Why Selling SEO Services is Typically a Bad Business Model

Apr 20th

John Andrews recently wrote an article about how consumer ignorance and carnival barkers lead to a market that is a self fulfilling prophecy:

There is so much so-called SEO out there, mostly outdated, baseless, or downright wrong, that the accessible information is more wrong than right. A Google or Yahoo! search on SEO topics is ridiculous, for many reasons. Often accurate SEO information is considered trade secret by knowledge consultants, and thus is not very accessible. What appears in front of the inquisitive SEO consumer is mostly junk. This puts the prospective SEO client at a distinct disadvantage, and provides an opportunity for the contract-seeking “snake oil SEO salesman” to close a deal at a good profit, often without realistic accountability or other consumer safeguards in place. But, as the 2001 Nobel Prize winning economist George Akerlof showed in his famous paper “A Market for Lemons”, asymmetrical information does much more than that. It actual can destroy the market for true, quality SEO.

Add to the above the following

  • introduction to SEO via spam emails or cold calls from providers who know nothing about the concept of search

  • spammy link exchange emails
  • low quality sites ranking because they are old and links flowed easier in the past
  • a rapidly changing marketplace
  • hosts that scam their customers for an extra $30 a year selling fake submission services
  • search engines that sell ads to the scam services and talk down the value of the high end services

Their is no reason to be surprised at how bad the service selling market is for many SEOs.

There are many other markets where the same type of market develops. In some cases it is even a sub-market of the whole that turns to trash. If your main keywords for your target market include discount / cheap / similar buzz words in your market then you might be selling to an audience that is not worth selling to, especially if your product is expensive or your service is time intensive.

Published: April 20, 2007

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Comments

jay
April 21, 2007 - 12:06pm

I agree with all that you wrote but what I never understood is why good SEOs even sell their services. It makes sense for SEOs who work for major companies because they will pay very good money but many people offer their services to small or medium sized companies. At the end of the month these SEOs have a regular salary and thats it.

I actually started doing it like that but quickly realized I get way more out of it if I just focus on my own projects.

I think many SEOs who don't work for major companies and want to sell their SEO services are either fake (and just don't know what they are doing) or didn't realize they can make more by working for themselves. If they would really know that their way of doing SEO works, they would just build their own sites.

Adrienne Doss
April 21, 2007 - 6:33pm

I've been doing a lot of research lately on starting my own SEO business, and I've run across this type of comment a lot: "If they really knew SEO, they would build their own sites." I understand what you're getting at, and I'm now spending a lot of time researching affiliate marketing as well.

But the main reason I want to start an SEO business is ... well, I have to start somewhere. I have to do something other than work my 40 hours and take the safe paycheck. I'm certainly no SEO guru, and I won't claim to be. But I know a hell of a lot more than the average website owner, and most of those people can't afford you guys.

Mat Siltala
April 22, 2007 - 6:36am

How about this - Do what you say you are going to do for clients and get them results, and when you do they will refer more people to you then you will know what to do with. (Thus, not having to worry about "selling SEO Services") The jobs will come to you if you actually do what you say you are going to do and produce results.

Lim CS
April 22, 2007 - 8:50pm

Agreed. A search on "SEO" or "Search Engine Submission" on my country search engine Google.com.my would see every single SEO company there have all these spammy SEO approach. The sadder thing is, a lot of the locals fall for it. :|

Lim CS
Increseo.com

Harvey
April 22, 2007 - 10:29pm

I agree that selling time by the hour is not a great strategy because it doesn't scale well, but SEO is no different to web development, network maintenance or mowing lawns in this regard.

I enjoy getting my affiliate cheques, but I also enjoy helping other people improve their websites. I don't think there is anything wrong with this, I like the balance actually.

DaveMel
April 23, 2007 - 1:34am

I have recently begun research into White Hat SEO for the very reason you theorize could hurt the industry. I experienced it, and know many others who share the same sentiments. The more SPAM and other Black Hat internet marketers are prevalent in the marketplace, the stronger the demand will be for legitimate White Hat SEO firms.
No one can deny the importance of properly utilizing the internet for marketing, and every company with a legitimate product is trying to maximize on their online marketing efforts.
At the end of the day, you are absolutely right, if you really understand SEO, there is no reason to not pursue affiliate campaigns. Still, you can't deny the demand for companies to have a good online campaign manager or SEO consulting firm. This demand justifies the SEO business model. The flaw in the concern about why someone who is good at SEO would contract their work out to others is the human factor which considers more than just the bottom line. There are millions of ways to make money in this world, and the motivating factor behind someone pursuing one over the other involves a variety of factors besides making the best return on their time.

Azhar Malik
April 23, 2007 - 8:26am

There are bad apples every where. As for SEO, I have to disagree with you. We are in a more integrated search marketing age now. Selling SEO alongside PPC, affiliate marketing and other methods depending upon clients needs is essential for ROI.

For us who are selling search marketing, it is not that we are too bad to do it ourselves, its just that our exit strategy might be different.

I think Aaron it depends where someone stands in their career to justify that decision. Selling SEO services in an agency format is not a bad business model.

ferret77
April 24, 2007 - 12:02am

Its bad because you never really have 100% control over what the SEs do, and when rankings dip or drop then you are the bad guy.

Joe Hunkins | J...
April 24, 2007 - 12:36am

Good citation Aaron - that was a really interesting take on the SEO biz. Of course *most* SEO "experts" are not really experts and many are charlatans, but this is true in all areas, not just SEO. Frankly most places would probably be best off by buying your book and doing the SEO in-house, but people will keep hiring "experts" to navigate the unknown online territory.

neil
April 24, 2007 - 4:23am

I know people making money and losing money in every industry known to man, and SEO with all it's unique oddities is no different. There are prestige, higher end, middle, low end, rip offs, scams, fish, and everything in between and in every industry all of these can be making or losing money. It depends on marketing, pricing, company structure, and so much more.

IvanJ
April 24, 2007 - 6:37pm

I totally agree with the article and would add that the real money is being that "snake oil SEO salesman".

Getting new business is extremely difficult unless you were lucky enough to have gotten clients back when the masses had no idea SEO even existed.

At this point, they're getting referrals up the wazoo (did I even spell that correctly??) because they're doing a great job.

Then again, why would someone (who knows what they're doing) want to sell [quality] SEO services when they could use what they know to make money selling ad space on high-traffic web real estate?

Adrian Oh
April 26, 2007 - 3:21am

The only problem with SEO business is, it cannot "scale". The more customers you get, the more people you need to hire.

Scott
April 20, 2007 - 6:36pm

Hey Aaron,

Very interesting article. It definitely got the wheels in my head turning. I've been doing SEO for about 7 years now and have to agree with a lot of what you said. This is a very new market still. There are tons of so called "SEO's" trying to make a quick buck. However... I do believe that the true SEO's are able to shine through. If they do their job and get rankings for their clients the clients are happy. This spreads and thus can help to regain the trust in the market. A huge part of my job is educating everyone I come across that is interested or just wants to learn more about SEO.

Your article takes an interesting look at how SEO could see a huge downfall but I don't think we will see that. Good SEO firms are already shining through. You know as well as I do who the successful ones are and they are doing VERY WELL for themselves. I really don't think a few bad apples will spoil this market.

Just my two cents! Love the post though. Fake SEO's is a big problem in this new market but it's people like you and I that need to continue to educate and shed a possitive light on this great service that can change the way businesses function!

Scott
iSearch Media

Scott Reynolds
April 20, 2007 - 6:56pm

Yes, it's no shocker at all. When charlatans work everything from retirement planning conferences to cheesy fax spam to scam the uninitiated, it drags those offering more legit services and straight talk down.

This is why any real SEO, IMHO needs to walk through a thorough initiation / education process with potential clients: "Here's the space, and in it here's what kind of work I do and for whom when I take on new accounts and vice-versa." As for SEO scams, warning people that they're out there in various forms is something one should do, without cannibalizing. It's one of several things I think a pro - even if they're Black Hat - has a responsibility to do before taking any real money from anyone. SEO of any kind is real work, and doing it holistically it's not easy. That's often what distinguishes the reliable from the posers.

I don't think the outlook is all that bleak, overall. There are businesses out there who already understand what solid SEO is on a basic level, and/or they at least have enough gut sense to do a little homework and shop around. Most good SEOs I am in regular contact with today seemingly aren't having to sell much; work is coming to them and sometimes more than they have bandwidth for.

Tim Linden
April 20, 2007 - 7:57pm

This happens in other markets too, not just SEO. It's annoying there too. I guess any business online just has to realize there are going to be scammers making their services look bad..

Justin Anderson
April 20, 2007 - 8:27pm

I don't get this post...

Selling SEO services is not a bad business model. It has a relatively higher billable hour than most services, like web design, and if you know what you're doing and not just scamming your clients, then it is a profitable business with little overhead, as one can survive quite nicely charging $100-$200 per hour for quality work and do it from home or a small office.

A bad business model is selling crap to people that don't know any better than to buy it.

feedthebot.com
April 20, 2007 - 9:21pm

I noted the some of the same things in my "avoid tricks" description a few months ago.

I disagree with you however Aaron on this because the more inaccurate and cluttered the seo info online gets, the better it becomes for SEO consultants and the more legitimate their efforts become.

Jordan
April 20, 2007 - 10:39pm

Maybe it is just time to build a bizrate for SEO services. Empower the customer with facts not rhetoric selling SEO is not typically bad business (model). It is that the scammers behind it are bad. Show buyers the frauds and they will never buy from them again. There is a strong demand for the individuals and businesses that have the knowledge to do SEO work. It is however a challenge for the ones in need to find legitimate help.

There are many reasons businesses and individuals need to purchase SEO:

• (Lack of) Time
• (Lack of) Knowledge
• (Lack of) Interest
• (Need for)Growth

It’s just a factor of who they are finding to help them. Most individuals who are scammed by the “snake oil SEO salesman” are the ones that are looking for sales, customers and lead. Just like everyone else! The only difference is that they didn’t know better when they purchased from the snake. Selling an SEO book/manual/information isn’t going to help them because they clearly do not have the resources to learn SEO but they do what to know who to buy from.

Blackbeard
April 20, 2007 - 11:19pm

Selling SEO services is a TERRIBLE business model. You only get paid when you work. How much does that suck? If someone is a great SEO, they should be able to rank on some quality terms for an affiliate site and bring in a few hundred a day while they sleep, eat, and relax.

If what I just said seems like crap to you, then you shouldn't be selling SEO services for $200-300 an hour. Heck, you shouldn't be charging $100 an hour.

Unless your client is going to make more value from the marketing optimization that you are performing than they are spending on your services, you are not providing a good service, you are scamming your clients for money.

All effective marketing should have a positive ROI. Most small-time SEO's don't provide real results. They might bring a bit more traffic, but they don't bring more sales. Sales pay the bills and if you aren't driving sales you're actually making your client a less-successful business.

Nate Moller
April 20, 2007 - 11:50pm

Aren't there "fake SEOs" in every market? Always some snake oil salesman that says they know all their is to know about whatever. Bottom line is, they don't know anything. The best part is that if you get some fraud SEO guru who approaches you, drill him on questions about specifics. Catch him off guard. Make him think about how much he really does (or doesn't) know about the industry. Like Scott said above, the cream always rises to the top. Those of us who are in the SEO industry, or at least trying, know who to follow, who to read, and who to pay attention too. Most of us are reading this blog everyday! Thanks for the warnings.

Moller Marketing

April 21, 2007 - 12:41am

Aren't there "fake SEOs" in every market?

Yes, but there is also more of a touch and feel and more methods of external verification in most other markets...for products or services.

Everett
April 21, 2007 - 1:03am

That's why 99% of my work comes from direct referrals. Snakeoil salesmen have already destroyed any real chance of calling up a prospect and pitching your services. Besides that, if you're a good SEO in today's market there is no need to "look" for work. Work finds YOU.

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