I do all of the SEM for my company, and am a great fan of your newsletter. My work is judged by the number of keywords that are in the top 5 listings in organic search. We work in a tiny niche, with only 327 other companies in our business in the USA.
My question is, how should SEO services be evaluated? In other words, what measurable objectives beyond landing above the fold are appropriate?
I've written extensively on measuring the success of your SEO campaigns, so I won't go into too much detail here. Suffice it to say that rankings are definitely not the correct measurement anymore, and haven't been for quite awhile. For more on that, you can see my Search Engine Land article entitled: 5 Reasons Why Rankings Are a Poor Measure of Success.
In addition, here's a slew of articles and info on this from our own High Rankings site.
To answer your question directly, the success of your SEO campaign will depend upon the goals set forth at the outset. Typically, it would be increased targeted traffic, conversions and/or sales.
Hope this helps!
Update 4/29/09 - Please see this related article:
---Jill Whalen is the CEO of High Rankings, a Boston SEO Consulting
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