John Andrews is a Competitive Webmaster and Search Engine Optimization Consultant in Seattle, Washington. This is John Andrews blog on issues of interest to the SEO community and competitive webmasters. Want to know more?

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Where the REAL Money is in SEO

Rand over at SEOMoz posted a set of salary estimates for SEO people. I understand the marketing value of having an “SEO Salary” post, but I don’t see the point for people working in SEO. If you have to argue about your salary level using outside references, you need Challenger Gray & Christmas or Robert Half or something based on data. But the article did remind me of the importance of staying aware of the real money in SEO work.

As I read, I see that Firm SEO work is quite different from Independent SEO or in-house SEO work. According to Rand’s descriptions, Firm SEO (like his SEO company) is a group of people working together on client projects, guided by an SEO Boss. Rand admits he hires inexperienced talent and the salaries he pays are “on the low side”. This is the opposite of what I do in my own SEO consulting, and what my better clients do with their competitive web and Internet projects. I am not an SEO Firm, so again this is perhaps highlighting yet another a different perspective of the unusual industry we call Search Engine Optimization (SEO).

Steve Jobs once said something like “A people hire A people; B people hire C people” and I have always carried that around in my head. I often see it in action. The best people tend to want the best people to work for them. Less-than-the-best often hire people “lesser” than them, for what I suppose is a myriad of reasons. Please note I am not suggestng Rand is hiring people lesser than he is (nor am I sugesting that Rand might be an “A” person). I am simply saying that his description of Firm SEO is opposite of my SEO consulting experience, where the better clients seek out the best SEOs, the best web designers, the best developers, and the best marketers to work on projects. In fact, more times than not, my clients have experienced extreme frustration dealing with “agencies”. From advertising agencies to web design agencies, the expertise and dedication of the individuals assigned by that agency to the projects turns out to be significantly below the calibre of the leaders of that “agency”. Sometimes we collectively wonder if the agency actually has anyone at all of adequate calibre beyond the founder. Other times we know they do, but we wonder why those people are not available to our projects, even when price is not a barrier. Perhaps it is just an “agency” mentality?

So where is the real money in SEO? Well, like any business, the incoming revenue (client fees) has to cover expenses before the owners and shareholders can count profits. So the operational challenge of a business (including an SEO business) is to minimize expenses while maximizing revenues. The goal of an SEO Firm must be to optimize the productivity of internal people, measuring revenue as part of the success metric. The more those people are paid in salary, the more revenue needed to provide profits after expenses. Since most fee-for-service situations do not tie project revenue directly to the productivity of the workers on the project, the “sales” department must generate the revenue. Who is the sales department in your SEO firm?

Maybe it’s clear why there are so many “boiler room” SEO Firms out there cold-calling customers and selling sub-standard SEO services. They are simply maximizing revenues, while minimizing expenses by hiring minimally capable SEOs (or doing minimal work). What is the flip side of that coin? I think it’s people like me: independent SEO consultants hired to work with the best web designers and coders and marketers on projects where someone else is already hard at work maximizing revenues, and where that exact person (or team) has definitively determined they need SEO to help them maximize the revenues. I usually refer to that last aspect as “the business team working strategically with the SEO” because really that is what it is. it’s about maximizing revenue. It’s not about minimizing expenses. Minimizing expenses is a positive side effect of hiring the best people available for the job. The best people get the job done right, the first time, and most efficiently, especially when they are also working with best people (that “A” team thing).
The real money in SEO is in performance, whether that is the performance of the SEO (how much she gets done per hour billed) or the performance of the projects that the SEO optimizes (revenues generated via SEO efforts). The real money is in the very FACT that well-done search engine optimization generates revenues in excess of expenses. Revenues far enough in excess of the direct expenses (such as the SEO consultant’s fee) that the revenues also cover the indirect expenses (the project manager, the marketing team time, the designer time, etc) and still provide profit for the owners and shareholders. The independent SEO consultant needs to maximize his client’s performance to match or exceed his own performance, as part of the combination This is not always easy, and the topic of another post or two since there is much to be said about working with client-based teams, maximizing consulting efficiencies, and helping client-based teams compound their investment in outside SEO consulting (so that we can all share larger profits).

Maybe “Firm SEO” involves alot more middle-man communication stuff, which generates additional overhead (meetings, meeting minutes, changes to Statement-of -Work documents, clarifications of same, budget adjustments, etc) and all that additional overhead needs to be covered by the revenues generated by the actual SEO?
Rather than “what are SEO salaries” I think the question for people working in SEO is “how do I get REAL money by doing SEO?“. The answer is, you get real money by placing yourself into a pay for performance situation, and performing well. Most of us perform our best when we work with others who are good at what they do, or better than us at what we do. “A” people, according to Jobs. I look to hire the best I can when I need help, because it helps me be my very best for my client. It is almost always less expensive than alternatives when you balance the books at the end of the project.
One final comment since we are now discussing where the real money is in SEO. Every time I am engaged in a real world SEO project where past revenues from SEO efforts far exceeded costs, I have discovered new ways that prior SEOs used to keep a share of those revenues for themselves. Often the SEO before me was raking it in, and the client was now acting to bring some of that back to the client side or to eliminate risk identified with the SEO activities. Maybe SEO is not rocket science, but it is business, and where there is business there will be optimization. If you ask me, the profits flow to those doing the optimizing, every time. What varies is what aspect of the project they are optimizing.

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5 Responses to “Where the REAL Money is in SEO”

  1. Jeremy Luebke Says:

    You are so right.Pay per performance is the way to go. I look back at one of my newer clients and think to myself how much more money I would be making from driving 50% more revenue we are already driving their way if we had just taken on the client in some form of rev share.

    The sticky part becomes the contract. It’s definitely not the cookie cutter contract we are used to. If anyone know of some good places to research rev share, in this industry or another, please share.

  2. New Jersey Web Development Says:

    Great post, you are spot on when it comes to how talent associates with talent. Pay for performance sounds great but how do you implement it from the client side? I have been wrestling with that exact phrase for a couple of years. How would you recommend a firm implement pay for performance when hiring a competitive webmaster to do SEO and the related activities? The next question that comes to mind is, how do you find a qualified reputable SEO, if you are not an SEO? At some point, if your SEO isn’t performing, you have to move on and find one that will. Should I open my phone book and look up SEO? Or should I ask the competitor, that is knocking my socks off, who he is using?

  3. Internet Marketing Company Says:

    Pay per performance is great… but you give up a little bit and relinquish some control and a little bit of know how. For the comment above back link the competitor that is kicking your behind it will reveal who is performing the work for them.

  4. Free Internet Marketing Articles Says:

    Typically you may want to track good seo companies that do article marketing for their clients..

  5. lee newell Says:

    Pay per performance, is always going to be a bit of a gamble. However, unless you are dealing with large businesses pay per performance seems to be the easiest way to make big money especially in the eCommerce sector