Performance Based SEO
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[edit] Comparison Between Traditional SEO and Performance SEO
[edit] Traditional SEO Payment System
Under a traditional SEO (search engine optimization) payment system, a large sum of money is usually charged to the client at the beginning of the project. This is a potential problem with the client. The reason for this is due to the fact that the client is the one who is assuming all of the risk for the project. No work is being guaranteed.
A new variation of this form of payment system has come out where the SEO may split the sum up into different stages. One example is where half of the sum is paid when the project is started and another part of the sum is paid if and only when the results are guaranteed. This does reduce the amount of risk that the client receives.
[edit] Performance Based SEO Payment System
Performance based SEO takes a totally different stance on who should assume the risk. The search engine specialist will begin work on the project before any money has even changed hands and they will continue to work on the project until the client sees rankings for their keywords. The client will start paying only after the SEO Company achieves and maintains the rankings the client wants, for the keywords the client wants, and in the search engines chosen by the client. This payment system eliminates completely the risks on the client's side. The risk it transferred from the client to the SEO now. If the SEO does not provide the company with rankings, no money will exchange hands.[1][2][3][4]
[edit] How does this performance based system work?
Under the performance system there is usually a contract that is signed for the length of 12 months. The reason for such a long contract is that it may take some time for keywords to rank. For some of the more competitive keywords, it could take half of the contract length to achieve.
Let's say that you have 3 key phrases that you want to target:
| Keyword |
|---|
| Widgets |
| Gadgets |
| Smidgets |
These three keywords have varying levels of difficulty from easy to difficult. The levels of difficulty are determined by looking at the number of results for a given search term and by looking at the current competition in the top 10. Obviously a keyword with fewer results and less competition for the keyword results in a less expensive price for that specific keyword. Let us take a look at our 3 keywords below and look at how a pricing structure for these keywords may look.
| Keyword | Difficulty | Price |
|---|---|---|
| Widgets | Gadgets | Smidgets |
| Easy | Moderate | Difficult |
| Inexpensive | Mid-Range | Expensive |
By looking at the list of keywords and their respective price ranges, the widgets keyword is easier to achieve a higher ranking than say the smidgets keyword would be. This would be due to a lack of competition at the top and/or fewer results being returned by the search. On the flip side, the smidgets keyword likely has much more competition at the top and far more results being returned.
This may be what the clients rankings will look like at the end of the month for their keywords:
| Keyword | Rank | Price Paid |
|---|---|---|
| Widgets | 5 | Upper-End Price |
| Gadgets | 9 | Mid-Range Price |
| Smidgets | 19 | Lower-End Price |
First, there is the widgets keyword. The rank for this keyword is high. This would justify having to pay the maximum amount for the keyword. This keyword had an inexpensive price so the actual amount will be small but it will be the maximum of this amount.
Now, taking a look at the gadgets keyword. This keyword has a little lower of a rank and thus the price that one would have to pay for this keyword's rank is likely not going to be at its maximum amount. The keyword is still ranked rather well and will generate a considerable of traffic yet. If we take a look at the pricing table, the keyword is at a mid-ranged price. This means that the keyword will be a little lower than the max that could be charged for this mid-ranged keyword.
Last, there is the smidgets keyword. This keyword has a little lower of a rank and will have a low end cost of the higher priced keyword. If this keyword drops much lower, it is likely that there would be no charge for this keyword for that month.
[edit] What are the benefits of performance based SEO?
There are a variety of benefits of going with a performance based SEO company over a traditional SEO company. Some benefits are listed below.
1. A performance based SEO company requires no initial investment into the project to get it started.
2. Under a performance system you only pay if you see results for your keywords. This will give you more peace of mind since you know work is being done on your project. If no work is being done on your project, you will likely not see results and thus have no bill for that month.
3. Work needs to be continuous under a performance based system. If the SEO company stops working on the project the rankings will likely drop as will their income from that project.[6][7]
[edit] References
1. http://www.seobook.com/archives/002105.shtml
2. http://www.searchengineguide.com/stoney-degeyter/pay-for-perform.php
3. http://www.seo-newsfeed.com/why-pay-for-performance-a287.html
4. http://seoarticles4u.com/Why_&34;Pay-for-Performance&34;_SEO_is_a_Better_Investment_than_&34;Guarantee_a645.html
5. http://www.webpronews.com/insiderreports/2005/09/01/pay-for-performance-pricing-models-for-search-engine-optimization
6. http://imajestic.com/seo.php
