Dealing with SEO Impact of Google Removing Right-side PPC Ads

During about a week starting February 15th, Google removed Adwords PPC ads from the right side of desktop search results (mobile never had them). More importantly for your SEO performance than for your PPC, Google also added a slot to the ads on top, for a total of 4. This pushes down organic listings and subsequent traffic to websites.

Google Chops PPC Ads and Organic Listings

Google Chops PPC Ads and Organic Listings

This change continues a several year trend of ever less screen real estate devoted to organic results. I’ve said for years that investing little or nothing in SEO means, on average, losing 6% to 10% per year in organic traffic. This trend continues. In other words, maintaining traffic is a 6% to 10% improvement.

The four PPC ads appearing in smaller mobile screens will depress organic traffic from smartphones and some tablets more than desktop, and that traffic is close to 50% web-wide.

Stats have yet to emerge on the web-wide impact on organic traffic, and I’ll add updates to this blog post when a good study is published. Reportedly, four PPC ads appear only for competitive commercial searches, but most fields are competitive, and my spot checking all kinds of clients showed 4 ads most of the time. One report shows the number of four PPC ads increasing rapidly now.

The upshot is that you should add a 2/15/16 notation about this in your Google Analytics, and check your results before and after.

What can be done to compensate? In general, keep investing in SEO, like you do in other sales and marketing. More specifically, deploy schema.org markup and do other things to ensure that you have a good Google One Box, which is in the upper right of Google search pages and summarizes entities, like businesses or rockstars or museums or most anything. It’s a good bet that Google will increasingly use the right side of desktop for special content, like medical condition summaries, flight status, definitions, and anything else relevant to a search. This data often comes from schema.org mark-up.

Of course this PPC change impacts Adwords management, but any good AdWords pro will know what to do, and this is just one small part of the PPC dashboard that rivals a fighter pilot cockpit. It’s really business as usual for PPC.

Should SEO Firms White-Lie to Clients?


SEO image for "Should SEO Firms White-Lie to Clients" article

In explaining and proposing services, most SEO firms lie by omission—and they probably should.

My firm’s neuro-marketing wizard, Jennifer Williams, has admonished me for including in proposals too many options worth considering in the near future. Long before that advice, I learned the hard way to include in the core part of proposals only the 2 to 4 highest priority SEO tasks, and to move other important tasks to a section called “Maybe Later” or “Further Worthy Options.”

For many prospects and clients, not doing those options tends to leave gaps in their SEO. Yet buyers’ brains may respond to several options by supposing that the thousands of dollars for core work is inadequate because incomplete. Or they may believe that the options are designed to milk excessive cash for services that should be part of one comprehensive treatment with no costs beyond what covers 2 to 4 priority-one tasks. Whatever the psychological cause of the “no, not now” response to a complete SEO proposal, the bottom line is that such proposals often prevent the buyer from doing even the 2 to 4 tasks they really should do first. So telling the whole truth may harm all parties.

This quandary relates to my previous blog post about whether SEO services should be pre-packaged rather than left open to an agreed on number of hours per 6 or 12 months to address SEO tasks gradually. These two blog posts address instances of the general problem that SEO done right, done completely, done so that it actually works, entails ever more complexity, precision and time, such that ever larger small business can’t afford it.

At DISC, I usually compromise by beginning with the 2 to 4 priority-one tasks, then list just a few priority-two options, and I make clear that there’s a ton more one could do, but let’s have the first work earn returns to invest subsequently. Sometimes, depending on the kind of client, I push 4- to 12-month retainers to cherry-pick sub-tasks from both priority one and two items. This is honest and sells, but if the buyer reads a proposal from a less scrupulous firm that simply assures good SEO work for a set fee, without listing details, the buyer may gravitate to that simpler view, and then that not so honest SEO firm simply doesn’t do enough to help the client.

This buyer behavior is another instance of the Hard Freakonomics of Search Marketing for Small Business.

I prefer to be honest and lose a sale than gain it and later explain that the whole truth is complex and more expensive than the client understood at first.

Should SEO Consulting be Pre-packaged at Set Prices?

When shopping for SEO consulting, you want to know the cost. When search marketing firms sell SEO, they don’t want to spend too much time writing proposals. These two marketplace motivations make set-priced SEO packages convenient and attractive.

SEO Packages and Pricing

Should SEO Consulting be Pre-packaged at Set Prices?

But do such packages mislead both buyers and sellers?

Some of the four main parts of SEO are more predictable than others, but none are as predictable as packages would lead one to believe. 

(1) SEO technical audits have about 15 tests that take about the same amount of time regardless of the website. Yet exceptions are all too common. Here are just a few examples of contingencies that add labor time. Often the Google Webmaster Tools panel is not set-up and verified, and Bing Webmaster Tools rarely is. Websites may have a few or many alternate domain names pointing to the main domain, and some methods of pointing have more risk of duplicate indexing than others do. In general, discoveries often warrant deeper sleuthing of causes and conditions. Search marketing agencies can average the contingencies in the predicted labor cost, or posit a price range. (DISC does a little of both.)

(2) CMS-SEO (content management system SEO) is much less predictable than SEO technical auditing, especially if the package includes implementing enhancements. Automatic or semi-automatic keywording of HTML titles, descriptive tags, header and sub-header text, URLs, folders, image names, alt tags, title tags, anchor text, search and sorting systems, and much more, are so varied among websites, and their solutions so different depending on the CMS, that predicting the optimum amount of time before doing the work is impossible. When the client’s team implements the CMS-SEO recommendations, the webmaster’s competence can mean two hours of guidance and quality control by the search marketing firm, or 20 hours.

(3) The process of keyword research and SEO writing is the most predictable of the four parts of SEO. The main unknown here is the amount of revision by the client, but the search marketing firm can stipulate, for example, one round of revision, and build that into the package.

(4) Most businesses will benefit greatly from several skilled hours tuning ROI reports. Upgrading to Google’s Universal Analytics, tuning goal and ecommerce reports, applying advanced segments, creating a single neat dashboard of salient reports, connecting Google Analytics and Webmaster Tools for better keyword impression and click-through reports, are among the common needs of all businesses. Two or three hours of initial consulting is usually enough to predict the optimum investment in ROI reporting.  

So in SEO there’s an inevitable but manageable disconnect between, on the one hand, ease of quoting and buying, and on the other hand optimum allocation of time. The way to manage this disconnect is to provide packages at set prices or a reasonably tight range of prices, and make clear in the proposal that additional work may be needed. At DISC we give weekly progress reports which summarize work and hours done and remaining, and which apprise clients of additional work needed, so that nobody is surprised and disappointed. Sometimes we are head-down in the work before we can come up for air to tally hours, but we strive for the ideal of advanced notice, and so too should all search marketing firms.

Yes, You Can, So Should, Predict ROI of Web Marketing

Most businesses know they need a website and search marketing, so many just do it. But there’s a huge range in how much you can invest. Seeing the likely profit scenarios will enable you to invest wisely.

Predicting Profit of Web Marketing

See Your Profit Before You Invest

The fact is that, with professional help, you can predict the ROI of most web marketing. Let’s take PPC as an example. One can ascertain:

  • Average click costs
  • Past conversion rates
  • average revenue and profit per order or lead.
  • Past conversion rates of leads
  • And a few other relevant stats, like return rates and subsequent organic and social traffic. 

Increasingly my firm insists on such predictive analytics prior to a full engagement. We want to help clients, and predicting ROI ensures that we will.

How Should You Budget for Digital Marketing?

Short answer: like you do for everything else–create an annual budget.

Determining Your Digital Marketing Budget

Determining Your Digital Marketing Budget

Search marketing channels and tactics proliferate so that only the largest companies can do it all in one year. Prioritizing and then estimating labor time and vendor costs will produce your annual budget, but that requires rare breadth and depth of expertise. Instead, look to the average of what businesses spend on digital marketing.

SBA.gov suggests 2% to 8% of revenue for marketing, not including sales people’s salaries, depending in part on how new your business is. Start-ups often exceed 40%.

This Gartner study on digital marketing budgets is one of the best and reveals that on average US companies spent 2.5% of revenue on digital marketinggartner.com digital marketing spend report.

Regarding the percent of marketing that goes to digital marketing, this article is worth reading: avalancheinternetmarketing.com – determine internet marketing budget. It shows the following average percent of revenue budgeted for marketing and then digital marketing.

  • B2B companies: 5% on marketing, 21% of that for digital marketing, or $105,000 per year per $10 million in revenue.
  • B2C (consumer) companies: 15% on marketing, 21% of that for digital marketing, or $315,000 per year per $10 million in revenue.

Of course no business is average. Myriad factors in the marketing environment and in the growth stage and kind of a business justify wide deviations from those averages. In 2012, Converse put 90% of its marketing into digital; Lexus 70%. My firm has a client in the housing business who, in the housing crisis, moved 100% of marketing into digital, mostly search marketing, and thereby survived to prosper when the market improved–with many competitors out of business.

It’s not clear to me whether the averages revealed in the above article include all website costs or only costs related to marketing the website, like conversion rate optimization. But even if it includes all website work, digital marketing consumes a substantial and rapidly growing piece of the pie.

In a sense, all web marketing, not just PPC, is a bidding environment. If your competition is behind the curve, you can spend less than the applicable US average.

My blog post about Resisting the Decline in Search Marketing ROI for Small Businesses and my Visibility Magazine article on the Freakonomics of search marketing show that if a mere 1% of 1000 competitors for your search terms invest sufficiently, your search marketing competition increases 100%.

In theory the day will come when the ROI of search marketing will be on par with non-digital marketing because enough firms do the math that shows how much to invest. This in turn will bid up the costs, and thus depress ROI, so that radio, TV, newspapers, magazines, trade shows and other “old-fashion” marketing will be equally or more cost-effective. That day, if it ever comes, is still a long way off. Meanwhile, smart marketers will increase digital marketing budgets, and earn handsome returns quickly.

Resisting the Decline in Search Marketing ROI for Small Businesses

Sunrise or Sunset for Small Business ROI in Search Marketing

Hope Shining through Dark Clouds for Small Business ROI in Search Marketing

This post summarizes and reflects further on Rob Laporte’s “The Hard Freakonomics of Search Marketing for Small Business,” published in the Winter 2012-13 edition of Visibility Magazine.

Hard Freakonomic consequences follow from the fact that display systems and the brain deal with only a few search results per search. The “top ten” means that if 1% of 1000 websites with similar keywords/topics/offerings invest sufficiently in SEO, then competition for any one website increases 100%. That is, 1% of 1000 is 10, which is a 100% increase in competition for the top 10 positions.

Yes, this is simplified logic; in reality 50 competitors would do, say, 20% of all SEO they could do, rather than 10 doing 100%. But the principle remains essentially the same.

The same logic applies to PPC more obviously because of the bidding for ads. This logic applies less to conversion rate optimization because one is not constrained to the top ten positions to boost results. However, the usability grand master Jacob Neilsen argues that a mere 10% better usability in one site vs. another will soon result in something like 90% of the business going to the better site.

Coupled to this freakonomic consequence of top ten positions is that:

  • Profit from search marketing demands increasingly more time or money to deploy essential tactics and tools.
  • The losses coming from not doing the relentlessly mounting minimum in SEO grow because search engines increasingly demand that websites do more merely to be OK.

To counter this trend, the search engines and many search marketing firms have been working hard to offer economical solutions for small businesses. For example, Google Places and now Google+ for Business offer relatively simple and inexpensive ways to get local coverage. AdWords Express greatly simplifies PPC for small businesses. Search marketing firms and software providers offer relatively low-cost monthly payments for turnkey solutions.

However, putting on the Freakonomic goggles shows that these less expensive channels follow the rule that you get what you pay for. My article in Visibility Magazine substantiates the above points, and concludes that the best mitigation, but not elimination, of this set of problems entails expert prioritization of all web marketing options.

Another Ray of Hope

DISC’s social media maven, Jennifer Williams, counters this dark view of the future of small business marketing by pointing out that:

(1) The rise of non-search venues for small business, like Pinterest, Etsy.com, and social sites, transcend the “top ten” search results via a rich web of relevant connections.
(2) An emergent cultural rejection of “too big to fail” businesses will continue to give rise to searches for smaller and/or local businesses outside of and perhaps soon within the major search engines.

I bend to this argument, but I don’t break to it. Top mind share produces more mindshare in all search and social venues, just as Walmart has destroyed countless small businesses. Yes, driving distance does not matter much on the web, but top brands wielding top tools and minds have long been investing in local and social search. As much as Etsy has grown, the big etailers have grown much more.

Still, I’ve learned not to invest much hope in my disagreements with Jennifer, and she may prove right once again.

I’d be delighted to hear your comments below on this question of the future ROI of web marketing for small businesses.

Bookmark this Graph that Encapsulates SEO Prioritization

Chart of SEO tactics by Cost-Effectiveness and ROI

From Marketing Sherpa’s “2012 Search Marketing — SEO Edition

This graph reveals in one view how web marketing managers should think about allocating resources among SEO tactics. Study it first, and then let’s talk (well, I’ll talk about it, and I hope to hear back from you).

This graph and the Marketing Sherpa survey it comes from illustrate the principle that you should allocate web marketing capital according to cost-effectiveness (with cost indicated by “Degree of Difficulty”).

The main weakness of this graph is indicated by the analogy that blending a lot of really bad scotches doesn’t make a good cocktail. In economics, for example, often the average of a bunch of economists’ projections proves wildly wrong, and likewise this study compiles estimates and less than scientific data. Similarly, a lot of beer drinkers used to like Pabst. Very few economists predicted the financial crisis (and I bet a lot of bad scotch and cheap beer was consumed as a result!). Still, I believe that this graph does a good job of suggesting how on average you should invest in various SEO tactics.

Of course on average, all women are about 1/50th pregnant. That is, your particular business situation and the web marketing work your team already has done well could make your optimum allocation differ tremendously from what this graph suggests.

What remains true for you, however, is that you should think about your web marketing according to the principles and categories of tactics illustrated in the above graph.

Should Search Marketing Firms Give Short-Term Loans to Clients?

Loans and Banking in Search Marketing

The Global banking crisis prompted me to contemplate whether search marketing firms – or for that matter any professional services firm — should loan money to their clients.

The practice of firms loaning clients money under 30 to 60 day terms is so common that it suppresses the kind of clear thinking and analysis that banks undergo when making loans. Should firms practice such “banking” with clients, and if so, what are the advantages and disadvantages for both firm and client.

Debt and Loan Agreements in Search Engine Marketing

Pulling this issue out of the shadows of oblivious convention into the light of clear reason reveals that there exists scant rationale for this practice. Let’s list and debunk common rationales.

The Client’s Rationales for Borrowing from the Firm

  1. When a firm begins a job prior to payment or continues a job prior to payment for past work, the client can begin or continue the job prior to the arbitrary date of their periodic check runs. This is a flimsy rationale because in fact companies can, with minimal effort, write and send checks outside of their normal check run cycle. True, many larger companies have a purchase order system that is not easily circumvented, but if the job is urgent, the company can circumvent this system. If they can’t or wont, that’s the cost of bureaucracy.
  2. By paying the firm after work is done, the client has leverage to ensure proper completion and perhaps to argue for additional work that may not be part of the original agreement. If the client has chosen a firm that needs such leverage, the choice was probably poor. True, even the best choice of a firm does not eliminate risks that the firm is worse than it appeared or that the firm will assign their least skilled employees, so financial leverage offers a reasonable insurance policy. Yet consider that good law firms are almost always paid by up-front retainer, whereas struggling law firms may break from that payment convention – and the firm may be struggling because it is not very good. Especially in a growing field like search marketing, if a firm offers the client credit in order to do business, maybe that firm is not a good choice after all.
  3. By paying in, say, 60 days, the client’s CFO has more money to play with. I’m not experienced in corporate accounting, but it seems to me that, especially with today’s interest rates, 60 days earns little or nothing — certainly not enough to justify the possible exclusion of the best search marketing firm.
  4. I can imagine that clients’ CFOs would gain other advantages beyond mere interest when delaying the payment of vendors for weeks and months. The question is, do these advantages justify to the firm the extension of credit prior to work? Let’s take a look at the firm’s point of view.

The Firm’s Rationale for Loaning Money to Clients

  1. If the firm does not have enough worked booked, then immediately using idle resources may be worth the risks (discussed below) in loaning the client money.
  2. Extending a 30 or 60 day loan to a client creates trust and a feeling of good will. This may or may not pan out. I would hope that the predominant grounds for trust and good will emerge from other aspects of the business relationship and don’t depend on cash. Buying favor usually does not curry genuine favor.

Unless the firm runs a credit check on the client (much like the client checked the firm’s references), the obvious risk to the firm is that the client defaults for any number of reasons. The client might go bankrupt. Or the client might be owned by a parent company that takes the cash and nullifies (legally or not) vendor contracts. Or the client may simply have late if not patently abusive payment patterns at odds with the firm’s contract. In such cases, the firm may have to spend valuable time performing collections, or, worse, may have to battle it out in court. Complete default is relatively rare, but the consequences are large, so the the firm should minimize such risk.

“Everything is a Situation”

Of course if the client pays in advance, the client has in effect lent money to the firm, until the firm works that payment off, and then a new “loan” from the client begins. However, if the client checked the firm’s references and the firm did not run a financial check from the likes of Dunn & Bradstreet on the client, then a few weeks of paying in advance is probably fair.

This analysis seems to have revealed that law firms’ tried and true practice of working on retainers should apply to web marketing as well. Of course a long-standing client with a good payment history or a new client recommended as trustworthy by a trusted colleague are situations where a relatively low risk loan is often the right thing to do. To quote a 1990s cop show’s frequent refrain, “everything is a situation.”

Remember GE

The recent history of General Electric adds a final moral gloss to this meditation on money and banking in search marketing. A huge part of GE’s business was banking. GE lent money to clients to buy GE’s products and services. Shortly after the inception of the financial crises, GE needed a government bailout. GE’s stock price tanked, and now hovers at barely a third of its pre-crisis heights. The world groans under its insane debt. Increasingly I’m in favor of having clients pay when they have the cash and avoid debt. That’s how my firm has proceeded for years when paying our vendors, and as result we are one of the few small businesses offered ample lines of credit — that I hope I’ll never use.

Should You Pay for an Initial Web Marketing Consultation Prior to a Proposal?

Handshake for a Web Marketing Proposal

You and I paid for this graphic, by federal taxes to the FDIC website.

A paid initial consultation in web marketing prioritizes what you should even consider, projects ROI that you can later track, and thus produces a proposal honed to your precise needs.

In theory, an initial free consultation can do the same as a paid consultation, but in reality the proposing firm’s incentives often undermine the value of a free consultation because:

  1. The good search marketing firm is likely to enjoy plenty of demand, so unless your business is exceptionally large or otherwise desirable, the firm won’t spend much time on a free initial consultation — at least not by the principles of the firm who know the most.
  2. The not so good firm or one that aims to expand rapidly by selling a lot and using a factory model of lower-wage, lower-skilled people has the incentive to make the consultation little more than a proposal that prioritizes by what they sell, not by what you need.

A good paid initial consultation will give you plenty of value that stands alone, regardless of whether you do further work with the firm that did the consultation. That is, the resulting report will prioritize by projected ROI the several search or web marketing channels you should consider, and then you can ask several firms for proposals that address the priorities.

How much should you spend on an initial consultation? Obviously that depends on how many web marketing channels you want to prioritize and on the amount of time devoted to gathering and calculating data by which accurately to project ROI. At DISC, for example, our minimum initial consultation in search marketing is $750, averages about $1400, and sometimes exceeds $2500. Our minimum initial consultation in social media is $525, and our social media marketing plans average $2450. Other factors influencing the cost of an adequate initial consultation are the keyword diversity of your offerings, the extent of your past data on traffic, conversions, and profit, and how many in-house employees and weekly hours per employee must be considered in the cost inputs within the ROI projections.

If you know exactly what you want from the firm, then the initial consultation, free or paid, is probably a waste of everyone’s time.

You can always invest more in SEO copywriting, SEO recoding of your CMS, pay-per-click, shopping comparison site marketing, social media marketing, conversion rate optimization, email marketing, and refinement of analytics and reporting, but if you’re sure that you need only one of these things (that it would deliver the highest return on investment), and if, even better, you know exactly what you want to do within one of those channels, than any good firm should be able to provide a well-suited proposal without the need for much if any initial consulting.

Unlike the earlier days of search marketing when now antiquated conventions of proposals and initial consultations formed, now the complex array of options and their varying applicability to each business and website creates a more nuanced dynamic — perhaps a game theory dynamic — during your first contact with prospective web marketing firms. That complexity and those dynamics place a premium value on the experience and trustworthiness of the people who will guide you to your proposal.

How Simple Can You Make ROI Reporting for Search Marketing?

Google Analytics and paid software like Omniture provide tons of potentially useful information, but the amount of information can overwhelm and paralyze if you don’t distill it into a minimal executive summary.

While every business has unique needs for metrics, all businesses want to see the resulting cash, so I show a couple of spreadsheets that allow you quickly to input data from analytics packages to produce monetary ROI projections and results.

Below is an example of an Excel projection of PPC ROI. Research with Google tools and with the client’s server analytics produces data inputs, which can all be altered to play with scenarios. Of course you can input actual numbers once the campaign is live. This simple spreadsheet for a small business was further simplified and compressed to fit here, but serves to illustrate.

Clear, simple spreadsheet for chief executives and marketing managers who invest in pay-per-click advertising.

Sample Spreadsheet for Showing PPC Profits after all Costs

Of course marketing managers often want, and DISC gives, other metrics as well as a few paragraphs about strategies done and planned, but when very busy, the snapshot above allows you to move on down your todo list, and of course the projections help you decide whether or how much to invest in PPC.

SEO reporting should also be driven by monetary measures, as in the simplified example below, where we use 75% of the clients’s industry’s average $1 click cost as a proxy for cash value of each organic search engine click. This client already had excellent SEO and organic traffic before SEO, so while improvements were only 29%, the monetary ROI is good.

Clear, simple spreadsheet for chief executives and marketing managers who invest in search engine optimization (SEO)

Sample Spreadsheet for Showing SEO Profits after all Costs

Given the incredible stat packages out there (which we at DISC love), the above tables seem too simplified. Exactly!

Depending on your server analytics package, you can create such views within the package, rather then exporting to excel, but either way, your search marketing work can and should be distilled to show costs and profits in one glance.