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Site Flip: Buying and Selling Websites for Profit

Thursday, August 31, 2006

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.

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