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.

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