A low ROI in business, when an SEO project does not reach payback and profit for a long time, is a common problem with the wrong approach. In this article, I will analyze a common mistake in building a link-building strategy; eliminating this mistake will garner you more customers and profits in the shortest possible time.
I have been building successful SEO strategies for more than 10 years, and at the time of writing, I hold the post of head of SEO in a large international company. Over the past year of hard work, we have increased the efficiency of link-building processes by more than five times.
The peculiarity of my approach is that I focus primarily on making a profit, considering SEO as part of a global business process and not a separate tool. Link-building, query collection and clustering, and content creation should all serve one purpose in a well-coordinated ensemble.
I often see how SEO specialists make the same mistake—they make a decision about the reference budget based only on the average link price without considering the global ROI. But, in fact, more links, although they require a larger budget, will bring greater profits to a business faster in the long run and will pay off several times whereas inappropriate savings delay and detract from profits, which I will prove below. As the saying goes, sometimes you have to lose the battle to win the war.
One of the main reasons for a long return on investment is that the target clusters of queries do not rank in the TOP 1-3 search engines. Despite the efforts of the SEO team, the site is ranked below the TOP 10; the results seem to be there but are not as significant as expected.
We all know that to get into the TOP 1-3 landing pages, you need to have a lot of links. More links = more spending. Here lies a common mistake of SEO specialists and managers: focusing only on the cost of the project and not analyzing the potential profit enough.
So here’s an example:
Let’s imagine that all our company’s profit derives from one target keyword cluster.
If we get into the TOP 1, we will earn $1 million per year. There will be two payments from a partner of $500,000 every six months.
After analyzing our competitors, the team concludes that 1,500 links are needed for the TOP 1. This amount could be obtained in various ways, but the more links we need and with the tight deadlines we have, the higher the average price per link will be. The price of the link is the cost of its placement + the work of the outreachers.
At the management meeting, two options for the annual budget are discussed.
Option 1
Buy 1,000 links for $200/piece
It will be necessary to invest $200,000/year
Option 2
Buy 1,500 links for $300/piece
It will be necessary to invest $450,000/year
Which option seems more profitable? To me, the second one—and here’s why: no, it’s not about “we invest more, we get more.” The costs in option 2 are 2.5 times higher, but they need to be evaluated from the point of view of efficiency for business and not just as the budget of an SEO specialist. Don’t just look at the average price of the link you receive.
Explanation:
To get 1,000 links in one year, you will need to hire three outreachers (creating 28 links per month, on average, to the promoted site) and pay them salaries of $72K ($2K per month for each). Let’s assume that an SEO specialist will also give a task to the outreachers. In this case, a dedicated team lead for outreachers is not needed.
To get 1,500 links in one year, you will need to hire four outreachers and pay them salaries of $96K ($2K per month for each) + one team leader. Because this is already more volume and more team, you need a dedicated person-manager, which is an additional cost of $48K per year, resulting in a total of $144K per year in salaries.
The more high-quality links you need, the higher the average price for one piece will be. Now, we are talking about links posted for a fee. Inexpensive, yet at the same time, high-quality links will be purchased very quickly; there will be sites from which it will be either more expensive to buy links, or they will be of poor quality, which is not very effective in SEO. Therefore, you will have to buy links with a higher average price in the future because the number of high-quality sites is limited.
We count the annual costs (the budget for links):
Option 1: (1,000 links): $72K for PO + $128K for link placement = $200K per year
Option 2: (1,500 links): $144K for PO + $306K for link placement = $450K per year
Let’s calculate the income:
For simplicity, let’s calculate with the knowledge that advertisers are ready to sign a contract with the company for $1 million per year only when it reaches the required volume of customers, achievable only when they are in the TOP 1 of Google.
When we reach the TOP 1, we get a contract; otherwise, we don’t. This is one of the advantages of being the market leader—advertisers sign a contract with him on individual and very favourable terms.
If we choose budget option 1 with an average link price of $200, we will get the 1,500 links needed to reach the TOP 1 in Google in 1.5 years. We will spend $200 * 1.5 = $300K in total
We will receive the first contract for $1 million in 18 months.
If we choose budget option 2 with an average link price of $300, we will get 1,500 links needed to reach the TOP 1 in Google in 1 year. We will spend $450K in total.
We will get our first contract for $1 million in 12 months.
By choosing the second option to get 1,500 links in one year with an average link price of $300, we will reach our desired income six months faster!
6 months = $500k of income
As a result, for 2 years of business existence, we get the following income:
The first option (1,000 links for $200/piece): $0.5 million – $300K = $ 200K
The second option (1,500 links for $300/piece): $1 million – $450K = $550K
By choosing the second option, you will receive $350K more income!
A final thought: Set up processes that allow you to build up links to your site more quickly and treat the project more like a business and not just a site that sometimes needs to rank high in search engines.
