Local SEO Industry Survey 2016

Welcome to the Local SEO Industry Survey

Now in its 5th year, the Local SEO Industry Survey is a study into the business practices, pricing, services, attitudes and growth expectations in the local search industry. The objective of the survey is to gain a better understanding of the trends and changes shaping the local search marketing industry. By sharing the results with our customers, followers and the SEO industry, we hope it provides you with useful insights to help benchmark your own services and confirm – or even re-define – your business’ direction.

The latest Local Search Industry Survey is now out – click here to read the new report.

We’d love to hear your insights and views on the findings so please leave a comment at the end of this post.

Local SEO Industry Survey 2016

This is the 5th year of this survey and you can see previously published results of the survey from 2011, 2013, 2014 and 2015. We promoted the survey to Local SEO professionals throughout November and December 2016 and had a total of 868 respondents. This year’s survey consisted of 20 questions, some that were modified from the 2015 study and some new this year. In addition to 2016 data, we also show historical results from 2015 and 2013 to provide some perspective on trends and changes. We also invited a few industry experts to offer their comments/insights into survey answers. You will find their answers throughout the survey results. The LUCKY winner of our random drawing for $1,000 USD Visa gift card is Stephan Reed from www.forefrontweb.com. Congratulations, Stephan!

Want to compare your business to similar businesses?

The survey respondents are from a mix of local agencies, national agencies, SEO freelancers etc. Collecting responses from such a wide pool gives us some fantastic data to compare and contrast, particularly when we are able to deep dive into results broken down by business type and size. As a follow up to this piece we will produce 5 additional reports which breakdown the results by Business Type. Naturally if you’re a Freelance SEO, you want to be able to compare yourself and your services vs. other Freelancers (i.e. your competition). These segmented reports will be very useful if you want to benchmark yourself vs. similar sized agencies or businesses. Simply complete the form below and we’ll send you the data via email before the end of February.

Questions:

Q1. Which of these best describes you/your company? Q2. How many people in your company are professional SEOs? Q3. What was your company revenue in the last 12 months? Q4. How may clients do you personally manage? Q5. What is your pre-tax personal annual earnings? Q6. Which channels are most effective for attracting new customers to your company? Q7. How many new leads do you proactively contact each month? (via outbound emails and calls) Q8. What is your success rate at converting leads to customers? Q9. Do you serve a particular vertical industry or do your clients come from many different industries? Q10. What does an average customer pay you each month? Q11: What is your minimum monthly retainer? Q12. Do you expect to grow your business in next 12 months? Q13. Are you planning to recruit more staff in next 12 months? Q14. Which are your hopes and expectations for next 12 months? Q15. Will it be easier or harder to do SEO in 2017? Q16. Which services are most in demand from your customers? Q17. How much of your work do you outsource to third-parties and/or white-label? Q18. Do you believe that Social Media is an effective marketing channel for local businesses? Q19. What SEO Tasks Are You Responsible For? Q20. What SEO tasks are most time consuming?

Section 1: SEO Businesses

This first set of questions relates to your business, its growth and your hopes and expectations for 2017.

Q1. Which of these best describes you/your company?

Note: “Other” was not an option in previous surveys. Key Findings:

• 35% of respondents are Local/Regional  digital marketing agencies
• 19% are National/International agencies
• 18% are Freelance SEOs
• 13% are In-house SEOs
• 11% are Web Designers

Analysis: In this year’s survey we saw a slight increase in the number of Freelance SEOs taking part in the survey (16% to 18%.) The number of in-house SEOs between 2013 and 2016 grew from 7% to 13%. One of the reasons for this increase over the years could be that many businesses — both small and large — are finally realizing the importance of SEO (and digital marketing in general) to their business. These companies are opting to hire full-time staff/employees instead of contracting with an agency to manage their SEO efforts. By hiring staff to manage their digital marketing in house, they have employees that are more familiar with the inner workings and goals of their organization, people who have 40 hours a week to devote to their digital marketing initiatives (vs. only getting a limited number of hours from an agency) and, as employees, digital marketing/SEO staff are more personally invested in the success of their efforts. Additionally, this year we saw a drop in the number of businesses that identified themselves as Web Designers (16% down to 11%.) This could indicate that many “web design only” firms have added other digital marketing services to their business model and no longer identify their business as strictly web design firms. Since almost all digital marketing strategies impact rankings, web designers recognize the need to include other services in addition to just designing and developing a website for a client. They better understand the need for a holistic approach. Overall we see a good mix of SEOs working in different sizes and types of businesses — which gives us some great data for comparison purposes. Back to top.

Q2. How many people in your company are professional SEOs?

Key Findings:

• 79% of respondents have 1-5 SEOs working in their company
• 16% of respondents have 6-20 SEOs in their company
• Only 5% of respondents had 21+ SEOs working in their company

Analysis: The majority of respondents have between 2-5 SEOs working in their company. With the majority of survey respondents working in Local and Regional agencies and another 29% working as Freelancers or Web Designers, it’s not surprising to find that the count of SEOs per company is at the low end of the scale. Back to top.

Q3. What was your company revenue in the last 12 months?

Note: In this year’s survey we included an “I don’t know” answer for those SEOs who are not privy to their company’s revenue information. Key Findings:

• The median company revenue is approximately $150,000
• 21% of respondents reported company revenues of more than $1 million
• 15% of companies earned less than $30,000

Analysis: With a top-range revenue being $1M, the average yearly revenue is $372,000. Since the largest percent of people who responded (35%) work for regional and national agencies, it makes sense that they would have greater revenues than freelancers. Additionally, in-house SEOs perform search engine optimization work for individual businesses in a variety of industries. This may make it difficult for them to associate their SEO efforts to their company’s revenue. We anticipate that revenue is closely linked to business type and size, so our follow-up data that looks at the different SEO business types will shine a closer light on this data point.

“[It’s] Scary that 10% don’t know their revenue.” – Matthew Hunt, Powered By Search

 

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Q4. How many clients do you personally manage?

Note: We did not have a 31+ option in 2013 Key Findings:

• The average number of clients each SEO manages is 12
• 60% of SEOs manage 1-10 clients
• 23% of respondents personally manage 21+ clients

Analysis: The average number of clients managed by each SEO dropped from 14 in 2015 to 12 in 2016. Why might this be? One theory is that because local SEO has become more complex and competitive in recent years, it takes SEOs more time/effort to manage each client’s needs. Since it’s now more challenging to rank their clients in the top 3 results – especially in certain industries & in densely populated cities – it makes sense that each SEO has to manage a smaller number of accounts.

“One of the interesting things on this question is the number of clients managed by one person. In our agency we decided to limit the number of clients each specialist can work on because SEO is more involved than ever. I’m happy to see that the results reflect that many other agencies appear to be taking the same approach. As an SEO it’s more important than ever that we dedicate the proper amount of time to our clients.

There are so many moving parts, and agencies that are trying to do too much with too little typically see varying results. Clients are looking for a more involved, hands-on approach and it looks like the industry is listening and making changes. One hope for the future is that the agencies that just ‘churn and burn’ clients [and are] doing bad work will start to die out and the industry will gain a better reputation.” – Casey Meraz, Juris Digital

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Q5. What is your pre-tax personal annual earnings?

Note: Respondents were given the option to not disclose any data and were removed from the analysis. Key Findings:

• Average yearly income is $70,000
• Median income is $45,000-60,000 per annum
• 12% of SEOs earn a six-figure salary ($100,000 and above)

Analysis: Income levels look healthy for the majority of SEOs working in our industry. The median income of $45,000-$60,000 is higher than median individual incomes in the US, Canada and the UK, for example. A significant 20% of SEOs surveyed earn less than $30,000 per year. For the amount of work that goes into SEO, that seems really low. It is probably safe to assume that many of these people either work part-time or are new to the industry. Because SEO is ingrained in almost all aspects of digital marketing (social media, content, advertising, etc.) and can no longer be treated as a stand-alone service, the demand for people with SEO experience will continue to grow and those with good, relevant skills will be able to command a higher wage. Back to top.

Q6. Which channels are most effective for attracting new customers to your company?

Note: Survey respondents were asked to select their top 3 answers. Key Findings:

• Word of mouth is the most effective way to attract new business (77%)
• SEO is the second most effective channel (53%)
• Local business groups (25%) and meet-ups/workshops are also rated highly (16%)
• PPC scores highly with 22%

Analysis: The best ways to attract new clients has remained pretty consistent over the years — word of mouth and SEO. SEO is the only digital marketing channel in the top three ways to attract new clients — the rest are traditional, offline channels (word of mouth and local business groups) which are dependent on reputation and physical relationship building. However both these traditional, offline channels – as well as meet-ups – have fallen in their impact. Perhaps local businesses are becoming more comfortable with online approaches and relationships. Or maybe it’s just that with SEOs being so busy they have less time for networking-type activities and are relying more on inbound marketing and social media to deliver leads?! Good news for SEOs — of the top three ways to attract new clients, SEO is the only channel that grew!

“If you have a hammer you look for a nail. I think that is true for Local Search Engine Optimizers as much as anyone. That being said, in client research I am seeing that digital word of mouth (reviews) and traditional word of mouth are the largest contributors to having new customers find you. In one case study in a client that was spending ad money on radio, billboards, Yellow Pages, AdWords and Facebook:

– 0% of new customers said they came in because of Facebook

– 9% of new customers attributed their visit to radio, billboards or the yellow page

– 33% of new customers said that traditional word mouth was the reason that they visited

A whopping 58% said that they came in because of reviews. That is word of mouth for millennials.” – Mike Blumenthal, Get Five Stars

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Q7. How many new leads do you proactively contact each month? (via outbound emails and calls)

Key Findings:

• The median number of leads contacted every month is 6-10
• 25% of SEOs do not contact any new leads per month
• 34% of SEOs contact 1-10 new leads per month
• 4% of SEOs contact 30-50 new leads per month

Analysis: The majority of SEOs (59%) proactively contact less than 10 new leads per month. The median number of new leads contacted each month is 6-10 (an increase from 2015, when the median was 2-5.) Most SEOs are not actively involved in the sales process and often rely heavily on inbound inquiries, word of mouth, local networking or have an inside and/or outside sales team to generate new clients. (As shown in Question 6, outbound calls and emails aren’t among the most effective channels for lead generation for SEOs.) One possible reason why SEOs are not as active in the actual sales process could be because SEOs are simply too busy managing clients and don’t have time for sales. (As we saw in Question #2, 79% of businesses only have 1-5 SEOs, so their time would typically be spent on execution vs. sales.) In established agencies with a sales team, SEOs will often meet with potential clients in the last stages of the sales cycle to help ‘close the sale.’ (SEOs are better able to talk with potential clients about the details of SEO after the salesperson has warmed up the lead.) Additionally, more agencies are implementing inbound marketing strategies to help bring clients to them:

“One of the things we have noticed is a sharp increase in lead volume, but also a decrease in quality of leads. We are a purely an inbound agency, which means we don’t cold call or email anyone.” – Dan Leibson, Local SEO Guide

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Q8. What is your success rate at converting leads to customers?

Key Findings:

• The median success rate for converting new leads into clients is 30% (same as 2015)
• 35% of SEOs have 20% or less success rate at converting new leads
• 25% of SEOs have a 70%+ success conversion rate (same as 2015)

Analysis: In 2015 and 2016 the median conversion rate was 30%; however, in 2013 the median close rate was 40%. Why was it easier to convert leads into customers three years ago? One reason why might be because back then businesses were less educated about digital marketing — it was more of a “mystery.” Now many prospective clients think they know everything and many of them are actually doing their own digital marketing. Additionally, sophisticated businesses may already be working with an agency or have been burned by a “churn and burn” type agency and simply don’t trust digital marketers. This means that now more than ever SEOs must be able to show their value and worth to potential clients. It’s clear through the range of conversion rates that some SEOs/digital marketing agencies are better at sales than others. Back to top.

Q9. Do you serve a particular vertical industry or do your clients come from many different industries?

Key Findings:

• 60% of SEOs serve a variety of different industries (down from 67% from 2013)
• 24% of SEOs serve 2-3 vertical industries (up from 20% from 2013)
• 16% of SEOs serve one vertical industries (same as 2015)

Analysis: There’s been a 14% swing in the number of SEOs who work with a variety of industries vs. those who work in 2-3 verticals. The trend is certainly to become more specialised. Does this mean that more agencies are beginning to specialize in a few niches based on their agency’s client portfolio/experience? Often during sales calls, potential clients will specifically ask if the SEO/agency has experience with their particular industry (i.e. bank, plumber, accountant, etc.) If an SEO can show expertise or case studies of projects they’ve worked on in a specific industry, it can be a benefit when trying to win new business in that niche — but this is also a double-edged sword if you’re doing local SEO. While it’s helpful to show that you have knowledge of a particular industry, it can also lead to concerns of local competitive issues/conflict of interest. Businesses may worry that you’re doing the SEO for one of their direct local competitors — and how will the agency handle this? Larger agencies with more resources have an advantage here because they can demonstrate experience, successes and are able to provide winning case studies. Additionally, larger agencies have more SEOs, so they can ensure their clients that they won’t have an SEO specialist work on their campaign if they’re also working on a competitor’s SEO.

“Across the thousands of SEOs & agencies that use BrightLocal we now see more and more who specialise in 2 or 3 connected verticals.

These agencies are able to demonstrate success for similar businesses and speak to clients in their ‘own language’ which makes them very credible.” – Myles Anderson, BrightLocal

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Q10. What does an average customer pay you each month?

Key Findings:

• The average local business customer pays $1,358 per month (on par with 2015 numbers)
• The median income per customer is $500-$1,000 per month
• 60% of SEOs get less than $1,000 per month from clients (vs. 70% in 2013)
• 40% of SEOs receive more than $1,000 per month from clients (vs. 30% in 2013)

Analysis: It’s very concerning to see an increase in the number of clients paying <$100/month (up 3% over 2015.) Is there really a place in the market for SEO services at this low rate? Can the work delivered be of good quality? Or does it mean that the SEOs who get that low rate aren’t really doing anything to help their clients? Are they the ones that give professional SEOs a bad rap? 34% of clients pay less than $500/month which is surprising given the revenue and income figures we saw earlier in this survey. But with many small- to medium-sized business clients only willing to pay $500/month, it’s not surprising that SEOs need to take on a large number of clients to generate income.

“I think this one makes a lot of sense. As the Local SEO industry becomes more mature, more and more businesses realize they can’t get quality Local SEO services for a rock bottom rate. That is why you are seeing movement in the $1,000-$5,000 range. That is just what it costs for a integrated SEO campaign that includes local SEO.

Also, as more and more people are becoming wary of the ‘smile and dial’ telesales SEO companies who operate at the lower end of the market, it becomes harder for those companies to to sell services.” –  Dan Leibson, Local SEO Guide

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Q11: What is your minimum client retainer per month?

Note: This question is new to the 2016 survey. Key Findings:

• The median retainer is $300-$500 per month
• 87% of SEOs have a minimum monthly retainer of $500 or less
• Only 14% receive more than $1,500 per month from a client

Analysis: With as much time as it takes to execute successfully on an SEO campaign, the monthly retainer of $500 or less per client seems very low. However, based on the other income-related questions in this survey, this seems to be the price point that SMBs are willing to pay. The big challenge for consultants and agencies providing local SEO services moving forward is: how can we better show clients the value of the work that we do? With local SEO becoming even more challenging and local search with stiff competition, what can we do to show the value of our services to current and potential clients? Back to top.

Q12. Do you expect to grow your business in next 12 months?

Key Findings:

• 86% of SEOs definitely expect to grow their business (down from 93% in 2013)
• 13% “maybe” expect to grow their business (a 3% increase over 2015)
• Only 1% of SEOs do not expect their business to grow in the next 12 months

Analysis: The outlook is very positive with almost 9 out of 10 SEOs “definitely” planning to grow their business in the next 12 months. At 86%, confidence is softer than in previous years (93% in 2013), but the general outlook is still positive with excellent potential for growth.

“I think this is just a reflection about general hesitancy about the economy. Obviously, there is a lot at play in the global political and economic arena these days and that is causing some skepticism when it comes to how the economy is affecting business owners.

We [our company] are big in the ‘yes’ camp that 2017 will be a great year for our business. As more companies are discovering and investing in local, it may become harder to compete with lower or mid-market products, but the local SEO business is booming!” – Dan Leibson, Local SEO Guide

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Q13. Are you planning to recruit more staff in next 12 months?

(Note: “Not sure yet” is a new answer to this survey.) Key Findings:

• 67% of SEO agencies plan to hire more staff in 2017 (vs. 70% in 2013)
• 20% of agencies have no plans to recruit more staff in 2017 (vs. 19% in 2013)
• 5% are not certain if they will add more employees or not

Analysis: Again we see signs of a positive outlook in the Local SEO industry, with many marketing agencies and consultants planning to recruit/hire new staff in the next 12 months. However agencies aren’t as bullish as they were just 2 years ago with a 14% drop in those stating they would ‘definitely be recruiting’. When you look at this data alongside the results of previous questions we see a pattern:

• 40% of agencies earn less than $100,000
• Fall in number of clients handled by an SEO (14 down to 12)
• Dropping sales conversion rates (40% down to 30%)
• 7% drop in agencies expecting to grow

And this pattern points to life becoming more competitive, busier and more complex for agencies to deliver results and grow rapidly. But perhaps this is a good thing. It’s survival of the fittest and the best agencies will survive and prosper meaning better service for SMBs. In an early question we learned that 12% of survey respondents are new to Search Engine Optimization, based on the hiring optimism for 2017 there should be work for people interested in entering the SEO industry. Back to top.

Q14. Which are your hopes and expectations for next 12 months?

Key Findings:

• Only 33% says it’s going to be a great year (vs. 47% in 2013)
• 46% say it will be good but hard work (vs. 37% in 2013)
• 3% of SEOs think it will be more difficult in 2017

Analysis: Despite 86% of businesses expecting to grow in 2017, the sentiment is not as positive as in recent years. A greater number of SEOs/Agencies are less confident about the success they’ll achieve and expect it to be harder work. The SEO industry is always changing. While the general outlook is positive and revenues and incomes are relatively high, there will always be challenges that will make us wary of the future. On the flip-side, local businesses will always need to have a web presence and be able to be found online, so the need for our skills and services won’t die out any time soon. Back to top.

Q15. Will it be easier or harder to do SEO in 2017?

(Note: This question is new to the 2016 survey.) Key Findings:

• 39% feel it will be harder or much harder to do SEO in 2017
• 20% say it will be easier or much easier to do SEO this year

Analysis: Overall, 41% of respondents feel that the difficulty of performing SEO tasks will be the same as last year. However, 39% of SEOs feel that they will face challenges this year and that SEO work will be harder than in the past.

“Doing Local SEO has always been complex, and I don’t think that will change. What I do think will change is the ROI from the efforts. As searchers spend more time on mobile and as Google puts ads more and more front and center, it will reduce the return that you can achieve with Local SEO. The increasing monetization of the Local Pack will make competition for the remaining spots less fruitful and further reduce the return.

Will it still provide value to the businesses that are looking to increase their access to new customers? Absolutely! Google still controls the presale funnel and will send your clients their share of business if you do things right. Google probably won’t be sending them to your website as much and the free opportunities will  just less than in the past.” – Mike Blumenthal, Get Five Stars

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Section 2: Local SEO Services

This set of questions relates to the marketing and Local SEO services you provide, how they perform for your clients and which tasks you enjoy or dislike doing.

Q16. Which services are most in demand from your customers?

(Note: Respondents could select as many answers as they wanted.)  Key Findings:

• 64% say that on-site SEO is the most in-demand service
• Web Design/Development is the second most in-demand services (50%)
• GoogleMyBusiness (GMB) optimization is third (47%)
• PPC is fourth (42%)

Analysis: On-site SEO remains the winner when it comes to services that are in demand. The second most in-demand service is website design/development. With the Google “mobile-first” initiative, many business owners find that they need to have their website redesigned to be mobile friendly. Since SEO is a crucial part of the development of a new website, it makes sense that these two services pair nicely together. Google My Business (GMB) services have increased by 4% over 2015. This is most likely due to the awareness that business owners finally have with regard to claiming their GMB page. Over the past three years Google has also implemented a Get Your Business Online campaign/program for local SMBs. Google has partnered with city and community service non-profits, like SCORE, City Municipalities, Chamber of Commerce’s, etc. to conduct workshops for local businesses to walk them through the steps of claiming their Google My Business page. Pay-per-click (PPC) has gone up slightly (+4%) over last year. This could be due to people selecting PPC as the option for social media ads (like Facebook ads) or targeted display ads. Even though these types of ads are based on impressions and not clicks, they could all be seen as paid advertising (or PPC) by the SEOs who took the survey. Additionally, the demand for social media marketing services has increased as well over last year (+2%). With Facebook Live, YouTube Live, Instagram Live and other video streaming services gaining in popularity, businesses will soon have to realize the importance video marketing will play in the continued success of their digital marketing strategy. Back to top.

Q17. How much of your work do you outsource to third-parties and/or white-label?

Key Findings:

• 56% outsource less than 10% of their workloads
• 22% outsource more than 25% of their work
• 9% outsource more than 50% of their workload

Analysis: It appears that more work is being outsourced now than in previous years, but the level is still low. SEOs are handling more clients year over year and are taking on a wide range of tasks, so a certain amount of outsourcing is understandable. However, with 67% of Agencies/Consultants planning to recruit more staff in 2017, there may be more of a focus to keep the SEO work in-house so they can retain control on the quality of work delivered. Back to top.

Q18. Do you believe that Social Media is an effective marketing channel for local businesses?

Key Findings:

• 41% of SEOs believe that social media is a powerful marketing channel for local businesses (+7% from 2015)
• 49% of SEOs believe that social media works for some local businesses
• Only 4% don’t believe in that it’s an effective channel

Analysis: The importance of social media on the SEO industry has increased over the past few years. Facebook pages can now show up in Google search results pages (SERPs), consumers turn to their friends and family for product and service suggestions and people actually use social media as a “search engine” to find local businesses. There was an increase in the number of SEOs that feel Social Media Marketing is “very powerful.” There are fewer SEOs that think social media is “over-hyped” (down from 9% in 2013.) Only 1% of SEOs believe that social media does not work for local businesses. Back to top.

Q19. What SEO Tasks Are You Responsible For?

(Note: Respondents could select more than one answer) Key Findings:

• Onsite optimization, Reporting/Analytics & SEO Audits are the most tackled tasks
• Self Marketing and New Business development are neglected in favor of managing existing client tasks

Analysis: This chart really reaffirms the varied and complicated tasks that an average SEO has to handle on a weekly basis. Because there are different sized agencies and business models, we expect to receive quite different responses. For a freelance SEO for example, we would expect that the range of tasks would be larger due to the fact that there is only one SEO working on the tasks (and that person is probably also in charge of sales and marketing as well!) In larger agencies you expect more specialization with different tasks being siphoned off and handled by different departments or specialists. Only 33% of SEOs are responsible for review marketing. Agencies must start spending time proactively asking for online reviews from their happy customers — AND should offer reputation marketing services to their clients. According to a recent online review study we did, 7 out of 10 consumers will leave a review if asked by the business. Now is the time for SEOs to get in the habit of asking clients for online reviews and make it a part of their client management. Back to top.

Q20. What SEO tasks are most time consuming?

Key Findings:

• Link Building, Citations and Reporting/Analytics are the most time consuming tasks

Analysis: Since we started running the Local SEO Industry Survey, Link Building has consistently been named as the most tedious and time consuming task for SEOs. Spending time link building took a real jump up this year. This coincides with ‘Links’ being cited as a more crucial factor in both organic & local ranking than ever before. Citations is another task considered t be very time consuming, but interestingly it dropped in this year’s survey. The reason for this could be two things –

1. Reduced impact of citations in local ranking factors
2. Better outsourcing options for citation building such as our own (local Citation Builder service)

Reporting and analytics is also a time-consuming task — and is often confusing to both SEOs AND their clients. Trying to identify the stats that show the ROI for your efforts means taking time to figure out what to show in your regular reporting to your clients and identifying what sources you will use to run these client reports (i.e. Google Search Console, keyword ranking reports from tools like BrightLocal, etc.). Back to top.

Thank you to our contributing experts

About the author

Sherry Bonelli

Sherry is the former Local Search Evangelist at BrightLocal. She led BrightLocal's Research and Content programs and championed the needs of their SEO Agency and SMB customers. Having worked in digital marketing since 1998, Sherry has a Master’s Degree in Internet Marketing along with numerous digital marketing certifications.

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