How Much Do SEM Services Cost in 2025?

Key Takeaways

• 70% of businesses pay $251 – $10,000 per month on SEM
• 77% of businesses allocate 6% – 25% of their overall marketing budget to search engine marketing
• 94% of businesses say they are happy with the return on investment (ROI) they receive from SEM

We surveyed over 250 businesses to find out how much they spend on search engine marketing. Here’s what they shared about their SEM pricing!

How much does SEM cost?

According to our research, SEM typically costs $251 – $10,000 per month on average (70% of businesses).

There are lots of different factors that can influence how much you’ll spend on search engine marketing, like the size of your business, your industry, whether you partner with an agency or freelancer, and more.

What determines SEM pricing?

Your agency’s pricing model isn’t the only factor that determines what you pay for SEM. Several other elements influence SEM pricing. While you can control some, others rely on external factors. Either way, you want to know about them before you sign with an agency.

4 SEM agency pricing models you need to know

As you research SEM pricing, you’ll come across several different pricing models, including these four:

1. Percent of ad revenue

With the percent of ad revenue pricing model, your business pays for results.

Instead of paying your agency a monthly flat fee, for example, you pay based on your ad strategy’s results. This SEM agency pricing model can seem attractive to many businesses, especially SMBs, but it does come with some drawbacks.

Learn more about the perks and downsides to the percent of ad revenue pricing model:

While the percent of ad revenue model generates immediate interest among businesses, it often delivers little value in the long-term. The lack of predictably that comes with this SEM pricing model makes it a risky choice for companies.

2. Percent of ad spend

With the percent of ad spend pricing model, your SEM pricing depends on your monthly ad spend.

This pricing model introduces some predictability because your company determines your ad spend. Depending on your ad spend, you may pay your agency five to 20% of it.

For example, if you invest $5000 and your agency takes 14% of that, you would pay them $700 each month.

Learn more about the advantages and disadvantages of this SEM pricing model:

From a cost perspective, this SEM agency pricing model offers several advantages to businesses like yours. You can budget for SEM costs each month, which can protect your advertising budget. Plus, you remove the motivation for agencies to go after low-value opportunities to deliver bare-minimum results.

Overall, the percent of ad spend model offers more advantages than disadvantages. You can predict your costs each month, as well as remove low-return strategies. Not to mention, your agency focuses on providing your business with the best results versus any results.

3. Flat rate management

With the flat rate management pricing model, you pay a flat monthly rate.

Like the percent of ad spend model, flat rate management offers predictability.

Your business can anticipate your SEM costs, which helps your team optimize your online advertising budget. Not to mention, in busy seasons, you know your SEM agency’s pricing won’t change, even if you increase your monthly ad spend.

Learn more about the upsides and downsides of flat rate management for SEM services:

If you’re looking for consistency, flat rate management may work well for your business. Although, while flat-rate pricing models offer convenience and predictability, it can impact service quality.

If you feature an elaborate campaign and strategy, for example, your agency may charge extra, which cancels any potential savings in the flat-rate fee offered initially.

4. Capped management based on percent of ad spend

With the capped management pricing model, you pay a flat-rate fee or a percentage of your ad spend.

As an example, an agency may require 14% of your ad spend or $500 per month.

How you pay depends on whichever amount is higher.

If your company spends $5000 each month on ads, you will pay by percentage, or $700 per month, because it’s higher than $500. In comparison, if you spend $2500 on ads each month, you would pay the monthly flat-rate fee of $500. That’s because $350 (or 14% of $2500) is less than $500 per month.

For many businesses, capped management pricing offers a compromise between other pricing models. But, unlike other SEM pricing models, it takes advantage of both flat rate management and percent of ad spend models, which offers your business options when it comes to SEM services.

How much should you spend on SEM?

So, you know typical SEM pricing, but how much should your business spend on SEM?

You control how much you spend on your ads and optimizations, so how much you want to spend will depend on your unique budget, needs, and goals. For example, if you have a goal to drive more website traffic from PPC ads, you may spend more on your SEM strategy.

According to our data, most businesses allocate 6% to 25% of their overall marketing budget to SEM (77% of businesses).

Is SEM worth it?

Yes! In fact, 94% of businesses we surveyed said they were happy with the ROI they received from their SEM strategies.

With billions of people using search engines every day to find information, and products and services, online, SEM can help you ensure your business appears in crucial search results when users search for something related to your business.

SEO vs. SEM: What is the difference?

Search engine optimization (SEO) describes an umbrella of strategies for improving your visibility in search engine result pages (SERPs). This digital marketing tactic focuses on your organic (rather than paid) ranking or position in searches related to your industry, business, or products and services.

SEM refers to paid strategies for improving your visibility in the SERPs via paid ads. Previously, marketers used SEM to discuss organic and paid techniques. In recent years, however, SEM has become synonymous with paid-only tactics, versus paid and organic ones.