When Business Models do Not Fit Search...

Sep 25th

Ebooks vs Physical Books:
Physical books have higher production costs, more middle men, and uber thin margins when compared to ebooks and downloadable software products. If you sell 1 to 2 % as many ebooks as you would physical books you can still make about the same amount of profit from it.

Getting on Amazon:
As stated by John T Reed, listing your book on other sites turns your unique market position into becoming another vendor of a commodity that people can get from many locations.

While some people consider books to have no credibility unless they are on Amazon, sometimes your book can get a reference even if you don't sell your book there. This list has had over 1,000 views, and a reader of my ebook told me they just bought my book from that list. I clicked the link to say I found the list helpful, as it helped me :)

Some authors also work their way up in Amazon by reviewing related books or make lists including their own books. There are so many reviewers that there are guides to becoming a top reviewer.

When Pay Per Click is Broke: Competing on Negative Margins:
Andrew Goodman talks about struggling writing AdWords ads for his new cheap book about Google AdWords:

As a result I can get very little search traffic on this term, so the paid search traffic for that book is mostly coming from the content targeting program, which I suspect isn't converting. We are talking about $1.20+ per click to generate content clicks; this is unlikely to pan out.

Yet ironically there are many ads for ebooks costing more (including mine), as well as services and other companies that work in the Google ecosystem, running on the same keywords, doing quite well. But advertising an inexpensive new book on the subject seems to run up against both editorial and quality score issues.

A long time ago I worked for a niche DVD selling company that did not have great consumer lock in and had a $75 cost per conversion using AdWords. I got their cost per conversion down to a few dollars, but sales dropped off sharply too, and their margins were razor thin.

Had they had a larger ad budget (or had they decided to throw a few thousand at SEO before dumping 5 figures into a functionally broken PPC campaign) I would have built them a ton of links and over time they would have ranked across thousands of titles making a bunch of sales from the free search results.

When Search is Broke: Nobody Cares:
Another customer wanted me to market an uber niche product in Australia. They wanted me to set up an AdWords campaign to help with that. I set up their Australia AdWords account, making it a bit broad to see what results they would get, and - as I suspected - they got nothing.

Recently that product started doing well in Japan, and when I asked them why and how they explained how hard they worked to market it offline and how hard they worked to contact related sites. Those social relationships led to word of mouth marketing, which later drove search volumes.

When Search is Broken: Overshaddowed Position:
I consulted a person who sold information about an open sourced project. There is so much link popularity in some of those fields that it is hard to break into the market selling an information product unless you can get some of the most well known people to help give you exposure.

Another common problem with overshaddowning is when words have multiple meanings and tons of people search for the other meaning. This can make it a bit hard to filter out the bad PPC leads, and if you show up when you are not relevant that hurts your overall CTR, which can drive up your click costs.

The Most Valuable Lead:
The most valuable lead is going to be a person looking specifically for you or your product by name.

Many businesses that work well offline are nearly impossible to make functional online using the largest ad networks. You can try to grab related traffic and traffic on peripherally related terms, but until people care or know about you or your product it is much harder to compete on margins.

When you run into the problem of advertising being unaffordable you can always dip a toe into the rich consumer feedback your marketplace offers to learn about the market and build social relations at the same time.

Also the more you can throw your name into what you do or offer the more that can help make up for a lack of ad budget.

How to Get Those Most Valuable Leads:
For people to want to search for you they have to have some type of initial exposure. Testimonials work great, but odds are most people are going to run into ads or affiliate marketing prior to seeing too many honest recommendations.

There are a ton of people who will blog on a wide variety of topics to earn a few bucks. It is not hard to do. When they blog about your topic ideally the profit margins are high enough that people see ads like this at the top of their site.

Some people find the algorithmic holes and fully automate the content generation process, and like it or not, as Dan Thies states, that content converts:

I learned enough in Econ classes to know that Google (through Adsense) is paying for a lot of the spam I see in search results. I've also learned enough from looking at Adsense reports to know that intercepted search traffic has a higher CTR and payout than ads that appear in real content.

Poor Matt... try as he might, he can't change the fact that his employer is paying for more R&D in how to do link spamming, than they are spending on R&D to stop it. This is Cathedral vs. Bazaar all over again, only this time the Cathedral is footing the bill.

I have been debating getting published, but it is going to require synergistic effects with selling updates or else I would lock myself out of the search marketplace due to poor margins.

Published: September 25, 2005

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Comments

September 26, 2005 - 1:57am

Why not self-publish? Lulu.com is a great resource, no upfront cost, you set the price and hence can truly determine your profit margin, and you can use their distribution service to get listed in Amazon, B&N, borders, etc. for a relatively low price.

September 26, 2005 - 2:31am

I’m a used bookseller by trade so I may be a little biased.

Plenty of people still only take a book seriously if it is a physical object.

Certainly including myself. I’ll pay good money for a book published my a known publisher but nothing for an ‘ebook’ or self-published title. Sorry, if you don’t have the credibility given by a publishing house I’m not going to take you seriously.

I do not read extended texts on the screen. It annoys my eyes. I hate products that don’t come with a manual. I installed phpAdsNew today. The documentation was in that most hateful of formats: PDF. So I printed the mess. No room on the left for punching holes so I can bind it. I just tossed the papers down. If I really decide that I need banner rotation maybe I’ll buy something more friendly.

When I felt I needed to know about CSS I bought one of Eric Meyer’s books and went to the park to read it rather than stare at my damned monitor.

But I’m wandering. My point was that some people, even people with lots of money to spend for advice, may take you far more seriously once you have a ‘real’ book published by (whoever publishes computer books nowadays).

Even if they don’t buy your book just seeing it listed on Amazon or searches that show them it is on Amazon may give you an additional kind of credibility.

Given the simplicity of your URL people who’ve bought the book can easily type it in and buy the latest edition with all the new tips and advice.

It isn’t as if we are at that quaint 1990s Wired view where the web is everything and ‘old media’ has been forgotten.

September 27, 2005 - 7:35am

Good post, Aaron. Readworthy as always.

September 27, 2005 - 6:13pm

Aaron, if you're going to quote me, I wish you'd actually try to convey a genuine sense of what I was saying. Instead it just seems to be an excuse for you to turn around and promote the value of SEO (you wanna build a few thousand links for me maybe? :) ).

As Richard Evans Lee pointed out, publishing a book with international distribution through a large publishing house can reflect well on the author. I didn't notice Battelle getting quoted in the Financial Times et al. on the strength of an e-book. And I notice you took the time and trouble to review John's book precisely because it's a well-known new release in wide distribution, not an ebook.

So let's get back to why I posted on a specific discussion thread on Search Engine Watch Forums regarding an AdWords campaign (paid for by my publisher) for Winning Results With Google AdWords (what you have called my "cheap new book"). On the forum, as I recall, we were discussing the quirks of Google's new Quality Score measure, which replaces CTR as one of two things that determines an advertiser's rank on the page on a given keyword query. My point was that my ads were having trouble getting early traction because the QS measure is "predictive" - and a lot of other advertisers on the same terms, including me advertising my services and ebook, have established track records (CTR and other factors) that may defeat the predicted quality of a new ad like my book ad. Basically I was just trying to muddle thru how this new scoring system works. I wasn't trying to ignite a PPC Sucks or SEO vs. PPC debate.

Incidentally, it was a given that this small AdWords campaign for a $16.99 book would be a money-loser, especially if I was paying for it (luckily, I wasn't). A small amount was budgeted for promo because (a) that's how you market books - get word of mouth going upon release; (b) the book is ABOUT ADWORDS, so we thought it sensible to follow our own example and advertise it through AdWords!!

The point wasn't that PPC is bad or that SEO is good. There was just a very specific point about quality scores being made. In fact, those Quality Scores may well be closer to the world of SEO than we realize, since Google could be taking all sorts of factors, including content on the landing page, into account in determining Ad Rank.

You heard it here first!

P.S. I thoroughly hope you'll read and enjoy my "cheap book".

September 27, 2005 - 9:30pm

Hi Andrew
eek... was not trying to step on ur toes. Sorry on that.

I long ago bought your ebook and still heavily recommend it. I was not saying your book was cheap as in no good, but cheap as in price compared to ebooks. That is just the nature of the beast.

You state your issue was quality score, etc...but where you are running into a wall is the profit margins...like $70 vs 70 cents is pretty hard to make up for unless you have one of the world's best quality scores...but it is hard to outdistance your own other ads that you also wrote which have 100 time the profit margin per sale.

I was just saying that in the PPC ecosystem even people I have refered business to and well trust (not sure if you know that you have landed some clients because I recommended your service to them, but you have), that some items do not fit it. Later below I also stated some ways that stuff could not fit the organic results or search in any way.

I would not have bought your first book, bought your second book (2 days ago in fact...and it just came in today), refered clients your way, or even mentioned you if I did not think you were good at what you do.

I guess I could have wrote a bit more clear or pinged you before posting, but I think you missed what I was trying to say.

The point of the post was not met to say SEO is entirely better than PPC. It was picking apart how some ideas or sites work better in search than others...on the free side, the paid side, and both. It will make sense if you read the whole post in that context.

Although I still think if a small company is good at SEO they can afford to compete in some markets even if due to low conversions, bad branding, or low margins they are locked out of some of the similar PPC markets...especially with how easy it is to influence MSN and Yahoo! search results. I believe most businesses should try to work up their weaknesses to where they can compete on both fronts though.

I would have reviewed The Search independant of publishing format or publisher.

I will be reviewing your new book shortly. :)

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