In SEO, How Much Should You Plan vs. Implement?

Planning SEO vs. Implementing SEO

Planning SEO vs. Implementing SEO

As SEO options proliferate, and as websites and their web marketing intricacies proliferate, an ever greater percentage of time should be spent assessing and prioritizing. Just plunging into this or that tactic may seem to save on overhead, but it can waste plenty more time than you’d spend in proper planning. This is especially true in SEO troubleshooting.

Contemporary SEO entails many parts, such as:

  • about 15 SEO technical tests;
  • about 30 CMS-SEO rules;
  • social media SEO, including blog and video SEO;
  • SEO keyword research and copywriting;
  • ROI reporting and subsequent optimization;
  • And much more.

What should you do first?

This planning time is especially important when troubleshooting sudden declines in organic traffic, such as many businesses suffered under Google’s new Panda regime. In troubleshooting, you must audit thoroughly, and since you must completely eliminate one after another of the possible causes of your losses, you must redress each possible cause 100%. If you do only 75%, then you’ll remain haunted by the suspicion that your continuing organic losses could have been solved by one of the tactics that you decided to only partly address in the interest of saving money.

Let’s consider and an example pertaining to database-driven websites. Software that mimics search engine spiders often finds problems in multiple URLs leading to identical end-pages. Although Google’s spiders are very smart and may overlook such issues, the cause of the website’s loss of organic traffic may be related to what the spider software found. Resolving problematic results of spider test can be expensive, and meanwhile other issues may be either primary or accessory culprits, like excessive intra-site links, or too much SEO writing, or a pattern of slow loading. (Often declines are due to several negatives, with one or two main problems pulling the lesser weaknesses into the vortex of Google’s demotion tipping point.) Each of the tasks in a troubleshooting list can take a lot of resources if they are to be treated 100%. Again, which should you tackle first?

This situation means that you can easily spend 40% of your budget running tests, estimating time and costs to fix each issue, multiplying costs by the probability that the weakness is indeed a cause of decline, and delegating who does what within the final prioritized list. While working on each item, people must keep good, time-stamped, detailed notes of what was done, so that, if more troubleshooting is needed in the future, people can double-check what was and was not done.

Success in business (and in society as a whole) is all about allocating capital efficiently. Planning your SEO assiduously will lead to such success.

 

Google’s Panda Algorithm Update: Is it Grizzly or Good for You?

Google Panda Bear

Was Google Panda Good for You?

The lessons of Google’s Panda algorithm update launched on February 24 are simple:

Grizzly Google Panda Update

Or Grizzly?

(1) Don’t do black hat SEO.

(2) Think hard about the risks of grey hat SEO.

(3) Do what Google tells you in their extensive guidance pages.

(4) Design good website usability. That is, put your human audience front and center.

Google’s Panda update justly punishes sites that have more than one of the following, but a single item that is especially abused may be enough alone to cause demotion:

  1. Scraped (or stolen) text content.
  2. Websites with lots of pages without unique content. When there are too many such pages, probably the whole site is demoted, not just those pages or categories.
  3. Excessive SEO keywording.
  4. Excessive intra-site links.
  5. Maybe more punishment then prior based on poor incoming links, according to some researchers.
  6. Maybe poor code. If not, expect this to play a greater role over time, because Google rightly assumes some correlation between a site with good code and a site with good content.
  7. Poor usability. It’s unclear what site features Google’s algorithms would identify as a proxy for poor usability, but here again, it makes sense that Google would see a correlation between good usability and searches being satisfied with Google when the searchers find first a site that pleases the brain.

Some of the above items are debatable and still being investigated by SEO researchers (including DISC), but the consensus is that items 1 through 4 almost certainly prompt demotion. And they all entail black hat or grey hat SEO.

White hat SEO endures for years, without risks which reduce the current value of your company. DISC has always practiced white hat SEO, and so far we have not found a single current client of ours punished by Panda (although a long dormant client who did much of their own SEO has come back to DISC for help in redressing a 40% drop in business starting on the day Panda went live).

In some forms of managerial accounting, risks are factored into ROI projections of capital investments and into the current value of the company. This logic applies to investments you have already made, so that the risks of those investments failing at any time in the future reduce the current value of your firm. Some simple math illustrates this principle.

  • $100,000 capital investment (in a new machine or in SEO, for example) is predicted to improve profits by $500,000 in one year.
  • But there’s a 50% risk of failure (in equipment or SEO) causing, in turn, a 50% reduction of the $500,000 ROI.
  • This means $275,000 ROI, not $400,000 (subtracting the $100,000 investment from the pre-risk-adjusted $500,000 increase in profits)

However, black or grey hat SEO can risk decreases in current organic-based profits, never mind the risk of not achieving increases. That math looks like this:

  • $100,000 capital investment in SEO is predicted to improve profits by $500,000 in one year.
  • But there’s a 50% risk of failure in SEO causing no increases and a 50% reduction of the, say, current $1,000,000 in annual organic-based profit.
  • This means negative $100,000 ROI (loss), which is $600,000 less ROI than would be the case if you eliminated the 50% risk.

While it is impossible to predict exact ROI and risks, the principle of risk nonetheless holds, and it should guide your SEO investments. If you take no SEO risks and, per Panda, you invest in website usability as well, or if you invest in eliminating all current risks, then the present value of your company rises immediately.

Business, like equity investments of all kinds, is all about reducing risks. Less risk of future losses via white hat SEO and usability enhancements adds current value to your business portfolio — and certainly to your peace of mind.

Should You Hire an In-House SEM Employee?

Should You Hire a Search Marketing Employee?

Should You Hire a Search Marketing Employee? (photo courtesy of BusinessInsider.com/negativity-has-no-place-at-your-startup-2010-6

My previous post discussed considerations in contracting with an SEM consultant, and concluded that you should (1) ask how the firm trains new and old employees and (2) interview the people who will actually work on your account. Here I address criteria for hiring in-house.

My 2003 article “SEM: In-House vs. Outsourced” published at SEMPO.org (Search Engine Marketing Professionals Organization) is still well worth reading. It’s executive summary states:

“SEM (Search Engine Marketing), which consists of the distinct activities of SEO (Search Engine Optimization) and paid placement, requires exceptional linguistic and technical aptitude, at least six months of experience, and ongoing research and training. Therefore, a manager who would like to have SEM expertise in-house should expect to allocate at least $50,000 (in the US) towards employee salary and training. Good programmers rarely make good search engine marketers, because of the highly linguistic nature of the work, so that a manager should be cautious about using existing web programmers for SEM. Marketing personnel may have the linguistic and product knowledge, but they need to have substantial technical knowledge of web programming relating to search engines. Even in SEM firms, it is rare that one person possesses sufficient mastery of the various fields of knowledge that impinge on SEM, and people who do have this mastery are likely to cost more than $50,000 per year.”

I then discuss the core aptitudes required of an SEM employee, in order of importance: linguistic aptitude, research skills, brains and education, technical aptitudes and experience, SEM experience. The only change to that priority I would make now is to move SEM experience up one notch.

I also discuss the kinds of business situations that warrant hiring.

Consider the problem of needing less SEO work after year one and the lack of synergies when using just one SEM employee. In theory, if any one facet of search marketing will cost more than, say, $80,000 in labor per year, you’re better off hiring in-house. However, the various parts of search marketing these days work best when synced together with several synchronized people each commanding distinct disciplines within search marketing. Such a team can deliver far more synergies than a single employee. Also, many SEO tasks require a majority of the labor in the first year, at least on a single web site that doesn’t undergo major changes each year, which means that an in-house expert would eventually run out of cost-effective jobs.

The tendency is to not hire soon enough because most businesses aren’t qualified to project the ROI of search marketing, and many firms have been burned by unscrupulous or incompetent SEM firms in the past. I advise paying an SEM firm well to assess the ROI of hiring in-house vs. contracting an SEM consultancy. If you don’t pay the firm well for this work, you may end up with a proposal disguised as an objective study which concludes that, what do you know, you should engage that SEM firm.

Can Spending Too Little on PPC Labor Cost You More?

Balancing PPC Labor and Click Costs

The Tug of War between PPC Labor Time and Click Costs

In previous posts I discussed how to allocate investments in SEO, and DISC’s head PPC guy, Dale Webb, recently posted on determining your ideal PPC budget. Here, I try to help you understand that if you spend too little in monthly PPC management, you will pay more in click costs – often more than revenue or profit per conversion.

Think of it: if you divide costs by hourly rate to get labor time, even $2000 a month at a suspiciously low $100 per hour is less than one hour per business day. And think about the work that must be done in PPC (and in shopping comparison site marketing, which is also PPC-driven, except for Google Product Search):

One must

  • write brilliant ads with the discipline of haiku;
  • assess and choose from among thousands of phrase combinations — each with options for exact, phrase, broad, and negative matching;
  • produce ad groupings that maximize quality score and minimize the risk that a few bad ads will spoil the adgroup barrel;
  • marry each landing page text with each ad;
  • track which of several positions produce the best combination of clicks and conversions, for every ad;
  • do split A-B and multivariate tests on landing pages to maximize conversions;
  • report clearly the results, the plans for next month, and the precise ROI;
  • keep reading and learning to stay apprised of the most profitable tactics;
  • and choose and tune many other variables that the search engines allow you to alter.

All of this work must be done by an excellent mind with exceptional linguistic and analytic aptitude, and lots of experience. If you don’t do this work at least as well as your top 10 competitors, you will pay much more in click costs relative to conversions than you will save in labor cost.

Of course the extent and acumen of your PPC competition is a major variable in the calculus of how little labor time you can get away with before you fall below maximum ROI towards negative ROI. But remember that Google’s market capitalization is close to GE’s because 95% of Google’s enormous revenue comes from its PPC, which means few industries are under-investing in PPC now. Increasingly, if a website has mediocre or worse usability (conversion rates), or if a business’s margins are too low, no amount of PPC expertise and time will produce profit.

Having managed PPC campaigns for as long as they have existed, we at DISC have found that $1500 per month in labor (10 hours per month, or 2.5 hours per week) is the minimum labor time – and that’s in industries with poor PPC competition, and after more time up front to set-up the campaign. Average PPC competition requires at least $2500 per month, usually $3500. Of course large businesses often spend upwards of $50,000 per month in labor to achieve maximum ROI.

The substantial amount of labor time required to find, implement, and tune the lowest hanging fruit means that you can’t just dip your toe into PPC to “test” the waters. A valid test must look at the best opportunities in PPC, and ascertaining those opportunities takes highly skilled time – the easy quick pickings have long since been bid up to the max.

If you are among the fortunate few, your resistance to spend what it takes is shared by most of your competition, which means you have opportunity to win profitable business that they neglected. Moreover, because there is a shortage of PPC talent, a gifted (and thus well-paid) PPC manager – who is given enough time — can deliver great ROI even if your collective competition is heavy. Fortune favors the bold – and the smart.

How Much Should You Invest in SEO within the 80-20 Rule?

Prices for SEO

How Many of These Do You Need for Effective SEO?

Uh-Oh!: This post has lots of numbers and is not chatty, fun, or easy to read. It is intended for marketing managers who really want to figure out what to invest in SEO. You can read just the bold text for a quick overview.

My post two weeks ago broached the 80-20 rule in SEO, and it suggested that because so many managers don’t go further than 20% — if they invest at all – pay-for-performance deals can unlock profits for both agency and client. But how are you to know what is the realistic 100% you could invest in SEO, and thus what the 20% would entail? This post will help you to ascertain that 20% by roughly calculating the 100% first.

Of course Sony.com and a 25 page brochure-ware website will each have very different 100%s. So let’s take two different kinds of websites to illustrate the range. One is a consumer ecommerce site selling 50,000 artist supplies (over 50,000 pages) and the other is a 25 page website promoting a civil litigation firm. Vastly different though these websites are, the prioritized list of SEO tasks is very much the same. Some of these SEO tasks require the same amount of time for both websites, and some of the tasks depend on the number of pages.

At the bottom of this post, I give rough time estimates based on DISC’s long history of tracking hours. Assign a monetary value to your team’s time (assuming your team knows what to do, which is a big assumption), or multiply hours by the hourly rate of a prospective SEO firm. DISC hourly rates for SEO are $175, with quantity discounts. Expect an average of $150 per hour on the market now. Rates go as high as $450 per hour. If rates are much less than $125 per hour, someone is getting hurt, probably you. On the other hand, a client may have or get a qualified person on staff, so for the sake of a rule of thumb, let’s put the hourly rate at $75 per hour. Also, remember that the great majority of this work is one-time and lasts for years.

A small site’s maximum is roughly 5500 hours (minimum is 127 hours). 5500 hours x $75 = $412,500 x 20% = $82,500. That may seem huge, but many professional service firm could make that back in one year easily. Below I mention the big effect of cutting video marketing and international marketing.

A large site’s maximum is roughly 56,000 hours (minimum is 254 hours). 56,000 x $75 = $4,200,000 x 20% = $840,000. Again this may seem huge, but consider that this can create tens of millions in sales in the US and much more internationally. If those new, additional sales came to a mere 8.4 million in the first two years, that puts the SEO cost at about 10%, and subsequent years are gravy.

In both cases, cutting international marketing and video marketing (which is as much or more about conversions rather than SEO), brings the 20% in the 80-20 rule to $5900 for the small site and $760,000 for the large site. Cutting the 50,000 product page SEO, and relying mostly on CMS & Database SEO, which can do a substantial amount of SEO automatically, reduces that 20% to about $100,000 for the large site.

In the old days of SEO, say from 1997 through 2005, SEO earned such huge returns when done right (though few knew how to do it right) that one did not need to spend much time calculating the optimum investment. Now it does take some time to make this calculation, but it is doable. Create a spreadsheet with various realistic increases in organic traffic x conversion rates x average gross profit. Consult with an experienced SEO person to learn how much work is needed to reach those increases. Of course DISC offers such services, and while this service here and at other good firms can take a few thousand dollars of time, you end up with a clear vision of the risks and rewards of investments – from 20% to 100% of the maximum – in SEO.

ROUGH SKETCH OF MAXIMUM SEO HOURS FOR A SMALL AND LARGE SITE

The numbers below are a very rough, but a good starting point for the manager considering SEO investments.

Practically speaking, some SEO tasks have no upper limit except what is determined by reaching the point of negative marginal return (that is, each dollar invested in a given SEO task returns less than a dollar in gross profit). This is a case where a good spreadsheet meets a good SEO person. Given gross profit per conversion (or lead tantamount to a conversion), an experienced SEO person can make a safe conservative guess at when negative ROI begins. That then marks the 100%.

I exclude social media marketing and link marketing, even though they are related to SEO (I consider link marketing distinct from SEO, though many lump the two together under SEO).

SEO jobs that take about the same amount of time regardless of the website’s size, content, and target markets:

  • SEO Technical Audit & Repairs – 8 to 16 hours, depending on amount of fixes needed.
  • Google and Bing Webmaster Services & XML SiteMaps – about 6 hours
  • Local SEO and Internet Yellow Pages (IYP) – minimum 4 hours, maximum 20 hours (per physical location)
  • Sub-Total – 20 to 48 hours

SEO jobs that take more time depending on the size of the site:

  • CMS & Database SEO – small site, 20 hours to 40 hours (The 25 page Brochure-ware site may need only 20 hours for manual application of the rules for all pages); Large ecommerce site, 40 to 80 hours.
  • Keyword Research and SEO Copywriting – small site, 20 hours to 80 hours; large site, 20 to 50,000 hours (an hour per page, plus complete keyword research)
  • SEO Results Reporting – small site, 12 to 24 hours; large site, 24 to 100 hours in a year (about 4 hours per month)
  • SEO’d Video Marketing – small site, 5 hours for SEOing one video to 100 hours for professionally producing and SEO placing over 20; large site, 50 to 500 hours.
  • SEO’d Blog Marketing – Small site 50 to 200 hours per year; large site 100 to 400 hours per year.
  • International SEO – Minimum of 20 hours for both sites; a huge maximum determined by point of negative marginal returns, but let’s cap at 5000 hours.
  • Sub-Totals – small site, 127 to 5,444 hours; large site, 254 to 56,400 hours
  • Grand Total hour – small site, 147 to 5,492 hours; large site, 274 to 56,448 hours

The 80-20 Rule in SEO

The 80/20 RuleSo you’ve decided that you want the free, relevant traffic delivered by SEO, but how much should you invest? That’s one of the toughest questions you’ll ever have to answer, for it asks you to predict the ROI of SEO vs. all other web marketing. By mining in-house and industry data and by using predictive tools, you can arrive at a good allocation. But before you do that, I would like you to step back and consider the 80-20 rule in SEO investments.

This blog post is derived from DISC’s Rob Laporte’s more extensive article, The 80-20 Rule in SEO, CRO, and Social Media, published in the Winter 2009 edition of Visibility Magazine.

The 80-20 rule is another name for “The Pareto Principle,” which was coined by the business management thinker Joseph Juran in the early 1940s. It is based on mathematics, and has been applied in economics, in such business management programs as Six Sigma, in The 4-Hour Workweek by Tim Ferris, and even in wardrobes, where often 20% of one’s clothes get 80% of the wear. (Thanks to Wikipedia.com for the facts in that summary). Business people often hear the 80-20 rule in connection with sales, where 20% of the prospects or clients bring 80% of the business.

What many marketing managers don’t understand, especially in small and medium-sized businesses that are less rigorous in managerial accounting, is how to apply this rule when allocating web marketing dollars and time and when choosing the services of web marketing firms.

The 80-20 rule is merely a rule of thumb, and it is difficult to know (1) how much more or less than the 20% of maximum you should invest and (2) what activities should be part of that 20%. Is it worth paying for and taking time to use the more expensive SEO keyword research tools offered by the likes of Hitwise, comScore, and Enquisite? Will you earn positive ROI by going beyond giving a good copywriter a day or two of training, and instead hiring a dedicated professional or spending several thousand dollars in training? The answers differ in each web marketing activity and require long experience with the marketing ROI for diverse web sites. This requirement adds value to the wise and honest council of well-established search agencies.

The 80-20 Rule in SEO

My Visibility Magazine article, “Is KEI Useful?” (Fall 2009), explains: “Keyword research follows a variation of the 80-20 rule: the last 20 percent of perfection can take 80% more time. If your potential ROI and your order fulfillment capabilities are sufficiently high, then it’s worth finding the funds to factor KEI, or even to spend the tens of thousands of dollars on the more expensive keyword research tools.” The mirror image of that statement is, the first 20% of the enormous, maximum amount of time one could spend in keyword research generates 80% of the value in the final keyword lists. The 80-20 rule applies to SEO copywriting as well: the final 20% of perfection in lacing in both key phrases and conceptually related phrases according to optimum frequency, density, and distribution can take 80% more time, and the first 20% of labor can deliver 80% of the results.

Implications and Applications: SEO, as opposed to PPC, has much less predictive data by which to ascertain the reasonable maximum investment and thus the amount of labor cost comprised by the first 20% in the 80-20 rule. As in PPC, the tide of competition is rising, although several studies reveal a dramatic lag in SEO investments relative to PPC and relative to the clicks and conversions delivered by organic vs. PPC listings. Given the saturation in the PPC market, and given the “New Normal” economy, firms have been flooding into SEO during the last two years or so. While I still see plenty of low-hanging fruit in this field, I’ve also observed SEO proliferating. Like conversion rate optimization but unlike PPC, the first 20% of SEO will almost always produce positive ROI because there are no click costs and probably most of your competition has under-invested in SEO. For more about the content and costs of this first 20% of SEO, please see “One-Time vs. Ongoing SEO” in the December ’08 Visibility Magazine. If you have already done the first 20%, then, in order to ascertain how much more SEO is worth doing, you’ll probably need consulting by a pro with long experience doing SEO for many different businesses.

Does the 80-20 Rule Suggest Pay-for-Performance (PFP) Deals?

In a longer blog post I would include examples of spreadsheets by which my firm evaluates PFP and revenue share deals. Such deep analysis often shows that, while a modest 20% investment is certainly worthwhile, one would make much more profit, even if less marginal returns, by investing more like 60%. Yet many marketing managers are reluctant to spend even the 20%, especially in this economy. This situation creates enticing opportunities for agencies to do what great capitalists have always done during depressions or “great” recessions: take more ownership of businesses, in this case by deals that claim a few years of results in exchange for non-paid work up-front. This helps the clients too, by reducing their risk and up-front cost and by aligning incentives, though at the cost of probably paying more in the end.

Search agencies, enriched by experience and data from all kinds of client histories, are well qualified to ascertain the first 20% in the 80-20 rule and how much more than that 20% is worth doing, while prospects and clients are likely to under-invest. This situation, together with sophisticated software and analytic spreadsheets, creates enormous opportunities for both agencies and clients to reap rewards from an optimum investment point between the 20% and the 100% within the 80-20 rule.