It’s pretty clear we’re headed for a recession if we’re not already in one. If you haven’t checked out our other recent post, you should make sure you plan your business for a recession. What I’d like to focus on here is SEO though.
If you’ve been working with Google long enough, you can start to identify what they do to prop up quarterly earnings all the time. It’s incredible. For example, in Q4 2021 it became clear to us that Google’s algorithm in PPC was getting reckless with overspend on completely garbage traffic. Overspend issues that would only happen once a quarter happened 5x a month as Google tweaked their algorithm to dial up the aggressiveness of spend largely on traffic with minimal value. You wonder why nobody trusts Google…let’s just say as a 15-year veteran of the industry, that distrust is well-earned at this point.
So what is Google doing right now? The standard “fill the entire SERP up with ads before the organic listings” play. See below, everything in red is ads and there’s 1 organic listing in this SERP now:
The filter by ability on the left is a new feature they’ve been testing lately. Being able to service both PPC & SEO for most of our clients, we’ve been able to see first hand how this has taken some traffic from SEO and directed it to Google Shopping. Many keywords that haven’t changed rank in SEO have simply lost some volume.
So does this mean that we should stop investing in SEO?
No, that is pure insanity and it baffles me that some people actually think this.
Let’s do some simple math for PPC.
- Our average client is spending somewhere around $70k per month in ad spend (low $10k, high $1mm+, quite the disparity).
- They pay us a percentage of ad spend fee to manage that spend, let’s say 11% ($7,700).
- So every single month they’re paying $77,700 for sales via PPC.
Now for SEO let’s say:
- They have a $7,000 per month retainer with us.
- There’s no direct associated ad cost.
- This means that they could have an SEO agency do consistent growth work on their website for 11 months before they spend what they’re spending in 1 MONTH in PPC.
And what happens when SEO results continue to improve more and more? The initiative gets more and more profitable, which is wild. We have some clients where the ROAS on SEO is over $1,000. You ain’t getting that on PPC. Ever. Period.
This high-profit spend once it gains traction unlocks the brand’s ability to invest more in PPC – a rising tide lifts all boats. A super conservative model goes something like this (keeping PPC stable for the sake of example too, ideally we’d scale that as well!):
|SEO Investment||SEO Rev.||PPC Investment||PPC Rev||Total Rev||Total ROAS|
In what we’d consider a “lay up” situation, SEO increased the overall profitability of the department by 12.4% (from $2.42 > $2.72). Now as a business owner, you can either choose to reinvest that profit into MORE PPC and push it harder until you get back down to a $2.42 ROAS like we started with, OR you can simply enjoy the profit increase.
The point is, SEO can be an almost infinitely increasing ROAS play. PPC cannot.
But How is SEO Different in a Recession?
It really isn’t to be honest. The biggest difference is that Google may get a little more annoying with ads to help prop up their profitability. SEO is an “easy expense to cut” because it’s not an immediately profitable expense and people think they can cut it and not see a business revenue loss right away.
The opportunity cost though is massive. You should not be an online brand and cut your SEO strategy completely when for most of our brands it’s ~30% of their website traffic and revenue. To leave that traffic completely neglected is reckless at best. The bigger issue is the opportunity cost that comes with not investing in SEO during a downturn while others are cutting their marketing budgets.
SEO is a very competitive market, this trait it shares with PPC. But during a recession, SEO tends to get cut first which means everyone else is cutting it too. You know what this means? Everyone else is getting stuck in the mud, so brands that continue to evolve their SEO strategy in a recession will come out WAY ahead!
But Are People Even Clicking Organic Listings if They’re Buried?
While 63% of people click on ads, this also means that 37% of Google users do NOT click on ads! Google commands almost 85% of market share, so that 37% represents millions upon millions of users that you’re completely ignoring if your strategy is a PPC ONLY strategy.
It’s abundantly clear that every data point imaginable points to the incredible value SEO can drive when it’s done right (emphasis on DONE RIGHT). Read up on our ecommerce SEO strategies & tips to take matters into your own hands, or hire out if you need more help. Don’t use a recession as an excuse to hire some cheap “we’ll get you #1!” agency. Digital Position is a world-class SEO agency that’s here to build your success story and get you through the tough times. Do SEO right, build a solid brand presence, and your wallet will thank you.