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How To Justify A Search Engine Optimization Budget
In this article I show you how to justify a budget to your VP of Marketing, CFO, President, or CEO.
If you're a marketing manager, I'm sure you use all the weapons at your disposal to achieve your sales and profit targets.
Every banner advertising, direct email advertising, lead generation, magazine advertising campaign requires a proposal to justify the investment.
But what about search engine optimization? How do you justify the investment to your VP of Marketing, CFO, President, or CEO. And how do you quantify the value of search engine traffic?
Well, first take a look at these statistics.
Jul 05 2000: Forrester Research reported that over 80 percent of Internet users reach sites through search engines.
This means if your Web site doesn't attract 80 percent of your visitors from search engines, you're losing out on a lot of search engine traffic.
Feb 14 2001: A study from NPD Group found that search listings are more effective than standard banner or button advertisements when it comes to brand recall, favorable opinion rating and inspiring purchases.
In unaided recall, search listings outperformed banners and buttons by three to one, and more than twice as many people gave a more favorable opinion of companies in the top three search positions than those featured in ads.
The study also found that 55 percent of online purchases were made on sites found through search listings, while a mere 9 percent were on sites found through banner ads.
Again, if your sales from search engine traffic accounts for less than 55 percent of your total sales, you are missing out on a lot of potential customers.
So how do you justify the investment of either outsourcing your campaigns or employing a specialist to do it in-house?
Well, let me speak from my own experience.
I managed the for my old company's Web site, www.iBoost.com. I spent a month optimizing over a thousand web pages.
The result was that in total I obtained over 2,000 top 30 rankings in the major search engines and web directories.
This helped grow the site traffic by 33%, which translated to an extra 400,000 visitors and 8 million page views a month.
Based on those figures, one top 30 position generated on average 200 visitors a month, or 2,400 visitors over the course of a year.
The initial optimization campaign was actually carried out back in October of 2000. But the web pages still command somewhere in the region of 1,800 to 2,000 top 30 positions.
So your rankings never really disappear from the index, once you have established your positions. They may move up or down the index, but they don't usually drop off the top rankings completely, for no apparent reason.
Before the online ad market softened, my old company could command up to $25 per thousand banner impressions. So, the extra 8 million monthly page views could have generated as much as $200,000 in revenue, per month.
Since my company didn't sell any products or services on the web site, I can only imagine how much revenue could have be generated by the extra 400,000 monthly visitors.
How To Calculate What Your Visitors Are Worth
Some firms charge on a pay-for-performance basis. For example, one company used to charge $85 for a top 10 ranking. You may have come across this company.
A top 10 ranking would almost definitely produce more
Updated :
It's common knowledge in the U.S. search industry that Google has a market share of about 65 percent. Lots of people know (or at least know how to check) the search giant's market cap, too (it's currently at $180 billion). But another measure of Google's size was presented yesterday, and it turns out that Google is on par with all but the biggest ISPs.
Craig Labovitz, Chief Scientist of Arbor Networks, stated on his company's blog, "If Google were an ISP, it would be the fastest growing and third largest global carrier. Only two other providers (both of whom carry significant volumes of Google transit) contribute more inter-domain traffic. But unlike most global carriers (i.e. the 'tier1s'), Google's backbone does not deliver traffic on behalf of millions of subscribers nor thousands of regional networks and large enterprises. Google's infrastructure supports, well, only Google."
Those are some fairly astonishing observations. Then here's another fascinating tidbit: Labovitz continued, "Based on anonymous data from 110 ISPs around the world, we estimate Google contributes somewhere between 6-10% of all Internet traffic globally as of the of summer of 2009." It's hard not to see Google's fiber network experiments in a different light after absorbing this information. The company might not just thrill the residents of a few towns and make ISPs nervous; Google really does appear capable of changing how the industry works, and may even be able to do so without breaking a figurative sweat.
We'll be sure to keep an eye on ISPs' reactions as Google moves ahead with its tests.
Publ.Date : Wed, 17 Mar 2010 09:47:56 -0400
Facebook's search suggestions are about to get significantly better. Rather than just suggest the names of people, events, groups, and Pages a person's already connected with, suggestions are going to draw from users' networks of friends and the entire site.
It is, of course, nice not to have to type out your closest pal's 17-letter last name multiple times a day. But this change overcomes a significant flaw in Facebook's existing approach to making suggestions, considering that it's the things people aren't familiar with they probably need the most help spelling and/or tracking down.
As for how the upgraded system will work, Wayne Kao, a Facebook engineer, explained on the company blog, "[I]f you start typing in 'MGM' to find the Facebook Page for the band MGMT, you may see it as the first result in the drop-down menu because you or one of your friends is a fan of MGMT on Facebook." Or, "If you are searching for something else, like the MGM Grand Las Vegas hotel or the movie studio MGM, you can select one of those instead from the drop-down menu."
Look for this change to roll out over the course of the week. Then enjoy spending less time typing all sorts of stuff, and not just your best friend's name.
Publ.Date : Tue, 16 Mar 2010 17:25:03 -0400
Investors and online advertising experts may want to consider for a moment what, exactly, has contributed to Google's stupendous financial success (current market cap: $180 billion). Now consider this: Google thinks mobile ad rates might surpass what's come to be deemed the industry standard.
According to Reuters, Vic Gundotra, a vice president of engineering at Google, announced during a webcast, "We hope and believe that there's even a chance that we could exceed desktop in the future."
Of course, this isn't the first time someone representing the search giant has spoken highly of the mobile market; CEO Eric Schmidt and CFO Patrick Pichette, among others, have emphasized its importance before. Earlier this month, a VP of advertising even claimed that desktops will be irrelevant in three years' time.
Still, Gundotra's comment may signify just how much Google is betting on the success of Android and mobile advertising, and how seriously it will take threats posed by Apple, Microsoft, and other companies.
Here's one last interesting tidbit: with regards to China, Pichette said during the same webcast that the country's "another great market in which Android should flourish."
Publ.Date : Tue, 16 Mar 2010 14:59:27 -0400
There's good and bad news for Google this morning with respect to Android and the mobile market. In terms of how many units were sold during their first 74 days of availability, it seems the Droid beat the iPhone to the million-unit mark, but the Nexus One is lagging far behind.
That's the state of things according to Flurry, which claims that applications using its analytics tools have been embedded in more than 80 percent of iPhones and Android devices. And anyone who's suspicious of the firm's stats should know that Goldman Sachs has used them as the basis for some forecasts, too.
So on to the comparison. You can see the results below. FYI: Flurry picked a 74-day period because that's how long Apple said it took for one million iPhones to sell. Flurry noted that the Droid enjoyed several advantages here. First, the iPhone had already taught consumers about the benefits of smartphones. Verizon also boasted more subscribers than AT&T, and the Droid launched towards the start of the holiday shopping season.
Android can definitely compete with the iPhone, then. The Nexus One's lack of success just makes it hard to judge what sort of circumstances are needed to even the odds.
Publ.Date : Tue, 16 Mar 2010 09:43:49 -0400
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click throughs than a top 30 ranking. If we use the figure of 200 monthly visitors for a top 10 ranking at a cost of $85, the cost of each visitor would be 42 cents.
Not bad. But don't forget that once you achieve a top position, little effort is required to maintain that position. So, in reality, it could generate as many as 2,400 visitors in a year. At $85 for a top ranking, this equates to just 3.5 cents for each visitor coming from a top 10 listing.
Analyze your log files. How many visitors do your top 30 search engine positions bring in each month? Now multiply the average of number of monthly visitors these search terms bring in by 12. This is your average return-on-investment of each top position for a whole year.
So for example, let's say you get 20 top 30 positions, and they bring in an average of 200 visitors a month.
Top 30 Positions 20
X
Visitors 200
X
Months 12
---
Total Visitors 48,000
Now if you set a budget to acquire 20 extra top 30 positions, you would increase your search engine traffic by 48,000 visitors.
If we take the rate of $85 for each top 10 position that Coastal Site charges, 20 top positions would set you back $1,700.
$1,700 / 48,000 visitors = 3.5 cents per visitor
How much does it cost you to acquire a visitor at present? Probably somewhere in the 25-50 cent range.
Top positions in pay-per-click search engines, such as Overture, cost as much as $5 to $6 a visitor. According to Overture, the average price its advertisers paid for a visitor was 30 cents, during the second quarter of 2002.
Based on our calculations above, the cost of acquiring a search engine visitor is as low as 12% of what it costs to acquire a visitor at Overture.
As you can see, clearly produces an excellent return-on-investment.
Don't forget that search engine positioning is effective, because the traffic is very targeted. Prospects who find your site through search engines are actively looking for information on products and services just like yours.
Search Engine Optimization Is A Science
Just like other forms of marketing and advertising, requires persistence and a lot of testing.
The optimization process is complex and time-consuming. You're trying to align your Web pages with the ranking algorithms of the search engines, while at the same time trying to out-smart your competitor's optimizers.
But the fact remains, is cost effective, and should not be ignored.
Now go convince your VP of Marketing, CFO, President, and CEO of this fact! ;o)
About The Author: Michael Wong is a respected internet marketing expert , and the author of a leading book , numerous marketing articles , and reviews of marketing software and ecommerce software .
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