SEO (Search Engine Optimisation) has largely reached the status of being a scam for many businesses, but in reality, like any business transaction, you'll get ripped off if you don't approach a purchase professionally.
I recently reviewed one client's SEO agreement and suggested they were being scammed. The agreement was professionally written and had targets that would be achieved. The problem, if the targets weren't achieved there was no penalty, so in fact the targets were just meaningless numbers. However had the business been wise enough to tie the targets to payment two things would have happened. The client would have received the service which achieved the results "they thought they wanted", or no money need to have been paid because targets were not met. With SEO this is dead easy to measure. You can agree to the list of keywords and you can measure the before and after position in Google. Nothing is left to chance.
However you'll see I wrote "they thought they wanted". You need to remove this part of the scam as well. You may think you want a particular keyword phrase to rank you well in Google's search results, but if it gets no traffic, there is no value.
A smart business person will:
1. Tie an SEO supplier to a list of known keywords.
2. Set agreed targets for those keywords in terms of positioning in Google's search results.
3. Measure the before and after position for the keywords.
4. Determine an estimate of the real value the keywords.
If you know the real value and the SEO business achieves the results you wish, then it is a service worth paying for as long as the return or the real value exceeds the cost of the service. The problem is the cost of using an SEO business can exceed the expected return so it can be a waste of money.
A good idea is to compare the cost of using SEO to the cost of using Google Adwords where you simply pay for advertising. Sometimes one will be more cost effective than the other. Sometimes both will be a total waste of money. If you do your research then it may be possible to use SEO or Google Adwords to make money. At worse, if you do your research, you'll know it isn't worth investing in either approach. Google and SEO businesses are there to make money off you. You are the only one looking after your interests so make sure you do your research.
I've now extended the SERP Calculator I wrote to include the number of clicks per month. The SERP Calculator lets you know the value of a position for a keyword in the Search Engine Results Page (a Google search). You should know the monthly value a customer is worth to you and you can use Google's Keyword Tool to determine the number of searches for a given keyword. The conversion rate is a bit rubbery and a good range is from 0.5% to 2%. The figure of 1% is the default and a good starting point. But as you can see this is just a guide and could easily be out by a factor of two in either direction. Whilst rubbery, right now it is the only guide I know of that will give you an estimated value you can use to base a decision.
The clicks per month is a figure I've just added which will enable you to determine an estimated cost using Google Adwords to achieve the same number of clicks.
As an example, I assisted Cherie Curlis, who is a member of JustLocal, to get a position in Google for Marriage Celebrant Melbourne. Previously Cherie didn't have a position in the first 10 pages of Google and is now in position 5. Google's keyword tool shows us there are 480 searches per month for the term Marriage Celebrant Melbourne. Cherie has provided the industry figure of $400-$900 for the typical service.
Plugging in the figures above we can see a position of 5 for "Marriage Celebrant Melbourne" has an estimated value of $117-$264 per month. It should be noted that it is expected the average time to acquire a new customer is 3.42 months. This is not a huge amount of new clients, just 3-4 per year.
Many SEO businesses set fees at $300-$400 a month, so if Cherie had used an SEO business for this one keyword, Cherie would be losing money. As a member of JustLocal I did this at no cost (keep in mind this will in future be a paid service). Thus it is important to know the expected type of return to see if SEO has value.
It should also be kept in mind SEO businesses often selected 8-12 keywords to optimise for, so all of the value of all the suggested keywords should be taken into account. Also the SERP Value Calculator is just guide. There's no guarantee of an actual return, but if used as a guide it is a valuable tool. More importantly, even as a guide keep in mind the return could be half to double the amount based on the default rate of conversion. For this one keyword phrase however, using an SEO business charging $300-$400 a month would be a waste as at best. It would barely recover the cost. Personally I think advertising should be 10-20% of the cost of acquiring a custom, so SEO should aim to return 5-10 times the investment. That's simply not the case here with SEO.
How then does Google Adwords compare?
Google's Adword tool suggests a bid of $4.30 for the keyword phrase "Marriage Celebrant Melbourne". With my own testing I've found I've not been able to get my paid ads positioned for the suggested bid so it costs more, often much more, but let's go with the suggested bid.
Now if we look at the SERP Value Calculator we see we expect 29.3 clicks per month. If these were paid ads using Google Adwords the cost would be $126 per month. That is certainly better than the typical SEO business charging $300-$400 per month, but at $126 a month, most of the money made would go straight back to Google. That simply isn't a good business decision.
Based on this information using an SEO business or Google Adwords is likely to be a costly exercise and most likely a loss, or at a minimum, most of the money going to third parties meaning there's little reason to use either SEO or Google Adwords in this case.
Whilst people may see this result as meaning SEO or Google Adwords is not worth it, that's simply not the case. The real meaning behind the information here is know your numbers and then you'll know if it is worthwhile for you. What amazes me in business is what works brilliantly for one business can often be a disaster for another and the opposite is also true. As an example I tested local paper advertising and found it a total waste of money. For another business they invested 10% of their turnover into local paper advertising and had a return of 10 times the advertising cost, or so they led me to believe. The information was made in passing and made have been exaggerated, but I still felt there was some substance in the information.
I'd highly recommend that you use the SERP Value Calculator to help you to determine whether or not SEO or Google Adwords is worth investing your money.
Kelvin Eldridge
www.OnlineConnections.com.au
Call 0415 910 703 for IT support.
