BUDGET FRIENDLY MARKETING FOR STARTUPS EMPIRICAL STUDY OF SEO SUCCESS FACTORS

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1 BUDGET FRIENDLY MARKETING FOR STARTUPS EMPIRICAL STUDY OF SEO SUCCESS FACTORS Richard Lackes 1), Tobias Anton 2) 1) Department of Business Information Management at Technical University Dortmund, Vogelpothsweg 87, Dortmund, Germany 2) Department of Business Information Management at Technical University Dortmund, Vogelpothsweg 87, Dortmund, Germany Abstract Startups often lack financial resources to run mass media marketing campaigns. This leads to the need for efficient and inexpensive methods to spread the word about a new enterprise with its product and services in a startups early development stages. As nowadays consumer search on the internet is almost ubiquitous, it is important to be found in this medium. Hereby studies show that it is crucial for a website to be among the first search results with one s website in order to be perceived relevant and to be clicked by consumers. Search Engine Optimization (SEO) of a startup s website is an opportunity to get among the top search results for certain keywords. This optimization can be done budget friendly with the startup s given resources. In this paper we empirically analyze the relevant factors that influence the search result rankings in the search engine Google in order to extract the key success factors that can be influenced by a startup and lead to more traffic on a startup s website in order to enter in a market without spending much budget. Keywords: Startups, Entrepreneurial Marketing, Online Marketing, Search Engine Optimization, SEO Introduction. Entrepreneurs face tough challenges when it comes to enter a market with a new product. Especially in the early development stages of their startup they mostly have limited financial and human resources to promote their company although their product may already be market ready (Ansari, 2013; Simpson/Taylor, 2003; Churchill/Lewis 1983). In order to inform a satisfying number of potential customers about one s product mass media advertising in television, print and on the internet often seems to be the only suitable way. But especially advertising in these marketing channels is expensive and requires lots of human resources in order to be executed professional and successful. The lack of resources can be closed by acquiring money e.g. from venture capitalist or banks. But investors may not be found or the founders may neither want to sell shares nor take a credit. The alternative is to use the given limited resources as efficient as possible and to choose the right marketing channels where one s target group can be found. In case of web startups the main target group can be reached on the internet. But this marketing channel is not limited to only these kinds of startups. Nowadays it is ubiquitous for consumers to find products, services and solutions for problems they face via a search engine. Studies say that more than 50% of customers find their way to websites this way (Dou, Zhou, Lim, Cui, Su 2010). Furthermore many studies proved that only search results on the first page are really relevant, as customers don t click through all search results (O Neill/Curran, 2011; Ramadhan/Shihab, 2006). Hence it is necessary to be ranked among the top search results for the keywords that match one s products and offers. When it comes to budget friendly marketing activities one opportunity, especially for startups, is the use of search engine optimization (SEO). SEO techniques can help to rank one s website under the top search results for certain keywords and therefore can bring new customers to a startup s website without spending much budget on marketing. Search engine companies like market leader Google of course do not tell which features lead to a good ranking in their search results. Insiders say that all in all it are around 200 factors that have an influence on the ranking in the Google search engine (Eustace, 2006). Therefore it is of interest to find out which attributes are important in order to create websites that are ranked under the top results for certain search terms. In this paper we present a study that aims to find out what factors are relevant for top positions in the market leading search engine Google. The remainder of this paper proceeds as follows. The second chapter will sum up relevant related work in the underlying research field. Chapter three presents our study and its results. The paper closes with a discussion and conclusion in chapter four. 247 ICEBM 2013

2 Related work. Several studies analyzed the ranking of websites in search results. Different approaches led to interestingly similar findings. Fortunato et al. (Fortunato/Boguna/Flammini/Menczer, 2006) looked at the association of the number of in-links to a webpage and the value of Google s PageRank algorithm of a page. They were able to deduce how many in-links would be needed to achieve a given rank for a certain topic. Not looking at other factors like the content and the structure of webpages however limits their study. Evans analyzed the methods of Search Engine Optimization companies that took part in a competition (Evans, 2007). The competition task was to get under the top search results for a given keyword. He found that the most successful companies in the competition mainly used methods of building many in-links to a webpage like entering the target webpage into the DMoz web directory and into the social bookmarking site del.icio.us. He also found that older domains were ranked better. Su et al. (Su/Hu/Kuzmanovic/Koh, 2010) developed a linear model that was tested in experiments with over 6000 webpages to predict a Google ranking. They were able to predict search results with a high accuracy. The top influence factors due to their study are the Google PageRank and the keyword appearing in the domain, the title of the page, the meta-description tag and also in the path of the URL. A reverse engineering approach was conducted by Zhu and Wu (Zhu/Wu, 2011). They analyzed search engine rankings for search terms and the characteristics of the ranked websites with a reverse engineering approach. They differentiated the ranked websites due to the search volume of each given keyword in order to find out if the search volume makes a difference on which factors are relevant. They concluded that the top five factors seem to be similar no matter how high the search volume for a keyword is. According to their results the top five factors are the length of the URL, the appearance of the keyword in the domain, the keyword density in the title and in the heading tags h1 and h2. Furthermore they name the amount of URL layers to be relevant. Without defining what a URL layer is they state it should be greater than one where two or three seems to be the best. We conclude it's the depth of subfolders of a URL (e.g. the URL layer for would be two). Study and results. Our research aims to find factors that are relevant to influence the search result position for certain search terms (keywords) with a reverse engineering approach. We focus on what factors a startup can influence by itself in order to achieve a better ranking for certain search terms. In general two types of factors can be distinguished: on-page and off-page factors. Characterizing property of on-page factors is that they can be influenced directly by the website owner. These factors are elements like the title of a webpage, the headlines, the text and the URL. These are the main factors we focused our research on. Furthermore other authors stated out their importance too (Zhu/Wu, 2011; Su/Hu/Kuzmanovic/Koh, 2010). To identify the most important factors with a high influence on the ranking out of these named factors a comprehensive analysis of over 400 search requests with random search terms on Google was conducted at our department (Eberhardt, 2009). The first 50 results were then taken and analyzed whereby results from the online encyclopedia Wikipedia were eliminated as their pages are almost among all top search results and therefore would have biased the result. This way we looked at the characteristics of about websites. The results and our implications for startups are as follows. On-page factors Every webpage owns a title that is visible in the browser s title bar. In our analysis of search results the search term of all top results appeared averagely more than once in the title of the top ranked webpages and the average keyword in title appearance of the lower ranked webpages was near one. So on first sight the keyword s appearance in the title seems not to make a big difference. But a real difference concerning the ranking can be observed when taking the number of words in the title tag into concern. Among the top five results mainly websites with fewer words in the title appear. Over all 400 search requests the first two results have an average number of only four to five words in their title whereas from result entry number ten downwards the average number of words in the title is between eight and nine (Fig. 1). 248 ICEBM 2013

3 Number of words in title Figure 1: average words in title with trendline With the given results we now can calculate the keyword density in the title tag: KD = K / W (1) with KD = keyword density, K = number of keywords, W = number of words. Keyworddensity in title Figure 2: average keyword density in title with trendline We now can conclude that the title of a page seems to be an important criterion. Thus one should carefully think about the title of every single webpage. Based on the findings we can say that if a startup presents a new product or service on its website and this fills the main content of a webpage the most relevant keyword should appear in the title of that page. Thereby the keyword should be named once in the title, the number of words in the title should be between four and six and the keyword density in the title should be between 0,2 and 0,3 (Fig. 2). To find relevant keywords for one s products one can make use of several tools on the internet like the Google AdWords Keyword Planner ( It is proposed to choose keywords that have an association to the text of the page, that are not too broad and that have a large quantity of searches but less competition (Hui et al., 2012). As the latter is hard to find the above mentioned keyword tools can help. As choosing the right keywords is the basis of the whole on-page optimization process it is of great importance. We furthermore analyzed the impact of the keyword being part of the domain name. Hereby no significant impact could be determined. In contrast we found out that the keyword as a part of the complete URL path has an impact on the ranking as the top search results had keywords in their URL above average. 249 ICEBM 2013

4 This leads to the need to use unique URLs that include the relevant keyword in them for all webpages of a startups product and services pages. If startups make use of content management systems (CMS) for creating their websites they should install an add-on to generate such unique URLs as CMS often generate dynamic links of webpages that only have numbers in them which of course cannot be analyzed for certain keywords by search engines. When looking on the text elements of a webpage we found out that headings had no significant influence on the ranking. Headings in HTML are declared in a hierarchical order from <h1>heading 1</h1> to <h6>heading 6<h6>. What we could find out is that the keyword density in h1 tags of a webpage that is on the first place of the ranking is on average four times higher than the keyword density of a webpage that is ranked on the tenth place. Thus it seems beneficial to put the keyword with the highest relevance for the content and only this one word into the h1 tag. The resulting values for headings of the top five search results are listed in table 1. Table 1: Average values for headings of the top five search results Heading Average number of heading tag occurrence in webpage Average Number of keyword mentions Average keyword density h h h h h h The table also shows that the occurrence of keywords in h2 and h3 tags seems to be good. Nevertheless the keyword density in this tags can be lower than in h1 tags and keywords can appear more than once in this tags. Both h2 and h3 tags are suitable to structure the contents of a webpage in meaningful paragraphs and to describe these. All in all it is recommended to stick to the hierarchical order of the heading tags. Startups should consider that using the heading tags might have a negative impact on the design and appearance of a webpage as browsers often interpret these tags differently. Here the use of the cascading style sheet technique (CSS) can help to manipulate the design of each heading tag without loosing the structure recommended above. Another method to separate text elements from the rest of the text is to mark words as bold. We found that there is a trend that the top search results have marked keywords as bold but the impact is low. It also seems to be disadvantageous to mark too many words as bold. We figured out that Google seems to penalize this as we find webpages on the last ranking positions that make use of bold marked keywords above average. We conclude that it reasonable to make use of bold marked keywords but in a moderate way as to much bold marked keywords seem to be judged as a manipulation attempt. The next central object of interest in our analysis is the keyword density in the whole text of a webpage. Keyworddensity in text Figure 3: average keyword density in text with trendline 250 ICEBM 2013

5 It is obvious that the keyword density is a very weighty criterion for the ranking (Fig. 3). The top five results reveal a keyword density of about three percent. The lower ranked results have a far smaller keyword density on average. Beside the named findings we found that the alternative text tag in images has no influence on the ranking and that using a keyword in the filename seems to have a very low impact as a positive trend can be made out. Furthermore the use of HTML meta-tags has no significant influence due to our findings. Off-page factors Looking at the off-page factors it is known from literature that the most influential factor is the number of links that lead to a website, the so called link popularity. The reason for this is that it is assumed that websites that are relevant for a certain topic are recommended and therefore linked by other website authors. The most famous algorithm to measure the link popularity is the Google PageRank. Our results underline the above assumption (Fig. 4). Entire backlinks to the domain Figure 4: average backlinks to domain with trendline It can clearly be seen that the top ranked results all have a higher number of backlinks than lower ranked websites. This has several implications for startups. First it is important to create relevant content on one s page that is linked by others. Therefore a startup should not only present its products and services on its website but also write texts on related topics. For example a web blog under the same domain as the startups website can be used to discuss industry issues or things that can be done with the startups product. This can be done in a funny or informative way. Therefore creativity is needed to create relevance. When relevance is created other websites will automatically link to the relevant pages. To support this linkbuilding process a startup should also make use of social media channels to spread its content. If it is done right the content will be spread in social networks and backlinks to the startups website will be created. Another charged possibility to create backlinks is to make use of so called linkfarms. These are pages that have no own content but only link to thousands of webpages in order to create in-links to these pages. We do not suggest this technique to startups as on the one hand it costs money and on the other hand it is doubtful as it can be that search engines try to also look on the relevance of the linking website and may penalize the use of linkfarms as their content is not relevant for the topics the startups website is dealing with. Discussion. In this paper we discussed the problems that arise when a startup tries to enter a market in the startups early development stages. Due to a lack of financial resources it is a tough job to market a startup s new product as a budget for mass media advertising often does not exists. We suggest, as one way out of this, to aim to be ranked under the top search results in a search engine as consumers more and more make use of search engines to find relevant products. This can be done without big monetary spending and in case of a technology driven or a internet startup the human resources needed are most likely already on hand. In order to get among the top ranked pages it is important to know for a startup how to build its website properly. Therefore certain characteristics of about webpages and their influence on the search engine ranking in the market leading search engine Google were analyzed. With regard to the results we concluded several implications for startups on how they should structure and build their websites and what can be done to support the development of backlinks. Related studies in this field support our findings. Our conclusions are limited by the fact that the search engine algorithms change from time to time. Also in our study we did not take side effects between the factors into account. 251 ICEBM 2013

6 References Journal articles Ansari, O. F. (2013). Marketing in SME Organizations: Problems & Remedies. European Journal of Developing Country Studies, 14, Eberhardt, S. (2009). Working Paper Department of Business Information Management at the Technische Universität Dortmund. Evans, M. P. (2007). Analysing Google rankings through search engine optimization data. Internet Research, 17(1), Fortunato, S., Boguna, M., Flammini, A., Menczer, F. (2006). How to make the top ten: Approximating PageRank from in-degree. 13 th IFAC Symposium On System Identification. Churchill, N.C., Lewis, L. (1983). The Five Stages of Small Business Growth. Harvard Business Review, May-June 1983, Dou, W., Zhou, N., Lim, K. H., Cui, N. & Su, C. (2010). Brand positioning strategy using search engine marketing. MIS Quarterly, 34 (2), Hui, Z., Shigang, Q., Jinhua, L., Jianli, C. (2012). Study on Website Search Engine Optimization. International Conference on Computer Science & Service Systems (CSSS). O Neill, S., Curran, K. (2011). The Core Aspects of Search Engine Optimisation Necessary to Move up the. International Journal of Ambient Computing and Intelligence, 3 (4), Ramadhan, H.A., Shihab, K. (2006). IEEE Conference Proceedings Information and Communication Technologies ICTTA 06 2 nd (Volume 1) Simpson, M., Taylor, N. (2002). The role and relevance of marketing in SMEs: towards a new model. Journal of Small Business and Enterprise Development, 9 (4), Su, A.J., Hu, C., Kuzmanovic, A., Koh, C. K. (2010). Hot to improve Your Google : Myths and Reality. IEEE/WIC/ACM International Conference on Web Intelligence and Intelligent Agent Technology, Zhu, C., Wu, G. (2011). Research and Analysis of Search Engine Optimization Factors Based on Reverse Engineering. Third International Conference on Multimedia Information Networking and Security. Technical report Eustace, A. (2006), Search Technology Overview, Google Press Day, Retrieved from: Authors Bibliography Prof. Dr. Richard Lackes holds the Department of Business Information Management at the Technische Universität Dortmund since He studied Computer Sciences and Business Administration at the University of Saarbrücken and graduated as a Ph.D. in 1989 with a doctoral thesis on cost information systems. After his postdoctoral lecture qualification on just-in-time concepts he focused on the following research fields: Supply Chain Management, Business Intelligence, Knowledge Management and Data Mining, E-Learning. Dipl.-Oec. Tobias Anton works as a research assistant and Ph.D. student at the Department of Business Information Management at the Technische Universität Dortmund since He studied Economics and Business Information Science at the Technische Universität Dortmund and the Ruhr-Universität Bochum and graduated with a diploma in His main interest and research fields are: Information Systems, Risk Management, Entrepreneurship and Internet Startups. 252 ICEBM 2013