If you are not an SEO expert and you have got involved in the operations of an SEO campaign, you probably experienced at first hand all the jargon, terminology, algorithms and activities involved to make these algorithms love you more. It can be a true pain!
The Pain of Modern SEO: Complexity & Unpredictability
The major pain point of any SEO campaign or activity is it’s complexity and the level of uncertainty when it comes to results and the outcome. There is no SEO Campaign/ Activity/ Strategy that can guarantee rankings. On the contrary, all SEO campaigns are susceptible in their nature to these 3 factors of uncertainty:
Algorithm Enhancements with new Features
You see SEOs play the game, but Google & other search giants own the game and make the rules. Guess what, rules change a lot and frequently.
Due to the increased complexity and uncertainty, most SEO campaigns are a complete frustration to the people who need to manage them. Especially for people who are not familiar with the terminology and try to understand why we need to do this? Why do that, it’s too expensive, can’t we skip it? etc…
Most of the times it results in SEOs doing whatever they can without their managers knowing what exactly they are doing and only hoping that whatever it is they do, it’ll work.
Meet an old pal, the Rank & Rent (RnR)
For these reasons black hat and other SEOs have figured out that most of the time it is easier to sell traffic rather than rankings, therefore they build websites in certain topics and then they “rent” the traffic of these websites to interested businesses.
SEOs gain easy money for their work, which is low maintenance with Recurring Fee, while the business gets exactly what they pay for. The magic here is that usually, the business saves money, since they get charged for the traffic at a lower price, compared to running AdWords.
The problem, however, lies, at the fact that these sites most of the time are ranked using black hat tactics, therefore getting smoked sooner than later from Google. This is a problem for those who want to replicate the RnR using white hat techniques.
Most spaces are already crowded by black hats, which makes it virtually impossible to overcome without serious upfront investment.
Well, they sell their services, the activities of white hat SEO. They perform all the white hat optimizations needed for their clients as commanded by the official guidelines, followed by their high costs of course.
Now, in theory, there is no issue with that, however, white hat SEO has some inherent costs that sometimes are too high to bear for most small and medium-sized businesses. Let’s have a quick look:
Technical SEO (Depends on Platform of CMS & Dev Cost)
On Page SEO (Usually Content Production and/or light dev tasks)
Off Page SEO (Involves the Distribution of pieces of Content)
From these three, technical SEO and on page SEO are the most straightforward and therefore their costs are usually manageable and predictable. But distribution is a pain in every marketer’s ass.
How much distribution is needed? Where? How much is it going to cost?
These are all very hard questions to answer, SEO is a probabilities game and most of the time SEOs go with a standard line of distribution and then push until it sticks.
Now, this is where it gets interesting.
As I’ve said earlier RnR can’t be replicated in legitimate sites as at its core uses shady, low-cost SEO techniques to rank high. The main reason for that is that the RnR is a model is leveraged mostly by Freelance Black Hat SEOs who have only a small team of outsourcers.
Agencies avoid it, as most agencies want to be as white hat as possible. The cost is higher for agencies if one of their clients is hit by a Penalty due to shady SEO practices. Of course, agencies won’t do white hat SEO without getting paid in advance, because they are aware of the high upfront costs and the probabilistic nature of the field. All SEO agencies try to convince their clients that they are good and their strategies yield results.
This holds true if you are a freelance SEO or an in-house SEO, you either can’t or don’t want to replicate RnR in a white hat manner. It’s rare to see freelance SEOs performing white hat rank and rent.
Meet SEO per Click the White Hat RnR alternative
For freelancers and individuals, it’s hard to lower the cost of (white hat) distribution by a significant margin. But agencies on the other hand can do it. Agencies can have people with relationships with various publishers and influencers.
Therefore Agencies have the manpower and the customer base needed to perform a pseudo Rank & Rend model, that we call SEO per Click.
SEO per Click, is a white hat, results-driven SEO Campaign, both, “results driven” and “white hat”, are critical elements of such campaign.
Of Course, SEO per Click is not as cheap as traditional RnR but it surely can make SEO more predictable, affordable and with less hassle from the side of the client. So without further ado I present you the cost calculation formula that we are currently testing.
SEO Per Click Costs
While pricing this type of service we have to take into account the following factors:
Risk-Based on your success rate of SEO campaigns as an Agency (70%)
Cost to Rank (Which includes your costs and a margin for profit)
PPC Value of the Term
In general, you can’t price any term less than it would cost you to rank for it. Since you will be charging after it ranks, you have to absorb that risk as well and incorporate it into your pricing.
Furthermore, as you will observe very quickly, even if you have very neat and optimized processes for distribution, costs will stay high for some terms. That’s why you need to have a grasp of the PPC value of each term.
Before proceeding in execution you and the client should know PPC Value and should have an estimated cost to Rank. If the cost to rank is way higher than the PPC Value of a term then it may be better for the client to start a PPC campaign.
Of course, there is always the case that the client has dominated the PPC area and is in need of more clicks, in this case, the client is not optimizing for cost but for volume and higher cost to rank is no problem.
SEO Per Click Price Calculation Formula
Now let’s price our services. So, let’s say that you have a term with 800 searches/month and that you have calculated that costs around $800 to rank at first position. This is only an ideal scenario I’ve made it up for simplicity.
Of course when it comes to risk assessment maths can get really wild. In our case we’ve kept it simple: If your success is x%, all you need to do is to divide 1 with your success rate.
As you can see, the total cost of SEO per click has increased significantly, almost 72% higher! This is where increasing your success rate can help in reducing your prices. You could play with the numbers a lot excluding profit from the calculation, but for example purposes, it works perfectly as is.
Meet WorthRank (The One & Only Number you Need)
Last but not least you have to demonstrate the relationship of SEO per click cost to a regular PPC campaign. Let’s assume that our keyword has an AdWords estimated bid at $5.
As we can see, even though our SEO per Click campaign increases total costs for the client, it has the potential to deliver results at 1/3 that of an equivalent Adwords campaign. Furthermore, the client has zero money risks, will pay as results come.
From an agency perspective, you won’t get in all this hassle just to leave money on the table. If people buy those clicks for $5 already, then you should find a client that could match a similar price. That not only minimizes risks but if you find other SEOs competing for the term you can smash them since your resources are way higher.
WorthRank, therefore, is the metric that lets us identify and compare the cost of traffic from a keyword through organic and paid means. WorthRank helps us assess what SEM strategy to follow.
WorthRank Valuation Table
As you can image different clients can afford different ratios, therefore it is critical to your agency’s profitability that you adjust WorthRank (and keywords) based on yours and your client’s needs. This is a rule of thumb that you could follow.
Too Good (Increase Profit)
OK (Can Increase Profit)
Switch to Adwords
Keep only if you maximize for Volume
Important Note: Of Course by design when you are focused on traffic and not conversions, when you are targeting informational terms for awareness you will have WorthRanks way higher than 1.0.
When WorthRank is higher than 1, you have to Charge your Cost To Rank fee Only. There is no much room for profit-maximizing, you should also let your clients know that their SEO spending is going to be higher than the spending they would have if they where running AdWords.
You Are the Master of your Fate
As you can see in order for this model to work, you need to be pushing your success rate high enough that keeps your prices affordable. This type of compensation will keep you in check and force you to push your success rates higher and higher but it will also keep you from going too high. It is better to focus on doing sales, rather than increasing a success rate of 94% to make it 96%.
The best part? Client’s won’t lose any money with your approach, even though some campaigns won’t perform at all. This alone will free you from black and gray swans that can seriously damage your reputation and make your life miserable by a small fraction of unsatisfied customers.
WorthRank, SEO, SEO per Click & The Future of SEO
A much-heated debate is the direction of SEO services sector. Many professionals fear extinction and many believe that Organic traffic from Google will fade the same way organic traffic from Facebook faded a few years back.
Search Engines aim for Profits
The SEO Industry size is at $65 billion and seems as solid as ever. But rest not, every hit SEO takes in terms of visibility, Google (and the rest) is gaining money, therefore it is very rational to think that SEO won’t be with us forever. All search engines try to satisfy users with as many as possible. That’s the goal, this is how they make their money.
People & Businesses have a different View
On the other hand, Search Engines are Research tools, therefore users demand quality and diversity. Also in most cases, businesses are not into purchasing clicks for terms that are informational in nature (and they represent 80% of all searches those terms). Hence a gap that search engines can’t fulfill with ads, the research part of a search.
Google Tries Hard
Google used a very clever trick called “Know Simple” to present snippets with information directly in search results instead of users need to click. Still, there is a long road to go before all informational queries could be served directly in Google.
What all these have to do with SEO per Click & WorthRank?
We are in a transitional era and until we see where the dust will settle with the voice assistants, Machine Learning and the rest, we are in an environment of extreme uncertainty when it comes to search results & Search Engine Optimization.
This is why it is important to have a measure of when to execute an SEO campaign vs PPC campaign for search visibility. A metric like WorthRank (supposing you measure it properly) can help avoid significant costs, while at the same taking advantage of terms that are (still) cheap and worth to rank.
For now and for the next 2 or 3 years it seems that SEO won’t be going anywhere, but it is in a very transitional period and if you want a competitive advantage you have to move from SEO to Smart SEO. To do that WorthRank and SEO per Click is the Solution.
If you want to hire someone, go for SEO per Click and pay what you get. If you are performing SEO yourself, make sure you have accurate calculations for your WorthRank.
Before you ditch this tab – Drop me a Message
If you enjoyed the article don’t forget to give it some love in any way you like and if you have some really interesting thoughts drop them in the comments below. Or if you want to chat about it, feel free to drop me a message. 😉
Theodore has a 15-year experience in running successful and profitable software products. During his free time, he coaches and consults startups. His career includes managerial posts for companies both in Greece and abroad and he has significant skills on intrapreneurship and entrepreneurship.