The Efficient Market Hypothesis Today Applies to Organic Search (SEO)

11/18/2015

- Andrew Wetzler, President

There was a time early on, when it was possible to “game the system” and achieve better Organic search rankings than your site effectively deserved. Over time, the algorithms of Google and the other search engines improved and have become more proficient at weeding out websites who are trying to short-circuit the process.

I was thinking recently about the efficient-market hypothesis (EMH) and how it relates to today’s digital marketing landscape. You may recall the term from your college days, but please take this opportunity to revisit the definition (courtesy of Wikipedia) and I’ll share my thoughts on how this fits with what’s required to achieve impressive Organic rankings today.

"In financial economics, the efficient-market hypothesis (EMH) states that asset prices fully reflect all available information. A direct implication is that it is impossible to "beat the market" consistently on a risk-adjusted basis since markets prices should only react to news, and news by definition is random."
Efficient-market hypothesis - Wikipedia, the free encyclopedia

The correlation I see is that companies that work smartly and consistently to improve their site’s organic effectiveness will out-perform those who do not in terms of rankings. So in other words, the market has become highly efficient.

Here’s a link to a whitepaper that reviews many of the important factors impacting your current rankings and if you’d like our specific insights relating to the strengths and weaknesses of your website from an SEO perspective, please Contact Us.

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