How can I tell a great SEO from a crappy SEO?
A crappy SEO, when asked about what they have accomplished in their career, will rattle off a long list of organic rankings.
A great SEO will rattle of results in terms of conversion as well as rankings.
Why do we optimize sites?
For traffic?
What good is traffic, in a non CPM format, if it does not convert? In fact, large quantities of non converting traffic can be costing you money that cuts into the bottom line.
A crappy SEO is obsessed with clickstream data figures such as visitors.
A great SEO is obsessed with conversion rate.
Optimizing sites for search really goes beyond simply making them optimal for rankings. Optimizing for search is also about creating conversion funnels for that traffic. It is about understanding user behavior and changing landing page design to turn traffic into conversions.
A conversion rate of 2.5% on 10,000 unique visitors is 250 desired user actions. A rate of .25% for 100,000 uniques is 250 desired user actions. Despite the similarity there is a difference.
Let’s look at the economics:
Let’s say that all of these visitors came from organic search. Let us again say SEO costs run around $100 an hour (either in terms of payment, the amount you could be making doing consulting work, or the amount you could be making working on another money making venture).
Site A, getting 10,000 uniques, is ranking #1 for the term buy blue diddley doos.
Site B, getting 100,000 uniques, is ranking #1 for diddley doos.
It takes Site A 5 hours of optimization, or $500, a month to maintain its #1 ranking, while it takes site B 20 hours, or $2000, a month to maintain its ranking.
Each conversion for these sites is worth $10 dollars.
Site A is getting an ROI of 400% on its SEO dollar.
Site B is getting an ROI of 25% on its SEO dollar.
What could Site B be doing wrong?
Perhaps they only sell one type of diddley do.
Perhaps they have poor landing page design.
Perhaps they simply lack the content the searcher is looking for.
So many things go into conversion, that an SEO that is completely consumed by vanity rankings will likely miss the boat. A ranking such as Site B’s is just that, a vanity ranking, because it isn’t turning enough of a return to be much else.
Every site has a conversion point, and analyzing that rate as a metric of success is a necessity. Even content sites offer newsletters that produce extra revenue for them.
A successful conversion rate can vary by market, but for most 1-2% can be used as a goal. Really your goal should be based on visitors, revenue, and ROI.
A good equation to use as a starting reference could be:
(RPC(Vx CR) - Spend)/Spend = ROI
(v=visitors, CR=is your variable for conversion rate which is undefined, RPC= revenue per conversion)
So if you have 2,000 visitors, make $30 per conversion, spend $1000 on SEO, and want an ROI of 300% your equation would look like this:
(30(2000 x CR) - 1000/ Spend = 3 (or 300%)
your CR would be 6.66% (if you can’t do Algebra, first smack yourself, and then email me for help).
Noting this example sometimes your conversion rate goal may be too high, if so you need to fix something (i.e. revenue per conversion, your goal ROI, or your spend). It really depends on your market.
Keeping your conversion rate one of your main goals in your organic search work, as well as any other Internet marketing you do, will lead to better results than some of the more frivilous and less revenue based goals many of us cling to.
8 responses so far ↓
1 Feydakin // Jul 20, 2008 at 9:47 pm
I have always been a fan of conversion rates and ROI vs. “traffic”.. You can have all the traffic in the world, but if it doesn’t put money in your pocket, or perform some task, what good is it??
Plus, it’s a lot easier to justify your job if you pull out the spreadsheet and show the boss that for every 8 cents spent (cost per visitor) on the website he makes $1.41 (earnings per visitor)..
2 Jordan Kasteler // Jul 20, 2008 at 9:48 pm
In my eyes, that is the difference between SEO and Internet Marketing. SEO seems more concerned with organic rankings while Internet Marketing is looking at a site with a more holistic and strategic approach which includes conversion optimization.
I see ‘em as two different animals. I don’t agree that an SEO with a laundry list of organic rankings is a “crappy” one but one that is just not as well-rounded in Internet marketing.
One point I would like to make though is that a crappy SEO is willing to sacrifice conversion for higher organic rankings.
3 Carrie Hill // Jul 21, 2008 at 6:36 am
I’m so happy to read more and more on “conversions” vs. just “traffic.”
We have clients (hospitality) who, due to their booking engine constraints, handicap us with regards to tracking online revenue. This is a mistake, and makes our job even harder, and their ROI/Conversion rate becomes some ambiguous “How are we doing?” ..”Oh you suck!” conversation.
When talking to those clients about investing intelligently in their online marketing, it’s always a struggle to prove how valuable our services are.
If you’re optimizing for traffic AND conversions - and can provide conversion rates to your clients - you’re going to get client buy in - nearly every time.
We hear “content is king” over and over again (heck, I’ve even said it)..someday I hope to hear “Conversions are king.”
Thanks again!
~Carrie
4 PJ Brunet // Jul 21, 2008 at 8:17 am
I prefer to go for the high volume of traffic, even if conversion is low. Very high traffic tends to motivate advertisers, eventually the ctr, payout will catch up.
5 Feydakin // Jul 21, 2008 at 12:36 pm
@PJ, that’s great for the people that don’t actually sell a product.. But even advertisers want to see those conversion rates, meaning click thrus.. Untargetted traffic doesn’t click.. (convert)
@Jordan, and that difference is why “pure” SEOs are doing less and less and “Marketers” are doing more and more work and just using SEOs as subcontractors.. A “pure” SEO says hey, I got you to #1, pay me.. Marketers say hey, I got you to #1 for words/phrases that point to great landing pages that convert in to real sales and put money in your pocket, pay me..
6 Marshall // Jul 21, 2008 at 12:54 pm
Wow! I occasionally search the web for ‘conversion rates’ formulas as it relates to organic traffic and I finally hit the jackpot with this post.
Indeed, those crappy SEOs just focusing on rankings for traffic’s sake, without thinking about the conversion goal are missing something. I’m glad someone has finally documented that the two go hand in hand (at least in websites I’ve read lately).
These additional tangible bottom-line “metrics” go so much further in meetings where justification for (continuing) SEO is needed, rather than just rank gain.
7 Amad Ebrahimi // Jul 22, 2008 at 3:35 pm
I agree with Jordan here, conversion optimization is definitely it’s own beast. I recently wrote a blog post about the three important aspects (in my opinion) of web marketing; SEO, Analytics and Conversion.
Both conversions and analytics can be their own specializations. As we see with Tim Ash (Sitetuners.com) and Avinash Kaushik (Kaushik.net). But in the end, the SEO who can pull all three of those together in a more holistic approach, will probably be more effective at delivering the ultimate ROI for their clients, which we all know is…$$$
8 admin // Jul 22, 2008 at 9:40 pm
Amad, one thing you need to remember is that Jordan is never right.
Just kidding, but it is true that for some SEO, conversion, and analytics can be specialties. But for a small business or your own affiliate site YOU are everyone of them in one body. I have yet to see a small business hire all three.
And Jordan is wrong :-)
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