Complete text of a contribution to an SEMPDX panel article that is posted here: Ask SEMpdx: What is the SEO Value Proposition?

Search Marketing Value Proposition

Setting aside the strict definition of "customer value proposition," there are three stakeholders who benefit from search marketing activity—and it pays to consider the (ulterior) motives of each:

1. Search Marketing Consultants
Earn income from their interdisciplinary expertise in information retrieval, online advertising, economics, and web technology. Online is the fastest-growing advertising medium in history. In 2006, $0.40 of every online advertising dollar was spent on search marketing.1 This growth trend motivates additional search marketing consultants (of varying skill levels) to enter the field.

Know Your Conversion Rate!

You can lead a horse to water… There's a big difference between driving qualified leads to a website and getting website visitors to register, or pay, or comment, or whatever it is you're hoping they'll do. Ad budgets are wasted when leads are driven to a website that cannot produce conversions at an acceptable rate. Rates vary by industry, product, and measurement method—you should know your actual and expected performance before undertaking any online marketing activity.

2. Search Marketing Customers
Marketing managers, communication strategists, and business owners who invest in search marketing derive one primary benefit:
increased search-referred leads
Search-referred guests are coveted because visitors arriving via web search are qualitatively different than audience arriving via other means…
3. Web Search Engines
Search marketing generates direct income for web search vendors in the form of pay-per-click and paid inclusion programs, and the vendors benefit indirectly as well. Search marketing increases the supply of indexable, accessible content on the web, compelling the use of… web search sites. Search marketing activity increases revenue for contextual advertising programs (such as Google AdSense) by adding to the inventory and quality of the pages available for syndication. Best of all, these indirect benefits cost the web search vendors nothing. No wonder they're so generous in their support of the search marketing community!
sean dreilinger works for interactivate, inc.