Link Economics 101: A Prerequisite For Advanced SEO

Links long ago became the currency of the Web, thanks in no small part to Google and its PageRank algorithm. Like anything of value, link authority is bought, sold, leased, bartered, brokered, swindled and stolen. The fact that links are valuable is widely accepted. But yet when pressed, can any SEO or link builder really say what that value equates to in real dollars? Of course, attributing sales revenue to direct click-through traffic (from the linking page) is a straightforward exercise (albeit sometimes an incomplete one, if/when the referring URL data is scrubbed). But what about the SEO impact of that particular link on the linked-to page? Or even harder to measure: the “rising tide that lifts all boats” effect that the link has across the site by boosting nearby pages / sitewide PageRank / domain authority? Is that value quantifiable?

Many times, we’re asked by prospects to substantiate our claim that link building (when done well) is a high ROI generating activity, and clients also ask us to track and report on the impact of our link building efforts. You can track and tally your link conquests easily enough with advanced link building tools like SQUID, Raven and BuzzStream. It’s quite another matter to assign a specific dollar value to the links — at least one with any accuracy.

For example, in my last column, I described the process for generating link bait and seeding it into social media that we practice at Netconcepts. Let’s say you are paying a retainer of $20k per month for this service (ideation, research, writing, seeding, competitive intelligence, phone & email reach-outs), and let’s say that hundreds, or perhaps thousands, of quality links per month result from the link builder’s activities. What’s the ROI on that $20k spend? Now, to complicate matters, let’s say the link builder works to acquire specific high-value links one-at-a-time, in a “brute force” fashion using hand-crafted emails and phone calls? Which links account for which lift in rankings? Even ascertaining which links were discounted due to spam signals is difficult to impossible, at least in any scalable way.

Consider this specific link building campaign. Netconcepts dreamed up and orchestrated a “Free Business Cards for Life” contest for our client Overnight Prints, that involved the self-made millionaire, Internet celebrity and Technorati Top 100 blogger Jeremy Schoemaker (aka “Shoemoney”). The contest was to design Jeremy’s business card. The winning entry, chosen by Jeremy out of over 400 submissions, was amazing. Our client, Overnight Prints, received some great links, with some great anchor text, from the initiative. Don’t ask me to quantify the value of these links though, because I can’t. But I just “know” that this campaign will have an impact.

It’s an inexact science. Organic rankings and search traffic across the client’s keyword portfolio, pre- and post-campaign (by at least 90 days), is a good starting point, but is by no means sufficient for the ROI-focused marketer. Both the revenue line and the cost line must be pinned down, somehow. Yet the link builder would likely counter with the argument that revenue is too many steps removed from what they actually have control or influence over, that growth in the quantity and quality of the backlinks is more appropriate in gauging success and justifying their salary — assuming that the fruit borne from their efforts can be isolated from other marketing activities (e.g. email marketing, direct mail), and from naturally occurring link growth.

All this makes selling a client or boss on the value of link building a tricky proposition. And it dissuades that decision-maker from allocating budget or authorizing the project. Nobody wants to simply “take your word for it” and whip out their checkbook.

Despite the aforementioned, the linking ecosystem continues to thrive. The suppliers to the ecosystem — from the expert individual practitioner (such as Eric Ward) to a reputable link broker (one of Conductor’s lines of business) — are inundated with work. Plenty of disreputable firms also feed at the trough — whether they be link spammers out of India polluting the blogosphere with their useless blog comments and filling webmasters’ inboxes with annoying link requests, or the link spam software providers that aid and abet them.

Given the attribution challenges, it can be tempting to scrimp on the vendor, consultant, or service hired for this all-important job. Remember though that you always get what you pay for. The wrong choice may ultimately do more harm than good. With no independent clearinghouse to vet link building services, one of the most important steps you can take is to do your homework on your potential vendor — reference checks, backlink analysis on them and their clients, and the like. Evaluating the business practices, business model, effectiveness, and business viability — this is all a must. Countless link building services have come and gone; you want to be sure you’re backing the right horse. Eric Ward advises that each link target requires an approach tailored to the unique nature of the target and the requester (features, content, audience, etc.). Eric warns: “cookie cutter packaged link building services will never put you in the best light.”

Furthermore, the “wing it” approach to link building is no longer viable, if it ever was. What’s required is the application of the scientific method in your link campaigns –- isolating control groups (both keywords and pages) that can be juxtaposed with the experimental group in order to gauge effectiveness of various tactics and campaigns. Competitive SEO now requires the examination of large amounts of backlink data from multiple competing sites to tease out what is meaningful in the inbound link graphs.

This takes a lot of brain power (and math), but this is where we’re heading with the next generation of auditing tools. SEO technology solutions (e.g. Conductor, Covario, Enquisite, GravityStream, and others) promise us unprecedented ability to track, monitor, and assess on-page and off-page elements for you and perhaps even your competitors, all in a single place. Automating the process of analyzing and quantifying the depth and quality of inbound links is essential to achieving any kind of scale.

Per my recent Pay-for-Performance SEO article, I make the case that all SEO activities (including link building) can be valued and ROI calculated in aggregate (such as through the Enquisite Campaign product). But let’s go back to the original premise for this article: what about on a link-by-link basis? I want to be able to say with some certainty that a particular link is worth $X and another link is worth $Y. Indeed, within Campaign (and probably other solutions too), links can have different values based on the keywords they are connected to. Each keyword has a different click (Campaign provides a market-based organic CPC for each keyword) and transaction value, and so does the link.

Technologies such as the aforementioned will herald in a new age where acquired links are tied to particular keywords, assigned a cost-per-click and/or conversion value, pegged as incremental over the baseline, attributed the referral traffic from direct clicks on the links as well as from the search traffic derived from the rankings lift, and so on. This I anticipate will do wonders for legitimizing link building to the direct marketers of the world.

A problem arises, however, when link builders are held responsible for missing ROI targets (regardless of how reasonable those ROI targets might be). This would be unfortunate, because link builders are not in control of the outcome — the link placement, URL target, anchor text, not to mention whether the link request is granted in the first place. In fact, the higher the credibility of the linking site (and thus the greater the trust, authority and importance in the eyes of the search engines), the less influence the link builder tends to have. Eric Ward describes such high caliber site owners as “passionately picky about what does and does not get on their pages.” And he would know; he’s built links for over 1000 sites over 15 years.

So by all means, predict, goal-set, track, analyze and cost-justify your link building initiatives. Eric just asks that you don’t hold your link builders accountable for editorial decisions made on sites they do not control.

Opinions expressed in the article are those of the guest author and not necessarily Search Engine Land.

Related Topics: All Things SEO Column | Channel: SEO


About The Author: is the author of Google Power Search, creator of the Science of SEO and co-author of The Art of SEO now in its second edition, both published by O'Reilly. Spencer is also the founder of Netconcepts and inventor of the SEO technology platform GravityStream. He also blogs on his own site, Stephan Spencer's Scatterings.

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  • Eric Ward

    Really good stuff Stephan. More than anything else, I wish the “sellers of the ueseless” would just go away, but sadly, the frenzy for link building is like what I imagine the gold rush was like in the 1800′s. You could probably pick from many different types of gold digging shovels, all claiming to be stronger or better than each other, all making sale after sale after sale. Only after you got to the desert did you realize your shovel was made of tin. In my industry niche, I can spot the tin, and I’ve saved many a company from making a very expensive link building vendor mistake. At the same time I’m not so vain as to think I have what everyone needs, because I most definately do not. But what I do know better than most, perhaps due to longevity, experience, and trial/error. is what type of link building approach and service(s) is most suited for any given content deployment scenario. Call it a link building blueprint. Every site needs to have a link building blueprint, and that blueprint will need to be 100% custom to each site for it to have maximum effect. And sites that have been around a long time need more than a blueprint. They need a link portfolio evaluation and a forward moving strategy that maxiumizes what they already have, and augments it with all they have missed. I hate to beat this horse, but it is true. Every site has specific optimal inbound link potential. Few sites ever reach that potential, because they don’t know what that potential is, or they spend too much time (and money) chasing the wrong types of links. My job is to show them what their site’s true link potential is, and help them get closer to it, even if that means sending them to a provider other than me.

  • nickstamoulis

    Hi Stephen, This is a great article that makes sense…personally I think ROI can indeed be determined as visitors and conversions are driven as a result of on-site and off-site relevant link building efforts. The one thing that you did not mention was links are very important, but establishing a company in a niche, industry/vertical is about developing search engine and visitor “trust”. Quality and quantity growth over time. And it is indeed 100% different for every client. Also I too wish (like Eric mentioned) that all of the useless link building services would go away, it would help us all in many ways…

  • http://rimam1 rimam1

    Useless link building services actually help in many ways too. They separate real link builders from the impostors. As the search engines mature, they impostors will fade away or their efforts will be neutered.

    My question is this: If you’re charging $20k/month for social media marketing, why are you even concerned about links anymore? Why not just forget it and focus on social media, on and offline branding, and paid search? It seems that search engines are making SEO much harder and that the way to go is to make your site sticky, and generate a LOT of traffic to it.

    Rae Hoffman did a post in January called “You Don’t Need SEO to Rank in Google” The point is that lots of traffic to your site is a positive signal to the search engines. She says in the post:

    “My nofollowed link from Twitter is more valuable to me than my dofollow link from TechCrunch because it sends me traffic on a regular basis that sends the right signals to Google while bringing actual human beings to my site.”

    As the search engines get more sophisticated, do you think they’ll still use links as an indicator of authority, versus traffic?

    Valuing links is like Thomas Edison valuing each of the 2000 failures that finally led to the successful invention of the lightbulb, isn’t it?

  • DaveD

    Great article, I think the “free business cards for life” campaign was a great idea for generating links. I have e-commerce websites, and getting natural links has always been a huge problem. I will keep this in the back of my head as I try and come up with some similar ideas for my business.


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