Pricing a Link
When trying to understand the value of a link a variety of factors can be considered, including:
- PageRank / link equity
- anchor text (if you can influence it to align with your keywords that increases the value significantly)
- link location (inline links are more likely to be trusted than links in the footer of a page near a bunch of other obvious paid links)
- direct traffic the link sends
- site quality & brand exposure
- endorsement value (if any is given)
Some links (bought links on SEO blogs, paid links near pharmacy/porn/gambling links) are almost certain to get your site noticed in the wrong way.
Large brands can get away with being far more aggressive than thin affiliate sites can.
Many people who heavily rent links still have not exhausted other cheap and easy link building strategies they could be using.
The Bottom Line
In some markets you need to own a billion dollar brand, have an old site, or rent links to compete. In other markets link renting may pose an unnecessary risk.
The most important aspect of link renting is the one people rarely talk about – the actual value to your business. To determine that you need to analyze not only the quality of the link, but also
- where you are
- where the competition is
- what is needed to bridge that gap
- any potential risks associated with the link buying
Along those lines, I thought it would be good to compare a couple sites to each other, to demonstrate how widely the value of links can spread.
Rich, Average, Poor
$17,000 Per Link
BankRate recently bought CreditCardGuide.com for $34M and it had about 2,000 inbound links on the day of purchase. BankRate may have overpaid for that site, but Rafael David made at least $17,000 per link to his website!
Think about all the crazy public relations stunts you could pull and make money if you got paid $17,000 per link! You could pay an entire town to tattoo your brand on their foreheads…or maybe do something a bit more tasteful than that. Where links are hard to get and lead value is high you can afford to pay a lot for links.
But BankRate was not just buying links, they were buying traffic and rankings…a set of links that fit the criteria needed to get a lot of organic Google search traffic. If Mr. David would have acquired half as many links he might only have 10% the traffic and his site may have sold at a much smaller multiple. When selling a site your base and your growth rate both feed into the multiple you can sell a site for.
In media stories about buying the site, Thomas R. Evans, BankRate CEO, said they bought the site largely because of its Google rankings:
“As an affiliate of Nationwide Card Services, which we acquired this past December, we have worked with CreditCardGuide and have been able to watch their growth and momentum firsthand,” stated Thomas R. Evans, President and CEO of Bankrate. “CCG has done a great job of developing its organic traffic and ranks highly in a number of important credit card search terms. Adding more direct, high-quality traffic to our credit card business will grow our revenue and improve the margins in this important category,” Mr. Evans added.
Affiliate Rankings: Strong Cashflow or Break Even
Some of my friends have affiliate sites that do anywhere from 0 to 10 leads a day at ~ $30/lead. They rank well enough to get good traffic, then their rankings slip. And they keep bouncing back and forth. Buying just a couple strong links could take a $150/day average earnings and boost it to $300…thus yielding a monthly return of $4,500.
If you are an affiliate selling the same crap that all the other affiliates sells, you will see that most the search traffic goes to the top couple ranked sites. As an example, one of my friends saw their Google ranking go from #3 to #2 for a huge phrase that is most of the site’s traffic…and their overall site traffic (and profits) went up 50%. If a company is primarily search driven and is in a high value niche they can see huge returns from just a couple quality links.
When you think about the opportunity cost a site making $150 a day might not be worth running. But every dollar it makes over its baseline is profit that can either be used to reinvest into quicker growth or fund other projects.
$1 Per Link
Some SEO and technology blogs have hundreds of thousands or millions of inbound links. For such authoritative sites the average value of each link might be less than $1.
If the competition has 1 million links and you only have 50,000 you might not get enough traffic for the site to be worth maintaining, especially if it is in a saturated market with limited traffic value.
Link Marketing Strategy
Survey Your Position (and the Competitive Landscape)
If you don’t have any organic links then it is going to be hard to buy your way to the top in competitive markets, especially if competing sites have strong advertising and brand budgets.
The key to understanding link buying is understanding the upside potential and how many links are needed to get there. If you are in a saturated market with limited cashflow and are ranking on page 37 at #362 then should you rent links? Probably not. You would be better off investing into awareness, branding, publicity, and developing organic links first.
If you are in the top couple pages and are in the game then renting a few links could help you achieve an explosive return on investment.
All Advertising Has Some Fat on It
Many links that you buy or rent will be filtered algorithmically and have little to no SEO value. But if they help you achieve a positive return on average within an acceptable risk profile then the purchase is worth it. That is how I always viewed directory links. Before Google whacked them I used to submit to about 100 of them. Maybe only 40 or 50 counted, but in aggregate the ROI was still there. Now I may only submit to a half dozen or dozen directories, but in aggregate the ROI is there.
More: continued here