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How Cost-Effective is SEO?

Posted on March 27, 2007 by Adie SEO 19 Comments

So a few days (weeks?) ago I asked Is SEO Easy? You guys responded by saying basically yes it’s mostly easy. I’m not willing to get back into the “how easy is SEO?” debate, especially since it’s been beaten to death. What I would like to offer, however, is my opinion on how cost-effective SEO is versus buying traffic through PPC, text-links, etc. So basically instead of asking “how hard is SEO?” I’m asking “how expensive is SEO?”

Money buys everything. Hearing so many people talk about how difficult SEO is confuses me sometimes. From my experience in SEO it’s not so much how hard it is as how expensive it is. If you have the money you can easily buy your way into a high ranking. Think I’m exaggerating? A good friend of mine just got page 1 on Google (and top 5 Yahoo & MSN) for a one word search term with an estimated 155,000+ searches per month and over 305,000,000 search results in Google. Are there more popular terms? Yes, but trust me when I say if you can rank top 5-10 for a term with 155,000+ searches a month you’ll definitely see the benefits. This is a term that will never become unpopular and is extremely saturated with competition. Guess how much this guy knew about SEO before tackling this extremely “hard” to rank term? Little to nothing. A month of work got him top rankings for the term. He asked me not to give out his website or targeted term to protect all of the effort he put in. But you can trust me, I’m being 100% honest when I say this guy knew hardly anything about SEO and now ranks top 10 for a 1 word, high volume term.

How did he do it? He spent money. The last time I talked to him he had spent about $2,000 to rank in this term. Now that money also netted him thousands of initial uniques but the long-term goal of that investment was to rank in this term. He bought text links, directory submissions, and paid reviews. That’s it. No tricks. No magical SEO solutions. No black hat. Paid links.

Okay so SEO isn’t rocket science, but now the question of is it cost-effective?

The biggest response I get from my friends in PPC (arbi mostly) is that why should one spend countless hours and dollars optimizing for search engines with no guarantee on reward? When you purchase traffic you can spend very little to determine which traffic converts best, which traffic is too expensive, etc. With SEO you pretty much just have to find a well-searched term and work and work until you get into the rankings - then just wait and see how it works out.

Although these are realistic reservations, I think they can be easily set aside. Going back to my example above lets assume that for $2,000 (a 1 time investment) my friend gets at least 1% of the total search traffic - granted with this term he is likely to get much more than that. But just to be conservative, we’ll say 1%. That’s roughly 1,550 uniques per month for this single term in search engines alone. So for the first month after this investment he will be paying roughly $1.30 per visitor. That’s outrageous! Especially when you can get targeted PPC traffic for $.50 (you can pay less, but it gets more and more untargeted the lower you go). And if you want to target this specific keyword, good luck getting the top Adwords results for anything less than $3.00 CPC.

So how is $1.30 per visitor for the first month of SEO justified? Because that’s just for one month. That investment of $2,000 can easily retain the top position for this term (which is popular but not so popular that the top rankings shift around daily) for at least a couple of months and more likely up to a year. That’s with no more investment. So if you assume that he is able to retain the top 10 position and receive 1% of search traffic for the next 6 months, he will end up paying about $.20 per visitor. That’s more like it eh? Continuing with this he will probably be able to retain that position indefinitely by investing a small amount more every month just to keep his relative incoming links fresh.

The cost of PPC traffic never goes down. If you are paying $.50 for barely targeted traffic (which typically converts worse than SE traffic) then chances are you will always pay $.50. It’s even fairly safe to say that you will eventually be paying more as PPC becomes the weapon of choice over SEO due to how easy it is to do. I’m not saying that SEO is hard, but that is what popular opinion is becoming.

I know none of these numbers are extremely accurate, and quite honestly I’m sure there is some error in them. But I think they prove fairly conclusively that SEO is very cost-effective. The targeted traffic you get from proper SEO is uncomparable to anything else, and the recurring benefits for fairly small investments are amazing. Sure you can get the same amount of traffic from PPC while probably spending less, but you will never get the same quality of traffic from PPC as you can from SEO without paying a lot more.

Is SEO easy? That’s subjective. Is SEO cost-effective? You bet your ass it is.

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    19 Comments »

    Comment by Jochen Van de Velde
    2007-03-27 12:30:42

    Hehe, I’ve been waiting for a post from you all day and you made me realise that even if you spend $1,000,000 on SEO it is worth it.

    Comment by Matt Coddington
    2007-03-27 12:36:26

    I hope for $1,000,000 you’re targeting one hell of a term ;)

     
    2007-05-02 05:29:00

    Damn Right, if you’re first for keywords like: mortgage, myspace layouts, dating,.. your million will mulitply with 50x in first month

     
     
    Comment by Jack
    2007-03-27 12:57:07

    Haha, Great article Matt. I think it’s Digg worthy if you think your server can handle it.

    And BTW for that million you better be targeting a keyword like porn or something special.

    Comment by ilker
    2007-03-31 20:34:54

    There is amazing SEO stuff on your blog Matt! I’m learning a lot ;)

    (sorry im a n00b cuz i never looked into SEO before)

     
     
    Comment by Jason
    2007-03-27 13:21:59

    He bought text links, directory submissions, and paid reviews. That’s it. No tricks. No magical SEO solutions. No black hat. Paid links.”

    Sorry I’m pretty new to the topic. Can you please provide some links to companies that provide those services (text links, directory submissions, and paid reviews)?

    Great article by the way. I have always believed PPC would give you the best RIO for SEO (nice acronym usage). I might have to re-think that based on this example. Or at least try to have success with the same method.

     
    Comment by Steve James
    2007-03-27 15:01:26

    Good article Matt. You’ve touched on a major part of SEO, which is link building. More specifically buying links and reviews. I think of this as kind of a PPC hybrid. You are paying for the link, and can track how many referrals, or clicks, come from that link. It’s definitely the side of SEO that produces the quickest returns.

     
    Comment by Simon Gould
    2007-03-27 17:16:22

    Nicely written, i’d digg it.

    Comment by ilker
    2007-03-31 20:35:45

    Dugg (if it helps.. guess Im too late)

     
     
    Comment by Gary Lee
    2007-03-27 18:00:03

    this was an ongoing debate over at JC’s blog, but I think you pretty much brough it home for the SEO side! Great Post and Keep up the great work!

    Comment by ilker
    2007-03-31 20:37:46

    Yeah thanks for taking it from the SEO point of view!

     
     
    Comment by make money online
    2007-03-27 20:35:35

    I find it easy for fresh new niches but hard if its well know and if your competing with the big guys. But I still believe I could rank well in serp without paying buying links.. :)

     
    Comment by Tony
    2007-03-28 01:07:30

    For my company it was extremely cost effective but a long period of learning. I paid nothing to learn and haven’t paid for links, though in the beginning I paid $300 to google thinking that would get my site indexed faster. I now know 1000% more than I did and we have had to expand our company several times to keep up with all the incoming work. We are in the middle of another expansion and I still have more ideas on getting our site even higher for high searched for keywords. For our sites specific keywords we are on page one over all three of the main se’s. We don’t sell small value items our average order is around $6000 so it has been a rather long but profitable ride. We are now at the stage where we are thinking about expanding into other countries. The total cost to the company would be less than about 1000.00 We now do 85% of all new business through our website.

     
    Comment by Mark
    2007-03-29 05:55:39

    Great post Matt.
    Er.. any chance of teeny weeny clue as to the area or subject of your friends keyword? Nothing specific to upset your friend but just really curious!

     
    2007-03-29 15:42:01

    [...] to Alexa and has about 1200 RSS subscribers. Just take a look at his recent write up about cost-effectiveness of SEO. While I am a daily reader of his blog I have rarely (if ever) commented on his blog- reason: [...]

     
    2007-03-31 09:10:13

    [...] How Cost-Effective is SEO? Matt over at Net Business Blog has written a very detailed article on the costs of SEO, and the conclusion is not surprisingly that SEO is far cheaper than for instance PayPerClick-advertising. Are anyone really surprised? [...]

     
    Comment by ilker
    2007-03-31 20:39:47

    Bookmarked this post (and your SEO category!)

    I’ll be back ;)

     
     
    Comment by Franck Silvestre
    2007-04-02 14:43:23

    I don’t read Calcanis blog, but your post is really good. I think that your should opt for an hybrid VEO/SEO.

    It’s your best choice. A good combination and you get your traffic for months or years to come.

     
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