SEO Should Be Pay Per Performance?

18 comments

The BrokerBlogger has an interesting series of posts going on where he's talking about the SEO industry adopting a Pay Per Performance business model.

Quote:
If a SEO prospective buyer does not educate himself enough, and does not have enough ethical empathy for the SEO seller, then he can be part or all of the problem in "upsetting" the relationship, especially if he has UNREALISTIC EXPECTATIONS.

Comments

Well it has already been

Well it has already been noted that affiliate marketing is a bigger market than search marketing...and that includes the money that goes to Google and Yahoo!

I think many of the best SEOs do a large amount of affiliate work. I only have 2 clients and one of them I have a percent of profit agreement with. Not sure if I am doing it the best way, but I have him pay all ad expenses and then I get 30% of monthly profit. It requires a bunch of trust both ways, especially since many of the large high dollar orders occur off the web.

Be careful...

After leading companies literally from thousands to millions, they have a tendency to stop wanting to pay commissions. One of the beauties of SEO is that it rarely requires significant scaling. On the otherhand, the retailer's business most often does, thus making % deals dangerous to the business relationship.

What I recommend is sunsetting contracts with a guaranteed commission for x months if the contract is not renewed. Even then, though, be wary of clients who look for every legal way to get out of those commissions, it can be a huge nightmare.

It's his mission

This guy's been on about his performance based SEO for at least a year now, I think longer. For whatever reason (and I'm really not sure what it is) it appears to be his mission in life.

wow

Is it just me, or is that guy a really tough read?

Not to mention it seems (on a tough read, I admit) he is placing himself in the middle as a broker between buyer and SEO. Hmmmm...the paradox. Biggest problem with SEO? Lack of clear communication/understanding between client and SEO (that includes expectations, knowledge of SEO, understanding metrics, etc). Solution? Add another middleman?

Anyway shouldn't this sort of "should it be profit sharing" question be left to the market and negotiations? I mean, if a situation is such that normal pricing models don't fit, then isn't it up to the deal makers to work something out? That's how it happens now, isn't it? Oh,I forgot. This guy wants to be the middleman. OIC.

In that case, why not blog to befriend the SEOs? That seems like a better approach to me than this blog-for-the-buyers approach. Less miscued expectations IMHO. SEOs would toss unprepared/difficult/flat-out-wrong clients to him, and he can work his middleman magic (bringing them back under whatever proposal he has worked out). That seems doable to me... I would have already thrown him a few prospects this year (and it's only January 30!).

BTW, Aaron I have similar setup to that 30% you describe. Obviously the % correlates with the expense burden. I have to say, though, that I have better access to tracking data, see better tracking and accountability on both sides of the transaction, and enjoy a far better overall "business relationship" than I do with any of the affiliate networks (puhLEEZE!) or affiliate programs. On the flip side, my clients start to appreciate the latent value of Internet assets, too :-(

totally agree rjonesx

Absolutely... I referred to casual arrangements (as I suspect Aaron did also). You can do some interesting leasing of rights to manage domains over fixed terms, as leverage.

Yeah...not that I have lots

Yeah...not that I have lots of time to take on clients, so I usually point them toward others, but sometimes you meet people who are cool.

I met one of my customers at a concert. I totally knew he would be cool to work with.

Other people who want fixed aggreements and all that jazz are not going to be people I want to work with. I think I do decent work, but it is no accident that I have no official boss in my life and I don't want to let clients become that. Plus when you break through beyond a certain point it is almost always more rewarding to just learn and do what you like, because you can scale that out, but as rjonesx said, if you get too big with a client they are likely to start to look for ways to cut you out.

He's tried

Quote:
In that case, why not blog to befriend the SEOs?

He's tried that, but no SEOs seem to agree with him. I've been in some email debates with him and a few other SEOs and he talks a lot about his ideas, while the SEOs shot them down.

So perhaps he has a new tact?

I think I may have briefly

I think I may have briefly communicated with the guy, but looking at his blog, the posts have too many colors in them for me to take them credibly...especially with 5 line long red text.

The whole point of using colors on the text is to make a piece stand out. If you use colors excessively they have no point. It is like putting the whole page in an underlined H1 tag.

hmmm..

maybe it's an SEO trick ;-)

It's noy just you

Is it just me, or is that guy a really tough read?

I found it to be excruciatingly painful.

But I do agree with the overall concept. we've been doing performance based deals for a close to 3 years now. By the end of this year, we'll probably be 100% performanced based.

That said, it isn't a model for everyone. It took a bit of time to perfect our model. There are a lot of little things you overlook when you first head down that path. But all in all, it has been well worth the time invested. Once you get the bugs worked out, it pays a lot better. And it also creates a much better client relationship.

Oh - I see - its the

Oh - I see - its the "BrokeRBlogger".

At first glance I thought he was just another BrokeBlogger

:)

Man how could anyone

Man how could anyone possibly take him seriously with all those font colors

When I first launched I

When I first launched I offered a money-back guarantee - but soon realised that this was pretty foolish, because:

1. Google et al control the criteria for rankings, not SEO's,
2. Like advertising, there are no guarantees either on leads generated through specific positioning, or number of leads that may convert into sales from such positioning.
3. Focusing on a narrow keyword list blinkers to success with longtail.

2c.

We all do what we think we

We all do what we think we need to do to get those links eh? As far as the article, I think the concept is valid, or at least as valid as another, and whether he changes the SEO world or not, it is refreshing to see another REAL blog instead of another blob of regurgitated drivel. This looks much more like original drivel and I appreciate that.

I have really never understand this particular debate going back to about '99 when I first started noticing posts using these terms. I thought it was ALWAYS performance based. Since 1996 we have focused on promoting clients websites over becoming affiliates ourselves. That has basically been a two step process. Generate traffic and ensure conversions.

I've known from the very first client we took on, that regardless of what the client SAID they wanted, (back then most clients would say they want to be #1 for this word or that word), what they really wanted was for me to deal with the challenges involved and simply see that their product or service generated enough sales to justify the expense of my services. In other words, they were hiring me to make them money. I also knew from the very first client, that if I did not succeed in generating sales, no matter how many #1's the client may have, they would be gone. I never saw that as performance based. I always saw that as business based.

So for 10 years, I've devoted my resources to providing services to clients wanting to develop or maintain commercial enterprises on the web. I could not agree more that sometimes more money could be made with a different allocation of resources and that sometimes, some clients can not be charged enough to make it worth putting up with the requests, questions, demands, ignorance etc. ad nauseum. Such is retail. Such is the business I chose.

After all this time, I still like the model of simply charging by the time we put in. I like being able to project income and set up budgets. I'm still not too crazy about affiliate deals.

My objective is to provide a service to my clients at a price that raises the barrier to entry for my competitors. I try to get them hooked on web heroin. I use custom stats, custom applications and custom strategies so that as their business grows and they consider saving the money they pay me, they are forced to look at where they would go to replace the stuff they like so well at a lower cost. Crude? Perhaps, but effective. I mean, I'm still here.

I completely understand why so many in this industry would decide to do it differently and NOT take on clients choosing to work for themselves. I would never, for a moment, disparage anyone who made that decision, (Believe me, there are plenty of days I kick myself in the behind for not making that decision myself), but it doesn't really change the fact that what you do is still performance based. If you invest more than you make,(don't forget your time has a cost too and that is an investment), you lose money. Lose enough money and you go hungry.

My point is simply that I don't believe it matters what business model we use or what we decide to call it. What matters is that we accept that it has always been performance based whether you provide services for a client or for an affiliate deal. Whether you get paid a set monthly fee based on man hours or get paid a piece of every pie sold. Don't perform and you don't get paid. At least not very well or for very long.

"SEO-Pay For Some Kind of Performance" vs. "Pay For Performance"

First, thanks to Bill Hartzer as he is indeed as generous and kind as I have read about him.

I also want to thank everyone here for all their comments and opinions, even the potential negative ones that I find very positive and beneficial. My initial reaction is based on the fact that the thing most in "short supply" for both SEO buyers and sellers is "TIME" (to read everything they should or want to). Even though Bill Hartzer said "series of posts", all of the comments prove that (understandably so) nobody had the time or desire to read from "Part I" to "Part XVI". I do understand, but I also find it interesting that, IMO, the number one complaint from most SEO's about SEO prospects and clients is "not taking the time to educate themselves properly".

seobook = I am acually against "Pay For Performance" based on a "percentage of the profit". IMO, it would only work with good, old friends because of what you said "It requires a bunch of trust both ways,.."

Jill = Thanks for remembering those 3 way e-mails and me. I can see why you think I am on a "mission". The truth is that this is "one suggestion" to try to help see faster and more "healthy" (no "bad reputation")growth for the Search Marketing Industry. Why? I believe it will help the searcher-users have a better experience, and I like many of the people in it. If you want more reasons, they are in my "About" (under my photo) on my blog.

John Andrews = I'm not offended, but I would appreciate clarification on "tough read" unless it is just the "colors" in the text (I agree with seobook's "5 red lines" comment and will watch it in the future).
As for "he is placing himself in the middle as a broker between buyer and SEO.", it is true only from an intermediary's perspective but not from a business profit perspective like Elance, VendorSeek, etc. does. Also, "why not blog to befriend the SEOs?"; I am certainly not trying to make enimies of SEO's, but I am trying to stay "autonomous".

If it didn't appear like self-promotion I would put a couple of links here to two posts of mine on 11/23/05 that explain why Jennifer Laycock and I agree there is a need for an SEO broker business of some kind. She did an article on this with a "Realtor" analogy: http://www.searchengineguide.com/searchbrief/senews/006129.html
We both agree on why it would not work!

rjonesx = "be wary of clients who look for every legal way to get out of those commissions". True, but besides a good contract, why would any client who has spent a lot of his time developing the relationship want to look for someone new if it is working for him?

Jill = When I did that 3 way e-mail dabate with you and two other SEM's, I did not have any "details", just the "general premise". The only reason that my idea was "shot down" was I know when to lose a battle to come back later to "win the war". But, every SEO I have talked to about my "one suggestion" did not have all my details and each one thought I was talking about traditional "Pay For Performance"(no matter what I said to educate them!). The PPC SEM, though, did have good reasons (for him), due to the type of special clients he wants, and I still respect your "Run Like The Wind" opinion for yourself. My suggestion is NOT for every SEO seller or SEO buyer!

WebGuerrilla = "I found it to be excruciatingly painful". Was it the colors or something else. I do respect your opinion on that. As for "It took a bit of time to perfect our model. There are a lot of little things you overlook when you first head down that path.", I would appreciate more specifics, if you can give them without breaking "confidentiality" concerns. In any case, thanks for agreeing with the "general premise" even if you execute the details differently than my "one suggestion". By the way, I have NOT gotten to all the details yet in my "series of posts", so no one (at this point in time) is really in a postion to evaluate it yet (THAT AIN'T "TEXT BAIT"). My initial posts were to demonstrate why I believe a custom form of this "Performance-based Pricing" is needed.

Chris D = No big deal, but it is "Brokerblogger" with a small "b" for "blogger". In fact, I am the opposite of "broke", and I am able to put long hours in because I want to vs. need to.

Brian Turner = I am against "Guarantees" for SEO's, since I agree with Danny Sullivan that they are all "twisted", and SEO's don't control the Search Engines.

massa = "I think the concept is valid, or at least as valid as another, and whether he changes the SEO world or not, it is refreshing to see another REAL blog instead of another blob of regurgitated drivel. This looks much more like original drivel and I appreciate that." Great comment! I even agree that some of my posts come across as "drivel". I try to learn each day to blog better, as I only started blogging on 7/18/05. But, I've been studying the Search Marketing Industry since about 1997 (all in my "About").

I likewise agree with massa's overall valid concept and business perspective.

Cheers,
Bill

wants.

"Was it the colors or

"Was it the colors or something else. I do respect your opinion on that."

The colors were a big part. The other issue is that you use an italic font for your core content, and then a regular font for quoted material, or content that you are trying to emphazie. (I think)

That's completely backwards compared to most blogs on the web. I just didn't have the energy to muscle my way through all that italicised, colored text.

"I would appreciate more specifics, if you can give them without breaking "confidentiality" concerns."

Actually, I just got started working on piece about how to structure and SEO performanced based/rev share deal. Not sure when I'll get it done, but it will end up on my blog in the near future.

the conversation

BrokerBlogger welcome to ThreadWatch™.

Had you been present here prior I would not have refered to you in the third person. Your post, introduced here as a thread-to-be-watched, was very diffilcult for me to read and understand. I have not gone back to determine why... it might be your writing style, grammatical structure, vernacular or perhaps (although I doubt it) the rainbow of emphases. I'm glad to see you didn't take offense as none was intended. As a new source to be read, I found it a very tough read.

Your post here befuddles me, too, so maybe I am just too dense for your blog. You wrote:

Quote:
As for "he is placing himself in the middle as a broker between buyer and SEO.", it is true only from an intermediary's perspective but not from a business profit perspective like Elance, VendorSeek, etc.

Forgive me if I still fail to understand the difference between a middleman and what you just (again) described.

You also wrote:

Quote:
Also, "why not blog to befriend the SEOs?"; I am certainly not trying to make enimies of SEO's, but I am trying to stay "autonomous".

Again, you'll just have to forgive my absolute density and move on with the others, because again I got confused because you seemed to blog to the client as audience, yet answer my recogniztion of that with a statement that you are tryng to stay autonomous. My point was that you might get more business befriending a side (either one) than decrying from the sidelines, and I suggested that it might be more profitable to debfriend the SEO side for the very reasons you outlined in your own post.

Phew. This even feels like a "tough conversation", but it's nice to see you visit TW™ with an interest in clarifying things for the friendly folk here.

Great Feedback

WebGuerrilla = My probable pathetic reason for using Italic and Colors is that I've read so many things on the web with the same basic type style and "black on white" or vice versa that I did desire to be "different" (especially with the basic background colors of blue/gray). However, I tend to agree with you and will alter what I do (it probably will save me time in doing the post, too!)

I bookmarked your blog and am looking forward to the "details" of your P-4-Performace arrangements (I realize each situation is different).

John Andrews = My quote "it is true only from an intermediary's perspective but not from a business profit perspective like Elance, VendorSeek, etc" needs clarification. I meant that my perspective is not monetized, although I intend to have Google AdSense ads eventually only to LEARN vs. "get rich".

"Forgive me if I still fail to understand the difference between a middleman and what you just (again) described" = you are right, it is a "middleman's" perspective, but that keyword has too broad a meaning for my intent. Also, I think that when I did a Wordtracker report last June, I found "broker" and "intermediary" to be better keywords (at that time).

My quote "I am certainly not trying to make enimies of SEO's, but I am trying to stay 'autonomous'." is based in my respect for Danny Sullivan who I believe is a great "intermediary" and tries to stay autonomous (especially proven when he quit the board of SEMPO for "autonomous" good reasons).

"you seemed to blog to the client as audience,.." = This is very true for some of my posts, but I really am on "both sides" as I believe all consultants should be on the "same side" as their clients and vice versa. So, I try to be "fair and balanced", but some posts don't turn out that way. I do have to admit that I tend to be more of a client advocate for only one reason, and that is that in the business world it is "Buyer Beware" vs. "Seller Beware". With SEO, though, it sure can be "Seller Beware". For many years I took a lot of "abuse" from clients in my own independent contractor sales/marketing/offline & online advertising business. So I do emphathize! At the risk of appearing "self-promoting" here is a post
of mine that I think is more "fair & balanced" = http://www.brokerblogger.com/brokerblogger/2005/11/seosem_buyer_se.html

"My point was that you might get more business befriending a side (either one) than decrying from the sidelines, and I suggested that it might be more profitable to debfriend the SEO side for the very reasons you outlined in your own post." = Point well taken. However, I really am not looking for "business". Maybe in the future that will change because I "want to" vs. "need to". But, for now, I am comfortable being the "ham in the sandwich" (as my good Jewish friends in NY used to say), since I have been in that role most of my business life.

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