The 50/15 Rule: Balance SEO and SEM Spending

 

Online and mobile marketing has proven itself as a legitimate and necessary part of any marketing strategy. U.S. companies spent $32 billion in online and mobile advertising in 2011, up 22% from 2012, according to the Interactive Advertising Bureau (IAB). Almost half of that spending is on paid search, also called Search Engine Marketing (SEM), which is growing even faster, up 27% over 2010. Note that the IAB’s totals do not include the billions of dollars spent annually on Search Engine Optimization (SEO), where companies try to rank highly in search engines’ unpaid, or organic, search results.

It makes sense that so much money is spent trying to get in front of people when they are searching – it’s rare that consumers announce exactly when and what they want to buy, but that’s what they do when they go to a search engine and do what we call a commercial search. Whether they are asking about cheap flights to Las Vegas, Father’s Day gifts or wristwatch repair, they are announcing their intention to buy a product or service…now.

As a custom content creation company, we have many SEO and SEM agencies using our service, so we have some unique insights into best practices for getting a website to the top of the search results, whether in paid or organic results. Clearly, for our clients, content is a key element of how they approach SEO and SEM campaigns. The search engines decide which web page ranks at the top of their organic results for a particular keyword largely based on the content on the page. Of course, they also look at domain names, meta tags, links and other factors. What is interesting is that increasingly, the content surrounding a link to a webpage is studied by the search engines to make sure the link is a true “vote” for that page to be listed highly in the organic results. As a result, we think every SEO expert would argue that content is crucial to an SEO campaign.

Content is also important for SEM. The top paid result for a particular keyword used to belong to the advertiser willing to pay the most for a click on its ad. The other advertisements on the page were listed in descending order of the amount the advertisers were willing to pay per click. Google changed that model in 2002, adding another element to who was listed first. Google decided that if an ad was clicked on a lot, it must be really relevant, so it would move that ad up in the paid listings, above ads that were paying more per click. Today, Google creates an overall Quality Score for each ad, which still includes the click-through rate, but also looks at things like the content on the landing page for that ad and whether the content seems appropriate for the keyword searched. As a result, if an advertiser can improve the content on its website, thereby improving the Quality Score of its ad, it can actually move up the paid listings, get more traffic, and pay less per visitor.

Trident Gum famously stated that four out of five dentists recommend sugarless gum to their patients who chew gum. We think it’s safe to say five out of five SEM and SEO experts recommend content as an integral part of any online campaign. But how much content? How much should be spent on content? Most experts keep that information close to the vest, but we wanted to give a rule of thumb to get the conversation started.

With that context, and understanding we could be accused of a heavy dose of self-interest, we humbly introduce the 50/15 Rule. We think the 50/15 rule will help marketers better allocate resources and funds to maximize the results from SEO and SEM.

The 50/15 Rule is simple. In any marketing strategy, content creation should comprise 50% of organic or SEO spend, and advertisers should spend 15% of their SEM campaign on landing page content.

SEO Spend – 50% should be on content creation

SEO is the science of getting the right content to the right people - using popular searches to guide content creation, then promoting that content to the right audience, leading to higher traffic and conversions.

Content Funnels Leads To You

A fantastic keyword list doesn’t help rankings or traffic until it has inspired pertinent, quality content. And the thousands of Twitter followers and Facebook friends can’t spread the word if there’s no word to spread. Viewed in this light, content creation should take up half the SEO budget – without it, there’s no SEO at all. Additionally, quality content can raise a site’s ranking, even without other optimization steps. We know of a very, very large online retailer that introduced category descriptions on their site, and fairly quickly saw their traffic from organic search listings rise by 5%. That led to many millions of dollars in increased sales for a fairly low investment in content.

PPC Spend - 15% should be on content

Many marketers see paid advertising, whether AdWords, banner ads, or advertorials, as a completely separate beast from organic strategies and content creation. However, Google's own Quality Score is based on how well your offering fits the ad created. The better the content matches the user's need, the higher the quality score and lower the ad cost.

Quality Content Can Lower PPC Costs

Jon Wuebben noted in his book, Content is Currency, that a pilates studio reduced PPC costs by 50% with SEO-optimized, on-topic content. Dedicating just 15% of your paid advertising budget can lead to the content essentially paying for itself in lower PPC costs, simultaneously increasing visitors and visitor satisfaction, because they will see content directly tailored to the keyword in their search.

The 50/15 Rule will not be appropriate for every marketer in every situation. The Rule is not meant to suggest that every single company or campaign needs to follow it like dogma, but it’s meant to work like the two-month salary rule on engagement rings, which was introduced by DeBeers, the diamond producers. We want to promote the 50/15 Rule to give the same kind of guidance to someone who is unsure about how, and how much, to spend on SEO and SEM. For example, spending a lot of money on a SEM campaign without having proper landing pages, each with great, relevant, keyword-optimized content on it, is either going to result in a failed campaign or at best one that under-delivers the potential ROI. At the same time, if someone spends 40% of their SEM budget on content, and only 60% on the price per click, that’s probably overkill, and again, not optimizing ROI. In the same vein, it’s a bad idea to have a SEO strategy that is 100% links and 0% content, or even 75% links and 25% content, especially with Google’s recent Panda, Penguin and other updates.

In summary, we’re hoping experts will agree that 50/15 is a reasonable guideline in the same way that two months’ salary is a reasonable guideline for engagement rings. If DeBeers’ rule didn’t work as a good guideline, we would not be talking about it over 50 years after it was introduced. We explained the 50/15 Rule to Kevin Lee, founder/CEO of Didit, who has advised companies on online marketing since the late 1990’s and who knows as much about SEO and SEM as anyone. His response, which he posted in a blog post:

…because so many marketers and advertisers under-invest in content, I found myself thinking about all the reasons why those under-investing in content should consider ramping up that investment and how a rule-of-thumb might help them. … When it comes to getting senior management to approve new budget, sometimes a rule of thumb gets you budget, other times even the most intelligent presentation as to the value of the investment of incremental budget alone might fall on deaf ears. So, feel free to use the 50-15 content investment rule of thumb or create your own.

We’re running the rule past other SEO and SEM experts, and we’ll continue to provide their feedback, along with more case studies and evidence that the rule is a good guideline for anyone who has ever wondered: How much content is enough? Feel free to include your experiences in the comments or share on Google +.

 

Christina Zila
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