Mike King: Owned media at Semrush. He’s broken over thirty bones, including all ten fingers, received over five hundred stitches. He lived in a remote village with fewer than a hundred people in Honduras when he was sixteen and started his first company at seven years old. That part actually doesn’t surprise me. Presenting When You Can’t Beat them, Buy them, Growing Your Audience Through Strategic Acquisition, please welcome Nick Eubanks.

Nick Eubanks: Oh, man. How’s everybody doing? Pretty good? Yeah. It’s been an amazing event. I haven’t gotten to be here as much as I wanted to be for a lot of the talks from some of the people that I look up to, but, everybody I’ve talked all the conversations I’ve had over the past few days have been amazing. I just the team that at iPullRank has just done such an incredible job. And so I won’t gush too much, but like events are really fucking hard and this is really impressive. So, as Mike said, I’m Nick. For anybody who doesn’t know me, like Mike raps, I build stuff. I usually sell it, but I definitely build a lot of it. Most of it doesn’t work, but it’s worked out a few times. So I apologize that a bunch of the stuff I’m gonna go into right now has already been talked about ad nauseam. I’m gonna try to make it a little bit different, but it’s all stuff we’re in the same industry. It’s the same theme. And we’re all asking the same question right now. Right? Which is like, what is actually happening, right, with with AIOs and LLMs and all the same shit. And so, you know, again, this is I don’t mean to make these points. They’ve been made ten times by ten other people. But the the rise of AIOs is wreaking havoc on not all search traffic, but a lot of search traffic. Some industries more than others. Definitely in the business and business services space. But like just from the start of March to the end of March, you know, AIOs doubled. They’re right. They went from 6% of global queries to 12%. They’re now back to like 9.5%, 10%. 

But in, you know, we zoom in on just the US, which a lot of us focus on as a market. You know, we’ve got some verticals that we track at Semrush where we’re seeing 50% of queries with AIOs. And it’s just doing this insane thing to traffic overall. Right? What’s actually happening for the really the first time in history is we’re seeing this decoupling of clicks and impressions where they used to be directly correlated and we’re actually seeing almost an inverse correlation to some extent with this right now. And because of that and because of the four sort of forced behaviors that are coming about as part of AIOs and people using LLMs for different types of queries, the shape of the funnel is actually starting to change. Right? We’re seeing the top of the funnel from a search perspective, at least organic, shrinking as the middle and the bottom continue to get wider but also sort of start to move. And so, you know, paying attention to where folks are starting to go is becoming increasingly difficult as attribution gets increasingly fractured and now is the time probably more than ever when the big leverage point from us as marketers with data is figuring out how on earth we get our hands on as much clickstream data as possible. And, I’m probably covered concentration of intent. So, again, these are just echoing things that I probably don’t need to echo as much. But there is some hidden nuances when it comes to LLMs. And so, the one thing I’m gonna ask from folks right now, if you don’t mind, is I wanna share some stuff with you that I’m not really allowed to share. So I’ll just ask you to put your phones away just for like the next three or four slides.

This is not gonna be on on the video. They took the slides out of my deck. Like, this is like legit, like some insider data. We will be publishing this but like probably not for another month. But it was too important to not talk about it. And so while ChatGPT relies almost exclusively on Google, what we’ve found is that, you know, it doesn’t rely on Google the way that we as SEOs would think. Right? So if you look here, what you’re seeing is that the lion’s share of the results that are showing up in AIOs are coming from page 3+ of Google. Right? It’s it’s the a Google is literally looking for results that are not on the first or second page, which is completely counterintuitive to it it broke my brain when we we found this out. And what’s interesting is we’re seeing a similar behavior with Gemini, less so. And we’re seeing it still, but again less so with Perplexity. So like 89% versus 48%. But it’s still just the fact that these results that are being pulled into these LLMs and into even the AIOs are coming from deep pages. And this is more these behaviors are more, indicative of LLMs more than AIOs. The AIO research is fractured because it’s changing so fast.

But we’re in this new era of SEO right now. And so the the way that I’d like to describe this and the way we talk about it in my team internally is, you know, we it used to be the Newtonian physics model. Right? Which is a a deterministic system with clear cause and effect relationships. We all, you know, we had some sense of what the input signals were and all the, you know, 200 influential points that might go into scoring and ranking a website. And with this new phase of SEO that we’re in, it’s it’s more, like quantum physics. And probability has come to replace certainty and there’s now all of these different states that all exist simultaneously. And so, in the wake of this, on top of all of this, on top of all this crazy shit happening with search, ad costs are continuing to rise, like, in a in a big way. Like, this this is kind of mind blowing for me that, you know, the average CPC on Facebook is up over 90% since 2020. And it’s probably not going down, but, like, it’s getting really expensive to buy the traffic that it’s getting harder for us to acquire organically. And so what is a savvy I said customer acquisition strategist because that’s what we are. But if you wanna use the word SEO, you can do that too. What are you gonna do? 

This is where own media really starts to make a lot of sense. Who here is familiar with the term own media? It’s like a general sense. So about about half okay. About half of you. So the the idea of own media is not a new idea. There’s a lot of companies that are in other industries that have been doing this for a long time. It’s it’s newish, in other verticals like the the Redfin example is a fantastic one from Andrew. I’m so glad he actually brought that up. It’s newerish for software, but media companies, publishing companies, they’ve been doing this for a long time, like a decade. This is a screenshot from an incredible article from Glenn Alsop, who everybody probably already knows who he is. But if you haven’t read this article about this sort of monopoly that’s been going on, so I’ve kind of behind the scenes, it’s a fascinating article. But this is how these companies who are doing, you know, buying and building and growing these properties are able to get traffic at this level. Right? This this is this is category creation travel traffic. And so, like I was saying, owned media is not a new strategy. Here’s some, you guys probably recognize most of the logos on the left. Here’s assets that they bought. Oh, my slide did a fun thing with the title there. These are the assets they bought on the right. And this is one of my favorite quotes that I’ve ever seen from Dharmesh, one of the founders of HubSpot, not new to marketing, but the idea that the next generation modern software companies are going to be building media companies inside of them, which is exactly what I’m doing at Semrush, and it’s what I would challenge or encourage you to start thinking of doing for your brands, your customers, is is to capture more of this. And and there’s there’s two real there’s a lot of reasons, but there’s two real reasons that, owned media is really attractive. And they are because it lowers your acquisition costs and on average, it increases your LTV. So here’s just how the owned media sort of fits into the bubble. Right? So we’ve got earned media, paid media, and owned is really that piece, that again, it’s moving out of date. So, like, websites and blogs is when how this was described when this idea first came about. It’s not necessarily that anymore. So, like, we’re buying digital assets and, no, I don’t mean crypto, but we’re buying blogs, communities, publishers, apps, newsletters, online, YouTube channels. We’re looking at podcasts. It’s where are our audience going to consume their media, on their incredibly fragmented customer journey? How do we get in front of them more? How do we create more impressions? And how do we do it without having to pay every time to do it? And this is why we’re buying these types of properties.

This is an obvious thing to an SEO audience, but what makes the assets actually valuable? It’s traffic, but more so than traffic, it’s the intent. Right? The direct intrinsic value or market value multipliers even for these assets when we buy them is what are the terms that they rank for? Everybody in here who’s ever done any kind of campaign has, you know, we’ve all leveraged paid data to get clean attribution on which keywords are driving sales. And then we we, you know, build our SEO strategies around targeting those keywords and we pay attention to who has those, you know, the the brand share, click share, impression share of those terms across our most important keywords. And if you want to think about this in terms of a market share, there’s two there’s two things that I think are interesting to consider. One is we, at least internally, are no longer talk no longer talking about total addressable market when we are looking at SEO and we’re looking at traffic and we’re looking at asset visibility. We’re now looking at total available clicks. Right? The impressions are important and they’re showing up other places that aren’t attributable to organic search. But, understanding more so that, you know, if we can’t unseat these these other people, we need to do whatever we can to buy them because the share of clicks, is getting smaller, so we need to go get more clicks. And how do we do that? It’s it’s owning more real estate. Right? It’s how do we how do we get from, move from just the first position to the first, to the second, the third, the fifth, the seventh. Like, we want them all ideally. And so, what I was saying is, you know, as organic search showed, this this graphic did not play well either. Yeah. The red line which you see going down here, this is, like, overall, of a group. So this is a big group of the portfolio that I manage. This is a bunch of those sites all put together. And this is what we’re seeing just in the past 12 months. Little less than 12 months. But if you see the red that that slow sort of death in organic, that’s attributable organic search. But that yellow line is direct. We’re also seeing, interestingly enough, which is not on here, we’re also seeing very large increases in referral. So, like, organic in some of these sites might be down 50% year over year, but the combination of direct referral and unknown may be up 60, 65%. So it’s it’s this shift, in the way that people are finding it. But, you know, whatever we can do to continue to have that yellow line, hopefully, at least go up, which is which is, driven a lot by a lot of these acquisitions, is a really important thing to understand. 

So I wanna draw your attention to something here that’s a perfect example of what I’m talking about. It is is anybody in here an affiliate, like an affiliate marketer? No? Okay. Thank god. It’s a bad time to be an affiliate. So the the left side is a screenshot of the, you know, page one, which is inside Semrush in November of 2020, since 2023, but it’s actually 2024. And you what you can’t see up there is there are four, websites that are Semrush affiliates. Here’s a screenshot for the same keyword, which is Semrush versus Ahrefs in March of this year. Those are all sites that there’s now zero rankings on page one for affiliate websites, and those are three sites that we now own. And so, this is the the practical manifestation of exactly what I’m talking about. This is why I think this strategy is so important, because we are facing headwinds as an industry. These are what I would consider to be probably the ten biggest headwinds that I think most of us are aware of but we need to be having conversations about with our clients, stakeholders, teams, leadership, investors. The first one is that the ecosystem and the attribution around that ecosystem is shifting. Right? More impressions, lower attributable traffic, lower less clicks. The SERP is changing faster than it ever has before, and that’s not gonna slow down. The amount of tests that are happening, the the I don’t I don’t know if anybody in here has has, run a query for, like, things to do in the city. I saw one, for New York, yesterday. That was like it had to be 1800 pixels long. It was I mean, it was not just the whole page. It was like multiple scrolls. And that’s that’s again, I think that’s unlikely to change. So trying to keep up with that is something we need to be aware of. AI content and the saturation point that we’re starting to hit in some industries, it’s now getting harder to forecast. Right? So like leadership inside Semrush wants to know, hey, we have seen some organic traffic losses for these keywords. How do we how do we get this traffic back? What, you know, what when are we gonna recover this traffic that that we’ve lost on these terms for these assets? And the the real answer is we’re not. The total amount of clicks is is never coming back. It it’s it’s it’s gone in a lot of ways. The pie has physically gotten smaller.

The, volatility in the algorithm I would also say the volatility of even with AIOs. Right? Like, Google, you know, goes up 50% increase then turns it down by 25%. And these are not they don’t seem like large numbers, but they’re they’re huge when you consider, you know, the six trillion queries that Google processes every year. Budget for this. This is something that probably everybody feel is feeling right now a little more than than usual is the budget pressure and the skepticism in a lot of ways around the ROI from SEO as a channel. This has not ever been something we’ve really had to prove because the there was always some form of attribution and and the, conversion rates historically have always been so much higher from organic traffic. We’re we’re starting to see, leadership doubt, you know, sort of what’s possible right now because there’s so much uncertainty, I think, because of AI. Zero click search dominance, brand authority as a ranking currency. So, like, this is an interesting one from an own media perspective because what I think and this is kind of funny because we’re kind of going backwards in some ways. 

So one of my first ever companies, this was in 2008, one of our strategies was we would spin up microsites. We even built a little CMS to help us do it. It was like CodeIgniter and WordPress cobbled together. It was it was pretty shitty, but it worked. We just build a bunch of sites, like, targeting, like, just, like, you know, a bucket of terms, and we’d all rank back to our client sites. And that, like, microsite strategy, which is spammy, it worked though back then. I think we’re gonna see sort of the rise of microsites all over again because not everybody wants to go out or not everybody has the budget to go out and buy the the big part or the big competitors or buy the big assets in their space. But there’s it’s now easier than ever to create a website, fill it up with half decent content. Link building is changing a little bit, but I also think links are also more expense, more, important than ever before. And that all sort of feeds this narrative into this idea behind owned media. Right? The more sites you can have that are within the realm, they have visibility among your audience, especially across their customer journey. The more links you can acquire, the more mentions you can acquire. These are all things that we know we’re training LLMs and and just sort of trying to get ahead and be proactive of where search is heading. Multi-platform search fragmentation. This this number scares me. I’ve got a bunch of Gen Z siblings, and, like, the way that they look for information, it just shocks me. Like, they they it is completely normal for them to start their searches on Instagram and TikTok. It doesn’t mean they’re getting good information, but that’s the behavior that that we’re seeing. And, you know, kids are now being raised on screens. And I just saw this is this is just, like, not to me, a 56% TikTok and Instagram for product searches. It’s wild. I won’t talk about this at all because I think other people have already been up here, have already done a way better job. And if you really want to know anything about EEAT, just talk to Lily or follow Lily anyway. 

So let’s look at some of the unit economics around what I’m talking about because this is the stuff these are questions I always get are like, well, how do you how do you guys decide what this is what this is worth? And, like, some of the more interesting conversations that I get to have are when I get to talk to people about buying non monetized assets, which is just a a fun kind of quirk because you still have to figure out evaluation on them. And I’m gonna show you exactly how to do that right now. I’m gonna it’s gonna be it’s gonna be a lot of numbers, but I’ll try to talk through it. And if anybody wants to talk more about the nerdy finance shit afterwards, I’m happy to. So the commonly known acronyms, and we are an acronym industry, are that you guys will probably all be familiar with, right, is customer acquisition cost, monthly recurring revenue, lifetime value. The lesser known ones, and this is more more specifically for SaaS, but this is the this is the most practical example that I can provide, is FP. So first payment, conversion rate to first payment, and referral rate. And that referral rate number is actually extremely important. So we’ll walk through a real life opportunity. So let’s say we wanted to build a high value. Let’s say, like, $10 million plus exit value. We want to build a high value website. So let’s pick a a vertical. We’ll go I chose the payment automation software vertical because the multiples are insane in this vertical. And we said say we want our buyer target to be Tipalti. If you don’t know Tipalti, they’ve raised over $700 million – their value last valuation the last time of their raise was in ‘21 at a little over $8 billion. So we go and we look at their most valuable keywords. What are the most valuable keywords? Right? They are a mix of accounting terms, full funnel terms around tax, payments, procurement, financial calculators, whole bunch of platform comparisons. So what would I do if I was gonna build something instead of buy something with that as my target acquire acquisition? That that company is the the target acquirer. I would probably go spend a cent and register a nice dot com right here with some exact match, stuff going on. And then I would scope out what it would take me to sort of get to a minimum viable amount of traffic that I could monetize. So for these guys, let’s say spend $20,000 a month, for at $2,000 dollars an article, so five articles a month, say a $50,000  initial link budget at roughly a $1,000 per link, which is decent pricing in the finance space. Each piece of content generates will say when it’s fully baked, so five or six months after these posts are live, these pieces of content are live depending on the keyword difficulty, obviously. But let’s say we can give them each to 500 visits. So roughly 100,000 visits per month on 200 pieces of content give or take. So total initial 12 month investment to get this thing sort of seeded is about a quarter of a million dollars.

So the idea is is that, you know, we’re we’re hitting some publishing tranches. There it takes time for the pieces to start to build to build content. You hit a little bit of that flywheel assuming that you’re able to actually drive this traffic. So this is this exercise is in a little bit of a a vacuum because I’m not assuming that a lot of these terms are gonna get completely, gobbled up by AIOs, which is what’s realistically probably gonna happen. But let’s say, you know, after 30 months based on this publishing schedule, we’re at 100,000 visits and then here’s where stuff gets fun. So let’s say we have 100,000 visits per month that we’re not paying for and we have a referral rate of around 1%. So that’s like essentially the click through rate from our site, AP Automation Pro, to to palti[.]com. So how much traffic can we actually send to that site per month? It’s highly qualified traffic, though. That’s a really important part. So it’s only 1,000 visits a month, but these are people that you’re you’re driving very specifically into solutions. We’ll say that we’re able to convert them to a first payment of 0.25%. That’s reasonable. That first payment value, because this is enterprise software, is $10,000. Let’s say their LTV and their LTV is way higher than this. But just for the sake of this, we’ll say the LTV is 18 months. And so every month, that website our website is generating $25,000 dollars in first payments and adding about $450,000 in incremental LTV to this business. So here’s a if you don’t like the numbers all over the place, here’s like what that would look like in terms of a funnel. So the reason so, what that means is for every 400 visits from AP Automation Pro, right, Topology generates one new customer. And so on average, the important thing about knowing these these unit economics is we know that what the website converts to a first payment at, we know exactly how much money we can spend to acquire that visit.

For most SaaS companies in and even especially enterprise companies, 30% of LTV is about the right target. Right? We always, any SaaS person will tell you LTV to CAC is like the number one thing that management cares about, investors care about, Wall Street cares about. And so anytime we can do it, an LTV to CAC over three, we’re good. If it’s over four, we’re doing cartwheels. So if we we assume a 30% target, that means we are willing to spend or Topalti should be willing to spend $150,000 to acquire a new customer. With this, after 24 months on our traffic ramp, we’re actually able to acquire that same customer for, like, about half the cost. This is the real power behind owning more of that total brand journey and leveraging own media whether you’re building or buying. But it’s it’s buying and not always folding in, which is a strategy that I ran a playbook I ran for a long time in my previous agency life. But buying, operating, adding value, how do you how do you take up as much real estate, earn as many of those clicks that are left in the universe as you possibly can. Did anybody get any questions? Thanks.