“You have to produce results in the short term, but you also have to produce results in the long term. And the long term is not simply the adding up of short terms.”
– Peter Drucker

Instead of shifting risk to the agency, pay for performance SEO can engender short term thinking, hide risk and exacerbate negative consequences for the client.

No matter how specific or measurable the metrics agreed upon, pay for performance scenarios only work when you have control over the outcome of your work. For some lines of work, like United Auto Workers linking part of their pay to the effectiveness of their unit, pay for performance makes sense, but for a profession like SEO there are too many factors at play outside of our control and best intentions.

  1. Search engine algorithms are secret and change frequently. Not that there’s anything wrong with that, but optimization therefore never ends, even if you reach your goal. Even Google says “No one can guarantee a #1 ranking on Google.”
  2. Competition between organic results. For example, you rank well for a competitive keyword but your competitor in the SERP below you has “Free Shipping!” in their title and steals clicks that should have gone to your client, who doesn’t offer free shipping.
  3. Competition between organic and paid results. The same thing can happen as above, but that search result could be a PPC ad.
  4. SEO implementation may not be done by the same person who recommended the change, such as changes to the server configuration or design of of the landing pages. The client could insist on something being the way it is even if it isn’t ideal for SEO.
  5. Negative SEO i.e., intentional competitive sabotage – competitors directing spammy, paid links to the client’s website resulting in lowered rankings due to no fault of your own.
  6. Google holds back performance data in the form of (not provided).
  7. Even if you hit your performance goals way above and beyond what was in the contract, most clients simply don’t budget in a way that allows them to fork out extra money for a campaign that delivered far beyond their expectations.
  8. Tactics that may be considered fine today might not be considered fine five years down the road. If an agency is going to get paid for performance, it makes sense that they would do everything they can to give you results fast. Unfortunately, sometimes short term success turns into long term nightmares. Stretching small budgets requires shortcuts to scale. The more an SEO process is scaled, the more it is likely to be factory line styled – and that makes it more likely to have footprints that Google can easily detect and penalize. The model that was intended to align agency and client ends up having the opposite effect.

Nobody takes medicine on a pay for performance basis. There’s too many reasons why drugs don’t work for everybody, from genetics, allergic reactions, misdiagnosed symptoms, and so on. It’s up to the patient, with the help of a doctor, to understand all the interactions before popping a pill. Working with an SEO agency should be thought of the same way.