Today’s SEO Q&A topic is on the importance of SEO for large corporations – uncovering huge potentials and possible reasons why they spend so much money on PPC over SEO.
Over the last couple months, actually the whole last year, we noticed that many large corporations leave a lot of money on the table because they just do not focus enough on SEO. It is so easy to spend huge budgets in PPC. Actually recent studies as well proved that. These studys are from the SEMPO organization or the marketing company Conductor. My colleague from the UK Patrick Altoft just wrote about this a couple days ago. He used the following interesting graphic in his article “Natural search vs paid search spend & traffic share for big brand retailers“. On the left graphic you can see that 89.47% of the search clicks are from SEO – i.e. the natural search results. On the right graphic the amount of money spent in SEO vs. PPC is shown.
Organic search traffic ROI vs. Paid Search traffic ROI
10% of the spending yield 90% of traffic
The amazing numbers are that with only 10% of the spending 90% of the traffic comes out of the organic search, natural search results. The other 90% of the money goes to paid search, Google AdWords etc. but yielding only 10% of the traffic. That is crazy right? It is an imbalance and we wondered – why is that?
Why can such a small part of the money for SEO yield such great results in organic and if we have such a great leverage in organic why just not spend more money on organic?
PPC – spend money and receive clicks
Matter of fact we think the two models are completely different and not everyone gets it. PPC paid search is a typical media spend model. You spend some money and get some traffic. You spend a Dollar today you get a click today. You can do the same thing tomorrow but if after the day after tomorrow your money is out you will get no clicks at all. As long as you pay everything is fine but as soon as you cut your spendings your traffic drops to zero. While paid search is quite comfortable to plan for (in terms of predictability) – it does not generate sustainable traffic – at all. It’s easy to use if I plan for a great holiday season I might allocate a big media budget to extra PPC campaign, but after the holidays, the effect of traffic increase is mostly gone (expect for some branding effects maybe)
SEO works different than PPC – SEO is an investment
Should you really spend so much money on PPC?
Well for SEO things work a lot different. It is not a quick win, there is no instant gratification on SEO because sometimes you need to work for weeks and even months to get results, to improve your current results. That is why a lot of people believe that PPC is so much better because you can measure it so much easier – and see instant results. Obviously if you get feedback the next day – how great would that be in SEO – but that is not the way it is. By trying to manipulate the organic search results Google and the other search engines do not make it too easy for us. We do not really known what Google expects, what they like when it comes to SEO, except for our experience and a lot of iterative trial & error. Especially with SEO and link building you need to sit there for weeks and months to monitor the results but once you are there, once you are at the top we can assume that the costs needed for SEO will decrease, actually dramatically.
That is probably what we see in some cases in the surveys. Keep in mind that 10% of the spending for 90% of the traffic is an awesome leverage compared to PPC where it is vice versa – 90% of the cost for 10% of the traffic.
For each PPC click you get 8.5 organic clicks and besides this the opportunity of SEO is 5.66 times higher than the opportunity of PPC. In the following graphic you can see the comparison between PPC and SEO. We wonder why spend money for Adverts at all? It is great to test and to learn the keywords that convert.
Comparison of PPC vs. SEO
SEO Opportunity for big corporations
The big companies are actually in a great position to improve their SEO and just use a little bit more budget for awesome results. Big companies tend to have very old, trusted domains. Old and trusted domains respond a lot better to link building and SEO measures. That means with only a couple of links a month, maybe one or two for each keyword phrase that could be highly targeted and highly converting, you could be number 1. In fact this is what we do for some big corporations. If you get a grasp of opportunity of pushing up you top converting keywords, that could be long tail keywords with two, three or four words with only a couple of links.
Easily outrank competitors
You can easily outrank your competitors!
Why bother spending paid search over the days, weeks and months to get clicks on them if you can outrank your competition with only a couple targeted links per keyword. That would be all it takes. We actually have done that for some large corporations throughout the whole year of 2009. If you have a leverage of almost 1 to 9 in SEO then imagine what would happen if you just add 50% of the budgets to SEO. Take away a little bit from PPC from paid search and move that into SEO. If you would add 5% of your budget to SEO you could do great things with that – easily get an ROI of 1000% on that!
To give you an idea about the budgets, a top retailer like Target spends $ 270,000 a day. That is almost $ 10,000,000 (ten millions) a month and that is really huge. And that means, they are already spending a million dollars for SEO. That is a lot already. Imagine doubling that up or just adding $ 500,000 so you could do so much extra SEO work, extra link building work with that, that it could easily get to an ROI of 50. Simply because there are 8 times more clicks on organic results than on Adwords results. You can capture a much larger share of the traffic. Well that does not convert in all cases but it is still an huge opportunity.
These $ 500,000 extra SEO investment could easily translate into 5 million, 10 million or 20 million ROI if done the right way. And we already do that for some large clients. Targeting highly converting top keywords in SEO is the way to go – for all industries.
What will be the future?
Is SEO the future?
You have to go after the long tail traffic in organic and there are not a lot of companies that already do that. We have done and still do that and we have seen awesome results. In fact we were astonished what’s possible.
We think the question is not “when”, but “who” is already implementing long tail SEO campaigns right now. A lot of companies already do but we have seen other large corporations who simpley even do not get the idea (yet). It appears some organizations do not even understand the enormous possible leverage of investing something into SEO and then reaping the benefits for months and years – freeing up huge future budgets.
Why throw all the money to Google if you can use targeted investments to improve your organic results?
It is not a question of when, but a question of who already does it and who will be next. Hopefully that’s YOU!
So, what do YOU think? Will YOU be next?
We hope this article helps understanding the idea of what Long Tail SEO is all about. It should help you to understand and hopefully tackle this untapped potential in your corporation – A.S.A.P.
Andreas Pizsa
Bishwajeet Mahato
Arihant Kothari
Brad
(609) 910 0736
December 5, 2009