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What Kind of Payment Plans are Available in the SEO Industry?

SEO payment plans and contracts

You’ve climbed a mountain of information by which to decide how much to invest in SEO. Now you’ve got to pay for it. What are typical payment plans? When is it worth hiring in-house, and what are the pros and cons of doing so?

One SEO payment plan that I’ve covered elsewhere in depth is pay-for-performance (PFP): see /about-us/press-and-media/visibility-magazine/pros-and-cons-of-pay-for-performance-in-search-marketing/ and www.2disc.com/blog/the-social-pay-off-in-profit-sharing-deals. PFP deals are complex and span at least a year. One type of pay-for-performance plan I don’t discuss in those articles is pay-per-position because that model has been broken by the large and constantly changing range of search engine positions based on such variables as personalization, geography, time, previous searches, continual experiments by search engines, and other factors that render proof of position, and calculation of payments, impossible. If you encounter such payment plans, either the firm offering them is way behind the curve, or their fine print accounts for variations in position in ways that could make future payments a point of ongoing contention. Here I focus on typical pay for services contracts.

At DISC, our proposals offer three options that cover the range you’ll find on the market:

Businesses with sufficient budget prefer to get the benefit of all the work as quickly as possible, and have DISC do all the high priority services within a few weeks. (This cost a minimum of $5000, averages about $12,000, and can go upwards of $100,000 in the first year).
To spread out costs over time, some business opt for an initial payment to cover the first round of highest priority work, and then pay monthly for 5 or 11 more months to cover the next most cost-effective tasks.
A third alternative is simply to pay for one of the services, and contract for other services later. However, the more services you do together, the more synergies happen.

Most SEO work is done one-time and endures for years. Monthly retainers should be use for SEO work on additional pages or for other SEO or web marketing, not for tweaking recently completed SEO. The reasons for this are difficult to summarize, but in short, the search engines don’t change their on-page algorithms nearly as often as off-page algorithms, and even when on-page algorithms do change, the rules of good SEO keyword research and SEO copywriting rarely change in synch. So unless the language of your industry changes rapidly, don’t sign on for SEO plans that nebulously tweak SEO that should have been done right – with diversification to deal with minor algorithm changes – in the first place.

Of course you could also hire an SEO employee. In theory, if any one facet of search marketing will cost more than, say, $80,000 in labor per year, you are better off hiring in-house. However, the various parts of search marketing these days work best when synced together, which means that an SEO firm with several synchronized people each commanding distinct disciplines within search marketing can deliver far more synergies than can a single employee. SEO technical, CMS & Database SEO, SEO keyword research and copywriting, and SEO ROI reporting each demand expertise rarely possessed by a single person. Also, some search marketing tasks require a majority of the labor in the first year, at least on a single web site that doesn’t undergo major yearly changes, and most SEO is one-time and endures for years, which means that an in-house expert would eventually run out of cost-effective jobs. (Link marketing and SEO’d social media are ongoing tasks, but I don’t categorize that work as strictly SEO, and even in link marketing, there are diminishing marginal returns on each new inbound link added).

If you do decide to hire in-house, my 2003, SEMPO (Search Engine Marketing Professionals Organization) article on the topic remains well worth reading: www.sempo.org/?page=article_20030702&hh.

Why you should be bidding on your own Brand Name in Adwords

One topic that has been heavily debated over the years is the extent to which PPC can “cannibalize” SEO. When you already have a top ranking organic listing, does it make sense to also pay for an ad to appear right above or next to it? Let’s consider the most basic example – your own brand name. If you have a website that isn’t completely blocked by the search engines for some technical reason, chances are you’re ranking #1 when someone searches you by brand name. And, chances are, the person will click that listing. So, why on earth would you pay for an Adwords ad to appear above it? Won’t that just make you have to pay for something you would have gotten for free anyway?

I’d like to argue that the small investment it will take to run a full-time ad for your own brand name will more than pay for itself over time and is well-worth doing. I promise I have no incentive from Google to make this claim; this opinion is based on years of Adwords experience, and more importantly years of experience interpreting website analytics and figuring out short and long term ROI for various marketing channels, and how they all fit into the overall picture.

Now, if you do some searches on Google for major brand names, you’ll see that some have PPC ads for their brand and some do not. I really feel that the one’s that aren’t are missing out on a relatively cheap way to really dominate the page, promote their brand and engage the user in a dramatic way. You can see that some brands have marketers that understand this and are taking full advantage. I really like the way Sears is doing theirs:

In the past few months, some new features have been added to Adwords that make bidding on one’s own brand much even more appealing than before. The one I’d like to focus on here is Sitelinks, and how Sears is leveraging them. Their PPC ad is, of course, the listing highlighted at the top of the search results page. The Sitelinks are the four blue links that go along with it (“Sears One Day Sale”, “Buy Gift Cards”, etc.). Sitelinks are a new feature in Adwords that lets the advertiser attach up to four links to their ad, essentially doubling your real estate for no extra cost. These Sitelinks can be changed at will and optimized based on ROI achieved by different combinations.

Would someone who searched for “Sears” and clicked the PPC ad have just clicked the organic listing had the PPC ad not been there? Almost certainly. Would this have saved the company a click charge? Of course. However, I’m willing to bet Sears is getting much higher revenue over time and much higher overall conversion rates when running that ad due to the way they so strongly command that search results page and custom tailor it for a potential customer. Between the organic listing and organic Sitelinks, which link to the standard, major parts of their site, and the Adwords listing and Adwords Sitelinks, which highlight more specific and current offers, they are giving the potential customer an enormous amount of info they can use to find and buy what they need more quickly and efficiently, before they even get to the site! And, those that do click the organic listing have the benefit of seeing and being informed by these Adwords Sitelinks, and it doesn’t cost you a thing.

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

Dominate search results using Google Merchant Center Part 2

Last week, in Dominate search results using Google Merchant Center Part 1, we looked at a sample search results page in Google, and pointed out that over half the viewable area was dominated by listings that came directly from the Google Merchant Center. We illustrated to e-commerce site owners the importance of getting a feed set up for a quick, regular new stream of high converting visitors. We pointed out that these “free” Google listings would immediately appear in the Google “Product Search” results, and possibly in the normal Google search results as “Shopping Results” directly above the organic listings.

This week, in Part 2, we’ll cover how to get your product listings into the rest of these highlighted areas:

Directly above the organic listings are the “Shopping Results”, which anyone running a feed in the Google Merchant Center is eligible for, and for which there is no cost-per-click. To be eligible to run your listings in those other three areas, you need an Adwords account. The highlighted area in the top right of the image above contains “Product Listings”, while the remaining areas are two different forms of “Product Extensions”. Here is how Google describes the difference:

“Product Ads allow you to show the pictures, prices, and descriptions of the products you sell next to related searches on Google.com. Product Ads have 2 available formats – Extensions, which allow you to enhance your keyword-targeted text ads with product information, and Listings, a standalone format that requires no keywords or ad text.”

If you already have an Adwords account, all you need to do to utilize the Product Extensions is link to your Merchant Account from within your Adwords dashboard. Then, your ads will be automatically appended with specific product information when relevant. Doing so is at least worth experimenting with immediately – most advertisers are seeing much higher click-through-rates and better conversion rates as a result, and it literally takes no more than a click of a checkbox in your Adwords dashboard.

If you don’t already have an Adwords account, you can still utilize Product Listing ads without having to run a full-fledged Adwords campaign. You do need to create an Adwords account, but rather than set up keyword lists and ads, you just link your Merchant Center listings, and when people search for your products in Google they will appear in the upper right portion of the search results page.

Unlike Shopping Results, Product Listings and Extensions operate on a CPC basis. if you already have an Adwords account, linking your Merchant Account could very well bring your cost down by increasing your CTR. If you don’t have an Adwords account, setting up a Product-Listing-only Adwords account is pretty modest investment since product-based ads are typically much cheaper and convert much higher than normal text ads. If you are looking to invest in some online marketing for your e-commerce site, this would be a great place to begin.

Clearly the importance of having a Google Merchant Center account cannot be overstated. If you are an e-commerce advertiser and are not using it yet, or have something set up that you don’t really attend to or actively manage, you are missing out on a large portion of high-converting traffic.

The 80-20 Rule in SEO

So 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.

Dominate search results using Google Merchant Center Part 1

Question: What do the blue highlighted listings in this image have in common?

Answer: All of these listings are pulled from Google Merchant Center accounts. If you aren’t actively managing a Google Merchant Center account, your products don’t have a chance of appearing in any of these areas.

For years, Google has provided advertisers with a free way to list their products in the “Product Search” section of their website by joining the Merchant Center program and uploading a product feed. These listings have been slowly creeping into Google’s normal search results, but the past year some radical changes have been occurring, and product listings from the Merchant Center are suddenly being thrust into the limelight. Merchant Center listings are so strongly integrated into Google’s normal search results now, that in some cases they can take up more than half of the viewable area, as the screenshot above shows.

Thankfully, joining and listing products in the Merchant Center is still free. However, to take advantage of most of that highlighted area you need an Adwords account. For now we’ll focus on the free area, and leave the paid stuff for Part 2.

The non-paid Merchant Center listings appear in between the paid listings and organic listings (in the above screenshot, it is the 5-product block under “Shopping Results for coffee maker single cup”). Anyone with an active Google Merchant Center account is eligible to appear in this block. As with normal organic listings, getting to these top spots takes some careful optimization, but if you can get to the top, it can provide an enormous boost in traffic with no click costs. Furthermore, conversion rates for product ads are generally much higher than any other type of listing due to their high degree of specificity and relevance to the user’s search. Either way, your listings are guaranteed to appear in Google’s Product Search section, which is a great source of high converting traffic in its own right.

Joining the Google Merchant Center always provides a boost in relevant traffic, often an instant, very significant boost, and there are no click charges. If you have an e-commerce website, you should consider this a very high priority. Getting a feed set up is quick and easy and can often be done manually if you have a small inventory. Feeds do need to be updated regularly to reflect what is actually being sold on the site, so you’ll probably want to have an experienced firm help you out here. Unless your database is a complete mess, it usually does not take long to set up a script that will automatically create your feed and upload it to Google. A cron job can be set up on the server to trigger this script at regular intervals, so your feeds will be created and uploaded automatically for you. Since all clicks are free, it usually does not take long at all the recoup the small expenses involved in getting your scripts set up. Then you can just sit back and watch the high converting traffic roll in at no cost to you.

Next week, in Part 2, we’ll dig into how your Merchant Center account can be tied into your Adwords account for total search result domination!

The Social Pay-off in Profit-Sharing Deals

My upcoming article in Visibility Magazine, “Revenue Share Deals in Search Marketing,” explains the pros and cons of such deals, but here I want to focus on a less numerical and more social facet of the mutual win.

The Social Pay-Off

Revenue share deals span at least a year, and where a lot of work is involved, can span 3 years or more. So this is a long-term relationship (at least by Hollywood standards), if not a marriage. Because the SEM firm or free-lancer has incentives completely in line with the client, who is now really a partner, the talks and emails tend to be more enjoyable for both parties.

In revenue share deals both parties share the joy of success more than in typical pay-for-services contracts. Sure, I’m happy when a typical pay-for-service client wins (OK, I confess to being a little miffed when, back at the turn of the century, a whole family retired early and wealthy because of a mere 20G of my firm’s work). But I don’t know, maybe it has to do with some hunting instinct: if the partner and I are both strutting back to the camp with a big carcass on our shoulders, it just feels like, “Yeah!, that’s good business. Let’s do it again soon, like tomorrow.” And sure enough we do it again tomorrow because that’s the deal.

The same is true with commiserating on disappointments about one or another tactic employed. The client isn’t dismayed that the firm made their money, and, well, sorry the results fell short. Nor is the SEM firm left feeling a little guilty. Of course, I’m only imaging this – my firm has never done anything in a revenue share that did not succeed marvelously. Bosh! But seriously, failure is very rare when a good SEM firm has incentive and the client’s offering meets a market demand. Instead, both parties learn from the failure and move on in amity together.

Like any business deal, revenue sharing contracts are fundamentally about profit, but at the end of the day, it’s nice to feel the mutual, social experience of walking – and running and jumping — with a fellow traveler down the paths of profit together.

I would be grateful to hear about your experiences with a revenue share deal, and how you felt about it along the way.

Can I Rank #1 in Google?

That depends on what you’re trying to rank for. Usually you can easily rank #1 for your company name (if it’s original). After that there’s a boatload of variables, some of which you can control, some of which you can’t. But since businesses always want to know if they can secure a top position in Google, we thought we’d give it to you straight from the horse’s mouth. Google that is.

httpv://www.youtube.com/watch?v=a6zGjcf6Snw

Come On In

Welcome to the new DISC blog. It’s about time, right?

Up until now DISC didn’t have a blog because there was an overabundance of blogs about web marketing and frankly, we didn’t want to just add to the noise.

But we’re ready, and this blog is for YOU, the client, the business owner, the CEO, the head of marketing, whoever you are sitting there with a budget and pondering your best investment among a dizzying array of options.

SEO, PPC, video, blogs, copy, design, conversion lift, testing, measuring, twitter, engagement…don’t give yourself a headache wondering which strategy will give you the quickest returns. That’s what this blog is for.

Maybe you’re wondering if your search optimization from 5 years ago is still good. We’re going to answer that.

Maybe you’re wondering how big your budget needs to be, and how small your niche needs to be for a successful PPC campaign. We’re going to answer that.

Maybe you’re wondering how to choose a search marketing firm. We’re going to answer that.

Maybe you’re wondering if you’d save by doing it yourself. We’re going to answer that.

The biggest question is not IF you should employ web marketing, but WHICH aspect of web marketing you should focus on right now. We’re going to answer that.

Got a question about your web marketing priorities? Send it in, because we’re going to answer that.