Re: SEO versus PPC - the unending debate

From: David Yancey <dyancey_at_proactics.com>
Date: Tue 22 Mar 2005 14:53:06 -0600

Will Weidman takes issue with my admittedly chilling allegation that
_very few companies will benefit from SEO_, saying that _Your conclusion
is based only on the math that dictates the results for the most
competitive terms._

Will, I never have said SEO is a waste of time, nor am I saying so now.
I am rather challenging the common assumptions about SEO, and, frankly,
the hype that has emerged about it in the last year or so, on the
grounds of hard numbers and cold relative performance.

Note that I am speaking here of SEO above and beyond the obvious work
needed to keep a site competitive in terms of its text elements,
conversion techniques, and navigation. Clearly, as I say in my post, all
site owners should follow SEO best practices. The question is how much
should a typical business do beyond the basics, IE, that would require a
professional consultant. And, what is the *relative* value of spending
marketing budget on pro-level SEO versus other promotional programs?

And, Will, the numbers make my case: if about 1-3% of companies globally
can get seriously positive return from *professional* SEO assistance, I
think most would agree that one to three out of one hundred is _few_
companies indeed. But my conclusion is based on much more that the
straight math.

Having been at this game for nearly nine years, with a number of
top-ranking sites, I will suggest that, in today_s ultra competitive SEO
setting, perhaps only 3% of companies will actually get *relatively*
superior ROI from the *significant* expense they now face to reach that
magic circle up at the top of a Google page.

The reason is that with all marketers competing for the best-performing
keywords, only the very few companies with heavyweight SEM/SEO budgets
can expect to be at the top. As the number of SEOs and their clients
increase, the number of competitors will rise dramatically, but the
number of top ten slots will still be, well, ten.

Can one get lucky, occasionally? Sure.

Can one find key phrases that are not yet being fought over by the pros?
Yes.

But we are talking about trading off SEO versus alternative
traffic-building schemes, for the longer haul, looking for consistent
performance.

Obviously, it is still possible to get high ranking with longer keyword
expressions. The question is, and it is one of pure math, how much
incremental traffic will these odd phrases really generate, how well
will it convert, and how much will each incremental click truly cost?
Will suggests we look at logs for clues to searcher behavior. Well, we
get many thousands of new search users a day, across hundreds of
up-scale, premium consumer topics, Will. We have a detailed report of
the precise key phrase or word they used, and guess what? With a large
pool of numbers, it turns out that the vast majority of people really
are NOT all that creative. It is simply a function of language, not
human creativity. It is also, no real surprise, a function of *other
information activity*. EG, where the searcher is using a phrase based on
some news story or event, a phrase that *no SEO could have planned for
in advance*.

In short, there really aren't that many novel ways to ask for info about
widgets, it turns out.

More seriously, on the numbers, Will's argument is undermined
mathematically when he ignores the very large number of folks who *never
clicked through, and hence, are not shown in any logs.* Our research
indicates that perhaps 80% of searchers try a search argument, look over
the top results, and then give up on it without thinking to tweak the
phrase. My conclusion is that the great majority of users would prefer
to click on a phrase that someone else has (carefully) constructed than
try and invent something as good.

Regardless, key phrase manipulation is a short-term window of
opportunity. The SEO pros will soon have covered all the *commercially
useful* combinations that, collectively, can yield sufficient traffic to
justify the SEO management expense. Adding in local parameters is the
next big thing among SEOs, but that too, will soon be dominated by the
heavy-hitters, I predict.

The math dictates that efforts to find more and more abstruse key
phrases will quickly reach a point of diminishing return. The formula is
simple: divide the cost to execute a sophisticated SEO program by the
*realistic* number of incremental visitors one can expect, multiply by
the expected conversion rate (for that specific traffic), and see if the
per-click expense is warranted by the increased profits.

Then compare this per-click expense with that of SEM alternatives, and
the several other ways to build targeted, conversion-prone traffic.

Having marketed and managed information services for about 15,000
smaller to medium businesses over my long career, I seriously doubt that
the typical business owner or marketing mini-department is going to soon
master the art of key phrase construction, and I can tell you that
almost none of these companies can afford the kind of expertise it will
soon take to get into the magic circle.

This is not to say that SEO consulting is in any way something to be
shunned. Nor do I expect the emerging SEO profession to be unsuccessful.
Indeed, if just 1% of businesses find they can usefully employ
professional-level SEO expertise, well, that will add up to about
500,000 clients globally, looking down the road.

But I am concerned with helping the other 99%. And in my posts, I am
usually speaking of where this industry is going, not where it is right
now. A business operator has to plan, and then select sustainable
marketing programs that can deliver on the plan objectives,

I therefore argue that, going forward, *the great majority of
advertisers*, must look to traffic building programs that *mostly*
employ other means. _Balance_ for these companies may mean, perhaps, ten
percent of the marketing budget for SEO and general site tweaking, 25%
for SEM and contextual, and about 2/3 spread over up to ten other
promotional channels, the mix varying (mainly) on the degree to which
the business is locally-focused.

The very great danger, in my opinion, is that most commercial site
owners will seriously under-estimate the cost and time needed to design
and execute their *basic* traffic building strategy. Many of these will
be tempted to look to SEO and/or SEM for a quick fix. Where this was
possible in the early days of SEO and SEM, it is rapidly ceasing to be
the case.

Building a sustainable flow of new and returning visitors is *hard*,
friends - - how well I know it! There is no magic bullet to shorten the
time required, or to make it simpler, or easy way to delegate the task
to some expert, even if you have the budget..

Web marketing is a numbers game, like it or not. If a company does the
necessary homework, and finds that its net conversion rate and achieved
margin per incremental unit warrants high per-click expense, then
obviously it should see if it can afford top-level SEO help, and also,
high-priced, high-yield keywords in SEM/contextual campaigns. But I am
predicting that when most companies do the math, they will think twice
about the all-too-often glib promises of SEO.

David Yancey
http://www.vivante.com




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To: online-ads2_at_o-a.com
Subject: Question about hiring sales team
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From: "David DeCantillon" <ddpromo1_at_excite.com>
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Date: Tue 22 Mar 2005 21:19:08 -0600

Got a question about hiring sales people..

I_m starting a web development company, which will include
various services, like developing web sites, flash presentations,
multimedia programs, plus advertising opportunities.

Prices can range anywhere from $299 up to $5000 depending
on product, time, etc.

How do I set up a sales commission plan that_s competitive, but
not overbearing on the company_s resources (i.e.programmers,
overhead) ?

Is there a way to offer the job as an independent contractor?

What about capital? Do I need to pay them a base pay to get them
going or strictly commission on each sale?

If you already went through this scenario, please fill me in!

Thanks,

David DeCantillon
President
D&D Promotions
http://www.powerofmarketing.com
mailto:ddpromo1_at_powerofmarketing.com
Knowledge Is Power..ONLY When Executed!



Received on Tue Mar 22 2005 - 14:53:06 CST