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,, 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.

When is Social Media a Better Investment Than SEO?

As a small business make sure your web marketing dollars make sense. Photo credit: Tennekis Wiki Commons

In a recent post Rob painted a bleak picture of the SEO playing field for small businesses – that an ever increasing number of small businesses soon won’t be able to compete in the organic search space because of limited budgets and increasingly savvy and well invested competition.

For some small businesses that time has already come.

Take the business owner who was experiencing booming success with his local restaurant. Great atmosphere, cheerful employees, decent food, ample parking, and the aroma of freshly roasting coffee made his restaurant a hot spot. So when he wanted to take his popular fresh-roasted coffee online, SEO seemed the logical route.

If all these people loved his coffee, why shouldn’t the search engines?

Because search engine spiders can’t taste coffee, nor can they see your local social proof, so they instead use complex algorithms to determine who makes it to the top, including the site’s age and authority, and there’s even speculation that well-known brands get an extra boost. Trying to compete as a small business with a relatively new site for competitive words is not an option for such a business.

If Not SEO, What Should a Small Business Do When They Have a Really Great Product?

People can taste coffee, and it’s people, not formulas, that run social media.

Invest in social media. And by invest, I mean invest in hiring an experienced social media firm or consultant to develop a clear and focused strategy, complete with tracking mechanisms for ROI measurement. Once you have that in hand, you can implement the strategy in-house. Not just to save money, but because an effective Social Media strategy really should be implemented in-house by the people who are most passionate and knowledgeable about your product or service.

For most mid-sized to large businesses, SEO should be the first point of attack. It establishes the all-important virtual “location, location, location” on the World Wide Web. For these businesses, social media can supplement, and is often best used for other marketing tactics such as brand awareness, market research, or customer service/relations, but organic search optimization is the best foundation.

For a small business though, social media can sometimes be the best first-line marketing tactic.

How to Know

How do you know when Social Media is your best first investment in online marketing? Here are some clues:

  • You’re a small business with fewer than 10 full time employees.
  • Your site is new.
  • Your site has little or no PageRank.
  • Your product or service area is highly saturated online – do a search for the general term that describes your product or service. If the top 10 results are strong contenders, you won’t be able to touch them as a small business.
  • Your product or service is one of many, but unique or special in some way.
  • Brand Advocate Opportunity – You already have a loyal local customer base that comes to you versus the competition for some specific reason. I.E. you have the best coffee within a 100 mile radius, or your customer service makes people feel good.
  • Your business has a brick and mortar component so that online success will not make or break your bottom line, but will grow it.
  • Your online marketing budget is less than $3-4K.


Many small businesses falsely think they can handle social media completely on their own. They recruit a member of their staff, usually someone young who is well versed with Facebook or Twitter, and set them loose. Or sometimes the business owner is savvy enough in social media themselves to make a go of it. Of course there are cases of this working rather well, but there are plenty of disastrous cases too. Best-case disaster scenario is an unfocused and ineffective campaign that bleeds time and resources with little to no results, souring business owners on the effectiveness of social media. Worst-case scenario – one major faux-pas can bring your whole business to a screeching halt. It is well worth hiring an expert to guide you, and definitely to have on call if disaster strikes.

How Social Media Can Open SEO Opportunities

The best part of investing in social media first, and investing well, is that it can open SEO opportunities for later. For example, a well-written and interesting blog incorporated into your site can capture long-tail search (less competitive, but less searched for terms), offer fresh content to the search engines for real-time search, and inspire incoming links that boost your PageRank. All of this preps your site to be eligible for investing in SEO later down the line, further boosting your online positioning strategy. Not to mention, if your social media strategy worked, you’ll have the money to invest in expert SEO services.

One Caveat

Are there cases where SEO can work for small business? That really gets determined on a case-by-case basis. It could be that your small business offers something in a generally competitive online marketplace, but fills a certain niche for which long-tail keywords can get you enough traction for success. Most search marketing firms offer free assessments to help you determine your best online marketing opportunities given your site’s current positions, the state of your competition, and your budget.