Search Engine Optimization

ROI of Your Investment in SEO

This presentation will give you real market value estimate of search engine optimization investment. The value is calculated on the basis of Pay Per Click data provided by Google. It is found that one keyword can surpass $200.000 in annual investment value.

Search Engine Optimization also referred to as SEO is a practice of achieving top search engine positioning for industry targeted keywords. Search engine optimization works on the principle of satisfying search engine algorithms and naturally promoting your website to the top listings.

Search engine optimization campaigns produce vast revenue opportunities and create win-win-win situations:

1. Customers win by finding a business that can help them.
2. Businesses win by capturing targeted prospects.
3. Search engines win by serving highly relevant results.

For the purposes of this presentation we used Google Traffic Estimator tool, due worldwide search market dominance by Google.

Search market share according to HitWise:

Considering Google leadership in search arena, we will focus on Google during this presentation.

In order to estimate the value of search engine optimization, we must look at market driven Pay Per Click advertising model.

Google Pay Per Click Model  

Google Inc generates profits by serving text advertisements along side search results. It has propelled Google to be one of the most valued companies on the stock market, reaching stunning $700 per share in November 2007.

The success of Google lies in unique advertising approach called Pay Per Click.

Definition by Dictionary.com

“Pay per click (PPC) is an advertising model used on search engines, advertising networks, and websites, where advertisers only pay when a user actually clicks on an ad to visit the advertiser’s website.

Advertisers bid on keywords they predict their target market will use as search terms when they are looking for a product or service.

When a user types a keyword query matching the advertiser’s keywords, or views a page with relevant articles, the advertiser’s ad may be shown. These ads are called a “Sponsored links” or “Sponsored ads” and appear next to or above the “natural” results on search engine results pages.”

You may also check Wikipedia.

Example:

Vocabulary:

SEO – Acronym for Search Engine Optimization

PPC – Acronym for Pay Per Click

Natural Search Results – results found by Google throughout the internet. Primary aim of SEO is to feature your website among top natural search results.

As you can observe from example above, this advertising method is highly effective. It encompasses relevancy to the searcher and offers extremely high chances of conversion to the advertiser, since the advertisements closely match the interest of the searcher, at a particular moment.

Google charges advertisers for each click received on the “Sponsored Links”, hence the name Pay Per Click. (the model was originally devised by Overture)

In example above “get a credit card”, credit card advertisers will be charged between $5.56 – $7.60 per click(as of March 2008).

The price per each click is determined by advertisers using bid model. Businesses bid on a keyword, whereby highest bidder receives top positioning. The model is essentially market driven. Price per each keyword is determined by the amount businesses are willing to pay. It can range between $0.01 and over $20.00 per click, depending on level of competition, return on investment and industry.

As opposed to older advertising methods, Google and other search engines allow businesses to target individuals who have indicated interest and are essentially hunting for a company that can satisfy their needs.

read second part…