OK, here’s the top ten reasons why I think the performance-based pricing model is no good for SEO.
For SEO consultants
- You will lose your clients: As soon as they realize your competitors -including search engines- are offering slightly lower CPCs or CPLs, your clients will kiss you good-bye. Competing exclusively or mainly on price in an increasingly aggressive market is a recipe for failure.
- You will learn nothing: Because of the time/budget limits, you will tend to stick to cookie-cutter approaches, quick’n'dirty tricks and spammy tactics. Good SEO requires continuous testing and research, which the performance-based pricing model makes nearly impossible. As a result, the best people in your staff will leave the company out of frustration.
- High risk: No matter how scrupulous you are, you know there’s always a chance that a number of things go wrong when dealing with web sites and search engines. Shit happens. With a 100% performance-based contract, you might not even see any money at all. Can your business afford to bear all the risk?
- All the big media agencies (most of which hardly know anything about search engine marketing) are going to offer “pay-for-performance SEO” soon: That’s why you should not. If you want you business to survive in the next few years, that is.
- SEO is not keyword advertising: The pay-for-performance pricing model is good for services where “performance” is trivially defined and easily tracked –which is simply not the case with organic search marketing. So let’s leave CPC to the AdWords folks, please.
For clients
- High fraud risk: With a CPC-based SEO contract, junk traffic and zero conversions are just a few click(bot)s away.
- You get what you pay for: Performance-based SEO is often aggressively priced. The reason is that cheap SEO brings cheap results: short-lived and non-repeatable. Ask yourself: would you trust a cheap surgeon? Can you afford failure?
- You will learn nothing: Nobody likes to give their knowledge away for free. Especially when it is so valuable.
- Performance is going to be increasingly expensive in the long run: Especially with CPC-priced SEO, chances are you will end up having to pay more and more to achieve the same results, never being able to reach stability and independence.
- You may find out that your “performance” is not, er, performing well: Don’t let them trick you into believing that obtaining a top placement for that particular keyword is the key to success. You are supposed to know your target better than anybody else. If you don’t, find a SEM consultant who will listen to your needs and work out an effective search marketing strategy.
Pay for performance is good where your skill is unique or seen as such. However, in the SEO arena there appear to be thousands of companies (one man bands many of them) who claim to offer superior SEO skills.
Equally clients can be bamboozled by SEO “experts” who show them sites that are at #1 or #2 for a supposedly key phrase or where there is no real competition or where they have tagged a site onto their in-house link farm to give it piles of links.
So I agree with your points, particularly as agencies are bound to add SEO as a value add to their offering just as you suggest.
Jim
That’s very nice put on paper. I definitely agree with you.
Jim: If I were a client, I would accept to pay for clicks only if I were 100% sure of those clicks’ quality. Because it’s not the quantity of traffic received in a given time period that makes the difference between cheap and good SEO. It’s a matter of quality (including how your web site is perceived by search engines and users), and the ability to achieve stable results in the long run.
PPC price model for SEO activities is like pricing advertising as a franchising selling activity (or, if you prefer so, you can call it affiliate marketing too).
This pricing model not only constrains SEO to share with clients their enterprise risks, but also gives credit only to direct sales coming from the advertising activity without admitting that it will gain long term brand awareness to the promoted brand.
Do you think that other players in the online advertising arena will accept for a long time a performance based pricing model or it’s going to be just a problem for the SEO world?
I dont agree with you at all. I am working with a very large company on this model and am making money hand over fist. Traffic can also be tracked if its good or bad. The client has a right to change keywords on us midway if they are not converting at a pre agreed upon rate. Since my team has done SEO for some of the biggest companies in the world with success we sell this model very easily. The client is also happy since they have seen more traffic and more sales.
Many of the responses seem to be from small one man bands. Bigger companies can handle a little risk for more reward.
I have two websites, one offers a more traditional approach to SEO the other offers Pay For Performance. Both sites rank well for a broad selection of industry specific terms.
What is interesting is those enquiries coming from the Pay For Performance site increase month on month. Also there is an ever increasing number of companies contact both sites.
Pay For Performance SEO is a relatively new concept and awareness is low, however that may change in the future. A few companies have given an entire industry a bad name, just do a search for Iomart, and you will see why customers are nervous about parting with wads of money before the see any tangible results.
Pay For Performance SEO is here to stay and is a result of an industry that has no formal qualifications or standards and cannot police itself properly.