SEO Tips
As the ecomomy seems to worsen, more and more people are turning to SEO for their marketing efforts. SEO has proven time and time again to provide the highest ROI compared to any other form of marketing because of the global exposure that can be gained when a site is found in the search engines. But search engine optimization isn’t always inexpensive. In fact, many SEO companies are charging tens of thousands of dollars every month to help position their clients’ sites at the top of the SERPs. So how can something so expensive provide the best ROI? Simply because the return is proportionate to the amount spent. Sure you might spend a small fortune, but if your business model is designed correctly and your margins are sufficient, you should profit from the exposure. So how do you avoid spending too much?
Let’s take a look at a basic example to figure out how much is too much for SEO.
Let’s say you sell something that’s a pretty popular item, like iPods. There were 24,900,000 searches last month for that phrase. I suppose if you captured just a small portion of those people you’d be happy, right. So let’s assume that you spent $100,000 on SEO to get your site ranked at the top of Google when someone searches for ipods. If you could get half of the people searching to click on your listing that would mean that you’d get about 12 million visitors/month to your site. Not everyone is going to buy an iPod from your site so let’s shoot really low and assume that only 1 out of every 500 people buy from you. That’s 24,000 sales. Even if you only make $10 on each iPod, that’s $240,000 profit/month or $2.8 million/year. Don’t you think that the $100,000 spent on SEO would have been a good investment?
Let’s look at another example and see if the formula always works out.
In this case, you’re selling a map of the Denver metro area. Sure tourists might like it but only 1000 people per month are searching for maps of Denver and frankly, most of those people are getting their maps for free from the Internet. So if you were to spend a chunk of change to get your site listed at the top of Google when tourists are searching for “Denver maps” would you be able to make money. If you could get even 500 of those 1000 people to visit your site and even if 1 out of every 5 bought a map, you’d only sell 100 maps/month. Let’s say they sell for $12 each. That’s $1200 per month or $14400 per year. When you consider your costs for printing the maps you may only make $3000. Looks like you can’t spend much on marketing in order to sell your maps. When you have a small niche like maps in Denver, in order to profit, you also have to have an extremely high sales conversion rate. No amount of SEO can make more people search for your product so you’re stuck. You have a fixed number of people searching for your product. You have little control over that. Unless you have limitless marketing budgets, creating demand for a product is difficult at best. We always say that you can’t make a market. But you can serve an already existing market. Keep that in mind when you’re looking for opportunities. First find a market that’s underserved, and then find a way to fix their problem.
