Placement guarantees are basically the SEO equivalent of "unlimited bandwidth" in the hosting business. They both are marketing dodges aimed at people who don't really understand how things work.
Originally posted by mazsola
You should ALWAYs avoid SE companies that guarantee placement.
Those guaranteeing specific placement on search engines will typically use one of three approaches:
1) Sheer volume. This doesn't work as well as it used to, since there are only a few search indexes now being used by all of the major search engines. In almost every case, they choose the keywords that will get "high positions," you don't. So they can choose, say, 20 keyword phrases that aren't very competitive, and track them in ten or 12 or 20 search sites. Then they'll give themselves maybe 6 months of reported to reach the goal of perhaps "ten top 20 listings." So they have as many as 2400 opportunities to get those ten listings on the front page (20 phrases times 20 sites times six months). The fact that they're not competitive keywords, meaning nobody's likely actually to search for them, and getting them listed on search engines that not many people use is what gives them the advantage.
2) PPC listings. They don't tell you that they're using both pay per click listings and organic listings in their reporting. By making a bid for a noncomptitive term that places it in the top 20, or top 10, or whatever they're using they meet the guarantee. This is a favorite approach among SEO companies that use telemarketing to make sales -- while they have a potential customer on the phone, they direct them to a PPC search site and show them a buried listing... then increase their bid and demonstrate that they "know how to manipulate" search engine algorithms.
3) They simply make the guarantee to get a sale. If they make it, fine. If they don't make it, they simply ignore your complaints.
The important thing to remember in search engine marketing is that your position for any specific keywords isn't really the important goal. The goals should be increasing traffic and, more importantly, increasing conversions. A top 10 listing, or even a first place listing, that doesn't result in sales is good for nothing but your ego and its possible value in your SEO firm's future marketing efforts.
Specializing in SEO and PPC management.