To understand why SEO costs are rising, let's take a look at the value net of each of the four players in the search industry. We can start by briefly defining the players in the search industry, and identifying what they give and take to the search industry:

Users: This is anyone who uses a search engine. They give their attention and if shopping, they give their money as well. They get relevant information in a timely fashion.

Web Publishers: This is anyone who publishes a web site. Web publishers give content/information. They get attention and money.

Search Engines: Search engines are like attention brokers; they help people find what they're looking to give attention to. Put another way, they help people maximize the return on their attention. They give information on where to give your attention; they get advertising dollars, as well as the ability to sell their own products.

SEOs: SEOs help web publishers get more traffic from search engines. They give traffic to web publishers; they get money for their services.

So that is the basic value net. Let's add some other basic facts:

1. The supply of web publishers is increasing.
2. SEO is increasing in complexity and decreasing in predictability; the end effect is that its harder to be a good SEO, and even harder to define what a good SEO is.
3. Search engines, Google in particular, are increasing the complexity of their algorithms, making it more difficult for the publisher who is not an SEO to get attention from search engines.

The result is twofold:

• Attention from search engines is in great demand and is increasing, due to the increasing number of web publishers who demand such attention.
• Via the complexity of their algorithm, search engines are constructing barriers to this attention.

The end result is a decrease in supply of distributed attention from search engines and an increase in the demand for it.

The result is rising prices for attention from search engines. Since *quality* SEOs, like search engines, can deliver this attention, the price of SEO is rising.

As stated in the introductory post to this series, markets with rising costs are prime for disruption (which is why I enjoy such markets so much). The way to disrupt a market with rising costs is to decrease the cost in a way that makes the price curve more elastic; in other words, cost needs to be decreased, but revenue cannot be compromised (in fact, revenue should go up). This would revolutionize the market completely.

In the following post, we'll do an "SEO cost analysis" to see how costs can be reduced for SEO services in a way that will not decrease -- and may in fact increase -- demand for such services.

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