SEO Engagement based on Traffic Generated

I need some direction in the middle of some fierce negotiation

[McMohan]

This is the first time I am engaging a client on a traffic-based SEO model. Below is a run-down on where we are at the moment -

1. Traffic average (number of visits) for the previous 6 months is to be the basis of existing traffic.
2. Traffic achieved over and above this average to be billed.
3. Run a Google Adwords campaign, to know the traffic benchmark cost.
4. Offer 30% discount over that benchmark cost.
5. Traffic achieved to be billed monthly.
6. Min. 1 year engagement.

Now the client demands -
Every 6 months, the average traffic to be reassessed by taking average of previous 3 months. Which means, the traffic we helped achieve will go free to them after every 6 months. It is like doing an Adwords campaign, where after 6 months if you continue the same campaign, that campaign is no more billed.

How do I go about this situation?

Thank you

[Mark_A]

sorry it all seems very complex to me.

Traffic gained by adwords does not become natural, it continues to need to be paid for.

[Sgt_Kickaxe]

Deny the demand, let the customer go if it's a deal killer. It sounds like the customer wants a guaranteed increase in their pocket no matter what you do and that's unrealistic.

There WILL come a point in which traffic lowers, eventually, at which point they continue to enjoy the fruits of your labor while you don't and that's also not reasonable.

Minimum 1 year? 30% discount over cost? walk away.

[buckworks]

Run a Google Adwords campaign, to know the traffic benchmark cost

I'm not sure what to think about that.

If the client had already been running AdWords campaigns that were well-tuned and proven to be cost-effective, I'd consider that a useful way to assign value to incremental traffic.

But if the AdWords is just starting from scratch, I'd be cautious.

The cost per click from AdWords can vary a LOT depending on a host of factors. An account manager who doesn't know what they're doing could easily spend several times what the traffic is actually worth. Or, a serious cheapskate bidder might be able to get really cheap clicks, although not many of them.

The numbers you want are somewhere in the middle, but the account would need some time to mature before you could discern them reliably.

[buckworks]

A few more thoughts:

I often look at organic traffic reports, or traffic from other promotions, and think, "That number of visitors would have cost $$ if we were getting them from AdWords." So subject to the caveat I expressed above, the cost of AdWords traffic is a useful baseline for assessing other promotional work.

An agreement about this would need to spell out clearly how success would be measured, and the site will need to be running analytics that you and the site owner both trust, and know the limitations.

If you're being paid according to growth in traffic, make sure your agreement spells out clearly what kind of traffic. The site owner should be free to do paid advertising without it affecting his arrangement with you. Clarify that clicks from promotions such as banner buys or PPC campaigns, for example, would be "his", not "yours".

Places where you should definitely get credit for growth would be in traffic from organic search, and also growth in referrals from other sites. Good link development will send visitors as well as Page Rank, so new traffic from new links should also be attributed to your work.

Do you know the sector well enough to know what the natural yearly cycles are likely to be? Be sure to consider seasonal variations, and think carefully about whether six months is enough history for framing realistic expectations.

Many sectors have natural peaks and valleys so sometimes, for traffic to double in a month would be no big deal, while at a different time of year a 10% decrease might actually be fantastic performance compared to previous years. You'd need to look back a full year to recognize the improvement, though. In some sectors the issue of natural peaks and valleys wouldn't matter much, but some it would.

[McMohan]

Thanks for the answers. Buckworks, the product demand isn't seasonal, so 6 months' average is a good indicator. Besides, we had to attribute a cost to the traffic objectively. In this case we agreed to use Google Adwords traffic as the alternative source against which to determine the costs. I have no issues with that.

What has put me off is the revision of traffic base every 6 months, which is a Win for the client and a Loss for us. I believe, we should be allowed to bill for the extra traffic for the entire year and after that, should we continue, factor in a percentage that would be the yearly growth in traffic for the site even in the absence of an SEO campaign.