The search marketing industry is built to run like a macroeconomy. What do I mean by that?
- Search results are resources.
- Websites are businesses.
- Users are people.
- Supply and demand are in effect.
- Google is a governmental body, and they work to improve market outcomes through the application of policies (algorithm updates).
Let me break this idea down for you to show why it’s critical to think this way when executing any search marketing strategy.
Basics of Macroeconomics
Macroeconomics is an elegant way of saying a “large-scale economic system”, in which societies or governments organize and distribute available resources, services, and goods across a geographic region or country.
Macroeconomics focuses heavily on income and increases in national output. It covers economic policies passed by the government, the working economy, and attempting to understand the population’s behavior.
According to Investopedia, the law of supply and demand attempts to explain the relationship between sellers and buyers of resources.
Principles of Economics
Gregory Mankiw, a well-known economist from Harvard, outlined a breakdown of his understanding of macroeconomics in what is known as the Principles of Economics.
These principles show how people make decisions and interact with one another, as well as what trends are seen in macroeconomics that affect the economy. According to Wikiversity, these include:
Not all of these principles are used in the article to maintain simplicity but complex understanding.
Why Should You Care?
Each of these principles can be applied to search marketing strategy; however, you must break them down to understand the larger picture and apply them to your tactics.
Opportunity cost is the best place to start because, in marketing, you must make decisions and drive strategy based on data; however, there is always a cost of moving strategy in one direction versus another.
For example, in SEO, you weigh the benefits of performing technical SEO audits and executing on the recommendations found in those audits or perform a content audit and execute a strategy.
There are two “costs” associated with each method.
The technical cost is related to the time spent auditing the website, providing the audit recommendations, and executing on those recommendations, with the help of a developer or a marketing team.
The content cost is related to the time spent auditing competitors, performing keyword research, creating content briefs, writing and editing the content, pushing the content live on the website, and performing on-page meta optimizations.
These methods can be done by as few as one individual; however, the process may take even longer.
Rational People Think at the Margin
Economists think people are rational. As search marketers, we must assume that users on the internet are also rational.
Even further, potential customers who think at the margin carefully consider how much satisfaction they will receive from the next step they take. In marketing, this next step for visitors could be clicking purchase and spending money on your products and services. What are you doing that makes them want to take action?
Below, you can see how this matcha powder is delivered “conveniently to your business” and could help customers take action, due to not wanting to drive to the store and take time away from work or family. This strategy shows compassion for people’s time.
By understanding the basis of this macroeconomic thinking, it gives you the perspective that every interaction with a potential customer is influential.
Users will not take the step you’re looking for in the marketing and sales funnel unless you give them a reason to. Make them feel like they would be making a mistake by not clicking your button.
Why? This tactic has the power to significantly influence how you optimize your websites, which leads to a boosted number of leads or sales generated overall. Hello, growth.
People are Incentive-Driven
There is a similar driver with this economic principle as prior. People need to feel like their next step is worth their time and money.
For example, by submitting your email to a company’s newsletter, you may receive 15% off the next purchase on the website. This monetary incentive will grab the user’s attention and induce them to submit their email to the list potentially.
Further, adding emotion-driven copy to a landing page for purchasing workout equipment can induce a user to purchase the equipment because the utility they will receive from using the equipment exceeds the cost.
This CRO mindset can help you AB test different configurations of landing pages to induce the right conversions. Beware of getting complacent. Your words have power; show your audience how you’re going to make their lives easier.
Trade is Mutually Beneficial
When breaking down “trade” in the marketing world, a couple of different marketing tactics come to mind: content syndication and guest posting.
Content syndication is the process of one website republishing content on a third-party website to increase the content reach to a larger audience.
This can be mutually beneficial: the larger publication may receive payment and free content for their website, while the smaller publication will receive coverage that they would not receive from their current audience and reach.
According to ClearVoice, the power of content syndication lies within the power of combining a network of millions of users that follow each syndicated platform and contributor. By going outside of the scope of your own following, you can push your content to a new group of people that you may not have interacted with before.
The cost associated with content syndication depends on the website, but many times they are based on cost per lead (CPL) or cost-per-click (CPC). Obviously, these metrics will be much different in magnitude depending on the size of the audience you are reaching.
Similarly, guest posting refers to writing content for another website with the agreement to give the site free content in return for exposure and free backlinks with keyword-targeted anchor text back to your chosen website.
Guest posting can be helpful for marketing leaders because it allows you to grow your own personal audience, but in turn, helps grow the audience of the brand of your business. If you take a look at some of the biggest marketing influencers in the world (for example, GaryVee), they have a much more religious following compared to VaynerMedia or VaynerX.
Although guest posting takes time to make connections, maintain relationships, continue outreach, writing, and editing, it is worth your time. Once you become a world-class marketer, people will reach out to you for guest post opportunities.
Pro Tip: The content that works best is content that the target audience of the publication aligns with. For example, if you are writing a guest blog for an HR publication, using examples about problems and issues in HR will resonate more and increase your chances of being published.
Creating mutually beneficial relationships or partnerships in marketing is a key factor for growth in 2020.
Markets Organize Economic Activity
According to the economic principles outlined by Mankiw, the market is shaped by the decisions of millions of market participants, which is considered to be guided by the invisible hand.
In search marketing, there are several inputs that users consider to be market participants: content creators, SEOs, PPC specialists, local businesses, video marketers, and internet users. The cumulative decisions of these participants guide the search market.
However, the market is not necessarily perfectly guided or continually improving. This is where government intervention takes place.
Government Attempt to Improve Market Outcomes
In the real-world market, the government changes policies that attempt to improve outcomes by analyzing market characteristics and enacting new policies that enhance the market.
In the case of search marketing, Google is the government, and the economic policies enacted are Google algorithms. Google is consistently updating their algorithm to enhance the user experience of a searcher, which directly and indirectly increases their bottom-line.
Whether these algorithm changes are selfish or purely to improve user interactions, these policy changes take place to improve Google’s overall performance.
For example, Google has recently rolled out changes in its algorithm that decreased the range of relevance for local search results. Certain locations for local businesses were showing up less as the radius from a user’s location increases.
An example where Google made an algorithm change that benefited their bottom-line was when they increased the number of paid results on the top of the SERP (search engine results page).
This did not necessarily improve user experience, and it frustrated many SEOs as organic rankings dropped; however, it improved the market and their bottom-line.
Country’s Standard of Living Relies on Country Production
A high-performing economy is usually a result of its ability to produce and sell quality goods and services, funneling high volumes of money back into the economy.
In search, Google can only be a high-performing economy if the content that is funneled into its index is worth readers’ time and attention.
For this comparison, we will treat each website on the internet as its own functioning country. That country’s standard of living is its overall performance on Google (whether or not it ranks for plenty of keywords and is generating traffic).
Because a country’s standard of living depends on its ability to produce goods and services, each website can only perform well if it consistently provides first-rate content. This consistent content flow generates traffic and awareness, and ultimate success on Google, leading to company growth.
Let’s Get Technical
One of the most significant applications of economics in search is the concept of “crawl budget.” According to Backlinko, the crawl budget is the number of pages Google crawls and indexes for a website within a specific period.
Crawl budget is determined by the crawl rate limit and the crawl demand. The crawl rate limit helps curbs the number of times Google crawls your pages where it negatively affects your server. Crawl demand is based on Google’s urge to crawl your web pages and fluctuates based on your pages’ popularity and content quality in the Google index. Crawl budget takes crawl rate and crawl demand, and determines the number of pages that Google bots want to review and index.
The ‘want’ has to be defined by their algorithm, which centers around supply and demand.
How to Increase Crawl Budget
To increase your website’s crawl budget, boost the quantity of excellent content, and align with Google’s Quality Guidelines. Even further, meet the needs of the market – answer the questions being asked by your target audience. Do your research; what do they want to consume?
By consistently creating engaging content (it can be more than articles – think podcasts, videos, webinars, etc.), you will increase the number of pages that Google crawls on your website, increasing the crawl rate limit.
Another way to increase a website’s crawl budget is by creating signals that increase Google bots’ demand to crawl and index your web pages. Several SEO tactics can generate signals that show an increasing demand for your website; however, let’s highlight link building.
With continuous authoritative links pointing toward your pages, it shows Google that your content is relevant and significant; it should positively influence your crawl budget.
Such a complex concept in macroeconomics can boil down to the simple SEO tactics that we learn when entering the industry, and they can heavily influence your success in search. Don’t forget your fundamentals.
Team Economics and Search Marketing Strategy
When building out a search marketing strategy, understanding how the search engines work, how user behavior applies, and how user behavior influences changes in search engines can make or break your goals.
Since 2009, search advertising spending worldwide has increased from $26.7B to $135.9B, with no shortage of continuous growth (via Statista). Even further, 70-80% of search engine users are only focusing on the organic results.
The search marketing industry is continuously expanding and is running in an upward trend, similar to a dominant macroeconomy. Understanding the power of those statistics and how the basic principles of economics influence decisions made by businesses around the world can give you a leg up when it comes to your search marketing efforts.