Is There an Easy Way to Determine Keyword Market Value?

Jan 9th
posted in

SEO Question: Are you aware of an SEO ranking (by revenue) list anywhere?

SEO Answer: There are two ways to take that question. I will try to answer both of them :)

What SEO companies have the most value?
Very few SEO companies are public. Those that are public are rolled into larger corporations with other businesses as well. I also absolutely do not think that bigger equates to better.

Quality SEO does not scale. You really only need a half dozen or so quality employees to make millions of dollars a year. Many big firms end up hiring lots of people to get on the horn cold calling people or using other aggressive sales techniques.

I have been offered deals to make a commission selling leads to some of the larger SEO firms on the market and I have always turned down that option and have been willing to make less (often nothing) referring leads to friends that I know and trust.

From personal experience I would say that I probably provided better value for my price when I was new to the field because back then I was a bit hungry.

As companies grow bigger they typically get less hungry with how hard they are willing to work to make the same amount of money. I have seen the results of some work from large SEO companies that get people to sign contracts for $1,000 a month and keep charging for work even if they do nothing but offer generalized suggestions that are not implemented.

After 6 or 7 months of working with a large SEO firm one of my friends had about 4 links pointing at their website. One was from their official manufacturer and some of the other links used anchor text like BuyViagra.com with the keywords ran together. Not good considering how few links they had after that much time and $6,000 in the hole.

What SEO Companies do the Best Work?
That is a bit of a tough call because I have not hired many companies. As mentioned above I would probably recommend staying away from large firms with many employees.

I typically refer many people to my friend Daniel, WeBuildPages, or DaveN. When a firm is really good and really established it is hard to match up a client worth working for because they have to be able to afford a high rate to be worth the time of a good firm. Many top SEOs place significant value on their time because they can make money creating their own sites.

What SEO Business Models are Worthwhile?
As far as what business models within SEO are worth doing I think affiliate marketing or contextual advertising are nice because they make great recurring income per unit time / effort and do not require much in the lines of customer service. In fact, if you are good at finding the right verticals you can even outsource large portions of the content production business model while being virtually guaranteed profits.

The other SEO business models that are worthwhile are ones where you can create value without having to give significant attention to each lead and/or guarantee end results. If you are guaranteeing results you should only work with legit companies that have intangible assets favoring them or else you are probably going to be better off working as an affiliate marketer and web publisher.

Many SEO verticals are rather profitable. A few examples:

  • keyword research services - Dan Thies is considered about the only game in town

  • link brokering - not much ongoing effort per client AND it includes recurring commissions
  • link building - since it is considered so hard to build links people are willing to pay a good amount for a set number of links. Even though fewer links may have more value people like the idea of getting x links for y dollars.
  • directories - not many of these are well monetized via contextual advertisements, but some directories are rather profitable from submission fees. The hard part about directories is many submitters (including me) hate paying recurring fees because it gets to be a bit complex if they pay recurring fees across 100 different directories for 50 different sites. I would probably stick away from making a general one if I made a directory. I would also look for ways to make it extensible (not forcing every site to get the same sized description and link).
  • selling a how to book - hey that's me! I would do pretty good on the business front if I did not spend so much money going to conferences, building SEO tools that I give away, and have an ultra sleazy bogus lawsuit recently thrown my way.
  • selling SEO software - most of the buyers in the SEO market are newbies to the market. It is appealing to think that there is some simple automated software that will make it all make sense. If I worked as hard at creating software for sale as I did creating my ebook and blog I have no doubt I would make 10 to 20 times as much income as I do. The problem with software is that it ages quickly, and most of it quickly becomes obsolete garbage, but since people think they need it the demand is there, so people fill the market position. That is why you see sites offering to use software to submit your site to search engines for $2.99. No doubt it is a complete scam, but it is what many people want so the service is available. Most well versed SEO professionals use some of the free software and create their own custom software in house.

I would stick away from selling SEO services unless you had a strong brand which allowed you to get ultra high quality leads. Why?

Organic results drive about 3 times as much traffic as the pay per click ads and yet business on average are spending around 10% as much on organic search as they spend on paid search (at least according to MarketingSherpa).

Marketers spent $5.5 billion on paid listings in 2005 compared with just $660 million on optimization for organic listings.

As the algorithms advance it will be harder to put garbage at the top of the search results. If you are putting garbage at the top of the search results and businesses are only willing to pay you on average about 3 to 5% of the value you are driving then you may as well be a content provider and let them fight over you contextual ad revenue and augment that with affiliate income.

What Keyword Terms and Phrases have the Most Value?
I think it is typically worth avoiding chasing the exact same keyword list many other people chase. The top earning keyword lists that are widely marketed have lead to many people creating sites about mesothelioma. In that sense competition may scale quicker than profits.

If you are in a robust marketplace and most sites are chasing after the top term you may be able to squeak into a great market position by going after some of the smaller overlooked phrases.

Localization and using keyword modifiers are huge. So is market depth. If there are only a few high bidders on the most general terms then odds are not so great that contextual ad value will be much of anything for ads triggered by similar content.

If you can find a way to leverage user generated content that allows you to pick up significant traffic from misspelled terms.

Also within a market you have to look at how the lead value breaks down based on location or other demographics. Andrew at Web Publishing Blog recently pointed at this chart of mortgage lead value by location. Also note that if there are 100,000 people chasing California real estate and only 300 focusing on Kentucky it may make better sense to chase Kentucky if you are starting from scratch.

Overture, Wordtracker, and the Google AdWords API offer search volume estimates and Overture currently lets you view their bid prices, but you also have to research why the top sites are ranked and your chances of breaking into the top results when you try to calculate the value of a market.

Another obvious option for testing market volume and value is to set up a test Google AdWords account and sign up for an affiliate program to see what sort of search volume and conversion rate you get.

You can also look at the number of news articles about a topic and trending blog references to see if the keyword is gaining or losing mindshare within the web publishing industry. I also linked to the Del.icio.us tags on my keyword research tool to show what sorts of stories, tools, and whatnot were recently saved.

Published: January 9, 2006

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Comments

January 9, 2006 - 4:01pm

Good to see someone's reading my blog ;)

January 10, 2006 - 9:33am

Aaron,
You are absolutely right about the large corporate SEO's over-charging for very little service. We fired ours after 7 months of paying for reports that came weeks late and receiving content suggestions that an intern could have written better.

It also makes sense that a newer, fresher, SEO firm would work harder for the money because it would mean more to them. You just want to be careful that they will stay the course.

Additionally, your note about which SEO verticals have the most profit potential is pretty interesting. I'd be interested to see you expand on those more in future posts.

Keep up the engaging writing. I refer people to your site when they ask me what I mean by 'create valuable content.' -Dave

January 10, 2006 - 2:41pm

Damn Aaron, I've got to read your blog more often.

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