Imagine you were an emerging retail brand in a hot consumer category.
Would you rather have your product placed in the primo retail space at a high-traffic store – or – would you rather have the #1 SEO position for major keywords? Let’s pull up some Analytics data and dive into this question.
SEO (Search Engine Optimization) is the practice of content creation, keyword optimization, link-building, and other techniques to outrank other competitors on Google Search rankings (& other search engines to some extent).
SEO for Retailers
It is probably one of the least sexy items on the list when you look at Marketing Channels. It requires a lot of time and energy, is difficult to predict in terms of results, and needs to be played with the ‘long game’ outlook in most scenarios.
Contrast that with Paid Ads – where you can get nearly instantaneous sales and results – and the question is why bother?
As stated in the title, the framing here is think about SEO in contrast to getting a product into prime time retail space. Even if your product or service ‘isn’t retailable,’ the comparison is pretty clear. And everybody knows no well-known retailer is going to be the first to test out a new product or service by putting it in prime retail locations. It takes time.
Byrdie in the Beauty Industry
Byrdie is a content marketing play in the beauty industry; their strategy is to get ranked across virtually all categories of topics related to beauty: skincare, haircare, etc. From there, they make money on a combination of affiliate marketing & ads. And the data shows, they are crushing it.
The fun part is seeing the results, but the question is, what was required to reach these levels:
- An uber-focused strategy on Search
- $Millions committed, long-term, to content creation. A lot of Byrdie’s top articles are long-for content, complete with visuals, expert takes, and beautiful formatting
- Creative, disciplined Content Architecture
Actual financial results remain unknown – although the company was acquired by publisher Dot Dash in 2019 – but here is the context of these results:
- Beauty, as a category, is a mega-lucrative, multi-multi-billion dollar market. Everybody knows this
- If you are a cosmetics, clean beauty, hair care, or skin care brand, people will be searching in volume on Google (which has about 90% market share of search worldwide) everyday
- Generally, about 70% of search results funnel to the Top 3. That means that everywhere where Byrdie ranks Top 3, they are getting a large % of the traffic
So if a company like Byrdie is near the top, then yes, this is equivalent to offering prime retail space in a mall. The physical equivalent is to go to a mall that has a Nordstrom, JC Penney, Bay, etc. and obviously, if you have prime retail space in one of those for your product, then it will sell.
Byrdie is not the only high-ranking publisher appearing at the top of the results. Their success simply illustrates the effectiveness of a search-centric strategy to acquire traffic in a lucrative vertical.
Transferwise (Wise) in Fintech
Transferwise (now Wise) is a listed, digital bank (Ticker: WISE, London) that is well-known for having the best service for freelancers or individuals who frequently deal in foreign exchange (forex). After launching in 2011 with the goal to take on banks via low-cost FX transfers, they eventually moved their way into a position where they could take on the giants of search.
TransferWise had to lower its customer acquisition costs. Paying upwards of $100 to acquire a customer for a service with minimal fees just isn’t sustainable. TransferWise knew it had to build a powerful engine for organic traffic.Digital Agency Network
And so they went to work.
They invested a lot of money into a team that churned out ~300 articles per quarter! For context, imagine 60 business days per quarter, that is roughly 5 pieces of SEO’d content per business day.
With just one SEO specialist on the team, they used keyword research to define the right topics and structures for articles. They then created content briefs that writers could follow to keep content uniform and high-quality.Digital Agency Network
This part of their strategy clearly worked.
The physical equivalent of their massive, organic SEO search presence would be to see them advertised every time you go to the supermarket/grocery store (where yes, they place financial services products).
Not only did this Flood-The-SERPs Strategy work for Wise – who 10Xd their blog traffic in a year – but it also helps to build trust in a new banking product, which is demonstrable via referring domains. In each of these cases, those 20K+ websites below (ie. ‘Referring domains) each have a link to the Wise site, demonstrating trust.
Today, Wise has become well-known worldwide for everything to do with forex, and have become a $6B+ publicly-traded Fintech. Based on the case study referenced above, you can bet winning the SEO game played a big part in that success.
Digital Ads – Customer Acquisition Costs are Rising
Ok, that’s all great. So yeah, maybe top SEO positioning is somewhat equivalent to prime-time retail space. But can’t we just advertise to get there instead?
There are two dimensions to this question:
- First and foremost, Customer Acquisition Costs are increasing in both eCommerce and Fintech to use the recent examples (but broadly for most major verticals)
- customers who are acquired through SEO (Organically) tend to be more likely to be repeat buyers for a variety of reasons
Farfetch (eCommerce platform, fashion) is an example of a company that has been clipped due to this whole phenomena – rising customer acquisition costs affecting their core business model.
Certainly, increased privacy and reduced retargeted post iOS 14 update are partially to blame. Many other D2C (Direct-to-Consumer) brands have also been negatively affected relative to CAC Spend increases.
Nevertheless, spending your way to the top of the search results – versus getting there organically – is not the best strategy at this moment in history.
There may be smaller niches where that strategy works, but for high-demand keywords in lucrative industries – where conversion is likely to be highest – the price you pay for Ads will cut into margins massively.
Game Theory – To SEO or not to SEO
The challenge with something like SEO is you have to kind of do it or not do it. The other challenge with SEO is that to outsource it is expensive. In-housing it takes time to build up.
The spectrum of decision-making about whether to do it or not is further muddied by the fact that it is a challenge to determine when to expect specific results.
Any type of content strategy, or link-building strategy is ultimately at the mercy of the Google web crawlers. Google is making updates all the time to the SERPs (Search Engine Results Pages) and those updates can change rankings in a heartbeat.
It is an investment and strategy decision, and it comes down to certain probabilities:
- With no investment, at all, access to that ‘prime time retail space’ is impossible ALL-OUT
- With a large investment, in a very competitive market (which will depend on Keyword Difficulty), there is no guarantee of success, but glory is possible ALL-IN
- With a mid-range investment, you can dabble, try and target certain keywords and see what strategies work to get ranked, but you might miss on the big opportunities HEDGE-BETS
This type of business environment creates these types of challenges, and pulling data together to try and ascertain whether to swerve right or left is difficult.
Ideally, we want Channels that drive high repeat buying behavior. If it’s not SEO, it needs to be something else. Everything related to strategy in these instances is easier if there are some baseline Analytics to help ease the the decision-making process.
Imagine allocating $50K to SEO – this could be for external contractors or for a full-time, in-house hire:
- Knowing that SEO is not instantaneous, imagine a 1 year timeline before seeing real results
- How many new customers would these efforts need to bring in to make it worthwhile?
- What are the profile of these types of customers? Are they likely to repeat buy?
A baseline LTV (Lifetime Value) can be established for the SEO Cohort, and that can be measured and tracked to a certain extent. These Customers will NOT ALL Churn (ie. a % wiill repeat buy), and SEO is not fleeting like Ads.
Once established near the top of rankings, those rankings don’t just disappear, they last (within reason); therefore, some kind of very basic NPV (Net Present Value) can be made on the $50K spend.
Overall, if the above examples are any indication, then YES, top SEO Rankings are equivalent to primo retail space in many verticals. That doesn’t mean everyone should go full-blown SEO, but it doesn’t mean you shouldn’t either.
Calculating the strategy around it is difficult and can take some time to think through. Basic Customer Analytics can help ease the decision-making process, but in the end a decision has to be made!