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How Much is a Link Worth To Your Website?

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Getting links for your site is hard work. You’ve got to have good content, you’ve got to research sites who’d be likely to link to you and you’ve got to approach them in such a way that your link request stands out from all the rest.

This takes time and effort, and time and effort costs money. And to invest money in any linking you’ve got to have a good idea of what links are worth to your website. Whether you run your own business, work for a company or an agency, you need the answer to this question.

So how do you decide what links are worth? This question focused in my head when I came across an eBay style auction for text links. Perhaps this would be a good way to value a link – let the market decide?

Link auction website

The auction site in question, Linkadage.com has over 400 registered buyers and sellers of text links. When I visited the site, there were 35 live auctions on display with titles such as “PR7 keyword-rich text ad on PR8 travel site + bonus!” for $28 per month for 12 months and “Link on PR8 Home Page” for $200 per month for 4 months.

I explored a little further on the site and found some interesting conditions. If I did choose to bid, I’d only see the website AFTER I’d won the auction. So the main information I had to go on was the reported PR value – though many but not all of the sellers gave short descriptions of their sites together with traffic figures.

And then there is the small matter of Google’s terms and conditions – “thou shall not buy PageRank” or words to that effect. How can Google tell? A text link ad on a relevant site is buying advertising, a text link on an irrelevant site is probably buying PageRank.

Buying text links is legitimate

Buying text links is of course a legitimate marketing practice but such links should never be bought on the basis of PageRank score – it’s simply not a useful metric for such a decision.

There are plenty of opportunities to buy text links – on portals, trade associations, ezines, even non-profit organizations.

If you are going to buy text links, then do so based on marketing decisions:

    -Does the site serve your target markets and offer potential for getting quality traffic?

    -Will your text link be accessible to search engines?

    -Is the content of the site compatible with the products or services that you offer?

    -Is the design of the site professional and do the companies who have already bought text links appear to be reputable?

    -Do you have a budget and a target in mind? You will spend $x and expect sales of at least $y in return.

With Linkage auctions, you can’t answer all these questions – you have to take a lot on trust. But as with any auction, creating and building trust is paramount and Linkadage.com has certainly taken steps to
do that. I’ll be testing their service over the next few months and will let you know the results.

So as a measure of the value of a link, this auction doesn’t offer any immediate answers. How else could I judge how much a link is worth?

Compare with Google Adwords

One way is to do a simple comparison. How much would it cost on Google Adwords to attract the same number of visitors? I’ve written before about how an article in Search Engine Watch gave an early boost to Linking Matters. In the week after that article, we had over 4,000 additional visitors. That would have cost me about $2,000 if I’d been paying by click through on Adwords. But even a year later, we still get referrals from that article and I’m sure it also persuaded many other sites to link to us. I could quite reasonably double that value to $4,000.

Work out the figures

Another approach is to do some calculations.

Take the example of a retailer website that gets 100,000 unique visitors per year. Sales conversion rate is 2.5% and average annual sale per customer is $200. That gives annual online sales of $500,000 which produces a net profit of 12%. Over 400 sites link to the retail site and these account for 50% of his total traffic.

A very simple mathematical calculation on the back of an envelope might be:

Links account for 50% of traffic so the retailer could assume that this produces 50% of sales – $250,000 with a net profit of $30,000 so each link is worth $75 in net profit.
We might go a little bit deeper.

Not all links are equal and some will drive more traffic than others. An analysis of referrer logs shows that the top 20 links account for 62% of the traffic and an equivalent percentage of link sales – $155,250 so each of the 20 top links produces $7,762 in sales and a net profit of $931.

And the remaining 380 links bring sales of $94,750 which is $ 249 gross per link or $30 net profit per link.

Easy to see that a top 20 link produces over 30 times as much as other links – a great argument if one was needed for concentrating on quality links.

With these figures in mind, or indeed a more detailed e-metrics plan, I’m ready to start thinking about buying text links.

A final word of caution

One of the reasons that buying links is attractive is that it does away with all that hard work of persuading other sites to link to you because of your content. But if that means you don’t put the same effort into creating content, then your site users and ultimately your business will suffer.

Buying text links can be part – but only part – of a link building campaign. And it may be particularly helpful for new websites that have no PR at all. But that doesn’t take away from our fundamental mantra, “create great content, link to great content and great content will link to you.”

Ken McGaffin provides link building services to established and new
launch websites. He is the author of the highly acclaimed ‘Linking
Matters Report’. You can claim your free copy at

http://www.linkingmatters.com.

How Much is a Link Worth To Your Website?
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