Search Engine Optimization: How It Affects Your Business

[Author's note: this article was originally published in June, 2003.]

According to the ClickZ network, one of the authorities on Internet marketing, search engine optimization ("SEO") is defined as “the art and science of helping sites get found on the major search engines and directories for relevant keywords and phrases.” In practical terms, SEO is the process of making sure that Web surfers and other interested parties can easily find you on the Internet.

The impact of SEO is undisputed. Effective programs drive traffic and show demonstrable returns. Depending on which source you reference, 50-80% of all website traffic is generated using a search engine or directory (as opposed to word-of-mouth, magazine advertising, banners, etc.). Fifteen major search engines, including easily recognizable names such as Lycos, Alta Vista, and AOL, account for almost 90% of all online search activity. The other means by which Web users find sites is through directories, which include Yahoo! and Inktomi. The primary difference between search engines and directories is that directories require humans to submit information to be listed, while search engines literally comb the Web for information.

SEO & Your Business

While SEO can be a valuable initiative for some companies, the importance of SEO to your particular business requires consideration. Internet marketing publisher ICONOCAST recently reported, “Search engines are the most widely used navigational tools and the most misunderstood promotional tools.” Developing and maintaining an effective SEO program can be costly and time-consuming, so you need to consider your companies’ online marketing goals and potential return-on-investment.

For companies conducting online commerce targeting a broad market (e.g. business-to-consumer firms), SEO is paramount. It is especially critical for smaller businesses with limited marketing budgets, as compared to an Amazon.com that aggressively pursues offline marketing activities to drive traffic to its website. For high-priced business-to-business and relationship-selling organizations that typically require personal interaction to close a deal, SEO is less important, though the Internet is becoming increasingly influential in helping customers acquire information about the organizations they choose to do business with.

How Search Engines Work

As WebCrawler founder Brian Pinkerton puts it, “Imagine walking up to a librarian and saying, ‘travel.’ They’re going to look at you with a blank face.” That’s what doing a search on the Web is like. To manage this vague and voluminous process, search engines such as Alta Vista and Lycos use structured methodologies to examine hundreds of millions of Web pages for the most relevant information.

The three basic elements of all search engines are:

  1. Spiders or crawlers: they visit web pages and analyze content
     
  2. Indices: the compilation of the spiders’ analyses
     
  3. Proprietary software: each engine employs a unique approach to evaluating and prioritizing web sites based on customized algorithms

These tools are used to gather and analyze website information in an integrated and consistent manner to yield the most applicable results. SEO is the process of applying the right techniques in this complex environment in order to get the desired search engine placements.

Search Engine Optimization Programs

Implementing an SEO program that will be successful over the long-term involves three primary steps:

  1. Develop your SEO strategy. Determine which key words (typically between 5 and 25) you want your company to be associated with based on an analysis of the competitive landscape, as well as how much you want to spend to be prominently associated with these words. The best SEO programs consider the popularity of particular search words versus the competitive landscape. For example, if you are a specialty book seller, the keyword phrase “first-edition books” will likely be more effective than the more generic and widely pursued “books” keyword.
     
  2. Build your website according to your SEO strategy. One of the biggest mistakes companies make is that they build or overhaul their websites before they establish their SEO strategies. As a result, major rework is often required. When SEO strategies are established in parallel with website development planning, both initiatives can be successfully addressed. Keep in mind that search engines analyze entire websites during their evaluation. If your company sells multiple product types on its website — for example, Amazon.com sells books and compact disks — multiple SEO strategies will need to be formulated.
     
  3. Test, refine, and maximize your SEO program over time. The most effective SEO programs are managed carefully on an ongoing basis. The top search engines are continuously refining and improving their search methodologies, so keeping a high profile is a moving target.

The Cost of Search Engine Optimization

Search engines help organizations drive traffic to their individual websites in essentially two ways:

By analyzing the millions of websites in existence and making effective matches between key word searches and the websites. This process is formulaic and maintains a precise level of integrity, i.e. you cannot “buy” your way onto the top of search lists. You must optimize your site. Fees typically range between $2,500 and $25,000 for a small- to mid-sized optimization project, depending on how many key words and product/service categories the client wants to optimize. In return, clients can usually expect a guarantee of minimum top-30 search engine placement (on the first 2 pages of results) for the key words pursued (typically between 5 and 25 key words).

By allowing companies to purchase keywords for both banner ads and/or favorable placement in the search process. You’ll notice on some search engines that two different sections pop up when you do a search. One is pay-for-placement, the other is the true results of the search. For example Alta Vista includes an area in its search results called “Sponsored Listings,” which is a pure pay-for-placement listing based upon the key words triggering the search. Specific banner ads triggered by the search request can also pop up. The cost of reserving key words is based on a CPM (click per thousand) model. Alta Vista uses a standard rate of $50/CPM, with a minimum spend of $2,000. Lycos also uses the $50/CPM pricing model, with higher pricing for front door banners, channel banners, etc. So, with Alta Vista, it costs at least $50,000 per 1,000,000 impressions to be included in the sponsored listings section on the first results page. For example, if the key word phrase “antique books” is input 1,000,000 times, and your company pops up 1,000,000 times as a result, the resulting cost is $50,000.

Conclusion

SEO strategies require careful consideration, and depend on your organization’s underlying Internet strategy. For companies that sell goods online or are dependent on Web traffic, an effective SEO strategy can reap significant dividends, and is often critical. For most other types of organizations, SEO can be ambiguous. Return on investment is tricky to measure for companies that don’t depend on their sites for actual sales, but research is conclusive that buyers are using the Internet with greater frequency to investigate the vendors they choose to do business with. If your company is difficult to find on the Internet, the only way you may be able to measure the impact is determining the sales you lose as a result.

Brian Piccolo contributed to this article. 

Contact Tim Bourgeois of East Coast Catalyst at tbourgeois(at)eastcoastcatalyst.com or 614-314-6400 to learn how ECC can help your company use search marketing strategies to grow sales and realize competitive advantage.