What's Wrong With This Picture?

Don't quote me, but here's some inside information on deep background.

The Search Engine Marketing Professional Organization (SEMPO)recently published a research paper, "The State of Search EngineMarketing 2004." (To download a summary copy of the research, go to Sempo.org Sesearch - Sem-Trends-2004.) According to the research, $4.087 billion was spent last year on search marketing programs in the U.S. and Canada.

Sempo

The picture it paints of the search engine marketing industryresembles one of those old penny farthing bicycles, which had a largefront wheel and small rear wheel.

The big wheel in search engine marketing is paid placement.According to the SEMPO research, 81.8% of the amount spent on searchmarketing in 2004, $3.342 billion, was for paid placement campaigns -pay-per-click (PPC) and cost-per-click (CPC) advertising programs suchas Google AdWords and Overture Precision Match.

The little wheel in search engine marketing is organic searchengine optimization. According to the SEMPO research, only 12.0% of theamount spent on search marketing last year, $492 million, was spent onorganic search engine optimization. (Another 4.4%, $182 million, wasspent on paid inclusion, such as Overture Site Match.)

What's wrong with this picture?

Earlier Search engine marketing researchconducted by iProspect, Enquiro, and others, has found that 60.5% to70.0% of search engine users find organic results to be more relevantwhen conducting queries. Only 30% to 39.5% of search engine users findpaid results to be more relevant.

So, why are companies spending 6.8 times more money on paidplacement, when organic search engine optimization can generate 1.5 to2.3 times more clicks for the same search terms? Is the cost-benefitratio of paid placement really 9.8 to 15.6 times greater than organicsearch engine optimization?

In my humble opinion, there are three fundamental reasons whyspending on search engine marketing in North America seems soimbalanced.

First, all of the major search engines make it significantlyeasier to launch paid placement campaigns and significantly harder tostart organic search engine optimization programs.

For example, Google AdWords says you can "start gaining newcustomers in less than 15 minutes." (And, when you're done, you can"help transfer funds from deposed dictators" in less than 15 minutes,too.) Overture merely claims, "Using Overture is easy." And, for just$199, Overture will put your new campaign on the "Fast Track" -providing "expert assistance" with search term selection, titles anddescriptions, budget management, and tracking URLs. Google now has asimilar program called "Jumpstart" that costs $299. (I'm shocked,shocked to find that search engines are competing with search enginemarketing agencies!)

On the other hand, if you are starting an organic searchengine optimization program, Google's Webmaster Guidelines "outlinesome of the illicit practices that may lead to a site being removedentirely from the Google index." (Although, they have yet to add thelatest guideline: "Do no evil.")

Yahoo also provides guidelines on search engine spam: "Somepages are created deliberately to trick the search engine into offeringinappropriate, redundant or poor-quality search results; this is oftencalled 'spam.' Yahoo! does not want these pages in the index." (Do youthink the major search engines are creating more fear, uncertainty anddoubt about search engine spam than they are for - say - click fraud?)

Danny Sullivan, the editor of SearchEngineWatch.com, thinksthe major search engines could do a lot more to level the playing fieldfor organic search engine optimization and paid placement withoutviolating the church/state divide. While I agree with him, I don'texpect Google or Yahoo will do anything that isn't in their"enlightened" self interest. If you were the New York Yankees, wouldyou trade Randy Johnson to the Red Sox just to level the playing field?(Not that there's anything wrong with that picture!)

Second, even search engine marketing agencies find itsignificantly easier to expand successful paid placement campaigns tothousands of keywords, but find it significantly harder to expandsuccessful organic search engine optimization programs to even hundredsof keywords.

Using Google's Broad Match and Overture's Advanced matchoptions, you don't even need to create additional listings to broadenyour paid placement campaigns to additional keywords. But, how do youwrite "pages that clearly and accurately describe your content" (Googleguidelines) or create "original and unique content of genuine value"(Yahoo guidelines) that include more than a couple of "the words userswould type to find your pages" (Google guidelines) without creating"pages in great quantity, automatically generated or of little value"(Yahoo guidelines)?

While most copywriters will say it's not easy to write a goodheadline within the constraints of Google AdWords 25-character orOverture's 40-character limit, I've found that it's just as hard towrite a good five to 10-word title tag within the constraints ofGoogle's 83-character or Yahoo's 111-character limit.

GoogleAD

And writing effective copy within the AdWords constraints (twolines of 35 characters each) or Overture constraints (one line of 190characters) involves the same "wordsmithing" abilities as writing aneffective meta description tag or lead paragraph.

After that, the AdWords and Overture copywriter is done. But,the copywriter for a new page of web content has just started. (I'vewritten both kinds of copy, so this isn't a knock on anyone'sprofession.)

Wait, there's more! When you've finished creating relevantcontent, then you have to start building links. But, according to Yahooguidelines, you have to build "hyperlinks intended to help people findinteresting, related content" without "excessively cross-linking sitesto inflate a site's apparent popularity." And, according to Googleguidelines, "every page should be reachable from at least one statictext link," but you shouldn't use "free-for-all" links or "participatein link schemes designed to increase your site's ranking or PageRank."(Get the picture?)

That's why organic search engine optimization is significantlyharder! If you've already optimized most of the existing pages on yourweb site, the only ways you can build on your initial success is towrite new pages, create more content, and build good links.

This is one of the reasons why I continue to encourage friends,clients, and partners to start optimizing the new content that is beingcreated every week without ever thinking about organic search engineoptimization. This includes press releases and newsletter articlestoday as well as corporate blogs and RSS feeds in the near future. Ifyour corporate communications people are already creating hundreds ofpages of new content each year, why not make an incremental investmentin optimizing and repurposing it for the major search engines - andnews search engines?

Nevertheless, I continue to look for new tips, tools, ortechniques that would help us create more, new, original, unique,relevant, optimized pages of valuable content quickly. If we're evergoing to shift the ratio of spending on search marketing programs toreflect the ratio of searches by users, we'll need to findsignificantly easier ways to expand organic search engine optimizationprograms to hundreds of keywords.

To pick up on my earlier analogy, the penny farthing bicyclewas invented in 1871. It was popular until 1892, when a safer style ofbicycle with two wheels of the same size was introduced. (And there'snothing wrong with that picture.)

Third, companies find it significantly easier to pay per clickfor paid placement and paid inclusion and significantly harder to payin advance for organic search engine optimization.

Who can blame them? Would you prefer to pay for results eachmonth as they are delivered, or would you rather pay in advance for aservice that can't guarantee a top ranking on Google or Yahoo? If fact,organic search engine optimization can't even guarantee a consistentranking from month to month.

So, who do we blame? As Shakespeare's Caesar observed, "The fault lies not in the stars, dear Brutus, but in ourselves."

Too many search engine marketing agencies (including my own)started off asking clients to pay for organic search engineoptimization based on our time and hourly consulting rate. Why not?Consultants and public relations professionals have been using thatbilling system for 100 years.

But Bill Gross, the founder of Idealab, revolutionized the waycompanies paid for advertising campaigns when he launched GoTo.com(later renamed Overture) and unveiled his PPC model (later renamedPay-for-Performance) in 1998. Google followed suit in early 2002, whenit changed its AdWords program from a CPM to a CPC model.

Today, hundreds of thousands of companies are hooked on theidea of paying for clicks (outputs) or conversions (outcomes). So, isit any wonder that they've become more and more reluctant to payprofessionals for punching clocks (inputs)?

So, professionals who specialize in organic search engineoptimization can pedal extra hard up the hill - trying to convincecompanies to continue paying for their inputs. Or, they can coast downthe hill - asking companies to pay for outputs and outcomes.

Now, even my business partner in San Francisco is reluctant toswitch gears on the way we charge for our organic search engineoptimization services. He's hoping that I'll forget this crazy conceptas fast as I've forgotten most of my previous New Year's resolutions.But, I'm at least open to testing the idea.

How might we do this? Maybe we could borrow a page from paidinclusion programs, like Overture Site Match. We might charge "anon-refundable annual review fee" for setting up an account and "forquality review of your pages." The first URL might cost more, the next2-10 URLs a little less, and the 11th URL and beyond a lot less. Thenwe might charge "a cost-per-click fee" for each lead driven to a site.We might have two tiers for different categories of web sites.

As for reporting results, we might use WebTrends, UrchinSoftware, ClickTracks, or NetTracker to measure organic search enginetraffic, sales conversions and return-on-investment. (If we're evergoing to shift the ratio of spending on search marketing programs toreflect the ratio of searches by users, we'll need to test, test, testand test some more.)

Still not convinced that this is an idea worth testing?

Consider this: In 2004, I did some consulting for a Fortune 500company that helped it use search engine marketing to generate severalmillion dollars in revenue. But, I only charged them several thousanddollars for my time. (What's wrong with this picture?)

But, please, don't quote me on that. I'm providing all of thisinside information off the record, on deep background. Right?

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