In theory, a performance-based SEO pricing model sounds appealing. Clients pay for results. Agencies are incentivised to deliver. Everyone wins, right?
In practice, however, these arrangements are rarely viable for experienced SEO agencies. While they can work under very specific conditions, the complexity, risk, and potential for misalignment make them unsustainable in most cases.
Here’s why.
1. SEO Outcomes Depend on Variables Outside the Agency’s Control
Unlike paid media, SEO success hinges on more than agency-led work. A strong technical audit or content strategy is only as effective as its implementation. But when delivery depends on external teams, agency performance becomes vulnerable to execution gaps.
Common blockers include:
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Development bandwidth: SEO recommendations often require technical changes, which may be delayed or deprioritised
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Content publishing delays: Strategic content plans only work if new pages are created and indexed
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Uncoordinated site changes: In-house teams sometimes introduce SEO issues (e.g., JavaScript rendering problems, broken internal links)
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Google algorithm updates: For example, sites with thin or duplicate content may need extensive rewriting—a major undertaking
Even with the best intentions, these factors often lead to delays or diluted impact, making a results-based payment model unfair to both parties.
2. SEO ROI Is Delayed—But Upfront Work Is Heavy
Organic search is a long game. Under a “natural” SEO strategy (i.e., one that avoids black hat shortcuts), it typically takes 6 to 12 months before meaningful traffic or revenue gains are visible.
That creates a significant issue for performance-based models:
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Agencies invest heavily in months 1–6 (technical audits, on-page optimisation, site architecture fixes)
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Revenue and traffic gains tend to materialise in year two or beyond
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Clients can exit early, reaping the long-term benefits without paying for the foundational work
Unless the contract includes delayed payouts (e.g., residual compensation after the agreement ends), the agency stands to lose financially—sometimes significantly.
3. Performance Incentives Can Encourage Risky, Short-Term SEO
When compensation is tied purely to results, it incentivises short-term gains, sometimes at the expense of long-term stability.
This can push agencies toward:
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Aggressive link buying
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Private blog networks (PBNs)
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Over-optimisation tactics
These methods can produce fast results—but also carry significant risk. Once discovered, they can result in manual penalties or algorithmic demotions. By that time, the agency may have already profited—leaving the client to clean up the mess.
Is There a Middle Ground?
Yes—but it’s complicated.
It is possible to design a hybrid model with safeguards for both parties. These contracts typically include:
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Strict client-side responsibilities: If key implementation milestones are missed, the contract defaults to a flat retainer
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Post-contract payout windows: The agency continues to be compensated for X months after termination
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Quality thresholds: Benchmarks for best-practice SEO to prevent risky shortcuts
TMI has explored such agreements on three occasions. In each case, the contracts were complex and time-consuming to develop. Only one moved forward—and within the first month, multiple client-side caveats were broken, requiring a switch to a standard retainer.
The takeaway? Good agencies rarely propose results-based pricing, and smart clients should approach such deals cautiously.
What Clients Should Look for Instead
Rather than chasing performance-only models, focus on transparency, capability, and accountability:
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Ask for case studies and references
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Insist on clear objectives and KPIs
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Require robust, ongoing reporting
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Choose a contract with short-term flexibility and a break clause
Ultimately, strong SEO partnerships are built on alignment, trust, and a shared understanding of goals—not on arbitrary outcomes.
