Skip to content

July 19, 2011

16

The Commoditization of SEO

by Anthony Verre

No one who’s watching wants to see it. No one who’s listening wants to hear it. Anyone who’s just starting out in SEO or anyone who’s been in SEO for years isn’t going to want to hear it or even agree. SEO is a commodity. It’s been commoditized.

Deep down, it’s something I’ve known for a year or so now, but two recent posts have solidified this viewpoint for me: Rand Fishkin’s The Responsibilities of SEO Have Been Upgraded and Alan Blieweiss’ Why I Joined Click2Rank. Each has a unique subject, each has unique vantage point, but the end result of both articles brought me to “commodity”. Neither are prerequisite reading, but I would recommend them both.

Here’s the definition of commoditization from InvestoPedia:

1) While many consider this sort of adjustment worthwhile, some view commoditization as a cause of price fluctuations. 2) When a product becomes indistinguishable from others like it and consumers buy on price alone, it becomes a commodity.[emphasis mine]

The New Used Car Dealerships of the Web

Between the rapid globalization (read outsource) and higher levels of saturation in the market place today, SEO services are the newest used carSEO is the New Used Car Dealerships Model dealerships on the web. The same knowledge resource [the product] possessed by many in a space dominated by price [consumers looking for the service]. The industry is about cheap quality. If the consumer doesn’t find SEO Company X’s price palatable, he/she can walk down the street and haggle with SEO Company Y’s people. Because in the end, all a client/consumer wants is a vehicle that gets done what it has to at the least expense to them.

Some will argue that this simply isn’t the case. And, I’ll listen to those arguments because I still want to believe it isn’t the case either. But let’s take this metaphor a bit further.

Ferrari’s and Yugo’s and Everything in Between

Like automobiles, SEO and SEM skill sets come in varying degrees. Some of us are highly-tuned, highly-functional Ferrari’s: clients know it’s expensive (and have a hard time justifying the cost), but also know (we hope they do) they’ll be getting precision, speed, luxury, and an unparalleled level of craftsmanship. Some of us out there are Yugo’s: clients know (again, we hope they do) all they’re getting is four tires and an engine. It gets you mobile, it’s A to B, it’s not the safest or the best, but it’s cheap training wheels. And then there is everyone in between these two poles; it’s a grab-bag of skill sets and you [the client] never know what you’re going to get.

A Second Depression

This is where it gets a bit political, so if you’d rather not, no hard feelings. We’ll catch up on the net another time.

It’s no big secret, the global economy is in trouble. From dollar-deflation issues and Euro troubles, to crashing double-dip housing market complete with derivatives [read a crippled banking and finance industry], crushed consumer spending, every company is watching their marketing budget with an extra layer of scrutiny. It was lean before, it’s lean now, and it’ll be leaner into the distant future. The Second Depression isn’t letting them off the hook, and in turn, they won’t be letting us off the hook.

SEO is less about experience, knowledge, and proven ability these days, even taking into account Rand’s accurate depiction of what SEO is today. It’s a numbers game for companies. They recognize the need for SEO and SEM services in order to be competitive, in order to still have footholds in the market place. However, since SEO services have been commoditized, it’s no longer advantage SEO.

SEO Prices Are Not Yours to DictateThe Game is Not Yours to Dictate Anymore

Companies know the score now. They no longer feel compelled to be held over the fire singularly based on an SEO’s knowledge, experience, and skill set. Thus, leading to higher costs. Prospective clients can send you packing and opt for cheaper(est) services thanks to a saturated marketplace, thanks to globalization. Current clients can spend half what they do now by pulling resources in-house. Couple that with ultra-frugal mindsets and heavily slashed budgets. Hopefully you can see where this is heading.

This doesn’t mean that Ferrari-esque SEOs are destined to find agency/in-house gigs (but that is one possible outcome). It doesn’t mean that Yugo SEOs and Middle SEOs will rule the market. It simply means that the game is no longer yours to dictate. And, as such, expect less. Even in destroyed economies, performance has a place. You can still keep the same prices, but expect that even less people will seek you out for that rate.

You can tell me that “quality” still means something to some. You can tell me that “results and proven track records” still hold water. I won’t disagree with that. But what I will tell you is that those things are “nice to haves” in a world where the guy next door does the same thing for half the price, even though he/she doesn’t have a leg to stand on. Because it’s about dollar-dollar bills y’all.

About these ads
16 Comments
  1. Jul 19 2011

    Great post! I’ve been predicting and talking about the impeding commoditization of SEO for two years now. I saw it coming. When SEO on page best practices were not changing, and still have not really, I realized that on page SEO was going to be an almost mechanical process and was losing much of the “art” that used to be necessary and an advantage. Nowadays any yahoo (no pun intended) can find a post on Sphinn from a respectable SEO that outlines EXACTLY how to do keyword research, competitive analysis, optimize page titles, alts, and tags, etc. And there are tons of software coming out and having been developed in the past 3 years. Even SEOmoz got out of consulting to focus on software and memberships. They too saw it coming! Aaron Wall has been screaming this for years as well. Cocky as he may be, he’s a super smart and insightful person.

    I do still believe that there are a select few top SEOs that are generally better at on page SEO and can “maybe” find a few tweaks that the average SEO could not that can help your SEO. But for the most part any noob SEO can probably do a good job with kw research and implementing on page SEO. This to me, makes on page optimization a commodity.

    But where I see a gap in commoditization is in the off site SEO realm. Yes, LINK BUILDING. This is where the separate the weak from the strong, in the ability to execute successful and long term, relevant and trusted, links. Link ARE the equity of organic rankings, and they always will be. They are the foundation of Google’s algo and that will never change.

    Let me put it this way, you can have OK (or even terrible) on page optimization and with a great link building campaign you can dominate. Or you can have world class on page optimization with an OK link building campaign and most likely you will not do well. This proves the power of link building.

    I do have on caveat, on page SEO makes a much bigger splash when you are dealing with large enterprise level sites with 100k+ pages.

  2. Jul 19 2011

    Nicely written, but I can’t agree! While it’s true that many businesses will look for the most affordable price, and may find difficulty in accepting a Ferrari-SEO’s price points, that doesn’t mean that they’re going to get the same peak-performance out of UGO SEO.

    They’re welcome to pay whomever for whatever, but it’s not the same product. Now, if search engines were to start looking at SEO the way businesses do, that might pose a problem. For now, however, you’ve got to be good at your gig to consistently rank a website and to turn a good profit. Companies who look for a cheap or quick fix may find cheap or quick success,but it will be fleeting.

    Good SEO’s and Bad SEO’s don’t deliver the same product, no matter what a business owner may think.

    • Jul 19 2011

      Nate,
      Thanks for stopping by! It’s ok that you don’t agree, that’s what makes discussion great. :-) I think the point, and you are proving it for me, is that business owners don’t know the difference between great SEO work and non-quality SEO work. To them it is the same product. The price is the distinguishing factor for them. The bulleted lists of deliverables, the conversations, they are all the same at some level (perhaps a slight difference or two). Like it or not, Miguel [Search Blogger] hit the nail on the head in his comment. Rookie SEOs and Seasoned Pros approach on-page in the same way. The mechanics are the same. There may be differences, but they are slight.
      The point: owners/consumers/clients don’t know the difference between them. What they do know, what they do see, and what they intimately feel is the hit on their pocketbook.

      • Jul 19 2011

        I’m sorry but this statement is absolutely incorrect: “Rookie SEOs and Seasoned Pros approach on-page in the same way. The mechanics are the same. There may be differences, but they are slight.”

        And it illustrates the larger fallacy behind this post.

        A commodity becomes a commodity because there is no differentiation in the product. Even if SOME consumers don’t know how to tell the difference, the results are DRASTICALLY different between a rookie SEO & an experienced one.

        As long as experienced SEOs continue to deliver a better product (higher rankings in more competitive markets in a shorter time) SEO will never become a commodity.

        And if the product you’re selling ISN’T different than that of a rookie SEO, then you don’t deserve to be paid any more than they would be.

        In fact, the example you give of used car salesmen only serves to further damage your case. Cars are not commodities, otherwise no one would ever buy higher priced cars. People pay a premium for luxury and quality. The long term impact isn’t always known right away & some buyers are tricked into buying lower quality cars, but over the long run, brands develop reputations and users purchase them accordingly.

        The same will hold true for SEO. Agencies & consultants develop reputations and consumers can educate themselves enough to make a wise decision.

        • Jul 20 2011

          Ben,

          You’re right, Seasoned SEOs and Rookie SEOs do not approach on-site, on-page SEO in the same way. I couldn’t agree more, and the statement is false. If nothing else, at just a pure knowledge and experience level of what works and doesn’t. That generalized state deserved to get punched in the head (both physically and metaphorically). ;-) Your points are well-taken, and as I said, my heart is where your head is at. I still want this to be the case, I just don’t know that it is.

          You end with, “…consumers can educate themselves enough to make a wise decision.” That’s a big task to put on the shoulders of consumers in an industry that hasn’t really grown up yet, in an industry that continues to redefine itself month after month.

  3. mikevallano
    Jul 19 2011

    Great post and outlook on the industry. While I agree to an extent, I think it’s our job to differentiate ourselves to potential clients. I’m not talking about skill level, but on trust, relationship-building, and a goal of improving clients’ bottom lines, not just rankings.

    And while SEO may be more of a commodity now, so are many other service-based industries. For example, if I need a plumber, I can assume that any plumber can fix my drain. However, I’d rather call someone that is friendly, can explain the problem, not track mud across my floor, and can work with professionalism, even if they cost a little bit more.

    The point being, there will always be ways to differentiate your services aside from price. And as for the companies that are shopping solely on price, they’re not clients I’d want to work with anyway.

    • Jul 19 2011

      Mike,

      I agree that service (value-adds) are a very good way to create the separation factor. However, “value-add” is subjective and intangible. What might be out-of-this-world for one client, might just be “meh” to another. I would agree that a track record of professionalism and “extra mile” behavior can be that distinguishing factor and get you a few extra dollars per contract. I think I would put the situation to you this way:

      If you’re sink is leaking, threatening to flood, you have a few options: 1) fix it yourself [9 times out of 10 the cheapest option and you learn something], 2) Call a friendly, professional plumber that charges $50 more per hour, 3) Call the plumber whom don’t a thing about, but still has all the certifications of Professional Plumber, and costs $100 less an hour. Now add in the variables that your household is on a shoe-string budget, and you still have other expenses. I think the choice is rather obvious from a fiscal standpoint.

      I think that’s how some businesses are now, and a majority will be, looking at the situation in the future. So you may not want to work with them because they are price-focused, but companies that want to survive won’t have much choice. Great comment, thanks for stopping by!

      • mikevallano
        Jul 19 2011

        Yes, good points. I’m sure we could chat for a while about this over some beers. If you come to Denver, hit me up and we’ll do just that. But much like SEO companies, not all beer is created equal. And I don’t drink the cheap stuff ;).

  4. Jul 19 2011

    The first SEO package started SEO down that slippery slope… when the industry realizes it isn’t a one size fits all world. Had packages until 98/99 then realized they were whipped and starting selling ala carte order what you want. We’ll get the ingrdients and give you a price. Every business is unique so every website is unique….

    • Jul 19 2011

      T,

      I hear you. Packages commoditize. The counter-argument is that packages allow for sustainability of agencies/firms. And that all out SEM/SEO strategy and building unique plans requires highly skilled, specialized labor muscle, cost, and tight operating discipline. And, it doesn’t come cheap. Personally, I prefer it, but for the sake of discussion (or argument :-)) packages are how business can survive in the economy now and going forward. They are what they are, no frills, no add-ons, just “THIS”. And, pricing is flexible b/c you can always subtract from packages to meet needs. It’s sustainable, just not long-term profitable unless you can bag hundreds of clients. And even then, you’ll make enough profit but won’t be super-rich. So, I suppose it’s a question of greed when it comes down to it.

  5. Jul 19 2011

    Anthony,

    Yes, SEO, as an overall business model is becoming commoditized. However, the more it does, the more half-measures results people will get. When the pendulum swing is great enough that site owners become disillusioned, they’ll then want to know how they got into that mess.

    Some will point fingers at Google, at “the system”, and at our industry. Fine. let them.

    Others still will seek to learn more, and upon discovering they were hood-winked by the “cheap – so hire us” herd, some of them will turn to those of us who don’t care about making a quick buck for volume pricing sake. They won’t necessarily like having to pay more. Yet they’ll understand why they need to.

    How do I know this is going to happen? Because commoditization has already been going on in our industry a while. And every new client – EVERY new client that came to me over the past several months fits in that “burned by cheap” reality.

    Why do you think so many became clients of mine after Panda? It’s not just due to people who didn’t now better, or those who thought they knew SEO when they really didn’t.

    It’s also because of people who sell cheap crap. :-)

  6. Jul 19 2011

    For the most part I am in agreement with you. The market is crowded – their is still high demand though. We spend most of our time with new sales differentiating ourselves from the pack. It’s harder than it used to be, and everyday we hear about potential clients considering another nobody we never heard of claiming that they could do the same job for half price.

    I haven’t lost faith. Cream always rises to the top. It’s just going to take much more work to keep winning new clients in the ever crowded marketplace. It’s going to mean we need better marketing skills and lots of good referrals to compete against the low price nobody’s that are crowding the market.

  7. Rachel Howe
    Jul 20 2011

    Great post Tony. I agree that all your points are right based on logical reasoning. For those that want to learn how to better sell themselves, I came across a great book called “Sell Yourself First” by Thomas Freese. I read a bit so far and it’s very insightful.

    Also, Does this mean you’ll consult us newer SEO’s on the tricks of the trade for the price of an Indian freelancer? (pun intended) :p

  8. Jul 20 2011

    It’s funny tom and I were just discussing this about a week ago. I was much the stance you are but he posed an interesting proposition. How many sales people are there in the world? A heck of a lot more than there are competent SEO’s. Throw a brick, find a salesman (sorry sales guys I didn’t mean to assault you just there). Yet there are still more than a few sales people that can command a six figure salary. Same is true with sports agents or advertising execs. Tom proposed SEO is very much the same. A person who is extremely capable of driving more dollars into the pockets of corporations is always going to be able to command a high salary.
    That being said… Not everyone needs that sorta juice.

    I really like your car analogy. Before click2rank had a website makeover something I wrote that was on the front page fits it very well. I often ask people “Who invented the automobile”. Invariably most people tend to answer “Henry ford”. Henry Ford however did not invent the automobile but rather invented the modern assembly line. He is remembered because he is the guy that made it possible for those who weren’t rolling in cash to get a car. Only a handful of lambo’s are made each year. Only a few people want, need or can afford to have one. In contrast a whole lot of 4 door sedans are produced every year. They are sold by the hundreds of thousands.

    I think as SEO’s we need to prepare ourself for a similar reality. No one has built an efficiently priced vehicle yet. One that is a perfect cross-section of price, efficiency, reliability and safety. The first person or agency that nails the SEO assembly line is going to make a whole lot more cash than the guys still trying to sell lambo’s. The name of the game is scale.

    One of the reasons some SEOs command such a high dollar salary is because they have to know literally EVERYTHING. SEO encompasses so many tasks now. Its not just onsite or linkbuilding or social or conversion rate optimization or content strategy or analytics. Its ALL of those things. Only a few people know all of those things and as a result they make a ton of money. This however is nowhere near close to the most efficient way to do things.

    Factories reduce cost in part by reducing salaries. They do this by requiring each employee to be intimately familiar with only ONE task. One task is easy to teach a person. Its easy to measure. And its easy to replace. When people figure this out they will realize its not the individual workers that are going to stand to make hundreds of thousands per year or millions per year.. but rather the business owner who orchestrates the symphony. This is where we are heading whether the experts like it or not.

    • Jul 20 2011

      Kris,

      Fantastic thoughts. There’s not much left to say because that’s exactly where I think it’s headed too, “When people figure this out they will realize its not the individual workers that are going to stand to make hundreds of thousands per year or millions per year.. but rather the business owner who orchestrates the symphony.”

      Because SEO is now a complex arrangement of dozens of disciplines and knowledge bases, it becomes increasingly difficult for a single person to execute them all and still be competitive within the market. That’s precisely why Ford was successful; he broke car creation into hundreds of small tasks that accumulated to become a full product.

  9. An SEO
    Jul 21 2011

    I would agree with you completely if not for this one fact-AS a commodity, there is still levels of quality in the product. Take a BMW vs. a Yugo-which has the greater possibility of getting you where you were going (in the same vehicle)? Yes both are cars, yes both have similar mechanical features and yes, both IN THEORY will get you where you need to go. IN PRACTICE we all know that a Yugo has a much higher propensity to break down on you as a BMW will-why-PROCESS and TOOLS used to complete the job. BMW utilizes certain tools and parts to make each car of a certain quality. Yugo DID use a similar type of process, but MUCH different parts to make a facsimile of that same “product”-and the difference in parts and process is the reason one is generally more reliable than the other.

    The same argument has been made about programming and many other IT processes (mythical man-month….) but of course, anyone who’s worked in IT for any length of time can quickly tell you that it does not exist-there is no way to commoditize quality.

Comments are closed.

Follow

Get every new post delivered to your Inbox.

Join 1,932 other followers

%d bloggers like this: