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SEO and the ROI Debacle

Summary

Don't waste your money on search engine optimization (SEO).

It doesn't mean you should avoid spending money on search engine optimization.

But be smart about it. Decide soon whether it makes sense to pursue SEO at all through outsourcing, hiring an expert or training your staff.

Your decision comes down to the following:

Competency of your SEO team
What you sell and how you sell it
Viability of your website (is it first-rate?)
Whether there is an online market (even people who research online and then buy using other means)
Money

Among your many questions as you ponder this decision should be this whopper: How many products or services do you need to sell over what period of time (including the lifetime value of customers) to justify the expense of SEO?

As you proceed, be aware of the fact that your profitability through search engine optimization can be hindered by a convergence of forces, including:

1. Tactical Ignorance
If your staff or consultants lack expertise, intuition or both, a program is destined to fail in some respects.

2. Labor Shortage
Nearly 60% of marketers believe a shortage has affected their strategy or will impact it in the next 12 months, according to MarketingSherpa's 2006 "Search Marketing Benchmark Survey."

3. Credibility Woes
Controversies abound about best practices and training. SEO leaders find themselves in a frenzy over everything from how to weave keywords into copy to link popularity building techniques. The polarization among SEO experts spills over to marketers in the rest of the business world who aren't always sure which side is correct.

4. Lack of ROI Accountability
If a business has measurement shortcomings (lack of log files or a weak web analytics program), it makes it tough to define and obtain a healthy ROI. Marketers need to be held accountable for what they pledge to accomplish, and a good review of a site's log files on a consistent basis can provide a wealth of information. Too often, someone's job isn't on the line because they're busy putting out other fires with the many roles and duties they assume.

Our white paper tackles a wide range of issues, including factors to consider when analyzing the competency of the experts you use, the merits and condition of your own website and your ability to effectively define and measure ROI.

It's easy for people to trumpet the growth of the search engine optimization industry. And it has been increasing- one national study shows an improvement of more than 100% in just the last two years. The SEO market is estimated to generate at least $800 million per year in revenues. Some could easily say the total is much higher because of spending that simply doesn't get recorded in surveys.

Unfortunately, many companies are just throwing their money at the wind, much like they do with paid advertising (also known as pay-per-click or PPC). In fact, PPC is the main reason some believe the global search engine marketing industry will reach $33 billion by 2010.

But back to ROI for SEO.

If your staff is going to tackle the algorithmic dance that is SEO, and yet lacks time or core competencies in this area, you very well may spend valuable money and crucial resources for little or no gain. Get the wrong consultant and you might feel robbed. Your own company won't help matters if your ROI strategy has holes.

In other words, do you really understand your conversions, customer acquisition costs, website usability, calls to action and how to measure everything? If you rank well for competitive keywords and phrases and get the corresponding traffic, will visitors buy? Do you have a compelling message, a great product or service, and incentives? What's your reputation?

Here's the good news: Many businesses don't need to sell many products or services to pay for natural search engine optimization. Prices and margins may vary, but there are many examples across different industry lines where the volume doesn't need to be a burden. Tracking SEO's role in the sale requires more thought.

We'll examine all of these questions, as well as explore industry trends, SEO credibility issues, B2B and B2C search behavior patterns, how effectively companies measure ROI and much more.

For starters, go to Google and search to see if your industry is represented when you enter logical phrases. Where are you? At the top or nowhere to be seen?

It's amazing how companies can still sit on their hands after looking at their poor search standings compared to how frequently people search for what they sell. We've encountered five main reasons:

They just don't get it! All of the facts in the world won't persuade them about the efficacy of SEO.
They're financially depleted. Marketing is often the first expense to be frozen. Why spend money to attract business when you have no business?
They're doing just fine without the extra revenue search engine optimization could trigger (paid advertising could be driving traffic - at a steep price).
They don't know what step to take or how far to go (We call this being "SEO-challenged").
No one is accountable. Clearly, no one gets chewed out very much and no one worries about losing their job for negligent job performance. "Lighting a fire" under someone in this scenario is foreign to the culture.

Is SEO worth the money? It is if you align an ongoing search engine optimization program with an effective website. Neither has to be perfect, but you need to have seasoned and committed professionals in place to make reasonable headway.

Search engine optimization can be likened to gardening. You need to start with good soil and faithfully nourish the plants for them to grow. SEO requires regular attention and care as well.

Read excerpts from this SEO study online: