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If I Spend X on SEO, What's My Y?

  |  November 10, 2010   |  Comments

Three tools for determining the opportunity of your website's vertical and what you might need to do to build up your site so it can gain organic search engine traffic.

Recently, I received an e-mail from a reader who was wondering…"At $2,500 per month budget, is there a rule of thumb for parameters on a dollar return for a retail product site? For example, should the $2,500 generate 10 times that amount on sales? Say, $23,000 to $27,000? Or, 15 times?"

Seems like a reasonable question. And, as with many things related to search engine optimization, the answer is simply not that easy.

Trust me when I say that every single search engine optimizer out there would love to be able to provide you with this kind of information. If we could be as precise as to the return that you might receive from search engine optimization as you might otherwise be with your paid search initiatives, based upon budget and expected return, SEO would have completely matured and – without a doubt – would be in everyone's marketing budgets.

Sadly, that day has not yet come. And, I suspect that it will never come. There are simply too many variables in play. It's really not a cop-out. And, this may be a reason why 29 percent of the largest companies (who participated in SEMPO's 2010 Survey) spent absolutely nothing on search engine optimization in 2009. See my previous column on SEO versus PPC for additional detail.

So, getting back to the reader's question…

The easy answer is "it depends." Every single search engine optimization project is unique. Why is that? Well, every single website is unique (hopefully), the competitive landscape is unique, things change at Google (see Google Local Results and recent change with what I suspect is a test for click-through-rates in Google's SERPs, and of course, Google Caffeine), and things like Bing powering Yahoo results cause shifts in traffic.

It's been a helluva year for our industry. Anyone ready for a drink? If so, see you at PubCon in Las Vegas!

Anyhow…

What is the real answer to our reader's question?

If you were just starting out (launching a new site in a pretty competitive retail space, for example) you might spend $10,000/month on SEO (lots of time to build up the necessary content/authority/links) and not realize a positive ROI at all, for a year. Then again, if they were an already established brand (I've referenced BrooksBrothers.com in a past column on the value of SEO), I could probably make a few tweaks and see a 20 percent gain in their already significant traffic, pretty quickly. ROI for them would be quick and large.

First, we need to identify the amount of opportunity that exists within the website's vertical. That is to say, for the content that they have on their website (or could potentially/reasonably have on their website) is there enough search volume taking place among searchers? Is there enough opportunity? A good way to judge this is my "Tool No. 1," below.

Tool No. 1 for Determining Opportunity – SEM Rush

SEMRush is a simple-to-use (and free to use; pay for additional information) tool for helping to determine opportunity that exists for an SEO effort. For this particular reader, SEMRush is estimating that his website is getting about $910 "worth of" organic/natural search engine traffic each month (that is to say, if he had to buy each click via AdWords instead of getting this traffic "naturally," he would have to probably spend $910 to get it, each month). If you've not used SEMRush before, I can't recommend it enough. Keep in mind, tools like SEMRush do not have direct access to the analytics of a particular website, so this information can be "off" (and sometimes substantially). But, more often than not, it does provide a good indication as to the approximate value.

SEMRush can help you realize what 1,000 visitors from "xyz" keyword might be worth, if you had to pay for the traffic on a cost-per-click basis. That's certainly one way to measure ROI (value of traffic).

Now, if you run an SEMRush report for BrooksBrothers.com, you'd see that it's currently getting an estimated $622,000 worth of "natural" search traffic to its site, each month. But, notice that the keywords listed in this report are mostly "branded" (people searching "brooks brothers"). The opportunity here is that it already has a lot of people linking to its site. It just needs to fix its site, structurally (code and content), and this thing could take off. A 10 percent gain off of $622,000 worth of traffic that it already has could be valued at $62,200 per month (off of a possible $10,000 per month investment into a search engine optimization effort). (Note: Someone at BrooksBrothers.com, call me. I'd love to do business with you.)

But, how do you determine if you can compete? What does it take to have the necessary authority?

Tool No. 2 for Determining Opportunity – Yahoo Site Explorer

As I mentioned in my Content is King! Links Rule! column earlier this month, if I am ever asked to oversimplify what it takes to be successful with search engine optimization, I say content and links.

So, a quick check that I'll do is run a "site:www.sitename.com" query on Yahoo.com (just type this in, as I have, obviously replacing "sitename" with whichever website you would like to review). What we want to do here is identify some of the "top ranking" websites for the keywords which we believe to be the most competitive, and start a spreadsheet to keep track of how many pages each competitor has indexed in Yahoo Site Explorer (and you might also include their backlink data, but be sure to select from the drop down "except from this domain"). If it seems that every website that is doing well has 1,000 to 4,000 pages of content indexed, and you have 50 pages of content indexed, there's a good chance that content generation is going to be pretty critical to you achieving similar results.

But, content is just one piece of it.

Tool No. 3 for Determining Opportunity – OpenSiteExplorer.com

Open Site Explorer is a great tool from my friend, Rand Fishkin at SEOmoz. You can also subscribe to the Pro Tools (which I do) to gain additional insight.

In terms of "things that matter" for search engine optimization success, domain authority would be right up there at the top. So, what is "domain authority"?

As defined on the Open Site Explorer website:

Predicts this domain's ranking potential in the search engines based on an algorithmic combination of all link metrics. Domain Authority scores are on a 100-point, logarithmic scale.

If you look at the Brooks Brother's website report below, you'll see that they have quite a few links and quite a bit of authority.

brooksbrothers

So, if you are a smaller competitor, wanting to rank for "men's clothing" and possibly compete with BrooksBrothers.com, you need to get a sense as to where your link popularity measures up to determine what the real (not perceived) opportunity may be.

mens-clothing-smaller-competitor

Summary

It's a bit of a back and forth to work towards understanding what the real opportunity might be for your search engine optimization efforts. Sometimes, a relatively small investment in SEO can equate to solid gains/ROI in very short order. For others, the investment in search engine optimization is going to need to be just that – an investment – until you've built up the necessary authority, via content and links, to compete.

At least with the tips that I've provided today, you can start to make a determination as to whether or not the opportunity is there for you, or what you might need to do to build up a website that has an opportunity to gain organic search engine traffic.

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ABOUT THE AUTHOR

Mark Jackson

Mark Jackson is the president and CEO of Vizion Interactive, Inc., a leading SEO company headquartered in Dallas, TX, with offices in Overland Park, KS and Clearwater Beach, FL. Mark joined the interactive marketing fray in early 2000 in business development with Lycos/Wired Digital and then AOL Time Warner. After having witnessed the bubble burst and its lingering effects on stability on the job front, Mark established an interactive marketing agency and has cultivated it into one of the most respected search engine optimization firms in the United States.

Vizion Interactive was founded on the premise that honesty, integrity, and transparency forge the pillars that strong partnerships should be based upon. Vizion Interactive is a full-service interactive marketing agency, specializing in search engine optimization, search engine marketing/PPC management, social media marketing, SEO friendly Web design/development, analytics installations/analysis, and other leading edge interactive marketing services, including being one of the first 50 beta testers of Google TV.

Mark is a member of the Dallas/Fort Worth Search Engine Marketing Association (DFWSEM), the Dallas/Fort Worth Interactive Marketing Association (DFWIMA) and is a regular speaker at the Search Engine Strategies and Pubcon conferences.

Mark received a B.A. in journalism/advertising from the University of Texas at Arlington in 1993 and spent several years in traditional marketing (radio, television, and print) prior to venturing into all things "Web."

Follow Mark on Vizion Interactive at @vizionweb. For more information, visit Vizion's SEO Blog.

His columns can be found in the Search Engine Watch archive.

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