Due Diligence is the process of investigation carried out on a business by potential acquirers who are thinking about making an investment.
Whilst Due Diligence processes have historically focused on financial, legal and staffing matters, it is quickly becoming common practice for potential investors to research the online footprint of their target business alongside the standard diligence process, in order to accurately assess the company’s true value.
Back in February 2006, the BBC reported that BMW had been given a “death penalty” by Google (http://news.bbc.co.uk/1/hi/4685750.stm), and had been temporarily banned from the Google index for carrying out a number of SEO practices that went against their guidelines. This is a perfect illustration of how serious Google are about tackling bad online practices, and even the biggest global corporations will have to face the consequences.
Since the BMW case in 2006, there have been countless updates and guideline reviews unveiled by Google, so it is more important than ever to be sure that your target business will not befall the same fate as BMW before the ink on your deal has even dried.
Performing online due diligence on your target business will provide you with a detailed analysis of its affairs and future prospects. When performing this due diligence check, you should ensure that you review the following aspects of your target business:
• Check the business is ranking well in the major UK search engines – Google, Yahoo and Bing
• Observe the capacity for improvement and expansion within the business
• Check that their PPC campaign is spending at an optimum level
• Review the business’s competitors, and how their site performs in comparison
• Demonstrate how well their campaign is performing against other industry websites
• How they can understand their online customers in more detail
• Analyse customer comments on social media sites such as Twitter, Facebook and Google+
• Research consumer reviews – compare volume of positive reviews against negative
• Review online coverage; is bad press threatening to hold the business back?
• Check if there are any risks assigned by the current format of the website
HitSearch director Andy Redfern comments: "There is always a risk associated with purchasing a business, but performing a due diligence check on the SEO and PPC campaigns of your target companies, as well as their general online reputation, should be a standard requirement for all potential acquirers, as this will help to safe guard your investment.”
If you would like more information about the best practices for performing Online Marketing Due Diligence on your target businesses, call HitSearch on 0845 643 9289.