are so crowded that it requires huge efforts to achieve top positions on search engines.
Of course the agency's fee depends on its reputation, too.

Should you need some help with finding a good SEM agency - do not hesitate to contact myself. Openly I do not work for any... I am an independent e-consultant.