Why is SEO so Undervalued?

7 comments

SEMPO did another State of Search Engine Marketing report, which Chris Sherman wrote on. According to the report SEO was only about 11% of the SEM market.

The report had both predictable findings and a few surprises. According to the study, the U.S. and Canadian SEM industry has grown from $4 billion to $5.75 billion, with paid placement accounting for 83% of the total spend.

Despite its demonstrated effectiveness and the amount of time and energy search marketers spend discussing organic search engine optimization techniques, SEO accounted for just 11% of overall spending, or $643 million.

While I am sure organic spend is way lower than it should be, I tend to think some of the data might be a bit jacked. How can only 60% of people use Overture:

The report also noted that Google and Yahoo dominate the paid search market with 95% of search marketers advertising with Google and nearly 60% of advertisers running campaigns on Yahoo.

and yet 38% of people use Yahoo!'s paid inclusion?

38% also report using Yahoo's paid inclusion program.

I would have linked to the PDF on the SEMPO site, but the only PDFs I could find were studies that were sponsored or funded by a specific firm.

Comments

i think SEO gets such a

i think SEO gets such a small market share relative to PPC because the transaction cost for buying SEO services is too high. for starters there is no SEO store, at least not one like there is a PPC store (i.e. adwords and overture). PPC is much more like a commodity game, and hence mirrors commodity markets with its frequent transactions and price changes. SEO, on the other hand, is closer to the opposite, where one SEO service is completely different than another SEO service. as a result, most people are just scared of it altogether, or just opt for PPC where the return on that spend is a safer bet (or at least a bet that is more clearly understood). IMHO what's needed are more SEO business models that address the issue of transaction cost.

Media spends?

Quote:
SEO accounted for just 11% of overall spending, or $643 million.

If they're counting the media spend in there, it would actually make sense.

SEO is risky.

I think the main reason that people are wary of spending money on SEO is because the results are so risky. With PPC a business can quite accurately figure out ROI and hence are willing to spend considerable more. With SEO everything is so much slower and uncertain.

Immediate Gratification

SEO, as mentioned above, is a risk as there is no true standardized or 'licensed' industry model on what someone might get when they engage in hiring an SEO firm.

A larger issue though, I believe, is that people want results now. They don't want to hear it may require hundreds of hours of writing, backlink work, redesign of some elements of their site, etc., to get any results worthy of mention several months down the road.

PPC is gourmet fast food.

SEO is a full course meal without the gaurantee of quality.

But

But, done right, it lasts. And may not require so much as a tweak for ages. PPC is always a "pay or get out".

Reminds me of a saying: "A

Reminds me of a saying:
"A bird in hand is better than 2 in the bush"

I imagine a lot of business owners take this mindset when deciding on whether to spend on organic SEO or PPC.

So plant a bush ...

... and you can have both.

Just as a wise farmer plants more than one kind of crop, a wise marketer cultivates more than one kind of promotional strategy.

I tell my client that SEO is like the apple tree in the back of the garden. It takes time to mature but properly cared for will bear sweet fruit over many seasons.

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