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The Ethics of Sectoral-Based SEO Services

Posted in: PPC,Search Engine Optimisation,SEM by Richard Hearne on August 7, 2007
Internet Marketing Ireland

As titles go, this post title is sure to have some people scratching their heads – ‘What is this guy on about now? I can hear some people saying. Well if you choose to bear with me the meaning will become very apparent in a moment or two.

The enquiries I receive

Sometimes the most interesting outcomes come from the business enquiries that aren’t really business enquiries. This post came about because I received an enquiry from someone asking me to look a their website. I get a lot of these requests – some genuine, some competitor intelligence, and some where a site owner is not 100% that their current SEO provider is applying best practice techniques. In the latter case, site owners most often are looking for third party validation of their current SEO strategy to sooth any fears they have. More about this in a second.

Specialisation is good… most of the time

My academic background comes from the economics discipline. Economic theory generally recommends that specialisation is a good thing. Indeed, I would say that SEO is quite a specialised area. But what about SEO companies that focus in the main part on just one particular niche? Does this create more problems than it solves?

The case of the [city] widget

The following case came about from email communication with someone who contacted me to check their site. It quickly became apparent that their enquiry fell into the third category I mentioned above – validating a current SEO campaign/strategy.

In order to maintain confidence I wont be naming names, and I’m only going to say that consumption of the product or service offered by the enquirer is geographically dependant. There is a large number of suppliers of what I’m going to refer to as “[city] widgets”, and the niche is highly competitive. Very often ‘[city1] widget’ is not a substitue for ‘[city2] widget’, although some substitution may occur where the user is location elastic.

The specialised SEO company

After looking over the website in question I found, what in my opinion, could be very dangerous utilisation of a particular technique (I’ll be writing about that shortly). So I made my opinion known to the enquirer and asked them to contact their SEO provider and seek some further clarification.

Follow-up correspondence contained some interesting information from the SEO about the technique used and why it was ‘perfectly safe’, but, more relevant to this post, why the SEO provider was initially chosen by the enquirer to promote their site.

It turns out that the SEO company is question are very much a ‘Sectoral-based’ SEO provider. That is, they are very active in one particular niche.

Why would you choose one SEO provider to promote your ‘[city] widget’ over another?

It’s more than common to use track record when selecting a supplier for a good or service. Proven track record is often a very good indication of future performance. In this particular case track record was indeed a strong criterion. I paraphrase:

seen as they represent our three main competitors, and those competitor sites all rank on page #1 for “[city] widget”, our site should do so also by the end of the year

For me that opens a real can of worms.

Is it ethical to represent competing sites?

In this case it appears that the SEO company in question represents lot of sites selling [city] widgets. They also happen to market software that enables the purchase of ‘[city] widgets’ which I’m sure is a very strong supporting factor. And, in fairness, the competitor sites mentioned do rank well for ‘ widgets [city]‘ (the order there represents the more likely search query).

So what’s the big issue? Well, in cases where [city] is different there really is no conflict. But in the case of representing multiple sites from the same [city], can one SEO company ethically represent multiple direct competitors? I’m sure arguments can be made for and against, but I take issue with one provider promoting multiple competing sites. Why?

Well there are only 10 spots available on page #1 of the SERPs. And we know very well that the real action is in the top 3 spots. So how does a provider representing 4 websites all targeting that same honey-pot phrase “widgets [city]” do so ethically? A number of questions arise:

  1. Are all clients aware that their SEO provider is also promoting their direct competition? Are NDA’s involved?
  2. Will each client site be promoted equally? If so, how?
  3. Is the SEO company being paid a performance-related bonus/retainer? If so, is it similar for each client site? If so, could the provider profit by rotating resources to make each site rank highest for a short period of time?
  4. Is the same internal individual responsible for actually working on each of the competing client sites? If so is data from any of the client sites being used in the promotion of competing sites?
  5. If the SEO company has multiple employees, and client sites are assigned to different team members/teams what steps are taken to ‘wall’ information?
  6. Most importantly for me, are client expectations being properly set? Is each client aware of how much traffic each position in the SERPs will receive? Are newer clients of the competing group aware that they may never attain number #1 position as older clients may have an ageing benefit both on- and off-site?

Those are just a few questions that come to my mind when a single SEO provider is promoting multiple competing websites. I’m not saying that promoting multiple competitors has to be unethical, but I do have the view that doing so opens up a whole new set of issues that make it wholly more likely to end up being unethical.

The can of worms gets even ‘wormier’

So I’ve stated my view that providing SEO for competing websites can be unethical. But there is another dimension to this can of worms that really grinds my gears – PPC. Let’s imagine that the SEO provider is a full service SEM company.

What happens when, as with many websites in this niche, PPC is used to promote the sites in question? And now consider what if the same provider of SEO also manages the PPC campaigns for the competing sites?

PPC is a very different beast in general to SEO. For a start PPC usually is managed under a % fee structure – the management firm usually gets a % of the total spend.

Now I’m no PPC expert, but I do know that PPC uses a modified auction system. Bidders can set their maximum bid, and all other things being equal, the highest bidder has their ad display above all others.

Let’s pause for a second and add back into the mix the fact that PPC management companies generally receive a % payment based on total spend. Now suppose that the same company is managing 4 separate accounts, all targeting a similar set of keywords, and all demanding results.

Personally I would be more than a little anxious that it might be very easy to manipulate the spend of all 4 accounts for reasons not entirely in the clients best interests.

We’re sorry, but the maximum bid keeps increasing…

For instance, it could become advantageous to have clients bidding directly against each other in a bidding match where there is only one winner – the management company (although the PPC engine wont ever be on the losing side either).

I can picture explanations being sent to clients explaining that the maximum bid is increasing incrementally, and that in order to attain better results a higher spend is required.

Higher spend = higher management fee.

I think you can quickly see that conflicts of interest could become all the more problematic.

Am I generalising?

The above of course is simply my own opinion. Again, I must state that the above case doesn’t necessarily mean that the SEM company in question is acting unethically. But in my view when one company promotes multiple competing sites there is an over-riding need for clients to have oversight which requires knowledge of the ‘bigger picture’, and for the provider to be absolutely transparent in order to maintain ethical standards.

Just my view. What do you think?

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  1. I think it’s certainly been one of the foremost issues on my mind with the recent explosion of SEO as a stand-alone profession. I’m glad to hear that your ethical integrity is intact on the matter, Richard. However, any SEO company that provides services to more than one company in the same sector and location is surely opening themselves up to accusations of foul play? If not, the trust issue is simply far too great to overlook.

    Comment by Ken — August 7, 2007 @ 9:50 am

  2. Sounds like good news if you are getting those sort of enquiries through the site – people are finding you.

    The only point I would raise is that we all know 99% of clients want the cheap option that probably won’t give them a good ROI and then they expect miracles. A lot of companies will struggle to make a profit, so may need to take clients from the same market. I have noticed from monitioring one market that there is at least one SEO firm that will take on clients for the same market.

    Comment by Mutiny Design — August 7, 2007 @ 4:04 pm

  3. Ken

    Surely the same would be true of any company offering services to multiple companies in the same sector?

    It’s not though, is it?


    Comment by Michele — August 7, 2007 @ 6:34 pm

  4. I wouldn’t have said so Michele, no. With SEO you’re effectively promising that you’ll do you best to get your client as high up the SERP’s as possible. How can you keep this promise if you’re doing the exact same for one of their competitors? It’s different to, say, designing/developing a website where you simply agree on requirements and a deliverable product or products. You’re not promising that the site will be more or less successful than one you did for their competitors – you’re simply building it to spec.

    Comment by Ken — August 7, 2007 @ 6:43 pm

  5. Ken

    But what about marketing in general?

    The big agencies will probably have multiple clients from the same sector …


    Comment by Michele — August 7, 2007 @ 6:44 pm

  6. Yeah, fair point. Well I don’t know a huge amount about marketing. Are marketing campaigns as measurable as SEO? SEO is pretty measurable… you’re either at the top for certain key phrases or you’re not. As marketing campaigns are ephemeral, is it even comprable? Do a lot of marketing agencies go work with competing clients on their campaigns in tandem with each other?

    Comment by Ken — August 7, 2007 @ 6:53 pm

  7. Ken

    I’m not sure how it works across the board, but I’ve been sent prospectuses by a couple of marketing companies in the past. If they specialise in a particular sector they’ll use their expertise as a selling point. Of course I may not be too happy with using the same company as one of my competitors, but that’s obviously my choice – I have to weigh experience vs. possible conflict of interest vs. professionalism

    SEO may be more transparent on some levels, but marketing has its own transparencies. For example, if you run a campaign with a specific coupon code or promotional offer you can easily see how well it has performed.


    Comment by Michele — August 7, 2007 @ 6:57 pm

  8. Some good points. The big difference I would point out is that with general marketing it is possible to have equal success for multiple clients in the same niche. It’s not a zero sum game – you can do well for a group of competing clients at the expense of other competitors. You might even grow the market.

    SEO is a zero sum game – if I get a site to number #1 then I have to knock someone else off that spot. So if I promote multiple clients in one niche success for one will generally come at a cost to another. And then adding in PPC management… well, the possibilities for misdeeds become endless…

    Comment by Richard Hearne — August 8, 2007 @ 4:54 am

  9. [...] I wrote about SEO Ethics and how I feel that companies who promote competing websites are far more likely to cross into what [...]

    Pingback by Using Text Replacement with Flash - Dangerous? | Search Engine Optimisation & Online Marketing Ireland .:. Red Cardinal — August 8, 2007 @ 8:53 am

  10. Interesting trail of thoughts Richard.

    When it comes to SEO you simply cant provide quality service to clients who are competing against each other. You cant focus on giving each client 100% to get top ranks, its impossible.

    I never actually thought about when it comes to Pay Per Click and that is a whole different can of worms. Your example of having clients bid against each other is a perfect example. I know of one Adwords user who would easily fall trap to this and his monthly budget is in its thousands. That would be nasty.

    Comment by Gavin — August 16, 2007 @ 12:25 am

  11. Gavin

    Unfortunately many of the better established players in Ireland are doing just this. Albeit concentrated into a few of the more refined online niches such as travel and leisure.

    Begs the question what would happen if some of these properties actually found a specialist who would be work exclusively for their best interests within their niche? I’m willing to bet some serious results could be achieved and some of these ‘established’ players could be put to shame…

    Best rgds

    Comment by Richard Hearne — August 16, 2007 @ 4:41 am

  12. I’m not surprised the more established players are doing it, they can get away with things like this as the client is non the wiser.

    To be honest I think the specialist(s) are only sitting around the corner. I wouldn’t be surprised if they bring a lot of these consultant houses to shame which is what is needed in this industry.

    Comment by Gavin — August 16, 2007 @ 5:48 pm

  13. Ken, Interesting food for thought… I thinks its best practice to only take one customer per local niche example pizza city, Chinese city, the problem comes in now with food delivery city. When doing local base SEO there is going to be keyword overlap the the difference being ethically it seems OK for the example of food delivery city compared to having two clients for pizza city.

    Comment by YellowSEO — December 5, 2008 @ 8:11 pm

  14. Some good points. The big difference I would point out is that with general marketing it is possible to have equal success for multiple clients in the same niche.

    Comment by Dareen — September 28, 2010 @ 1:48 pm

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