How To Build Investment Interest In Your SEO/SEM

Wednesday, April 2, 2008 by Mistlee

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How To Build Investment Interest In Your SEO/SEM

By Lee Odden

* From the session at SES NY, Session: Build Investment Interest in Your SEO/SEM Firm

How to Build Investment Interest in Your SEO/SEM with an introduction by Anne Kennedy and a presentation by Patricia Hall, Investment Banker, Hallmark Capital. If you own and/or are running a fast growing search marketing agency and want to gain more insight into making your firm more valuable for acquisition/investment, then this session is for you.

What Wall Street looks at:

Client list is important - Keep in mind, if you have big name clients now, what will you need to do to keep them.
Nature of revenues - Are they one time projects or are they retainer based? One time projects can be good if you specialize and can go to all the other players in a category.
Technology strategy - For example, if you've created a software application to mine keyword data, that is valuable.

You don't have to develop your own software. You can take a best of breed approach and bring to clients whatever the best solution is for your clients.It's an interplay of these factors that interact within your own company that determines how valuable they are.

Scalability - If you're able on a dime to scale up, that is seen as valuable. Brings up Healthcare industry as an example.
Management/owner and leadership - There's no one best answer, it depends on who is looking at investing in you. An ad agency will look at different attributes than someone who is new to your industry.

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There isn't necessarily one right answer - it's the interplay that determines value. Value is in the eye of the beholder. In the end, you're valuable to the person looking at you. Some companies are percieved as valuable even without revenue, depending on what the acquiring company sees as the compliment the acquisition would bring.

Three key factors that investors look for:

• Sustainable revenue generation. Can you generate revenues today, tomorrow and in the future. What is the nature of those revenues and can they be maintained? Retainer or high volume of one-offs - it doesn't matter. The gap between generatig revenue now compared to the future is a risk to be evaluated.
• Visionary leadership. Whether you are the sole leader or part of a team. The investor will want to be confident the leader knows they market, knows their goals and how to get there. The ability to articulate and communicate that vision is very important to the investor market.
• Competitive positioning. There are many companies in the SEO/SEM industry. You should understan d who the competitors are. Who are you running up against when trying to win business. Think of it in terms of a graph to illustrate the competitive landscape, where you company is within that landscape and be able to articulate how you're different.

What a SEO/SEM firm can do today to enhance their attractiveness to the investment market.

Reputation - Do what you do well. What clients and the industry say about you. Why? You're selling a very specialized service to a market that doesn't know very much about it. Reputation is built up over time and it's cumulative. Take care of your clients.
Innovate - Stay ahead of the curve. The SEO industry is rapidly changing so you have to constantly be thinking about how to competitively deliver your services. Search engine optimization used to be about adding keywords to web pages and now it's no longer that simple. Now it's all about content, blogs and social media.

Because things change so quickly in the SEO/SEM industry, 3 months is like a year in the rest of the world. Focus on how you're going to innovate.

Continue reading this article...

About the Author:
Lee Odden is President and Founder of TopRank Online Marketing, specializing in organic SEO, blog marketing and online public relations. He's been cited as a search marketing expert by publications including U.S. News & World Report and The Economist and has implemented successful search marketing programs with top BtoB companies of all sizes. Odden shares his marketing expertise at Online Marketing Blog offering daily news, interviews and best practices.

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