With credit markets bare and consumer confidence at an all time low, it is imperative to use capital resources surgically to continue through the prevailing downturn -The focus here is to optimize your marketing budget.
SEO is the Vanquisher
Conversion is Good, But at what Price?
All marketing efforts increase exposure, and thus the opportunity to increase revenues, but a good manager uses pin-point accuracy in selecting which media are both effective and efficient. On several levels, SEO is the vanquisher.
SEO has the ability to be efficiently managed because it is a fixed cost. Before you start a campaign, you know exactly how much it will cost, and when those cost will come due. The benefit is that expenses are easier to manage, and thus easier to forecast.
PPC, in contrast, is a variable expense. SO why does this matter?
Do the Math
If x number of visitors arrive to your site through pay per click and y convert into a customer, then we compute the efficiency (or ROI) of that PPC investment by taking the total revenue dollars of those y sales less the total PPC cost associated with x number of visitors divided by the total revenues. OR:
Fig. A: ROI = {R-(x Visitors * PPC)}/R
In the case of SEO, no matter the number of visitors coming to your site, the costs remains fixed. So the ROI becomes total revenues minus the fixed costs divided by total revenues or:
Fig. B: ROI = {R-x}/R
Right away you see that the efficiency (ROI) in Fig. A is more volatile because more variables exist. To a manager, variability equals inconsistencies, which yields inefficiencies.
Moreover, if your industry has heavy competition for sponsored links and a high click-though-rate, but a lower conversion (a great example: “NYC Plastic Surgeons”), then your margins are being heavily eroded by an avoidable variable expense.
Therefore, conversion is great, but understanding the costs associated with those conversions is better. And while there are many different ways to allocate your online marketing budget, SEO offers managers a solution for driving traffic to a website in an efficient manner.
Nick graduated from Butler University with a Bachelor of Science Degree in Finance. Mr. Hoffman spearheads new business development endeavors for SEO Design Solutions. Prior to his tenure, Nick worked for Merrill Lynch and UBS Financial.
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Thanks for the good post…I do not hesitate to tell you that i came your blog only to get backlink, but you post caught me and I am here. I heard that people make too many blogs on wordpress and blogspot to promote their sites. Is this a good technique? should i make many blogs and put my site link there, even there is no traffic but i’ll get some backlink.
I would consider that tactic short sighted at best. The real way to benefit is through producing unique quality content and having others link to you rather than you having to seek sources to build links from comments.
It is essentially like bottom feeding since most of the blog comments are nofollowed anyway or will be deleted if you use “keyword rich” anchor text to spam blogs.
If you want links, do something link worthy, no puns here, but flip the script and create something worth linking to, then let it go viral.
Excellent article. I don’t think many will appreciate how important your words are. Although they don’t realize it, you are actually talking about the imminent death of PPC and the far more powerful and fair alternative that is looming on the horizon.
Ciao ;)
Precisely NEO:
We have been doing this for years. Why use PPC when you can get organic pages to rank by transferring trust rank within your own website to elevate “specific money pages” or coined as “the preferred landing page” to reach those in need in the SERPs, when they need it “when they execute a search”.
We know that PPC gets 1/4 of the engagement of organic results, you just have to do the math, invest in the time it takes to acquire the savings and “reap the rewards” of algorithmically aligned organic traffic.