The Value of (SEO) Search Engine Optimization
To start off we must remember the first Law of Marketing:
You should be able to spend $1 and make $2 predictably. Then scale.
This ultimate truism of marketing is oddly one that so many seldom have if ever experienced from their own marketing: that marketing is not actually an expense. Marketing should be a predictable way to find business, where you pay $X, and you make $Y such that Y is more than X, and ideally substantially greater. Spend a buck to make a buck and a quarter, and you can scale that (heck, that’s a 25% Return on investment right there!) – Spend $100, make $125. Spend $1000, make $1250. Then you tweak and test and improve that ROI so that $1 in ad spend equals $2 in ROI. Then $4. Then $8. Etc.
Nobody wants to spend thousands on “a hope and a dream”, and that’s the ultimate hurdle in sales. But EVERYONE would spend $1000 to make back $2000. And most people, having made $2000, would then spend that $2000 right back and make $4000, etc.
The point being, marketing generally should behave as a predictable multiplier of investment.
Now, if you were an attorney and you were to go to Google and place a bid so that your ad would show up in front of people who were actively looking for you, you could expect to pay around $70 to $140 per click. Bear in mind it may take 10 to 50 clicks to get a lead (i.e., someone raising their hand and saying that they’re interested in your services), and it may take 10 to 20 leads to get a client. So that $70 x 25 clicks on average x 15 leads on average, or just a bit above $26,000 per client. (and before you wonder too much, the prices DO go up beyond $300 per click!)
Why, oh why, would an attorney be willing to pay $26k+ for a new client? Because personal injury attorneys make BANK. Many PI lawsuits can win mid-six figures easily, and the attorneys take a fair cut of that (often in exchange for “no up-front fees” and “we only get paid when you get paid” which often means it’s a hefty split – a split that may have cost way less if you just paid their regular fees (when that’s even possible).
And because one lawsuit can be worth that much, the invisible hand drives up the cost of clicks to a point where it makes financial sense to pay because of the law of averages, which says you’ll make it back and then some (provided that you’re not a terrible attorney, and you know how to cherry-pick a winner).
Now let’s just look at one of those terms: Pittsburgh Personal Injury Lawyers (and it’s corollary, Personal Injury Attorney Pittsburgh)
There are around 2000 monthly searches for the two variants, each worth about $73/click on average, or around $146,000 in advertising value per month (were each of those searches to click on an ad, which admittedly they don’t – in fact it’s usually fewer than 10%)
Now, being at the top of page 1 for a search like that could get you as many as 40% of all of the clicks for that search term. Nearly 90% of the searchers will stay on page 1, and about 35% will stay above the fold (i.e., they won’t even scroll down to see more results on page 1!)
A hot dog vendor in a small town like Kittanning, PA will never sell as many hot dogs as he would in Times Square.
So what would it be worth to be in spot 1? From a PURELY ad-cost basis, 40% of 2,000 is 800 clicks, at $73/click = $58,400/month in “free” advertising clicks by being in the organic, un-payed, section of the search engine results.
Now, if you were an attorney, what would that be worth to you? At least $58k per month! And so what do you think an attorney is willing to invest to get there in his city? -and stay there. And how much do you think another attorney would be willing to invest to beat him?
That’s the heart of the matter – that space is VALUABLE!
Is it worth less for other niches, like dentists and plumbers? Sure. But it’s still worth thousands of dollars in advertising, which is worth 2x or more that in ROI.
And it’s worth a lot because it’s an investment that, once completed, continues to pay for months or years (as opposed to pay-per-click marketing where stopping the paying is like shutting off the firehose instantly). SEO is more akin to real estate – I can move your hot dog cart, plumbing business, or dental practice to your location’s online-version of Times Square – which is valuable because of the traffic that is generated in that spot.
So how much should SEO cost?
First, let’s talk about the minimum wage.
The Federal minimum wage is sitting at $7.25/hour (though higher in some states). The average fry cook at McDonalds, who works part-time (20 hours/week), makes (before taxes) about $580 per month.
Now, I have had numerous business owners tell me that they thought that SEO wouldn’t be very expensive, maybe around $500/month. And every time I walk them through the above calculations.Why is SEO expensive?
And then I ask them: Do you think it’s fair (let alone possible) that I deliver business-changing value that can mean $10,000 to $100,000 or more every month in their pocket for less than a part-time fry cook at McDonalds makes?
Can I pay you $7/hr to generate a quarter of a million dollars?
That’s paying someone .05 to .005% of the value that they bring you.
Then I ask what they think it would cost to get on page one when others are spending $5k-$10k/month to get there themselves – what is the cost to compete? Do you really think $500 could compete? What kind of service do you think you would get for that kind of price?
Why would someone who can generate $100k online through their skill even want to work for $500? (Answer: they wouldn’t)
And then I ask this: Do you think that, if someone could deliver 6 to seven figures of value to their clients, that they’d ever even need to consider taking a job for $500/month?
(And bear in mind, tone of voice is hard to convey in written text, and I’m not trying to sound condescending, but why would you think that someone who can command the sway of millions of dollars in revenue for scores of clients would even have time to put in such an unfair amount of value, effort, and work would need to scrounge for customers that pay 0.01% of the value that they are given?)
And then they get it, and they usually hire me.
The Moral of the Story:
SEO isn’t cheap; anyone who tells you that it is cheap — and proceeds to tell you that they can make you $100s of thousands of dollars in additional income per year for under $500 a month — is probably trying to sell you something (and that something isn’t SEO).