Much has been made this past week in the search realm of an article by Jakob Nielsen that claims search engines are the leeches of the web. Nielsen, known for both his usability expertise and his blindness for decent site design charges that search engines are simply sitting back and profiting from the hard work of web site owners without doing any work of their own.

Nielsen's main point is that " engines are sucking out too much of the Web's value, acting as leeches on companies that create the very source materials the search engines index." He goes on to explain that as the online world gets more and more competitive and keyword prices continue to rise, it's search engines that stand to benefit. Nielsen cites the need for companies to continually improve their conversion rates so that they can afford to increase their spending to retain their pay-per-click rankings.

Commentary on the article has varied from agreement to skepticism to gentle scolding. One thing that everyone seems to agree with though is Nielsen's assertion that online businesses must learn to market themselves through more channels than search engines.

There are two problems that tend to happen when companies first start exploring search engine marketing. The first is that they get caught up in pay-per-click adversities and ignore organic search. The second is that they start relying on free search engine traffic and use that as an excuse to cut their budget for other forms of marketing.

Companies that rely solely on pay-per-click advertising fall into the exact trap that Nielsen warns of...a never-ending cycle that requires them to increase their bid, increase their conversion rate to pay for that new bid, increase their bid again and so on. That's because just as your company is working to improve their conversion rates so that they can retain that top position, your competitors are doing the same. Think of it as running a race that never ends.

That's why it's important to avoid thinking of pay-per-click as a race. In fact, I'd even advocate that companies stop worrying so much about what position their ad is appearing in and start focusing more on conversion rates and what they can actually afford to bid. If businesses focused on increasing their conversion rates and bidding only what they could afford to bid, things would eventually start to level themselves out.

On the other hand, companies that start relying too heavily on free search engine traffic to keep their doors open put themselves at significant risk. While not much more needs to be said than the old adage "don't put all your eggs in one basket," the reality is that many site owners need to be reminded the natural search results can fluctuate. That means that the great rankings that are driving tons of buyers to your site today can vanish in the blink of an eye. Without some other form of marketing in place, your business runs the risk of dying a quick death.

That's why companies need to stop putting their sole focus on turning search traffic into buyers and add a new focus toward making them repeat customers and brand evangelists. Gone are the days of simply trying to shove a search referral through the buying process, the focus now is also on how to create a customer experience that keeps people coming back for more.

Consider your current break down of sales...what percentage of them comes from search engines? From direct URL type ins? From links? If you're finding that more than half of your buyers are coming from search engines, you need to rethink the way that you are marketing your site. Don't forgo good search engine marketing, just use it to feed your other marketing efforts.

Discuss this article in the Small Business Ideas forum.

January 12, 2006

Jennifer Laycock is the Editor of Search Engine Guide, the Social Media Faculty Chair for MarketMotive and offers small business social media strategy & consulting. Jennifer enjoys the challenge of finding unique and creative ways to connect with consumers without spending a fortune in marketing dollars. Though she now prefers to work with small businesses, Jennifer’s clients have included companies like Verizon, American Greetings and Highlights for Children.

Search Engine Guide > Jennifer Laycock > Are You Making Too Much of Your Money From Search Engines?