How Cost-Effective is SEO?

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.