There is much debate in the general public and in the search engine optimization community as to what amount companies should pay for search engine optimization expertise.*¬†Prices are all over the board, and can be influenced by an SEO firm’s size, reputation (or lack thereof), resources invested in customer service, and many other factors. Moreover, there are a variety of pricing models from which to choose.

Rather than hire a firm, some companies instead opt to attempt this specialized discipline in-house in order to save money. Of course, there is a cost associated with this option as well – labor. Often, the cost of effectively performing SEO in-house, when fully calculated, will be equal to or greater than the costs of outsourcing (due to a sizable learning curve and the necessary testing and experimentation required).

In any case, companies often make decisions on whether to outsource (and if so, which provider to choose) based solely on price. However, one thing that is rarely factored into the decision making process is the potential cost of doing SEO wrong.

The Price Tag
The most obvious cost of doing SEO wrong is the price that was paid for the actual work, whether paid to a firm or toward salaries for internal resources. While this is the most quantifiable cost and the easiest to recognize, it is generally the least expensive consideration. This concept is sometimes difficult to understand, since there is typically a finite sum the company considers “at risk” when they sign a contract with an SEO firm or commit internal resources to the task.

Penalization Issues
In many cases, companies hire shady optimization firms that use underhanded techniques to increase rankings. Other companies use well-intentioned but over-eager internal resources that implement dated, and often dangerous, methodologies. Such strategies may work in the short term, but it is typically only a matter of time before the search engines catch on to the gimmick and the site becomes penalized**. In this scenario, the company actually winds up in a worse situation than before they hired the search firm or committed the internal resources, since now they have lost any search positions with which they started! Afterwards, getting back into a search engine index is difficult and sometimes near impossible.

Lost Opportunity Cost
Search is currently one of the hottest marketing channels in the world, and increasing numbers of companies are jumping into the mix and realizing outstanding returns on their investment. However, it can take several months to attain optimal results with search engine optimization, and choosing the wrong provider or using ineffective methodology can delay any returns. It is critical that the methodologies used at the outset are effective and timely to minimize the waiting period for results.

Disenchantment Leading to Channel Abandonment
Worse yet, sometimes a company that hired an inexperienced or unscrupulous firm, or used internal resources to little effect, will abandon the idea of pursuing SEO. Frequently, companies will make blanket statements about how SEO “doesn’t work for their businesses”, because they didn’t get results from a single poorly-executed initiative. This mistaken belief is potentially the most expensive cost of doing SEO wrong, since the major increases in revenue that SEO can provide are never realized by such companies (although they are often realized by that company’s competitors).

While price can (and should) certainly be a factor in the SEO decision making process, it should not be the primary factor. Unfortunately many companies who think they are saving money when making SEO decisions find out later that the actual costs of doing SEO wrong can make the savings pale in comparison. Worse yet, firms that focus primarily on price will sometimes unknowingly embrace methodologies that put their site at great risk for penalization and at best do not get the anticipated results. Meanwhile, those who abandon SEO entirely due to a single bad experience leave the channel wide open for their competitors, who are usually happy to take advantage.

*For the purpose of this article, we refer to natural or “organic” search engine optimization, where a company helps a firm to show up prominently in the natural results, as opposed to the sponsored or paid results.

**While fear of penalization is often used as a scare tactic by SEO firms, the threat is very real – one need only read about the recent Traffic Power fiasco to confirm it.

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