Archive for July, 2009

SEO or SEM?

Sunday, July 26th, 2009

With the growing buzz around inbound marketing, it might be useful to note a few key differences between Search Engine Optimization (SEO) and Search Engine Marketing (SEM).

SEO optimizes a website’s content and code so that it appears on the top of organic search results for which the search engine does not charge any money. In the case of SEM, you create an ad for your product or service, sign up with a search engine (say, Google) via its advertising program (Google AdWords in this case) and pay a certain amount of money to the search engine each time your ad is clicked on its search results page or on its partner websites (Google AdSense members).

The popular notion is, once you’ve spent a onetime fee to get your website SEO’d, you’re done. That’s not true. Search engines like Google keep tweaking their search algorithms regularly to improve the search quality, so a well-optimized site that appears in the Top 3 positions today might even vanish from the first page of organic search results tomorrow after the new tweak is implemented. Which means, in actual practice, you’d need to keep spending money to get your website re-optimized every time the search engine provider makes a change.

In case of SEM, while you need to keep paying for clicks on an ongoing basis, the cost of keyword research and ad design is a truly onetime expense that doesn’t have to be repeated when the search engine undergoes a tweak.

Coming to content, a search engine displays links pointing not only to your website but to other websites that carry reference to your company. In the Web 2.0 world of today, not all content pertaining to you on various blogs and forums is favorable to your company. Imagine the risk to your company’s reputation if the top organic search result points to a website containing negative comments about your company!

Exacerbating the risk is the distinct possibility that organic search results often vary from location to location, so it’s quite possible that your prospective customer in the USA is seeing negative comments about your company at the top of their search results and your marketing manager located in India isn’t even aware of this! This actually happened recently with an India-based software development company that gets most of its business from Web 2.0-based freelance portals.

If you only do SEO, you are stuck with this risk. Whereas, with SEM, you can mitigate this risk since people see ads that you’ve created.

End of the day, SEO and SEM have distinct functions and the question shouldn’t be “SEO or SEM?”. In my opinion, a comprehensive inbound marketing campaign should include elements of both SEO and SEM.

I invite readers to post comments based on their actual experience with SEO and SEM.

Competition Keeps Prices In Check — But Not Necessarily Low

Saturday, July 11th, 2009

Writing in India’s leading business daily The Economic Times last week, V Raghunathan, CEO of GMR Varalakshmi Foundation, complains about the exorbitant data charges levied on business travelers when they use their mobile devices to download emails during their overseas trips. Frustrated by lackadaisical response from his mobile service provider, he turns to TRAI, India’s telecom industry regulator, for redressal. When he draws a blank even from TRAI, he uses his article in the ET for “cathartic effect”.

For lesser mortals who face similar problems but don’t have the benefit of venting it out in leading newspapers, there’s the blog! 

Here goes:

From: S Ketharaman [s.ketharaman@gtm360.com]
Sent: 08 July 2009 22:52
To: ‘editet@timesgroup.com’
Subject: Letter to the Editor of The Economic Times
 

Dear Sir / Madam:

  

This has reference to the guest column titled “An appeal to the telecom regulator” by V Raghunathan in The Economic Times edition dated 4 July. His suggestion for mobile devices to be equipped with a feature that warns users with a PAUSE signal whenever they start using their handhelds in a foreign country is very interesting.

  

Having accessed data on mobile devices in the UK, Germany and the USA, I can say that extremely high charges for data downloads outside the home country is not an issue unique to Indian overseas travelers. A couple of years ago, a customer from the UK, who never exceeded his monthly fixed fee of GBP 29 for his 3G data plan while inside the UK, got a rude shock when he received a bill for GBP 400 for the one month that he had visited India and downloaded not more than 50-60 emails during his entire stay of five days.

  

Since data is one of the value added services that telecom companies are betting on to offset declining conventional voice-based average revenue per users, I doubt if they will ever get together to arrive at a “more reasonable pricing” as Mr. Raghunathan muses. Even if they do, wouldn’t that be be deemed as “price fixing”, which is illegal according to antitrust / cartel laws in many countries?

  

Historically, while it is true that competition keeps prices in check, there is ample evidence to show that the band in which prices are kept “in check” by competition is not necessarily close to cost plus reasonable margin as consumers tend to expect. Apart from the exorbitant overseas data download charges slapped by telecom companies, the ridiculously high “not sufficient funds” fees levied by banks in the UK and USA are another example to illustrate this. What competition does do is give consumers the option to use alternatives like hotel WiFi connection mentioned by the author – although, having come across hotels in London that charge as much as GBP 14 per hour or GBP 40 per day for in-room WiFi connections, I am not sure how universally applicable the USD 20 figure mentioned in the article is.

  

Since we can be reasonably sure that telecom companies are not going to be too eager to do anything about their high overseas download charges, turning to regulators might be the only option, as the author has done. But, even assuming that regulators deign to respond to a common man’s plea, it is questionable how far they can help. After all, even if the Indian regulator TRAI has control over pricing in the context of Indian telecom companies, regulators in many developed countries do not tend to get involved in matters of basic pricing that are explicitly announced by telecom operators, who are therefore free to charge “whatever the traffic can bear”.

  

Sincerely yours,

   

KETHARAMAN SWAMINATHAN

Founder CEO

GTM360 Marketing Solutions Private Limited