For large advertisers -- companies with more than $100 million in annual revenue -- the opportunities presented by search engine optimization (SEO) continue to be significant and largely unexploited. Since the economies in the U.S. and Europe began to slow down in the third quarter of 2008, the majority of surveys conducted with senior marketers regarding their focus in 2009 and 2010 reveal that:
- Large companies are focused intently on lead generation, which means concepts like branding are moving down the list of priorities.
- SEO is considered the leading program by which to drive these results.
The reason SEO is gaining traction in the downturn is that some marketers think SEO is "free" due to the fact that, unlike display or paid search, there is no impression or click-based transaction cost (i.e., it doesn't hit the media budget, which is getting cut by 10 to 30 percent in most companies year-over-year).
For large advertisers, however, there are a series of strong internal barriers that need to be overcome, making SEO anything but free. In conversations with literally hundreds of companies, here are the top barriers to driving results in SEO:
- The changes necessary to drive SEO -- particularly technology changes to the templates for the site -- cannot be executed by the IT department in a timely fashion.
- Getting financing for SEO is difficult. Many organizations think SEO is free, and there is insensitivity to the investment necessary, as well as the continuity of the investment required to develop and maintain SEO leads.
- Ensuring that the web analytics system is configured to provide information on how effective SEO is performing is complex. Most organizations under-invest in their analytics systems, depriving marketing of key data necessary to optimize the driving of leads.
- Getting FTEs (full-time equivalent employees) to do SEO work is difficult in the "Age of the Hiring Freeze." Talented SEO people are available on the market in increasing numbers; however, the justification for bringing them in-house continues to be a challenge.
- And last, but most important: Hiring freezes drive organizations to rely more heavily on their agencies to drive SEO. The majority of agencies lag in the usage of technology to build scalable SEO programs, making their pricing models increase linearly with the number of site sections or sites being optimized. It takes five people to optimize one site, and 10 to optimize two sites, etc.
Forrester Research recently conducted a study that found 45 percent of all companies rely on their agencies to do SEO, and the percentage increased to more than 60 percent of larger organizations. It is this last point that is of great interest, as the fundamental economics of SEO have to change between advertisers and agencies for the potential of SEO to be exploited.
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