The modern age of internet marketing has allowed many businesses and entrepreneurs to flourish where there had not before been an opportunity to do so. It is no surprise, therefore, that the marketing industry as a whole is entirely fixated on the benefits of marketing online. New business owners — and even some who have been around for a while — are feeling the need to invest online above all other marketing channels. There is, however, a dark side to internet marketing. The cost of employing such services as web design, SEO, and PPC are skyrocketing, but the returns from these strategies have more or less stagnated. Rising prices coupled with diminishing returns has created an environment where it just doesn’t make sense to invest heavily in these strategies for many businesses, especially smaller businesses.
The cost of SEO
Search engine optimisation takes a great deal of time and effort to do correctly. It also takes a long time (months and years) to grow a website to be profitable through SEO. Most companies that provide SEO as a service charge anywhere from $100-$200 per hour of work and the average monthly bill to do minimal SEO work ranges in the $2,500 to $5,000 per month. That’s a lot of money for most businesses, and there are no guarantees search engines will give you a competitive edge over your competitors in the end.
For those companies who can afford the cost, search engine optimisation does usually pay off over time. As a website grows (assuming whoever is doing it knows what they are doing), more customers show up, and more people write you checks. This, however, can take years, and tens of thousands of dollars in cash. That’s why many companies today have abandoned relying on search engines to earn business. They prefer, instead, to spend their marketing dollars on direct outreach, which is easier to track and assess for ROI.
The challenges of local SEO
At the national level, Google’s algorithm is perpetually being poked and prodded by businesses trying to find a way to get their website ranked first. Google doesn’t want companies gaming their system, so they continuously rework their algorithm, so search results satisfy their users’ search intent, not promote any one company’s sales pitch. It’s a back and forth that has raged on since the beginning of Google. Hence, Google has made a push for local.
As a means to combat some of the spam from companies trying to get ahead, Google has begun to make a push to favour local businesses over national websites, so long as it satisfies search intent. This should have made life easier for local companies, and it did for a while. Unfortunately, the same hounds that have gone after the algorithm at the national level began working through how to game the system at the local level. In a short time frame, local SEO started to be as challenging as national SEO.
The returns of SEO
One of the things small companies miss when they sign up for SEO services is to look at the big picture of how many people their efforts can drive to their website. If no one is searching for the keyword you are targeting, or no one in your market is searching for it, then no one will ever come to your site. The other factor to consider is that Google displays ads above organic results in almost every search, and there is conclusive research that shows how much traffic your website will earn based on its placement.
In the graph above, you can see that the first placement in a Google search earns the lion’s share of the clicks, and the numbers taper off quickly from there. Keep in mind most search results today have ads in their top three spots, which means even if you rank first for your search term organically, you’ll get fourth place click-through rates. This is a significant reason why PPC (pay per click) has quickly overtaken SEO as a service at most agencies.
Is SEO worth the investment for your company?
It’s easy to find out if SEO is worth the investment. All it takes is a quick search and some math. First, you can find out how often your target keywords are being searched in your area by visiting Google Trends. Google Trends is free to use and shows you all of Google’s search trends in any part of the country. From there, you can roughly estimate the search volume for your keywords, and then calculate, based on placement, how many clicks you will get to your website.
Here is an example: Local Joe’s Gym wants to rank for the keywords “gym”, “local gym”, and “gym memberships”. In Google Trends, he finds that a total of 400 people search for those keywords per month in this market. Now, he also knows that all the other gyms in town do PPC, so his first place ranking (assuming he gets first, which is no guarantee), will get an estimated 10% of the clicks. Therefore, the most Local Joe will get from his three keywords is 40 clicks per month.
The hard reality is that the internet is becoming more competitive and more saturated. When you rely on search engines to drive new business, you expose your business to a perilous and unpredictable marketing model. For local businesses, SEO services are not worth the investment. Instead, it’s best to focus on the strategies that work in local markets: networking and advertising (TV, radio, billboards, vanity numbers). There are cost-effective ways to gain decent visibility online without having to spend a fortune on SEO. There are tools, for example, that help local businesses list themselves in all the available online local directories, which increases your business’ SEO and online presence. Outside of these minimal strategies, best to focus on marketing that works.