Bad News: SEO-Firm Growth Screeches to a Near Halt
Every year for the past five years, MarketingSherpa has conducted a research study into the state of the search engine optimization (SEO) industry–the hundreds of firms and consultants who help marketers optimize their Websites to gain more search traffic.
SEO-driven traffic is the most desirable you can get from search engines. Why? Well, unlike pay-per-click (PPC) search advertising, there’s no cost per click. The traffic comes from so-called organic listings, the search results the engine shows naturally without being paid to run your ad.
Plus, clicks from these organic listings on average can convert as well as–or even better than–the clicks from paid ads.
The big marketing debate over search engine optimization was not whether to do it; it’s self-evident that you’d want to appear at the top of free rankings for keywords important to your brand. No, the big debate has been whether you should do it inhouse vs. hiring an external expert to help you with it.
I’ve always been of the opinion that if a complicated marketing tactic can make a big difference to your bottom line, you’d better get expert help with it. But that’s just an opinion. What matters are the data.
That’s why last year we asked more than 2,000 marketers whose sites had been optimized what the results were and whether they had used an outside expert. The data were phenomenal.
The marketers who had used inhouse SEO resources saw an average 73% lift in overall site traffic.
The marketers who outsourced SEO to an expert saw an average 110% lift in overall site traffic.
With results like these, it made perfect sense to me when our tracking also revealed that from 2004 to 2005 the SEO firm industry had grown year-over-year revenue by 124%. I was delighted to see such a leap in marketers following data-proven best practices.
All of which makes the results just in for this year even more shocking. According to MarketingSherpa data, SEO industry year-over-year growth came to almost a complete halt in 2006. Total revenue growth was a teeny tiny 6.7%.
Did the SEO firms do a bad job? Not that I can tell. In fact, the average SEO firm added 76% more expert staffers to do the work better. In an industry where manhours are to a great degree what distinguish great campaigns from failing ones, this is a good sign. (See link below to more study data.)
In addition, there’s positive evidence from marketers themselves. This August we asked more than 3,000 marketers what tactics get the best ROI. Traditional online ads got the worst response, which just 24% of respondents saying that banners had great ROI. Paid-search marketing did much better, with 57.5% of marketers saying their PPC campaigns got great ROI.
But then came SEO, the King of All Tactics, ROI-wise at least. SEO headed the list with a remarkable 69.2% of marketers saying they got great ROI from it.
With all that fabulous ROI, plus years of proof that inhouse SEO just doesn’t do as well as outsourcing, why is SEO industry growth sagging so dramatically?
It’s a mystery to me.
Anne Holland is president of MarketingSherpa, a research firm publishing buyer’s guides and benchmark data for its 237,000 marketing executive subscribers. For a copy of MarketingSherpa’s Buyer’s Guides to Search Marketing Firms featuring easy-scan comparison charts for 63 PPC agencies and 104 SEO firms, go to: http://www.sherpastore.com/e-commerce-benchmark.html?8966.
© MarketingSherpa, Inc. 2006
