Posted in Internet Marketing Strategy	August 17, 2005

Executive Summary

• Website search engine optimization is not like other marketing investments
• Organic website search traffic can generate a strong ROI over time
• Website search engine optimization measurement requires a complex system

While chatting recently with the publisher of a large, circulation-driven consumer magazine, I was surprised to hear that until about 18 months ago, they had made no effort to generate organic search engine traffic for their very successful free companion website.

Opportunity: Unlike other sources, including pay-per-click, email and website text advertising and even co-registration, he had no idea how to budget either expenses or revenue for a website search engine optimization program. His deepest fear was that he'd spend several hundred thousand dollars on testing, and have nothing to show for it.

Leap-of-Faith: After considering a number of options, he decided to make a major commitment and hire a full-time search engine optimization specialist at a fully loaded cost of about $170,000 per year, including salary, overhead, training and tools. He was prepared for the worst, having been told by others that it could take six to 18 months to generate measurable results. He was confident that his tracking and reporting systems would tell him what was happening, even if it was small. He budgeted the full $170,000 in annual expense with no revenue from website search engine optimization for the first 12 months. He wanted to make sure no one's expectations, including his own, would be too high.

Results: During his first week, the new search engine optimization specialist benchmarked website search engine referrals from Google, Yahoo! and MSN at about 100 per day with a five percent conversion to their free email newsletter (eLetter), or about five sign-ups per day. By last month, that number had been methodically driven to 5,000 referrals per day with a seven percent conversion rate, or about 350 new eLetter subscribers per day, or 127,500 new eLetter subscribers per year. During their first 12 months, the average eLetter subscriber acquired through organic website search engine optimization generates about $7 in net revenue (after cost of goods sold or COGS) for this publisher. That translates into a whopping $892,500 increased net sales with a return on investment (ROI) of about 5X.

Lessons: Although its hard to test search engine optimization in a small way, most publishers who master the source tell us search engine optimization is both one of their largest sources of quality traffic and, for those that know how to measure search engine optimization success, almost always their highest Internet marketing ROI.