Website Appraisals 101: SEO

Search engines today direct huge traffic around the web, similar to the way traffic police used to stand at intersections and control the flow of cars and pedestrians. Furthermore, traffic from search engine referrals has been repeatedly found to click more ads than traffic from other sources. The point is that an assessment of search engine optimization is key to a website appraisal. If you enjoy this article consider my free newsletter.

As I wrote at City SEO, there are five standard things to consider in reviewing a website's SEO. These factors are backlinks and inbound links, keywords, external links and link structure, content, and finally current SEO effectiveness.

Ultimately, a site SEO review needs to be conducted. Once this is done, a dollar value can be put on the website's SEO strategy. Each factor can be valued individually, but to keep things simple, we prefer to just look at current SEO effectiveness, and replacement costs for SEO.

Current SEO Valuation

Ideally, a website is ranking number one for its targeted keywords. To put a value on this, establish how much revenue is generated from monthly search engine traffic. A good analytics program such as Google Analytics would be handy for this. Then consider what percentage of traffic is being converted, and see if the website is exploiting its SEO effectiveness well.

Other important considerations are how effectively a website turns its SE traffic into repeat viewers, members, newsletter subscribers, etc. The relationship (if any) a site builds with its search engine visitors needs to be evaluated. The earlier site SEO review will be helpful here, because visitors come back for a site's content. Another thing that might help earn bookmarks is a tightly focused keyword strategy. Visitors that see lots of links and material on a particular keyword judge the website a good resource and bookmark it.

Replacement costs of current SEO need to be taken into account. For example, if it would take $5000 worth of SEO work to get a site where it is in the search engines, this needs to be considered. On the other hand, if the work is simple on-site SEO, the appraisal of the SEO work done will be valued less. This is why backlink strategies can cost in the thousands of dollars. They require lots of work, and in particular specialized work the ordinary webmaster probably doesn't have time for.

SEO Appraisal Factors and Numbers

The bulk of an SEO appraisal is really in the replacement costs, with current SEO effectiveness giving a smaller - but still considerable - premium.

Generally speaking, SEO pricing is broken down according to
difficulty of the keywords/market
hours required to provide the SEO service
size of the website/project - correlates to ability to pay
SEO required

Rand at SEOMoz has more on SEO pricing. Note that SEOMoz is an upper range company with respect to pricing, and that not all SEO necessarily costs what they charge.

To provide an objective appraisal of hourly replacement costs, I'm going to reach for an idea I developed in my article on content appraisals. That is, I suggest taking the average of the on-contract SEO's hourly rate and that of an SEO who can provide an equivalent level and quality of service. For example, SEOMoz' services are comparable to those of Bruce Clay, a firm that charges $2000 a month for SEO services. Rand charges $300-$400/hour for his work. Further up the scale, some SEOs (Aaron Wall) charge as much as $500 an hour.

So the low range price of SEO per hour is about $50-$200/hour. The midrange SEO rate per hour is roughly $201-$350/hour. Finally, $351-$500+ is the high end of SEO.

Related articles are archived in the topical categories website appraisals, tips, and the website market.

Domains Domains Domains...

Domains are a potentially high profit market, which is why they're so atractive to many. I've researched some domains that can potentially be bought and sold easily. (If you enjoy the read, consider my free newsletter.)

Here's the list of finance and business oriented domains I found were availablevia the excellent domain tool, whois.ws:
eurobond.eu
beforetaxprofit.com
daytrading.com
dividendrate.com
equitycollar.com
equityfloor.com
equityoptions.com
equityswap.com
grantor.com

If you do purchase one or more of these domains, in order to flip them, please leave a comment and let me know how it goes, or email me (bookworm.seo at gmail).

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Website Appraisals: Traffic Appraisal

Appraising traffic is an important part of deciding whether or not to buy a website. (If you enjoy the read, consider my free newsletter. )

Essentially, there are two points about traffic: quantity and quality.

Volume can be measured in sheer unique visits, and in page views.

Quality can be measured by the estimated cost per thousand impressions (CPM) the site's publisher can earn from showing ads to his visitors. Furthermore, if the clickthrough ratios (CTR) on ads, and conversions ratios (CVR) on affiliate programs, and sales of his own merchandise contribute to determining the traffic's quality. Obviously, the higher the CPM, CTR, and conversions/sales, the better the traffic.

To appraise traffic, the following formula is appropriate:

Traffic Appraisal = Volume x [.3CPM + .7CPM X (CTR + CTR/CVR + CVR)]

The .3 and .7 reflect the greater trends in online advertising today. More publishers and owners prefer to use cost-per-click ads (AdSense, YPN) and cost-per-action ads (affiliate) on their sites rather than CPM ads. The numbers in the round brackets are a way of valuing click through rates, click throughs to conversions (to see if traffic is converting once it clicks through), and conversion rates proper.

The difference between CTR and CVR as compared to CTR/CVR is in what is being compared to. CTR and CVR compare to traffic stats, while the CTR/CVR ratio - my own invention - compares conversions to clicks.

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Business For Sale vs Web Site for Sale

Surfing the Web today, I found that a "business for sale" generally goes for much more than a "Web site for sale." Naturally, this is of interest to site flippers looking to make the biggest bucks from their site flipping. (If you enjoy the read, consider my free newsletter.)

Google business for sale and you'll find that franchises and other businesses are selling for tens or hundreds of thousands of dollars. By contrast, most established websites for sale at places like Website Auction Hub go for a few hundred to a couple of thousand dollars.

Several thoughts and comments come to mind when I consider this state of affairs in the business and web site world.

First, it raises a traditional question in business planning: will you sell volume or will you sell quality? By volume, I'm referring to micro-businesses, such as websites that generate income in the double digits on a monthly basis. By quality, I mean mostly bricks and mortar businesses that have a high trust factor, and generate income in the hundreds or thousands of dollars monthly.

Second, if people are willing to sell "web sites" much cheaper than they're selling "businesses," the opportunity for the site flipper's wet dream arises. The opportunity can be summarized as follows. Given the differences in pricing between the "web site for sale" market and the "business for sale" market, site flippers can buy on the web site for sale market with the idea of reselling it soon after on the business for sale market.

This is the basic idea behind house flipping: buy a house, and resell it quickly. Except that laws make house flipping illegal (agents can be sued for not getting the best price possible). Chances are, the internet will be regulated like any other industry (domain registries being a good example of some early regulating).

A third issue this raises are the long term prospects for the "web sites for sale" market. Someone is bound to fuse the business- and web site-for-sale markets. When this happens, the law of supply and demand means that web site prices will increase, while business prices will decrease. A new equilibrium will be reached in the market where the above-mentioned opportunity will dissapear. And if the market doesn't take care of it, government will.

Fourth, I wonder if the business for sale market is as succesful at finding buyers for sellers as the website market is. This will affect the equilibrium reached when the two markets merge. It might also prove meaningful to site flippers whose pockets aren't that deep, as selling a business usually entails more costs than selling a web site does. Listing fees alone are 2 times more expensive, at least.

Last, and most importantly, I encourage my fellow Site Flippers to immediately involve themselves with the web site market as deeply as they can. The window of opportunity to profit from the current parallel business for sale and web site for sale markets is shrinking by the minute, as even the mainstream media report the "news" about our industry.

Related articles are archived in the topical categories buying a site, selling a site, flipping tips, and website markets.

Canadian Domains to Register

I was playing around with some registrars and found some interesting domains that are still available. If you enjoy the read, consider my free newsletter.

Canada's universities: canadasuniversities.com
Canadian parties: canadianparties.com
Canadian exchange rate: canadianxchangerate.com,
-canadiandollarrate.com,
-canadianloonierate.com,
-canadiancurrencyrate.com,
-canadianloonies.com
Canadian Idol: canadianidolatry.com

Let me know what you think, and if you register and/or sell any of them, let me know too.

Related articles are archived in the topical categories buying a site, tips, flipping case studies, and the website market.

2007 Canada Games Domain

A client of mine is the new, proud owner of http://www.2007canadagames.com. The owner, a friend and client, saw people searching for that, and figured hey, why not go for the domain name. There aren't any development plans as of yet. Either way, the domain has great value: it's the exact name of the games, it's .com, and there's massive interest in the games.

For those who don't know, the 2007 Canada Games are Canada's version of the Olympics, with athletes from across the country competing.

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