Any WordPress site that wants to develop on the Internet will face a problem for its visibility: how to invest effectively in SEO?
Should we focus on natural referencing, paid referencing or both?
Definition of referencing: SEO, SEA, SEM and SMO
Before we start, let’s come back to the notion of referencing, otherwise we’ll get our brushes tangled up.
SEO is the set of methods that make a website visible as your wordpress website (on the Internet).
- Natural referencing (SEO: “Search Engine Optimization”), i.e. the positioning of a site in search engines.
- Paid referencing, also called advertising referencing, which is generally reduced to simple sponsored links (SEA: “Search Engine Advertising”, therefore Adwords).
- SEO on social networks (SMO: “Social Media Optimization”), i.e. your visibility on communities (mainly Facebook and Twitter, but also Youtube, Viadeo, MySpace or Linkedin.).
- The rest of the referencing (direct and indirect), which includes emailing, street marketing or even contest games.
The notion of paid referencing (therefore SEA) is the most difficult to understand because each professional puts a little bit of what he wants in it. A simple question on the translation to be given to the term SEA on Twitter gave me very varied answers: “Sponsored links”, “paid referencing“, “advertising search engine“, … The definition I gave above is therefore questionable…
In summary, search engine marketing (SEM) will therefore include these different concepts:
SEM = SEO + Paid referencing (SEA and other) + SMO + Multichannel
EDIT: following a debate on Twitter, it is true that my definition (and the following diagram) are wrong, and for several reasons:
- By definition, the SEM only includes the WEB
- The SMO is partly referencing (and only partly)
- Display was missing: purchase of advertising inserts, outside an affiliation platform
- SEO also includes VSO (Video Search Optimization
This would give a definition as follows:
SEM = SEO (and VSO) + Paid referencing (SEA, Display and other) + Part of the SMO
The problem for a typical company is to know where to invest: natural referencing, sponsored links, emailing, sponsored articles, price comparators,…
And very often, the question comes down to choosing between SEO and Adwords. It is therefore imperative to measure the return on investment of these two traffic acquisition levers. So start by asking yourself these two questions:
- How much does it cost?
- How much do I earn?
I assume that a return on financial investment is calculated. We could obviously measure a return on investment in terms of notoriety (duration of visits, number of pages visited) or impact on traditional commerce (how many of my customers in store came through the Internet?).
The ROI of Adwords and sponsored links
Calculating your return on investment is simple: Margin – Cost.
Your cost is the budget spent in Adwords, to which you add the time spent managing your campaigns (creation of ads and landing pages, keyword management, statistics tracking, etc.).
For example: you spend €10,000 on sponsored links, and spend 35 hours on optimization every month (5 working days), at €40 per hour, so Adwords cost you €11,400.
Now it is up to you to offset this expense with a net margin of €11,400. You will therefore need to know the gross margin you make on your products (the statement reimbursing you VAT, we do not take it into account), from which you will have to deduct all your fixed and variable costs (rent, electricity, salaries, various taxes, subscription, service providers, etc.) to obtain your net margin. As a reminder:
NET MARGIN = Turnover – VARIABLE AND FIXED EXPENSES
Let’s take a concrete example: a company with a 40% gross margin on products, which is reduced to 20% with fixed costs. Assuming that Adwords is the only source of traffic and sales, the company will have to achieve a turnover of 57,000€ per month to make its sponsored link campaigns profitable.
Instaon is a specialized in Adwords campaigns that will help you define your budget as well as set up your campaigns for wordpress.
The ROI of natural referencing
The calculation of the return on investment of your natural referencing is very similar: Margin – Cost of the agency (or employees).
Using the same example, it will be necessary to achieve a turnover of 57,000€ to compensate for the 11,400€ spent on natural referencing each month. This expense represents (salary and employer charges included) between 2 and 3 full-time referrers, except in the case of web agencies where some can very easily make you pay this amount for a half-time referrer.
However, this analysis would normally have to be complicated like this:
Net margin – (hourly wage * number of hours to position on each product)
In natural referencing, there is also an additional variable. The formula given above can be used to calculate the ROI after the service has been provided. If we want to estimate the return on investment of SEO before choosing a service provider, we must estimate the number of hours to spend to position ourselves properly.
And here, it’s a bit like a “feeling”, since it depends on the number of results on Google, the number of companies that want to position themselves on it, the number of keywords contained in the target expressions or the seniority of your domain. The more experience your referrer has (especially in various fields), the more accurately he will be able to estimate this number of hours.
SEO versus CPC
Is natural referencing better?
The question is therefore whether you should spend this amount on SEO or AdWords. Before going any further and launching a controversial debate, I might as well give you my vision right away: I always favour natural referencing, but sponsored links should not be excluded.
In fact, these are two distinct sources of traffic that are not at all of the same use.
The interest of SEO
Natural referencing is one of the best sources of traffic, for several reasons. With its site, you can potentially attract hundreds of thousands of visitors via hundreds of thousands of keywords (the so-called long tail), and this with text, image or video content.
In addition, the transformation rate of this traffic source is generally high, provided that it is positioned on targeted requests (called niches) or relevant to a need. On the other hand, requests that are too broad are not very remunerative, even if they can attract tens of thousands of visitors (with terms such as Real Estate, Money or Car).
But where it gets complicated, it is that natural referencing is sometimes long and uncertain. On some high demand requests, it is not uncommon to have to work for several months to obtain good results. And even after reaching the first position, there is no guarantee that we will stay there…
The interest of Adwords
AdWords is a “safe” source of traffic as long as you pay. With the bidding system, it is usually enough to put a high bid to appear at the top of the page. It’s a bit simplistic, but it remains the basis for visibility in sponsored links. However, it is necessary to add all the optimization variables on keywords, ads, landings pages or retargeting and keywords to exclude.
The second advantage is speed. In less than 24 hours, you can create a campaign and appear on Google. The other side of the coin: as soon as you stop paying, you lose all your visibility. It is therefore not an investment like SEO, but a constant burden for the company.
Third advantage, we will be able to make constant (and fast) adjustments to refine our results, while an SEO adjustment will take you at least 2-3 days to be applied.
AdWords is therefore excellent for starting a site, as well as for having a targeted, flexible and complementary traffic source to SEO.
Do not forget other sources of traffic
Don’t forget to always diversify your traffic sources, especially for 100% web-based business. Because if one of these sources fails you (penalized site or deleted Adwords account for example), you must be able to survive.
And that’s where price comparison, emailing, sponsored articles or social networks come into play. Never put all your eggs in one basket!
To conclude, I would say that SEO has good days ahead of it and that it remains the best source of traffic for a site. Adwords is an excellent source of complementary, flexible and immediate traffic, just like newsletters, price comparators and social networks.