What is the overall market size of SEO?
What is the expected growth of global search engine optimization this year and beyond?
The rise of ChatGPT, Perplexity.ai and Claude have put into serious question not only the growth prospects of this large, but little-understood industry, but also whether or not it will be a sustainable growth driver in the years to come.
If you’re an industry veteran or a newbie thinking about starting an SEO business, this information will prove helpful for your understanding of the SEO space and how the market may or may not expand in both the short and long term.
This high-level SEO industry growth report will give you a sense of the overall size, scope and expected growth of the search engine optimization industry.
Table of Contents
Disclaimer & Executive Summary
Please consider the following key points relative to this market report.
- This report on the SEO & digital marketing industry provides detailed expert market size and market growth estimates for digital marketing/SEO consultants, search engine optimization (SEO) agencies, SEM firms and other companies who provide expert consulting for internet advertising. The report includes detailed discussion of the United States as well as global statistics.
- This market report is not comprehensive, but represents a collation of various market reports and research reports performed by reputable third parties. The research included herein should not be wholly relied upon to make complete, accurate or timely business decisions, including investment decisions.
- Related, ancillary SEO services and firms provide various overlapping SEO services, including–but not limited to–website design, public relations, management consulting, advertising & market research/analysis and IT consulting.
- The numbers discussed below do not take into account obscured data, including SEO services provided by white label SEO companies.
- We encourage those interested in further detail based on the findings presented to further consult the original research sources referenced herein.
IBIS World Statistics
- Total SEO industry revenue was $52 billion USD in 2021
- Overall industry profit for 2021 was $3.1 billion USD
- The expected annual growth between 2020 and 2025 is 3.5%
- There are over 125,000 total companies servicing the search engine optimization industry
- The expected growth in internet traffic from 2020 to 2025 is 26.4%
Market Report World
- The expected growth in industry revenue from 2020 to 2024 is $740 million USD
- The expected compounded annual growth rate from 2020 to 2024 is 15%
Borrell
- The expected market size of the industry in 2020 was $79.3 billion USD
As one might expect, significant variation exists between assumptions on market size and growth.
However, some reports take a look at industry specifics like search engine optimization SaaS, including MarTech, while others focus specifically on direct search marketing and SEO services. Despite the variation, key indicators, including the SWOT and industry analysis below reveal additional details on whether or not it makes sense to enter the SEO business.
SEO Industry Performance
Historical performance for the SEO industry.
SEO Industry Lifecycle
Demand lifecycle for search engine optimization relative to market maturation.
SWOT Analysis
The following provides a Strengths, Weaknesses, Opportunities and Threats (SWOT) analysis of the SEO market.
SEO Industry Products & SEO Services
Products and SEO services provided by agencies, service providers, SaaS/MarTech companies in SEO (search engine optimization). Source: Borrell.
Spending by category
- 53% of industry budget and spend was for “web presence”
- 17% of industry budget and spend was on “online ad production”
- 12% of industry budget and spend was for “online marketing support”
- 9% of industry budget and spend was for “online public relations”
- 9% of industry budget and spend was for “consulting and research”
Major Market Segments in SEO
Major markets that typically engage search engine optimization service providers. Source: IBIS World.
Major Market Segments by Sector
- 30% of the industry is from retail trade and consumer goods
- 21% of the industry revenue is from travel, entertainment and media
- 18% of the industry revenue is from internet and telecom
- 11% of industry revenue is from other business
- 10% of industry revenue is from financial services
- 10% of industry revenue is derived from healthcare and pharmaceuticals
Major Competitors
As a highly-fragmented industry, industry researchers do not believe that any single SEO agency or search engine optimization company represents more than 1% of the overall industry pie.
AI Impact on the Growth Prospects of the SEO Industry
AI is expected to massively disrupt the growth prospects of traditional SEO in ways that are both good and bad.
Users are still going to be searching, but how they search and interact is changing at a rapid rate, impacting mobile optimization as well as desktop searches.
No longer are individuals or companies simply heading to Google to search and ask questions. The landscape is changing.
And the growth of traditional search engine optimization is most assuredly going to be impacted.
Positive Impacts on the SEO Industry
- Enhanced Content Creation. AI tools enable faster, more efficient content creation. Marketers can generate blog posts, web copy, and meta descriptions quickly using tools like ChatGPT, Perplexity.ai or Jasper. This allows SEO teams to scale their efforts, targeting more keywords and producing more content efficiently. However, it also takes the cost to produce content — something that has typically been time-consuming and expensive–to near zero. This means that now that everyone has AI super powers, no one really does!
- Better User Experience with Personalization. AI improves search experiences with personalized results. SEO professionals will focus on providing targeted, hyper-relevant content to match specific user search intent. Websites offering quality, personalized experiences will likely perform better in search engine optimization, especially those that are enhanced by AI (artificial intelligence).
- SEO Automation Tools. AI can automate repetitive SEO tasks, such as keyword research, rank tracking, and link-building outreach. Tools like Semrush, Ahrefs, and Surfer SEO already integrate AI for deeper insights. Automation allows SEO professionals to focus on strategic, creative decisions–rather than spending time deep in the weeds of customer campaigns.
- Better Understanding of Search Intent. AI search engines are becoming increasingly context-aware, prioritizing search intent over raw keyword matches and things like exact match anchor text. SEO strategies now focus on answering questions rather than simply ranking for specific keywords. Websites that align content with deeper search intent will win.
- Improved SERP Features and Opportunities. AI enhances, and greatly expands, search engine features like featured snippets, “People Also Ask” (PAA) boxes, and visual AI-driven search tools. SEOs can leverage these features to dominate more SERP real estate in the winnner-take-all game of SEO. New opportunities like voice search optimization and AI assistant results create additional ranking opportunities as AI search engines pull from existing quality content form other sources. While not as direct as the traditional “blue links,” being a source in an AI answer can still drive relevant, meaningful traffic to your business.
- New Analytics and Insights. AI-powered analytics tools provide actionable insights on user behavior, content gaps, and SEO ROI. Search engine optimization experts will be better equipped to measure and refine digital marketing strategies, especially as they expand.
But what will this do for growth of search engine optimization? Will it expand the industry? Will the industry contract?
Searches and interactions with chatbots are expected to increase, but it’s going to be happening well beyond what’s available on Google.com and that dominant, monopolistic ecosystem.
Which means there will be negative effects.
Negative Impacts on the SEO Industry
- Reduced Organic Click-Through Rates (CTR). AI-powered answers in search engines (e.g., Google’s AI-generated summaries) are reducing the need for users to click through to websites, lowering total traffic numbers, conversions and ultimately revenue to businesses. As searchers get their answers directly in the SERP, traffic to websites concurrently decreases, undermining traditional SEO efforts.
- More Competition for Visibility. AI tools make it easier for anyone to produce content at scale, flooding search engines with low(er)-quality, AI-generated gobbledegook. SEO professionals must produce high-value, authoritative content to stand out in a sea of AI-generated noise. That means quality search engine optimization is likely to remain expensive (sad face).
- Shift from Search Engines to AI Chatbots. Chatbots like ChatGPT or Perplexity AI are becoming alternatives to search engines, answering questions directly. Users are bypassing Google altogether. The search engine optimization services market is going to need to shift from a Google-first mindset in optimization and start to approach something more akin to “Search Everywhere Optimization.”
- Evolving Algorithms with Increased Complexity. Search engines are constantly evolving with AI to detect and demote poor-quality content. Any of those paying attention to recent happenings will see this in the consistent and brutal results of the Helpful Content Update (HCU) rollouts. SEO strategies relying on shortcuts (e.g., spammy content or backlinks) will likely face quick(er) penalties going forward. SEOs will need to stay adaptable and nimble as AI search algorithms grow smarter.
- Loss of Control Over Search Engine Rankings. AI-driven search results are becoming harder to predict. AI models often pull data from various sources, potentially bypassing traditional ranking signals like SEO backlinks and keywords. SEO professionals may struggle to influence AI-determined rankings or featured answers. When the search engines have more control, there is a higher likelihood that many will be entering the SEO services industry due to the lack of predictability of outcomes. A friend said it best recently, “foreign markets like Venezuela and Russia are more predictable and stable than trying to rank organically on Google.” In short, technical SEO will become more technical and more broad.
- AI Content Cannibalization. Large language models (LLMs) generate responses using content pulled (in aggregate) from websites. Websites lose traffic, even though they provided the data that AI tools rely on. This creates concerns over copyright, content ownership, and ROI for content creators. Most importantly, it reduces incentives for creators to create content that is truly original.
The overall growth of SEO in the traditional sense is massively in question, but growth in search in general has never been more promising than it is today.
Conclusion
Strong opportunities remain in the search engine optimization (SEO) industry.
Continuous innovation makes the advertising industry a dynamic sector. Prior to recent memory, advertising was primarily concentrated in print and broadcast media. Significant shifts to internet marketing continue to occur, especially as more brands push toward direct-to-consumer (DTC) advertising options through online search, social media and other digital channels. Furthermore, the proliferation of mobile phones, tablet and desktop computers is expected to continue to see the rise in the search engine optimization (SEO) industry. These shifts are also creating shifts in consumer media consumption behavior. As a result, advertisers are expected to follow consumer demand of digital media.
In fact, according to the Internet Advertising Bureau (IAB) internet advertising revenues increased nearly 54% from the years 2013 to 2018. Increased demand for industry services is expected to expand the industry further in 2020, created anticipated earnings before interest, taxes, depreciation and amortization (EBITDA) of nearly 7% of overall industry revenues. Even in spite of pandemic pressures, the industry is expected to continue to grow over the coming four years (through 2025), albeit less rapidly than in years past.
Frequently Asked Questions (FAQs)
What are the major profit stats and drivers?
Industry EBITDA accounted for roughly 6.7% of revenue in 2020. This represents a slight decrease from 2015 when EBITDA margins were 8% of revenue. Profit remains higher among larger industry players.
What are expected industry COGS (cost of goods sold)?
COGS (cost of goods sold) in the search engine optimization (SEO) industry are low, representing only about 1.4% of revenues. Most of these expenses are related to software and office-related products.
What are Industry Depreciation Expenses?
Industry depreciation expenses relative to revenue were <1% in 2020.
What are typical wages in the SEO industry?
Wages in search engine optimization accounted for some 38.8% of revenue in 2020, up from 37.6% in 2015. The industry remains reliant on heavy labor inputs, particularly on the consulting side.
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