How much should you spend on SEO?

Here is a good article that attempts to answer the question: How much should you spend on SEO?

Don't have time to read the whole thing?  Here are the highlights:
Monthly retainer: $750-5,000 per month.
Hourly consulting rate: $100-300/hr.

While most SEO companies have $1000 / month minimum and 6 moth contracs. ProfitableSEO plans start at $250 / month with no contract.

Our monlty plans (retainers for SEO time and materials pricing) have 100% roll over time.  We don't know of any other SEO company that does this!

Good SEO takes time.
At ProfitableSEO we don't rush things so that you can get high quality SEO at the best possable price.

For small local business ProfitableSEO can do a $99 / month plan (retainer) called Webmaster Plus SEO. 

Ecommerce SEO starts at $899 /month.

By starting with one of our packages you get 45% off our SEO time and materials pricing. Best of all any package can be customized to fit your needs.
SEO Starter Package $499
ECommerce SEO Package $899

How much should you spend on your Brand:

Google: 

...businesses on average should spend 10 percent of their gross sales for the year on marketing each new product or service, or 20 percent of the new service's sales and revenue target. And consumer products and services companies should always spend a higher percentage than business-to-business companies.