SEM Pricing Models: Search Engine Strategies San Jose 2007

Aug 23, 2007 | 2,735 views | by Navneet Kaushal
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How should you charge for SEM work? Monthly fee? Percentage of ad spend? Percentage of sales? We explore a variety of options, in this session.

Moderator:

  • Misty Locke, President & Co-Founder, Range Online Media

Speakers:

  • Rand Fishkin, CEO, SEOMoz.org
  • Lance Loveday, President, Closed Loop Marketing
  • Ken Jurina, President and CEO, Epiar Inc.
  • Mike Murray, Vice President, Fathom SEO

First to start the session is Rand Fishkin. Rand begins by mentioning some of the kinds of SEO services:

  • site auditing reports
  • standard consulting,
  • keyword research,
  • content creation & copywriting,
  • link building,
  • strategic planning design/reports,
  • viral content creation/promotion,
  • social media marketing,
  • reputation management/control,
  • brand tracking & reporting and
  • webdev/Web design

Next he shares pricing models:

Hourwise consultation :- When his company started they initially charged $100-$400 an hour. Now he charges a grand per house. Also for an onsite training he charges a minimum of $8,000 a day.

Monthly retainers:

  • By-the-Project-Pricing
  • Pay-for-Performance
  • Profit Sharing
  • Hybrid Models

For example:

  • Travel industry Website: For this particular website, his services included ROI, keyword, strategy, link building, measurements. Fishkin's company charged $24,000.
  • Large Media Web Property: Services required for this website included strategy, on site meeting/training, SEO, training, phone/email etc for which the company paid Rand $25,000.
  • Classifieds Website: services required includes link building recommendations, site auditing, strategies. This cost the $ 16,000 over a period of 40 days.
  • Personal Reputation Management: 2 listings had to be shifted to 3+ results. Rand charged $20,000.
  • Technology Web Site: remove link bait. $30,000.

Consulting Business Model

More clients equals more income which further equals more people.

Next is Lance Loveday from Closed Loop Marketing. His company's Pricing goals include:

  • Minimizing risks
  • maximizing the upside
  • maintain justifiable and rationalized prices
  • competitive
  • stay in line with what the client expects
  • what works best for the client

Pricing Models:

  • flat fee
  • hourly cost plus
  • CPA
  • percentage of expenditure and
  • retainer

Set up rates:

Fixed cost ($7,000 +) includes:-

discovery

keyword themes

strategy

campaign structure

writing ads

keyword research and tracking

campaign setup

Fees are determined on the basis of:

  • scale of campaign
  • news vs. existing client
  • international
  • geo-targeting
  • the PITA (pain in the ass) factor
  • size of the client and
  • estimated time.

The management of fees depend on the percentage of expenditure. He also points out his guidelines which include:

  • The setup fee will cost around 2-3x of monthly management fees
  • Number of keywords used is less important than the number of campaigns and ad groups
  • Lance charges extra one-time rates for big campaigns that are expanding or reworking.
  • Ad hoc consulting on landing pages, analytics and other online marketing best practices is included (design and configuration is extra)

Third up is Ken Jurina of Epiar Inc. Jurina says the main question is how much one should charge for SEM? “The way that is going to make you the most of profit and deliver the highest value of your ideal client”.

Ken goes on to say that there are 4 industry pricing models:

1, Retainer based ($2,000 to $50,000 p.m.)

  • Monthly feeds
  • search and pack

2, Pay for performance

3, Fee for service model (anywhere from $2500 to $1 million plus)

4, Hourly consultation

Get Niched

  • Know your strengths and shortcomings
  • Perform a SWOT analysis.
  • Are you Organic or PPC?
  • If yours is an established name, quote the price else be reasonable you gotta survive.

What Epiar's does:

  • 90 % fee-for-service
  • 7 % pay-for-performance
  • 3% customized services
  • Stick to your business model
  • Do not compromise for any client
  • ink building
  • keyword research

Each client and his needs are different. Knowing this they could want different things such as a new domain, past SEO or anything else.

Levels of Services:

  • site audits
  • monthly maintenance plans
  • Web analytics
  • hourly consultation

Create detailed and proper business contracts and always make sure the clients sign.

Last is Mike Murray of Fathom SEO. Remain careful of bizarre price factors. Below are some stuff actually available in business contracts.

Bizarre Price Factors

  • 20 placement 8 engines
  • Refund admin fee
  • 900 directories no spam
  • 10 top 10 rankings

Problems with

Hourly Pricing – Lack of resources, shortage of experts.

Custom Fit Pricing – Not pocket-friendly and inconsistent.

Performance based model – rely only on established names.

Retainer – quality issues. Takes a long time and this means more money.

Pricing Models:

  • can be easily accessed by small and mid sized businesses
  • Time tested
  • comprehensive
  • it is easier when you can train consistently
  • teams should be accommodated with diverse skill sets
  • Simple, short, easy
  • Mostly it should be Scalable

Search Engine Optimization Model:

  • Annual with monthly payments
  • Depends on number of keywords and webpages
  • One can add more pages and keywords
  • Programs can be updated
  • Follow strict process
  • Long-term fits ongoing optimization.
  • $800 to $1,800 monthly plus options.

Online Public Relations Model:

  • Annual but with monthly payments.
  • Hourly focus provides campaign direction.
  • Vast offerings (links, guides, news releases).
  • Campaigns crafter quarterly, measured.
  • Follows a strict process.
  • Long-term reflects sound plan.
  • $800 to $1,800 per month

PPC Model:

  • 3 month arrangement in monthly payments.
  • Management fee and 5% percent of media spend reflects
  • Analytics and conversion
  • Custom reporting
  • $800 to $1,800 per month

Conditions

  • Money back guarantee (within 6 months)
  • It doesn't drive more sales from serious prospects
  • Risky

Right to Cancel model

  • Unable to demonstrate full program merits
  • Creates a premature focus on rankings

SOURCE: BRUCE CLAY

4.thumbnail SEM Pricing Models: Search Engine Strategies San Jose 2007

Navneet Kaushal

Navneet Kaushal is the founder and CEO of PageTraffic, an SEO Agency in India with offices in Chicago, Mumbai and London. A leading search strategist, Navneet helps clients maintain an edge in search engines and the online media. Navneet's expertise has established PageTraffic as one of the most awarded and successful search marketing agencies.
4.thumbnail SEM Pricing Models: Search Engine Strategies San Jose 2007
4.thumbnail SEM Pricing Models: Search Engine Strategies San Jose 2007