Search Engine Optimization: August 2011

Wednesday, August 31, 2011

SEO Book.com

Passive Online Income vs Sustainable Online Income

Posted: 30 Aug 2011 09:22 PM PDT

Is there such a thing as "passive" income? Generally no. A person can cash out existing brand equity and exposure, but if they cash out too aggressively and/or do not reinvest enough then they are ultimately cashing out their market position and will eventually fade.

Does Google Make "Passive" Income?

Online there are some network effects that are hard to beat. MySpace had them over Facebook & only lost due to years of systematic incompetence & mismanagement. And even Google has to claw and fight for every percent of search marketshare.

A person could say "well Google makes passive income" and I would counter that with "not really."

So far this month Google has made about a dozen search interface changes or tests & the underlying relevancy algorithms have likely had at least 3x or 4x as much change.

Keeping Google's Marketshare Costs Big Money

The propaganda Google spreads include statements like: "users keep coming back to Google even though they have a choice of a search engine every time they open a browser"

While Google maintains that their monopolist marketshare is due to user appreciation of superior technology, a ton of their exposure is paid for. I was helping a friend set up a new laptop and the amount of Google added to the machine made me feel like Google is the new Norton or Symantec.

If you use the Internet Explorer browser to access the web it comes with a Google Toolbar.

That toolbar defaults to enhanced features enabled.

Google also pays for Chrome to be installed in the laptop.

If you are curious enough to click on the pinned Chrome logo then when it opens they try to set it as your default browser.

If you do use Chrome regularly you see Chrome store ads bundled right int he browser.

Even if you don't use Chrome or the Google Toolbar in Internet Explorer then whenever you use Google they suggest setting it to your home page.

And even if you don't change your homepage, Google paid to be the default search box on Toshiba's default start page!

If your default search provider isn't Google when you install Chrome they use an option screen to help you change it, with Google being the first choice

Either Google is fibbing when they state how much of their existing marketshare is due to superior quality service, or they are hedging a risk of losing marketshare to Bing by buying placement everywhere they can. And to me this really highlights one of the big issues with truly "passive" online income. In spite of Google's success (& the great network effects they enjoy), even Google feels the need to spend hundreds of millions of Dollars a year buying exposure for their own browser, buying default search provider exposure in 3rd party browsers, and ensuring new computers are filled with promotional Google crapware.

This sort of cross promotion is everywhere, from ads on Youtube promoting Chrome

to Gmail ads highlighting featured Youtube videos

and Google+ games having Chrome ads integrated as special items in the game

right on through to Google buying display ads promoting display ads.

Facebook realizes how powerful this cross-integration is & thus buys ads on Youtube as well.

But if you want to leave Google's ecosystem it takes a lot of effort, as Google is willing to advertise the Google alternative aggressively wherever they can.

Google recently extended their ecosystem of cross-referencing further by automatically adding Google Related to Google Chrome & the Google Toolbar, which recommends Google content within the browser no matter where you are on the web.

Google's bundling not only follows users around the web & personalizes ads, but it also bakes right into the core of their relevancy algorithms. Eric Schmidt stated "the internet would be better if we knew you were a real person rather than a dog or a fake person. Some people are just evil and we should be able to ID them and rank them downward."

Either you sign up for a Google Profile or you suffer the consequences! Forbes published (then quickly pulled) an alarming article titled "Stick Google Plus Buttons On Your Pages, Or Your Search Traffic Dies." Wired followed up spreading a similar message & a new Google trusted stores rating system for merchants was also spotted.

With so many attempts at lock-in there is no surprise that some other browsers which have partnered with Google are considering moving on.

This is not to say that Bing doesn't do marketing as well. They just are not as slick about it.

Policing Advertisers Costs Billions

In addition to evolving their core relevancy algorithm, Google has to police advertisers who are willing to be deceptive, market counterfeit goods & use the lowest common denominator. When Google is too loose that can cost them a pretty penny: they just paid a $500 million fine to the US government for ads from Canadian pharmacies. The DOJ claimed Mr. Page knew what was going on:

Mr. Neronha said those efforts amounted to "window-dressing," allowing Google to continue earning revenues from the allegedly illicit ad sales even as it professed to be taking action against them. Google employees helped undercover Justice Department agents in the sting operation evade controls designed to stop companies from advertising illegally, he said.

"Suffice it to say that this is not two or three rogue employees at the customer service level doing this on their own," Mr. Neronha said in an interview. "This was a corporate decision to engage in this conduct."

Likewise, it costs Google a lot of money to deal with lawsuits that arise due to their business practices & lack of respect for copyright with photos, books & videos. They eventually had to develop an expensive video footprinting technology to adopt DRM features on Youtube.

And building the partnerships Google has to run Youtube isn't easy. They pay something like a half-cent per video view & if you create a site with a "no soup for you" message (like the above Google page) for markets where the finances do not work out then you are violating their search guidelines by cloaking, whereas Google overly-promotes YouTube in the search results and is free to count ad views as video views (once again, against Google's guidelines).

New Niche? New Lawsuits

Eric Schmidt highlighted how the lobbyists write the laws & then Google went out and hired over a dozen lobbyist firms. Anything that disintermediates search costs Google a cut of revenues.

While Groupon is still unproven as a business model, Google was willing to spend $6 billion to buy it in order to avoid the risk of missing out on a new form of local ads.

Mobile search now represents 12% of the search market. To look in their dominant search position onto the new devices Google:

build a new operating system to give away for free
paid carriers a revenue share (in addition to giving it away)
likely violated Oracle patents (that will likely cost them in the B's)
had other patent issues which required Google to spend $12.5 billion buying Motorola (that is nearly 1/3 of the cash Google has built up through their IPO & saved profits in the 10-year history of the company)

Sneaky ISPs Redirecting Search Traffic

What is worse for Google, is in spite their default status, their huge ad budget, and being large enough to be sued regularly, even all that isn't enough to keep all the traffic they pay for, as there is widespread hijacking of search traffic by ISP providers.

Google Isn't Passive, but ___ Is

Google may have bit off more than they could chew & are certainly doing anything but being passive. But maybe some other companies that make great money are doing so passively. Offline that is certainly true in many instances, but online passive companies tend to disappear.

Look at all the work Yahoo! has done with their news box & their sports vertical, yet when you back out the cash on the books & the foreign investments the company isn't valued at much above $0. AOL has also cratered. In spite of their huge traffic streams they are not growing with the market due to search bypassing them & niche players picking them apart one vertical at a time. Running a portal profitably & sustainably is anything but passive.

Even deep into the long tail at the other end of the equation the profits may be every bit as scarce. Demand Media's accounting techniques show that they were far better at growing revenues than growing profits & the company may never be profitable.

The Limits of "Search"

Google & Bing keep eating more of the value chain through content scraping & a more interactive search experience that include new ad formats, like coupons & product ads with pictures.

In addition, search companies are challenging the boundaries of search by creating vertical media & ad networks that compete against a wide array of publisher websites.

The Huffington Post

Autonomy / Fast Search

Groupon

BankRate

MapQuest + TomTom

The Yellow Pages

Dell / HP

That "Shady" Competitor

When Google talks about "protecting users" one of the case studies / angles they push is the health angle:

The paid post at the top happens to be about brain tumors, which is a really serious subject. If you are searching for information about brain cancer or radiosurgery, you probably don't want a company buying links in an attempt to show up higher in search engines. Other paid posts might not be as starkly life-or-death, but they can still pollute the ecology of the web.

While Google was using the life-or-death approach to policing link buying outside of their AdWords ad network, Google was knowingly selling search ads to Canadian "pharmacies" providing illicit drugs in the US. The official settlement document lists how Google insiders knew work-arounds to the automated systems & were working directly on managing the ad accounts associated with the illegal activities. Google had done so for over a half-decade & only changed their approach *after* they knew a sting operation was underway.

For those scoring at home, this has been Google's approach to the health vertical:

3rd parties buying links that *could* influence search results for important health topics = morally reprehensible
Google selling links *within* the search results for important health topics to criminal organizations = totally reasonable

Given the above investigation, it is not surprising that they shut down their health records initiative. They had already spent all their credibility.

Google may protect you from some third parties, but Google can not protect you from Google. :D

Not only can Google hardcode the algorithms toward promoting certain websites (while editorially discriminating against other webmasters for doing the exact same thing), but Google also actively invests in the publishing ecosystem, which pits them directly against anyone who doesn't receive their largesse.

Webmasters are told that having networks of similar websites is spammy. And yet, Google invests is a company that owns about 7 copies of the exact same business model in the exact same niche as a roll up.

As we saw with BeatThatQuote, Google owned-and-operated websites get penalized for a shorter duration of time for the same offense that other websites get penalized for longer periods of time for. It was only through *repeated* exposure of the absurdity on SEO blogs that Google decided to treat their own property like they treat a typical webmaster.

You can also do nothing wrong, but have your model undermined by looking too similar to a company that is exploiting Google's relevancy weaknesses & forces Google to apply retribution. A lot of small ecommerce sites were purged in the content farm update. What is so sad about that is that if not for accounting games & selling stock as a business model a lot of the biggest "success" stories in the content farm might not even exist.

While the above section focuses on Google, it could be about any competing business that touches the web...a bank which uses bogus accounting driving smaller banks out of business, a company that receives no bid government contracts associated with bribes & uses those "profits" to price dump in related fields, an ISP redirecting your traffic, etc. No matter how clean a business model looks at a glace, there is some gray area where businesses meet & exceed the numbers quarter after quarter.

Look, for example, at the sorts of links NetZero puts in some of their customer emails

And those links point at the illegal "fake news" styled $1 trials (with endless unstoppable recurring billing).

Look closely at any mainstream media site & you will run into those ads.

Are Passive Revenues Impossible?

It really comes down to how you define passive.

If your site doesn't evolve & isn't aggressively marketed then eventually a search engine or another competitor will pick away at your advantages until you are soon found ranking #2 then #3 then #7 then #20 then invisible. Or you might get clipped by an algorithm all at once in a sudden stop torch job that makes your site essentially invisible, or it may be a slow & painful debt by a thousand cuts.

This is one of the reasons I generally prefer to have a site with a 30% or 50% profit margin over one with a 90% or 95% profit margin. Sure high margins are great while they last, but if you don't reinvest enough over time an algorithm or a competitor will eventually torch some of those high margin projects.

When it comes to online income, passive and reliable are not synonyms.

If you saved the margins you made while they were there then you are lucky, whereas if you adjust your lifestyle to that level of income & don't save anything then dark times have appeared.

It turns out having passive frugal spending habits & active savings habits are crucial if your lifestyle relies on "passive" income. ;)

Categories:

business

Monday, August 29, 2011

SEO Book.com

Buying Google AdWords Ads on Brand Keywords?

Posted: 28 Aug 2011 05:54 PM PDT

Is Paid Search Incremental or Cannibalistic?

Earlier this month Google referenced a "study" they did which showed that 89% of AdWords ad clicks were incremental (meaning that they were clicks that the website would not have received if they relied on organic search results alone).

As part of that "study" they stated that "indirect navigation to the advertiser site is not considered." Why did they chose to exclude that segment of traffic? Because they advertiser would have got almost all of it anyway. They never really defined what indirect navigation is though, so you are left to guess as to what qualifies as being part of that segment.

The "study" also stated:

A low value of incremental ad clicks may occur when the paid and organic results are both similar and in close proximity to each other on the search results page. This increases the likelihood of a user clicking on an organic result as opposed to a paid result. Close proximity occurs when the ranking of the organic result is high, placing it near the paid results. Organic results triggered by branded search terms tend to have a higher ranking on average and this may lead to a low IAC value.

So which keywords should you advertise on? And which keywords are buying the milk when you already have the cow for free? According to Google:

A low IAC value does not necessarily suggest a pause in search advertising is in order. In fact, for many advertisers with a low IAC, it is still profitable to invest in search advertising. To evaluate the economic benefits of search advertising, an advertiser must run a calculation incorporating their individual IAC, conversion rates, and conversion revenue. The below equation can help determine whether search advertising is worthwhile on a case by case basis.

Is an Experiment Required?

Google later suggests that a more rigorous test would include a split test experiment that compares a control group against an ad group with paid search ads held back. They then suggest that "many advertisers are adverse to conducting such experiments due to the setup costs involved and the potential revenue impact from having a hold-out group."

What I don't buy *at all* is the suggestion that such studies need to be rigorous & expensive. On the organic search front, Google Webmaster Tools already offers organic search CTR stats by ranking position & ranked page:

And since Google is heavily promoting adoption of the +1 button, they also offer A/B split data for how that button impacts search performance.

If Google provides this data for free for organic search then why (other than protecting their own revenues) do they suggest this data is hard to attain for paid search? If Google respected their advertisers & wanted the advertisers to advertise based on complete data they would make this data available automatically, like they do with the +1 button data.

No "Study" Required

Here is my big problem I have with Google suggesting that I need a quantitative study to know if I should buy my own branded keywords:

I know I am going to get almost all the clicks anyhow (Google removed "indirect navigation" from their study for a reason, and 3rd party studies have shown how directly cannibalistic these ads are)
the whole point of building a brand is increased affinity with users & not needing to pay for incremental distribution driven by brand demand. To spend money to build brand only to have to keep rebuying the existing brand equity is quite a futile exercise.
in the bid auction Google sets arbitrary pricing floors at the keyword level to squeeze advertisers (almost nobody is bidding on "seo book" but if I do Google will want $2 or $3 per click)
even if I go through said "quantitative study" I end up needing to re-test it every so often as Google arbitrarily juices the ad prices to increase their revenues
when Google offers the enhanced long sitelinks they are doing so because they think the search query is primarily navigational, yet they still put ads above the organic search results, which IMHO is pretty dirty
and the dirtiest bit of it all (that smells the worst) is that competing against you in the ad auction is not only arbitrary pricing floors, but also Google itself, which buys keywords against your brand (using their own monopoly money)

Larger Sitelinks Drive Down Competition

Google recently expanded sitelinks in the organic search results to make them take up a huge portion of the above-the-fold screen real estate, driving down attempted organic search brand arbitrage & negative reputation issues.

Driving Down the Search Results

Using features like Google Instant, a Google+ promotional bar & longer AdWords ad copy, Google has been aggressively pushing down the search result set so fewer listings appear above the fold.

Each month there is another test of some new feature that pushes the organic search results downward.

Zero Moment of Burning Ad Budget

Google promotes a concept called "the zero moment of truth" suggesting that you need to advertise just about anywhere late in the conversion cycle to "be there" and reinforce your messaging.

However, with enhanced organic sitelinks, the brand owns so much of the search real estate that it will lose limited traffic to competitors if it doesn't buy AdWords on its branded keywords. Further, given the ability to block certain sitelinks & edit the page title & meta description you should be able to control the copy on your branded organic listing to make it look and feel like the ad copy you would use in AdWords.

There are some nuanced exceptions though, as brands are not always well aligned with how people search...

When You Should Buy Your Brand Keywords

Short Term Specials & Promotions

If you have an event coming up that you need to promote for a short duration of time then running AdWords ads is a great way to instantly get exposure for that campaign.

Certain Misspellings

In the past if you misspelled keywords Google would put the spell correction right at the top of the page. More recently they have decided to put it below the AdWords ads. So on this type of ad (where Amazon already ranks #1, but has the organic search results pushed down by the ad & then a spell suggestion) I think that ad is burning money.

In other cases, like where you don't rank high in the organic search results, buying AdWords ads on common misspellings is a much smarter idea. For instance, I think this is a smart ad buy by Agoda.

However, in the longrun, if I ran Agoda, I would point a few misspelled links at my website to boost my rankings for common misspellings.

One way to reach misspellings and longertailed searches for your brand is to use an embedded match, where you bid on agoda and then use -[agoda] as a negative keyword.

Brand is Shared By Multiple Companies

Mercedes Benz is burning a bit of their ad budget by advertising where they are irrelevant.

Certainly it makes sense for them to buy exposure for the branded keywords, but in the above examples they should put -kingston as a negative keyword.

When Google Runs Negative Ads

In some cases Google ads promote negative messaging. For instance, while using Gmail I saw an ad suggesting that I should "uninstall McAfee" in a computer that did not even have it.

Buying branded ads in those cases would likely make sense, if for no other reason to compete with & block out risky negative ads that could go viral. Whether Google should even allow such ads is another question for debate.

Big Money Markets Full of Spam

Google was recently clipped by the DOJ for a half-BILLION Dollars for running illicit ads promoting Canadian pharmacies. The DOJ went so far as highlighting that Larry Page knew what was going on & intentionally allowed these ads to run:

Mr. Neronha said those efforts amounted to "window-dressing," allowing Google to continue earning revenues from the allegedly illicit ad sales even as it professed to be taking action against them. Google employees helped undercover Justice Department agents in the sting operation evade controls designed to stop companies from advertising illegally, he said.

"Suffice it to say that this is not two or three rogue employees at the customer service level doing this on their own," Mr. Neronha said in an interview. "This was a corporate decision to engage in this conduct."

After the above instance, Google is perhaps going to be "guilty until proven innocent" where they are running sketchy ads.

In the short run it is likely appropriate to still run branded keyword ads while the issue is getting sorted out, but if you see anything like the following on your branded search results it probably makes sense to fight it on the public relations front in the background while opening the wallet to protect the brand publicly.

And since most major pharmaceutical corporations are routinely fined for running illegal ads, I don't understand why these pharma corps don't have a black hat SEO (or 3) on staff to help manage the search results.

If Google wants brand then give it to them in spades. ;)

Categories:

pay per click search engines

Sunday, August 28, 2011

SEO Book.com

Google Appends Prior Search Query

Posted: 28 Aug 2011 04:39 PM PDT

Smart SEOs have been preaching brand for years and years now (& so has Google if you read between the lines).

For some time Google has appended prior search queries in AdWords. In some cases they also show ads for related search queries, append your location to the search query for localization, spell-correct search results based on common search trends, and (as the Vince update showed) they can also use search query chains & brand related searches as a signal.

As far back as 2008 Google sugested previous query refinements for organic search, but they haven't been very prevalent thusfar IMHO.

While researching another article, I was searching for some browsers to see how search engines were advertising on various keywords, and after searching for Firefox I later searched for SEO & saw the following:

This is yet another way brand familiarity can boost rankings. Not only are you likely to score higher on generic search queries (due to the Vince & Panda updates), but having a well-known brand also makes Google more likely to recommend your brand as a keyword to suggest in Google Instant, makes people more likely to +1 your site, and it now also can impact the related organic search results further if people search for that brand shortly before searching for broader industry keywords.

Categories:

google

Tuesday, August 23, 2011

AboutUs Weblog

Technical Issue: Cassandra Truncate

Posted: 22 Aug 2011 06:03 PM PDT

Here is a technical post from AboutUs software engineers:

Cassandra truncate means slow test suites.

Enjoy!