Chap#3: Why Search Engine Marketing is essential?

Here we come with the 3rd Chapter of SEO Guide.

As you guys know, Search Engine Optimization is the process of taking a page built by humans and making it easily consumable for both other humans and for search engine robots. This section details some of the compromises you will need to make in order to satisfy these two very important kinds of user. In short this section will tell you why do you need Search Engine Marketing (SEM).

Lets begin!

One of the most common issues we hear from folks on both the business and technology sides of a company goes something like this:

“No smart engineer would ever build a search engine that requires websites to follow certain rules or principles in order to be ranked or indexed. Anyone with half a brain would want a system that can crawl through any architecture, parse any amount of complex or imperfect code and still find a way to return the best and most relevant results, not the ones that have been “optimized” by unlicensed search marketing experts.”

Sounds Brutal…

Initially, this argument can seem like a tough obstacle to overcome, but the more you’re able to explain details and examine the inner-workings of the engines, the less powerful this argument becomes.

Limitations x3

Limitations of Search Engine Technology

The major search engines all operate on the same principles, as explained in Chapter 1. Automated search bots crawl the web, following links and indexing content in massive databases. But, modern search technology is not all-powerful. There are technical limitations of all kinds that can cause immense problems in both inclusion and rankings. We’ve enumerated some of the most common of these below:

1. Spidering and Indexing Problems

  • Search engines cannot fill out online forms, and thus any content contained behind them will remain hidden.
  • Poor link structures can lead to search engines failing to reach all of the content contained on a website, or allow them to spider it, but leave it so minimally exposed that it’s deemed “unimportant” by the engines’ index.
  • Web pages that use Flash, frames, Java applets, plug-in content, audio files & video have content that search engines cannot access.

Interpreting Non-Text Content

  • Text that is not in HTML format in the parse-able code of a web page is inherently invisible to search engines.
  • This can include text in Flash files, images, photos, video, audio & plug-in content.

2. Content to Query Matching

  • Text that is not written in terms that users use to search in the major search engines. For example, writing about refrigerators when people actually search for “fridges”. We had a client once who used the phrase “Climate Connections” to refer to Global Warming.
  • Language and internationalization subtleties. For example, color vs colour. When in doubt, check what people are searching for and use exact matches in your content.
  • Language. For example, writing content in Polish when the majority of the people who would visit your website are from Japan.

3. The “Tree Falls in a Forest” Effect

This is perhaps the most important concept to grasp about the functionality of search engines & the importance of search marketers. Even when the technical details of search-engine friendly web development are correct, content can remain virtually invisible to search engines. This is due to the inherent nature of modern search technology, which rely on the aforementioned metrics of relevance and importance to display results.

The “tree falls in a forest” adage postulates that if no one is around to hear the sound, it may not exist at all – and this translates perfectly to search engines and web content. The major engines have no inherent gauge of quality or notability and no potential way to discover and make visible fantastic pieces of writing, art or multimedia on the web. Only humans have this power – to discover, react, comment and (most important for search engines) link. Thus, it is only natural that great content cannot simply be created – it must be marketed. Search engines already do a great job of promoting high quality content on popular websites or on individual web pages that have become popular, but they cannot generate this popularity – this is a task that demands talented Internet marketers.

The competitive nature of search engines

Take a look at any search results page and you’ll find the answer to why search marketing, as a practice, has a long, healthy life ahead.

10 positions, ordered by rank, with click-through traffic based on their relative position & ability to attract searchers. The fact that so much traffic goes to so few listings for any given search means that there will always be a financial incentive for search engine rankings. No matter what variables may make up the algorithms of the future, websites and businesses will contend with one another for this traffic, branding, marketing & sales goals it provides.

A constantly shifting lanscape

When search marketing began in the mid-1990’s, manual submission, the meta keywords tag and keyword stuffing were all regular parts of the tactics necessary to rank well. In 2004, link bombing with anchor text, buying hordes of links from automated blog comment spam injectors and the construction of inter-linking farms of websites could all be leveraged for traffic. In 2010, social media marketing and vertical search inclusion are mainstream methods for conducting search engine optimization.

The future may be uncertain, but in the world of search, change is a constant. For this reason, along with all the many others listed above, search marketing will remain a steadfast need in the diet of those who wish to remain competitive on the web. Others have mounted an effective defense of search engine optimization in the past, but as we see it, there’s no need for a defense other than simple logic – websites and pages compete for attention and placement in the search engines, and those with the best knowledge and experience with these rankings will receive the benefits of increased traffic and visibility.

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Chap#1: How Search Engines Work? (Google, Yahoo, Bing)

Search engines have four functions – crawling, building an index, calculating relevancy & rankings and serving results

Crawling and Indexing

Crawling and Indexing

Imagine the World Wide Web as a network of stops in a big city subway system.

Each stop is its own unique document (usually a web page, but sometimes a PDF, JPG or other file). The search engines need a way to “crawl” the entire city and find all the stops along the way, so they use the best path available – links.

“The link structure of the web serves to bind together all of the pages in existence.”

(Or, at least, all those that the engines can access.) Through links, search engines’ automated robots, called “crawlers,” or “spiders” can reach the many billions of interconnected documents.

Once the engines find these pages, their next job is to parse the code from them and store selected pieces of the pages in massive hard drives, to be recalled when needed in a query. To accomplish the monumental task of holding billions of pages that can be accessed in a fraction of a second, the search engines have constructed massive data centers in cities all over the world.

These monstrous storage facilities hold thousands of machines processing unimaginably large quantities of information. After all, when a person performs a search at any of the major engines, they demand results instantaneously – even a 3 or 4 second delay can cause dissatisfaction, so the engines work hard to provide answers as fast as possible.

Providing Answers

Providing Answers

When a person searches for something online, it requires the search engines to scour their corpus of billions of documents and do two things – first, return only those results that are relevant or useful to the searcher’s query, and second, rank those results in order of perceived value (or importance). It is both “relevance” and “importance” that the process of search engine optimization is meant to influence.

To the search engines, relevance means more than simply having a page with the words you searched for prominently displayed. In the early days of the web, search engines didn’t go much further than this simplistic step, and found that their results suffered as a consequence. Thus, through iterative evolution, smart engineers at the various engines devised better ways to find valuable results that searchers would appreciate and enjoy. Today, hundreds of factors influence relevance, many of which we’ll discuss throughout this guide or you can find out our daily tips on our Facebook Page  or twitter account.

Importance is an equally tough concept to quantify, but search engines must do their best.

Currently, the major engines typically interpret importance as popularity – the more popular a site, page or document, the more valuable the information contained therein must be. This assumption has proven fairly successful in practice, as the engines have continued to increase users’ satisfaction by using metrics that interpret popularity.

Popularity and relevance aren’t determined manually (and thank goodness, because those trillions of man-hours would require earth’s entire population as a workforce). Instead, the engines craft careful, mathematical equations – algorithms – to sort the wheat from the chaff and to then rank the wheat in order of tastiness (or however it is that farmers determine wheat’s value). These algorithms are often comprised of hundreds of components. In the search marketing field, we often refer to them as “ranking factors” For those who are particularly interested, we crafted a resource specifically on this subject – Search Engine Ranking Factors.

Search Engine Results

You can surmise that search engines believe that Ohio State is the most relevant and popular page for the query “Universities” while the result, Harvard, is less relevant/popular.

So How Do I Get Some Success Rolling in?

How Online Marketers Study & Learn How to Succeed in Engines

The complicated algorithms of search engines may appear at first glance to be impenetrable, and the engines themselves provide little insight into how to achieve better results or garner more traffic. What little information on optimization and best practices that the engines themselves do provide is listed below:

Google

SEO information from Google (webmaster guidelines)

Googlers recommend the following to get better rankings in their search engine:

  • Make pages primarily for users, not for search engines. Don’t deceive your users or present different content to search engines than you display to users, which is commonly referred to as cloaking.
  • Make a site with a clear hierarchy and text links. Every page should be reachable from at least one static text link.
  • Create a useful, information-rich site, and write pages that clearly and accurately describe your content. Make sure that your <title> elements and ALT attributes are descriptive and accurate.
  • Keep the links on a given page to a reasonable number (fewer than 100).

Yahoo!

SEO information from Yahoo (webmaster guidelines)

Many factors influence whether a particular web site appears in Web Search results and where it falls in the ranking.

These factors can include:

  • The number of other sites linking to it
  • The content of the pages
  • The updates made to indices
  • The testing of new product versions
  • The discovery of additional sites
  • Changes to the search algorithm – and other factors
Bing

SEO information from Bing (webmaster guidelines)

Bing engineers at Microsoft recommend the following to get better rankings in their search engine:

  • In the visible page text, include words users might choose as search query terms to find the information on your site.
  • Limit all pages to a reasonable size. We recommend one topic per page. An HTML page with no pictures should be under 150 kb.
  • Make sure that each page is accessible by at least one static text link.
  • Don’t put the text that you want indexed inside images. For example, if you want your company name or address to be indexed, make sure it is not displayed inside a company logo.

An article by Seomoz.org. (Courtesy of Pludu Inc.)

SEO Pricing Models: How Much Should You Charge?

As other founders do I’ve maintained one additional role, that I soon hope to relinquish.

Salesperson!

My reluctance in hiring a salesperson is that finding the right person for the job can be quite a challenge. “Selling” search engine optimization (SEO) is a very consultative venture and one that I’m loath to turn over to someone mostly motivated by a commission check.

Selling SEO requires that you know the space well, and that you’re able to balance the need to bring revenue into the company while ensuring that you’re bringing in business which won’t lead to future headaches, because:

  • Expectations weren’t set appropriately.
  • The prospect lacks an understanding of the process.
  • There aren’t enough resources on the client’s side (or not enough money to outsource) for generating content, addressing issues, and implementing recommendations.
  • The work isn’t properly scoped out so that we can gain a solid estimation as to the work that will be involved (so that the work doesn’t end up being unprofitable).

It’s that last piece that I’m going to address, today.

Scoping Out and Pricing an SEO Effort

In order to survive as a well-run business, we must make sure that we operate profitably. Just as I might look at the probability of generating a positive ROI for prospects that come seeking SEO services, so too must I focus on ensuring that my company also runs profitably.

To that end, I made a decision, years ago, to hire a head of operations who also happened to have a background in process improvement. It also doesn’t hurt that she’s a CPA. Her name is Kim Patterson, and she also happens to be my wife’s cousin (so you headhunters can just keep on looking).

Kim came to the company with no background in SEO. Over the years, she has learned the process and has put in place measurements of effectiveness, efficiency, and accountability that I believe had been sorely lacking in our industry.

Another major component of bringing Kim on was to make sure that we were charging a fair rate (one which was within Industry standards, one which helped us to reach our profitability goals and one which would be reasonable, based upon what value we bring to our clients).

I asked Kim what formula she uses to price our SEO initiatives. Her response:

First, you need to determine your profit goals (15 percent; 20 percent; 30 percent; more?). You calculate your fixed overhead costs (costs that you pay no matter what your sales are), variable costs (what costs go up as sales go up – and what the relationship is to the sale dollar; not all relationships are the same for each sector of your biz) and direct costs (what actual direct labor, direct services, etc) for the actual job and make sure when it all is put together you end up with your targeted profit.

The real tricky part here is determining the direct costs. SEO projects can’t be precisely scoped out for everything that you might do for the next 12 months. Part of SEO is analysis and recommendations, based upon what we see in the SERPs, analytics, competitive analysis, and industry changes/opportunities, among other things.

Pricing SEO is one of the great challenges, because most prospects still have a basic understanding of search engine optimization and the time/work involved in the efforts. The best that anyone can do is get a sense for how much time may be required to spend adequate time to address specific goals.

Rand Fishkin provided a tremendous value when, in 2007, he wrote a quality post on pricing SEO. Granted, this was written over four years ago.

Can you think of much that is cheaper today than it was four years ago? If supply and demand are the drivers for pricing, I would suggest that demand far exceeds (good) supply. There are many people who lay claim to being good at SEO, and a scarce few who truly do it well.

Today, I hope to peel back the onion just a bit, to help you to understand how search engine optimization is priced and how you, too, might want to consider your pricing models for SEO.

SEO Pricing Structure

Many firms still offer package rates for SEO. In fact, there’s one firm that is driving me absolutely crazy because they’re spamming a client of mine with emails. Here’s an example of one such email:

I just got the details from XXX management on our July SEO Special, and here they are…… “Summer Gold Rush” Special

Our National Gold Plan – Regularly Priced at $2750 per month will be greatly discounted for ONLY 30 new clients starting July 11

The 2011 Summer SPECIAL:

  • Only $1999/mo for the life of the account 
  • That’s a $751 monthly savings 
  • That’s approx 27% off each month for 30 lucky clients 
  • Equal to saving over $9,000 per year 
  • Clients can purchase multiple specials

*Starts as a 3-month agreement, then runs month-to-month

To me, an SEO effort isn’t a package of tactical deliverables. Unless you’re simply hiring a company to merely provide tactical work (keyword research, site structure analysis, competitive analysis, SEO audit, analytics review, usability consulting), SEO is something that is unique to every website, competitive environment, client goal(s), and assets (news, blog, product search, local, video, image, etc.) and is ongoing with review and “optimization” (there is a reason that “O” exists in “SEO”).

Just as you’d expect to scope out a website design and development project, so too must you scope out a search engine optimization effort.

  • Who’s going to write the content?
  • Who is responsible for PR efforts?
  • Who is handling social marketing?
  • Who’s doing link building?
  • Who’s restructuring the website, as necessary?

Today’s SEO is about bringing together many facets of your marketing, web design/development and PR/social efforts so that they work well together.

All of these things go to “scope” and each requires time (either the agency’s time or the company’s time). And, yes – time is money.

Setting Pricing Structure

When we go through the process of determining how much a search engine optimization effort might be, it goes directly to how much time we have to spend on the initiative.

Yes, we have some basic templates to follow, in terms of what is generally included in most SEO efforts, but then we need to dig deeper into the time that might be needed to address items which the prospect has mentioned are “goals” of the effort, and address any human resource allocation that we may need to provide because the prospect isn’t adequately staffed.

Cost of Talent

We’ve all seen the ads: “$400/Month for SEO.” How can one firm be charging $400 per month while another is proposing a monthly cost of $20,000 per month? What’s the difference?

In most cases, it comes down to people. In my past, I was the president of an SEO firm that had over 30 “employees” (contractors) offshore. We paid those folks $300-$400 per month for full-time employment.

I won’t speak for all offshore firms/contractors, but our experience with these contractors wasn’t very positive. A couple guys were good, but more often than not, the work would need to be redone by our staff in the U.S., or otherwise we sold the services so cheaply that the client’s expectations were low and so “it worked.”

It depends on your expectations.

If you think that the $400 a month guys are doing “the same thing” as the $20,000 a month guys, you’re probably going to be wrong. Chances are the $20,000 a month guys are hiring people that cost more than $400 a month. While the deliverables may seem the same (anyone can get their hands on the $20,000 a month company’s proposal, and find/replace with their company name and say “we do the same thing”), at the end of the day, you’re paying for the people/process/software/experience of the firm(s).

Cost of Software

There are plenty of great free SEO tools. Due to the length of this post, I can’t get into them all.

Then, there are plenty of great tools that cost significant amounts of money. The firms charging $20,000 per month may very well be using software for management of the efforts that cost $10,000 a month. It’s something to consider. Some of these pieces of software are slick, and I can see that larger companies would want this type of information/dashboard/reporting, because they need to work with a firm that is very polished and professional.

Amount of Talent Needed

Small effort? Perhaps we only need one person.

Small-ish effort, but the client has no webmaster, copywriter, PR folks, link builder, etc.? We may need to put a lot of resources into a project that would cost quite a bit of money and the ROI may simply not be there, for this small business.

If a project is properly scoped, you should be able to get a general sense as to how much time/work/effort may need to come from the client, and how much will need to come from the agency. Some efforts can become quite complex, with web designers, developers, copywriters, PR staff, social marketing, video optimization, SEO analysts, link builders, analytics specialists, usability consultants, etc.

If you need more resources, you’ll be paying more (whether it’s to your in-house team or to your agency).

ROI Estimation

As I mentioned above, many times, the effort needed for an SEO effort, and the time needed to realize results, can prevent many companies from affordably investing in search engine optimization. And, there are many times when companies are infatuated with “free” search engine traffic that they don’t realize that there are simply not that many searches for keywords that are relevant to their business.

If there are no fish in the pond, no amount of bait in the world is going to catch you a fish. Comprendé?

This is why one of my favorite tools is SEMRush. You can check out the estimated value of the organic traffic for your competitors, and compare that with where your website is currently, and get a sense as to whether there will be value available to you in your efforts.

If you see that all of your identified competitors are getting $200 a month “worth” of organic search traffic each month, it’s going to be hard to justify spending any amount of money on organic search. You might be best off to invest in a pay-per-click effort. At least with paid search, you’re guaranteed to pay only when you actually get a click.

Amortization of Efforts

The real value of SEO efforts are, generally, not realized in the first month(s) of the effort. Folks ask me all the time, “how soon until we see results?” The honest answer is “hard to say, but our guess is ____.”

We don’t own the search engines, so we can’t make guarantees. But, if a search engine optimization firm has dug into the competitive landscape and done a fair amount of research, they should be able to determine whether an opportunity to have a profitable SEO effort is possible, even if it may take some time. This is where you should be considering the lifetime value of the effort.

You didn’t get into business thinking that you’d start and be profitable, right away (at least, not most of you). In fact, when I started my company, I didn’t take a salary for over a year and I expected that there was a price to pay to be in business.

With search engine optimization, it’s kind of the same way. There will be a period of time (perhaps as small as a couple of months, and perhaps as long as many years) when money and time is going out, and there’s not an equal amount of value coming in. But, if you’ve done your homework, and know that the opportunity for great value is there, and you “plan your work and work your plan,” you can realize gains that can far exceed the value in “pay per click” models.

One such company in an extremely competitive industry for SEO was being charged $6,000 per month for SEO and was getting OK value for a couple of years, and now – five years later – realizes an approximate value of $319,000 “worth” of organic search traffic each month. Even if they were getting “no” value whatsoever for the first two years (invested $144,000 total) to one day realize a monthly value of $319,000 (each and every month), you’d say that this is a pretty good investment, right?

It doesn’t always come to these types of valuations. Just like the TV ads say, “results will vary.” For this particular client, they happen to be in a space which people search for these keywords veryoften.

For the local business owner, that’s one of the critical pieces in determining whether SEO is for you. What is the “search universe”? How many times are people searching for your keywords?

So, How Do You Price Your SEO Efforts?

Do you know if the efforts are profitable? How do you measure profitability?

I’d love to hear your thoughts, in the comments section below.

An article posted by Mark Jackson