What is an SEO worth [in cold hard cash].

[NFFC]

Quite a few ways of looking at this, I suppose it depends from SEO to SEO but I'd like to discuss a few comparision points so that we can discuss this issue.

SEO as an consultant.
I think of this as the lawyer model, it was how I used to price when I was an SEO. In essence I think that a good SEO works in many similar ways to a good lawyer, my lawyer here in the UK charges £175 an hour [thats currently $331 USD]. That seems about right to me.

SEO as advertising.
In the UK and talking about mainly small businesses the easiest comparison is with the Yellow Pages. For my hometown with a circulation of 323,000 a full page colour ad would cost just a smidgen over £10,000 [approx $19,000 USD]. Now that seems a little high for an SEO campaign targeted at such a small city but would seem a good start base for a wider campaign, how much more a national or international campaign would be worth is the next question. I'm not sure of the answer apart from more than £10,000.

SEO as PPC.
It seems to be increasing in popularity, I can see why from the clients POV and also from the SEO's who use this model, it seems everybody gets good value. I'm not too keen on it myself for that reason, I think SEO should give exceptional value. That aside how much cheaper than clicks purchased from the search engines should this model be, or for that case how much more expensive? I think there is a case for a premium, after all a good SEO will bring you double qualified traffic [they searched, they click to a site, they clicked again to yours [assuming full relevency of course]]. My hunch is that SEO "by the click" should be at about 50-60% of the search engines cost, I think a client would be a hard sell on a premium to that rate, they require a discount?

Thoughts?

[johnafish]

The advertising analogy is an interesting one, everyone who uses an SEO is looking for the best possible results and I understand that the results can't be 'guaranteed' but when you pay for advertising in a publication people (presumably) check the circulation before the advertise. The SEO model doesn't fit the analogy because it's like being asked to advertise in a publication with an unknown level of circulation, or "we'll do our best to get you on page 2 but it could be on page 40 or it might not be published at all". One would have to be naive at best to advertise unless the cost was very low.

The 'good lawyer' analogy is not realistic, a lawyer will be qualified and a member of a professional body who you can contact for redress should they be incompetent. I'm not aware of any such protection for clients of SEO's. I think I'm right in saying that even with my rudimentary experience I could set up a web presence tomorrow claiming to be an SEO and charging people hundreds (or thousands) of dollars and offering 'no guarantees' and it would be perfectly legal. The trouble is many do.

As for the PPC comparison, this is interesting. PPC is probably the most 'honest' solution because you're bidding for advertising space against your competitors, you pay more and you get a better placing against people in the same industry. Not an ideal solution but the results can be measured against the cost and the cost isn't several months (or years) ahead of the sales which is important for a small business. PPC is moderate cost (per visit) but there's no risk, you pay when people visit your site, the SEO model is potentially anywhere from very low to very high cost (per visit) it is very high risk for the client.

I don't know that much about the 'techniques' used for search engine optimisation but I would guess results are variable at best, some of this variation (maybe a great deal of it) would be related to the abilities of the particular SEO. So there is the dilemma, how does one deal with an industry that has more than its fair share of 'rogue' elements, variable quality and no guarantees.

The way I see it a business has to invest to achieve return, In my business I have to design, develop and manufacture goods that are then sold for a profit, it may be a year before a particular product goes into profit, some exceed our expectations and others fail altogether. We do what we can to eliminate guesswork but failures and pleasant surprises still happen, overall we make a profit. The SEO business doesn't seem to be prepared to apply such a model where it gets paid for its results.

I would be happy to pay an SEO hundreds of dollars per month for every month my site was listed high up on major search engines but I've yet to find an SEO that will do business on that basis. Many businesses will be getting good results and value from using an SEO but I reckon many many more are paying money into a black hole for useless results.

I am genuinely interested in this subject, I have two sites I'm looking to promote (one in Europe and the other in the US), please email me (seo@bikelug.com) and we can discuss it.

[Mikkel deMib Svendsen]

Good post, NFFC. However I think you forgot one model that has turned out to be increasingly important (and profitable) for me: CPA

How much is it worth to a client to profit $100 more and gain more reach and marketshare. Give me a (decent) share of that and I am happy :)

Lawyers actually also work this way sometimes: At a cut of the potential winnings.

This model has turned out to be far the most profitable for me (as calcualted by prfots per working hour) and the one where clients stick around for the longest time (in fact, I never had one single client terminate such a deal - yet)

[NFFC]

>I would be happy to pay an SEO hundreds of dollars per month for every month my site was listed high up on major search engines but I've yet to find an SEO that will do business on that basis.

Plenty around that will do that also, they tend to want to pick the keywords and as a rule will match that to your budget.

I don't agree with your other points but hopefully others will chime in.

>I have two sites I'm looking to promote (one in Europe

When you find a good SEO one of the first things they will tell you is that is not such thing as Europe on the www.

[Mikkel deMib Svendsen]

I would be happy to pay an SEO hundreds of dollars per month for every month my site was listed high up on major search engines

I would never personally sign up to that. However, as mentioned above, I would potentially sign up on a CPA deal - but you would end up paying me far more than a few hndred dollars a month :D

When you find a good SEO one of the first things they will tell you is that is not such thing as Europe on the www.

Just my words! It is one of the most comon misunderstandings people outside Europe have. From a demographic as well as marketing point of view there IS no Europe - it's just a political thing. Not real life :) In real life there is France with French people, Germany with German people, Denmark with Danish people and so on. Not a Europe.

[johnafish]

What is CPA, I've not encountered it.

Can anyone recommend an SEO or SEM company that is honest, reliable and doesn't operate a hard-sell policy?

[seobook]

CPA = cost per action.

like affiliate programs. (as I mentioned in the other thread)

[NFFC]

>In real life there is France with French people, Germany with German people, Denmark with Danish people and so on. Not a Europe.

Here, here.

Mr Meckler needs a prod if you have the time http://weblogs.jupitermedia.com/meckler/archives/007657.html

[Mikkel deMib Svendsen]

> Mr Meckler needs a prod if you have the time

Done! :)

[MikeDammann]

I would never personally sign up to that. However, as mentioned above, I would potentially sign up on a CPA deal - but you would end up paying me far more than a few hndred dollars a month :D



Just my words! It is one of the most comon misunderstandings people outside Europe have. From a demographic as well as marketing point of view there IS no Europe - it's just a political thing. Not real life :) In real life there is France with French people, Germany with German people, Denmark with Danish people and so on. Not a Europe.
I had no idea. Seems like a tough battle for European countries to stand their grounds individually.

[Mikkel deMib Svendsen]

I had no idea. Seems like a tough battle for European countries to stand their grounds individually.

Nahh, I think we got used to it by now. After all, it's been like this for several thousand years :)

[chrisgarrett]

The main challenge is for companies thinking they can set up a "european operation", people who live and work in these countries like it this way no its not really a problem. It always makes me laugh when tourists say "this summer we are doing europe" when they actually mean they are going to take a train journey from paris to milan, get surnburn then fly back. That is like visiting Disneyland and thinking you have "done america" ;)

It is really amazing the difference a couple of hundred miles can make though.

[MikeDammann]

I have never been to Disneyland and I am ony 200 miles away. Seems everyone in Europe has been though ;)

[Marketing Guy]

An issue here is what exactly is being offered for the price? Is ongoing link building part of the package you pay for up front? Are you going to have to pay a monthly retainer? What are you paying for and what are you getting for your money?

I've seen so mant clients lately that have been burned so badly, I'm not surprised that businesses are wary of SEO's. In the past few weeks alone, I've seen clients who have:

> Paid for spam filled doorway pages
> Paid for the SEO's to host their content and drive traffic to the SEO site and onto the client (for a monthly retainer)
> Paid for hidden text spam (lol)
> Paid around £150 for 1 YEAR's worth of traffic
> Paid for PPC from a company that subsequently went bust (I guess you know who)
> Paid monthly fees for crappy links on banned link farms

And that's just clients I've been dealing with, not other examples of spam and tacky crap that's been churned out (for example, a SEO company who added 350,000 (!) pages of highly optimised spam, with (their own) Google Adsense, to their clients site - a charity (.org)!).

The question is not what a SEO is worth, it is what can a SEO offer you (and how much is it going to cost)?

On top of that, there are very few "SEOs" (and I do use the term loosely) that have any concept of marketing whatsoever and it really is shocking the amount of money that intelligent, savvy business owners / managers will pay them to manage their online presence.

Still, as long as the cowboys are ripping people off, it leaves a great market for the rest of us. ;)

MG

[DaveN]

to me it's about marketplace and client..

some clients may be the biggest in the industry and have no clue what SEO is worth, while spending millions on TV adverts and Branding, they spend very little on seo.. (good for a showcase client not for revenue)

then you have the clients that realise the true value of a good seo, but their business can't handle the traffic. (bad all round)

then you get the client which has everything in place, these are the guys that will hunt you out and will pay the true value of your services. (perfect)

£50,000 contract to a uk business which knows the real value is still very cheap for them.

DaveN

[rcjordan]

I never stayed with the client-based model very long. Frankly, I found them whiney and tedious. I do sell a bit of advertising, and some years before CPC arrived I priced it at the "eyeball-level" using the same (rough) pricing scale of direct postal mail campaigns.

Adding to your YP analogy, NFFC, I can tell you that a small real estate firm in the US spends $30-40k annually on newpaper and tab ads. ...And they do it knowing full well that that 70% to 80% of their leads are using and relying upon the internet for their property searches. So, if their print buys were logical (alas, they are not) the same small real estate firm should be spending about $120k per annum on their web ad campaigns.

[Mikkel deMib Svendsen]

The question is not what a SEO is worth

Actually this IS the topic of this thread. Take a look at the title :)

You are welcome to start a new thread with other related topics but I think we should stick to the asked question here

[hardball]

If you make it rain money, you should get wet. The whole thing boils down to CPA. If you are buying a laundry list of services you can expect the service but not neccesarily monetary gain, when you partner with one who creates revenue, you will get and should share that revenue. Similar to commisioned sales people IMO.

Anything less leads to short cut dodgy stuff. Oh mister client, look at the new links and doorways we promised! uh huh..show me the money.

[fantomaster]

There's different approaches, as has become obvious.

However, SEO isn't exclusively about sales: you'll still find quite a few (usually pretty big) companies out there who will go for branding only. (No CPA model feasible here.) If you're a multi billion market leader for a whole palette of products or services, you "owe" it to your overall image to be well ranked in the search engines. It may not drive sales directly if you do, but if you don't it may very well make them drop.

Also, if you're offering IP delivery (cloaking) services, CPA generally won't work too smoothly either. E. g. tracking sales reliably for a large corp (even if they should agree to your setting up some checking scripts on their networks) can be a nightmare, etc.

Finally, if, as an SEO, I opt for CPA or profit sharing, I'll obviously want to focus on truly lucrative industries only. That's fine but on the other hand it would typically leave the smaller and less profitable industries out in the rain - read: the lion's share of the market.

Another aspect of SEO is first generating targeted traffic and then offering it to interested buyers. This will typically be performance driven and charged by click thru, similar to the PPC engines.


As we focus mainly on IP delivery solutions, we prefer to work with customized fixed fees tagged to precisely defined deliverables; the advantage for clients being that they'll have a clear cut budget plan with no hidden costs popping up all of a sudden.

Obviously, in a highly competitive field more effort will be required which will be reflected in the fee structure, but then that's widely a given across the industry, no matter which approach.

On the client's side it's all very well to demand returns, returns, returns - but the advertising analogy simply won't hold if you restrict yourself to comparing it to buying ads in a newspaper or on the radio, etc. That type of advertising is for PPC campaigns to handle. (Though this is fraught with serious problems of its own, vide the current expanding discussion on click fraud.)

If anything, organic SEO is more akin to the darker side of guerilla marketing - trying to get your message across in an essentially unfriendly, unwelcoming environment.

Attempting to gauge costs within an essentially off-the-mark paradigm based on completely different tenets of transparency (clearly defined media metrics, rate cards, etc.) is simply untenable.

This is actually where client education is called for.

[johnafish]

Yes, because the world is full of 'multi-billion' market leaders and there's a shortage of SEO's. Of course these huge firms would never think of just setting up their own team to do optimization work, after all it's like magic and only 'special' people can do it.

Advertising / marketing folk are interesting, I once attended a meeting to discuss advertising a product that had sufficient potential to bring in about £10M over 3-4 years, the advertising budget was based on that forecast, by the end of the meeting the advertising guy had bulled the figure up to £250M (along with the budget) and his people were almost beating their chests. Funny, but a wasted day.

However I am digressing, in the real world there are lots of small and medium sized businesses looking to place niche products onto search engines and given the hard-sell desperation I've witnessed (for my tiny budget) life isn't so easy in the SEO business. It's a fairly new and immature industry, it'll take time but it WILL fall into line with the real world and the survivors will be the firms who realise that they can only expect to be paid for the results (whether that's placement or traffic) and work towards long term business relationships rather than the current one-off 'hit'. This WILL happen because the cowboys are destroying confidence in the industry.

Also there are only 10 top-ten places on Google for any particular search so not everyone can be there. The SEO industry is at the mercy of the search engines and over time the gains for any particular 'technique' will get smaller, it is inevitable.

However, there are sensible companies out there who realise that all these small and medium sized businesses can only finance their advertising from their sales, there's often no huge budget for up-front investment in long term advertising strategy. These business can't be ignored because they make up the bulk of the economy.

I've seen a lot of rubbish being talked in this forum, but I've also found a few very sensible companies, so thanks it has been an eye opener.

No offence, just the opinion of a casual observer.

[marketingmentor]

To those that asked about honest ethical that is structured around payment for results this is what I do with clients.

Most clients pay a small initial deposit to cover setup time. They then pay either per key phrase when it receives a top 10 ranking, % of sales or fee per month that the site retains the top 10 ranking.

This method provides incentives for both me as the SEO and the client.

[MikeDammann]

What annoys me to death is the whole pay per keyword game. I avoid it by any means necessary. If you have competitive keywords on page 2, but lots of related easier keywords generating your client sales and leads, you have earned your fee. A monthly fee is definitely recommended, and as long as your clients are satisfied, they will keep paying. Targetting specific keyphrases is a complete waste of time IMO and you cannot always guarantee what will hit exactly, nor should you. Being able to generate business for them overall is what counts. Submit to the right directories, use your connection with webmasters who own related sites, make sure they are getting something while waiting for the rankings. That way from day 1 you will start seeing revenue and you won't get the "when you think I will start getting ranked" types of calls.
Mike

[thejenn]

I agree with Mike. All keyword phrases are not created equal. You cannot fairly charge the same price to rank "used car" as you can to rank "used toyota in Dallas, texas". They don't have the same value, thus, pricing them equally would be ludicrous.

When I was still working with an agency, I preferred Mikkel's CPA pricing model. It makes for an easier sale when it comes to getting a large corporation to shell out dough (after all, who doesn't want to spend money if they know they are only paying out a portion of what they earn?) There's absolutely no risk to the company, even though they ultimately pay more than they would have with flat, up-front style pricing. Additionally, any SEO worth their salt also stands to win with this scenario. After all, if you do your job, your client will be earning plenty of money and you'll be getting a nice share of the profits.

Now that I'm working on my own and only taking clients on a very limited basis, I tend to prefer to work as a consultant. I'd rather work with select companies and help them learn how to perfect their in-house SEO. I'm not big on taking on projects as my schedule with writing and an 8-month old just isn't consistent. But doing some on-site training and helping guide someone through those early days of learning SEO is great fun. I think that if more companies that really wanted to take on SEM in-house would embrace this idea, we'd also see this industry grow.

[bluetooth]

I have never been to Disneyland and I am ony 200 miles away. Seems everyone in Europe has been though ;)


lucky people... :D

[Relevancy]

How do you set up CPA? How do you track what they are earning? Do they give you access to their books? their shopping cart? what?

[Mikkel deMib Svendsen]

You can either use one of the affiliate networks, such as CJ, and their tracking technology, or you can set up a program on your own. There are several scripts and software solutions that you can install on your site and use it to track conversions.

[Black_Knight]

A lot of the big blue-chip companies like a CPA model, partly because its a real-money metric, and partly because the value can be directly compared to the CPA of their other efforts. Any company with a genuine marketing department should already know its existing CPA and its target CPAs.

PPC works well with this because you can adjust spend on the fly to attain CPA as conditions change. However, SEO can also be modelled around CPA with set KPIs (Key Performance Indicators) regarding target numbers of actions per day/week/month/quarter/etc.

It's a fairly new and immature industry, it'll take time but it WILL fall into line with the real world and the survivors will be the firms who realise that they can only expect to be paid for the results (whether that's placement or traffic) and work towards long term business relationships rather than the current one-off 'hit'. This WILL happen because the cowboys are destroying confidence in the industry.
It has already fallen into line this way. Think of investment in SEO just like any other form of investment. The investments with a fixed return are the investments with the lowest ROI on average by a mile. The high returns come from taking the risk. The higher the level of risk, the higher the potential return.

The same is true in SEO. If you want to pay on a pure commission basis, there are already many companies that will serve you in this, but the costs are higher and so your own margins (returns on investment) are that much smaller. As you shopulder a higher proportion of the risk, the company you employ has to shoulder less, and can offer cheaper rates because they don't have to cover their business against failures beyond their control.

[shor]

A lot of the big blue-chip companies like a CPA model, partly because its a real-money metric, and partly because the value can be directly compared to the CPA of their other efforts. Any company with a genuine marketing department should already know its existing CPA and its target CPAs.

PPC works well with this because you can adjust spend on the fly to attain CPA as conditions change. However, SEO can also be modelled around CPA with set KPIs (Key Performance Indicators) regarding target numbers of actions per day/week/month/quarter/etc.


This is essentially how we work in-house. KPIs define our target metrics (be they leads, unique visitors, actions/events etc) and we work towards our KPIs utilising our allocated budget. PPC is a big red dial that can be used to finetune our overall performance and adjust for differential between forecast and actual performance of other marketing campaigns.

If we outsource SEM/SEO to a third party, you have the same (usually lower :P) CPA threshold. We don't care what volume you bring in as long as you maintain the specified CPA. It then becomes your job to generate as many actions/events as possible as you are being paid on a CPA basis (usually on a progressive scale and a capped rate after X amount of actions).

[doogle]

Just wondering if anyone in this 2 year old post ever found an honest search engine optimizer (SEO), or figured out what a good honest SEO is actually worth?

[Mikkel deMib Svendsen]

I am good and honest and I am worth a hole lot of money. I don't know what others are worth :)

[Relevancy]

I am good and honset too. I am worth a lot of money too, but I am dumb and don't charge anywhere near what I am worth.