Small businesses face rising SEO costs as AI Overviews cut clicks

Small businesses are spending up to 30% of revenue on search engine optimisation as agency retainers average $3,199 a month, according to a new analysis of 2026 pricing data. The report says Google AI Overviews have cut organic clicks by 58%, creating pressure for businesses to rethink whether traditional SEO still delivers enough value.

Why it matters: - Small businesses are paying a growing share of revenue for SEO while organic search traffic is shrinking. - The analysis says a business with $200,000 in annual revenue could spend up to $60,000 a year on SEO. - For a business making $100,000 a year, that spend could reach 60% of gross revenue. - AI Overviews and AI search tools are reducing clicks on Google results, which weakens the return on fixed monthly retainers. - A lower-cost alternative could change how small businesses buy SEO services.

What happened: - A new analysis of 2026 agency pricing data says small businesses are spending $18,000 to $60,000 a year on search engine optimisation. - The analysis combines data from three industry sources. - GoodFirms surveyed more than 300 agencies and found 48% charge between $1,500 and $5,000 per month. - Clutch says average monthly SEO spend is $3,199. - DigitalApplied reports a median retainer of $3,500.

The details: - Most agency contracts do not tie fees to outcomes, so businesses pay the same retainer whether traffic rises, falls or stays flat. - Businesses often spend $15,000 to $30,000 before they know whether the work is producing results. - If results disappoint, businesses may start over with a new agency and another six-month commitment. - An Ahrefs study of 300,000 keywords found AI Overviews reduce organic click-through rates by 58%. - For keywords triggering an AI Overview, position-one click-through rate fell from 7.3% in December 2023 to 1.6% in December 2025. - ChatGPT and Perplexity are also pulling queries away from Google. - DigitalApplied says AI tools have cut the cost of routine SEO work by 20% to 30%. - Tasks that took 15 to 20 hours a month now take 5 to 8 hours with AI assistance. - Seventy-three percent of agencies now include AI in standard packages, but the median retainer remains $3,500. - The full analysis is available here.

Between the lines: - The pricing model appears out of sync with the current search market. - Agencies are using AI to work faster, but many have not passed those savings on to clients. - The report argues small businesses are paying 2024-era prices in a 2026 environment with less search traffic available. - The PageRise launch reflects a broader push toward software that automates work previously done by agencies.

What's next: - PageRise is in private beta and says it will use autonomous AI agents connected to Google Search Console and DataForSEO for keyword research, content strategy, technical audits and reporting. - The platform will charge $59 to $169 per month. - PageRise says early access signups are available here. - The company is based in Manchester, UK. - The analysis says businesses should ask what share of an agency fee goes to strategy versus execution, how AI has changed the workflow and what plan exists for declining AI Overview traffic. - The report warns that vague answers may mean a business is paying old prices in a new market.

The bottom line: - SEO is getting more expensive relative to the traffic it can deliver, and AI is accelerating the pressure on agency pricing.