Marketing Driven SEO Strategy

Jul 31st
posted in

The conventional SEO strategy goes like this:

  • Research keywords
  • Optimize site for those keywords
  • Link internal pages using keyword loaded terms
  • Get links from other sites with keywords in the link

These days, this strategy isn't working as well as it used to.

If a site isn't genuinely interesting and isn't worth remarking upon, it can be difficult to get links, attention and rankings.

These are essentially marketing problems.

By basing our SEO strategy on fundamental marketing principles, we stand a much better chance of dominating the rankings, no matter what niche we choose to target.

Audience

This document is intended for those who know basic SEO principles, but are new to marketing concepts and theory.

If you're new to SEO, there are helpful tips throughout the document, and links to further instruction on SEOBook.com.

Principles That Form The Foundation Of This Strategy

  • 1. Market Analysis
  • 2. Competitive Review
  • 3. Positioning
  • 4. SEO
  • 5. Economics

Market Analysis

In the past, marketing was a last-minute ad on.

A company knocked out a product, then it was handed over the wall to marketing, whose job it was to get the product out into the market. Marketing put a colorful picture on the box, commissioned a jingle, and bought up millions of dollars worth of media time.

These days, marketing is more integrated. A product or service is designed with a clear audience in mind, although many SEOs might disagree, especially when asked to bolt an SEO strategy onto a Flash site consisting entirely of animation!

The internet offers us the opportunity to design with a clear audience in mind, but with a lot less risk than brick-n-mortar companies.

We can figure out if there is a market, and what that market demands, test that market, and then build a site to cater to that market. We can do this quickly and cheaply, using the power of search marketing.

Find Clear Space & Consumer Demand

Like SEO, marketing is part art, part science. Even if you cover the technical aspects of SEO, there is no guarantee you will rank well. Likewise, if you follow a marketing strategy, there is no guarantee of making money.

The trick is to find a place in the market that has two key aspects: clear space and consumer demand.

How do we find these places in the market?

Let's start with a basic marketing analysis.

Perform Market Analysis

Ask yourself three questions:

  • What does the consumer need?
  • How many consumer need this product/service?
  • What is the buying process?

You must fill a genuine need in the market.

Is there demand? It's no good trying to sell something, be it a good, service or opinion, if there is no demand for it. For example, do you know why most blogs don't get read? It is because there is a very limited demand for opinions from unknown writers. Demand is spread very thinly across the opinion/news space, and supply is virtually infinite.

How do you find out if there is a demand for your idea?

The SEO has a valuable tool at his/her disposal for determining demand. Keyword research involves mining databases of previously searched for keyword terms to see if there are existing traffic streams (demand) they can tap into. Any volume of keyword searches indicates demand. Generally speaking, the higher the search volume, the greater the demand, although there are traps, which we'll get to shortly.

For those new to keyword research, here's a step-by-step, using the SEOBook Keyword Tool

Example Of An SEO Marketing Analysis - Gone Wrong

The SEO aims to build a revenue generating site.

The SEO undertakes keyword research and finds there are a lot of searches for Britney Spears pictures.

It turns out that there are approximately 135,000 searches for Britney Spears pictures each month.

Our first two questions - "What does the consumer need? (Britney pictures)" and "How many consumer need this product/service? (lots!)" - appear to be answered. So the SEO licenses a collection of Britney pictures, sets up a site that charges a small membership fee, and ranks well for Britney related keyword terms.

And fails to make any money.

Why?

There are various reasons, but the main reason is that the SEO failed to ask "what is the buy process?" Conventional SEO-led strategies often fail to include this step, however it is crucial if your site is to succeed.

The buy process is, as the name suggests, the steps a person takes when they are interested in buying something. Had the SEO examined the buy process, she would have realized people don't pay for Britney pictures online. Granted, this example is a little silly, but this problem occurs often, especially when search traffic is viewed in isolation.

Offline, people may buy gossip and celebrity magazines, but when online, they expect to look at Britney pictures for free. Online, the buy process for Britney Spears images simply doesn't exist, except in a very narrow B2B market between photographers and publishers.

So what happens next?

Choose Niches With A Commercial Imperative

The SEO, discouraged that his first idea didn't work, chooses to run ads instead. Where there is traffic there is money, right?

Again, this approach is likely to meet with limited success, especially when compared to other niches she could have targeted.

People looking for Britney pictures don't tend to be in a buying mode, and so advertising, especially action based advertising such as Adsense, is likely to go unclicked. The activity "looking at Britney pictures" doesn't have a strong commercial imperative, whereas an activity such as "buying toys", does. Such sites need a very high number of page views to make much money.

One way to determine if a commercial imperative exists is to examine the bid prices for Adwords. Almost always, the higher the bid price on the keyword, the more transactional the niche.

Think Of It From The Advertisers Perspective

The SEO also needs to understand the buy process in order to choose the areas which will be most effective for advertisers. The most effective Adsense sites, for example, are sites where visitors are looking to buy something. That's the only reason advertisers use Adwords - they need to sell visitors something*.

In reality, it's a little more complex than this.

Non-commercial searches can and do result in sales, however searches directly related to commercial activity - such as transactional searches - are most likely to result in higher income for your site and make for more profitable niches. See my article on the three types of searches, navigational, informational, and transactional for more information.

Ask yourself:

What makes someone buy something? Will they buy it online, or offline? Are they even capable of buying something over the internet? If visitors are in a buying mode, then what stage of the buy process are they at? Are they ready to buy right now, or are they looking for information?

Look at demographic details for competing sites and keywords to get inside the mind of the searcher. Don't just look at search volume, but also consider the intent behind the keyword, how you would monetize that demand, and the visitor value.

*The one caveat is to drive brand awareness, but this also has limited effectiveness. When was the last time you clicked on an adwords ad that focused entirely on building brand? And if people don't click, you, as the publisher, don't make money.

I hope I've impressed on you the need to evaluate keyword terms within a marketing and business framework.

Competitive Review - Strengths & Weaknesses

  • Query the search engine results pages under the keywords you want to rank for
  • Pick out the top ten sites in your niche. The top ten sites will usually appear under a mix of keyword terms relating to your niche
  • Determine the strengths and weaknesses of the competition
  • Determine the strengths and weaknesses of your own site, relative to the competition

Once you've decided on a niche to target, you then need to determine the level of competition within that niche.

A SWOT analysis can help you determine how your site compares to those already in the niche. SWOT stands for Strengths, Weaknesses, Opportunities and Threats. You perform this analysis on your own site, and the sites of your competitors.

You can can go into incredible detail with a SWOT analysis, but it doesn't need to be complicated. You simply need to determine what you're good at relative to the competition. Draw up a chart like this, and complete:

If you can't find any areas where you are better than the competition, either refine the niche, choose another niche altogether, or figure out a plan that will make you better than the competition. Ranking well doesn't really help, because a searcher will not stop at the first site they find.

Keep in mind that it is easier to be successful if you already know a lot about a market. Any experience you have lowers the investment needed to research the market and ensures you can write at a higher and more compelling level than people who do not know the market.

By doing a SWOT exercise, you'll also get a feel for any opportunities your competitors might be missing.

Positioning

  • Undertake keyword research
  • Look for a niche that is "worth remarking upon" and is new, or doesn't have a lot of existing competition
  • Select a brand name and domain name the describes the niche ie. SEOBook.com. It is useful to include a keyword term
  • Build a site that focuses exclusively on this niche, and no others.
  • Conduct SEO campaign
  • Monitor results.

What do you think of when someone mentions the name "Google"?

Search, right.

How about IBM? Computers. Hewlett Packard? Printers.

If you aim to be the first in the customers mind when they think of a keyword term, you can easily win the ranking game.

Be First

Who was the first president of the United state.George Washington. Who was second? Who was the first man on the moon? Neil Armstrong. Who was the fourth. It is important to be first. Being first is memorable.

But wait a minute! Google wasn't the first search engine!

Correct. However, they've overcome this by being first in people's mind when it comes to search. Yahoo was the first search service, and whilst it's star has faded of late, it is still a very wealthy company. It is no good being the tenth anything. Aim to be first. And if you can't be first....

If You Can't Be First, Be First In A New Niche

You'll face the problem of not being first whenever you enter an existing niche. And on the internet, that's "most of the time"

Look at the top sites in your chosen niche. If they got in early enough, chances are they enjoy the linking benefit that comes with being first. Typically, Google's linking algorithm favors long established sites, as opposed to newcomers. To find out why this occurs, check out Mike Grehan's "Filthy Linking Rich". Those who are first to occupy a niche have a much easier job of getting links because they are remarkable, simply by virtue of being unique.

So what to do if you arrive late to a niche?

Invent a new niche, and be first in that.

Say you sell holiday rental accommodation in Palm Springs. Unfortunately, there are a lot of holiday rental accommodation services in Palm Springs. So to differentiate yourself, you might decide to focus on "the cheapest rental accommodation services in Palm Springs". Or "the most upmarket rental accommodation services in Palm Springs". Or "the best rental accommodation guide for solo travelers in Palm Springs".

Focus on a new angle that your competitors aren't targeting. This is called market segmentation.

Make Sure The New Niche Is Worthwhile

One of the traps of market segmentation is that you might segment too finely i.e. there are not enough customers in your newly segmented niche to be worthwhile.

When you do your keyword research, look at the keyword volume for niche keyword terms. Are there any keywords that have good volumes AND cover an angle that you competitors aren't already targeting? Find a suitable keyword term, and make that your niche. Also, look at demographic details for competing sites and keywords to get inside the mind of the searcher. Remember, there needs to be a commercial intent.

Take Your New Niche For A Test Drive

This strategy has been used in PPC for a while, however it's outlined really well in the book The Four Hour WorkWeek by Tim Ferris.

Once you've decided on a new niche that you can be first in, you need to test the niche to see if it delivers enough revenue to make the effort worthwhile. You can test a niche quickly and easily by using PPC, like Google Adwords.

A lot of SEOs don't use PPC, but they're missing out on a tool that can save them a lot of time and effort.

For those new to PPC, check out Aaron's Guide to PPC.

Run a short Adwords campaign targeting the keyword terms that relate to your new niche. You may only need to run it for a week or two, and it shouldn't cost you more that a few hundred dollars. The aim is to answer the question: "do people who search on the keywords want to buy what I'm selling?".

Ensure your site has a clear call to action that will help you measure actual buyer interest. For example, a sign-up form offering more information, a sales inquiry, or an actual purchase. You don't need to have your site finished to do this. A basic three page site will do.

Monitor the campaign and do split/run testing on the ad-copy. This means you compare one set of wording against another. Helpfully, Google Adwords has this functionality built in, and they provide a free product called Google Optimizer if you want to test you page copy. Check out my article "Tested Advertising Strategies Respun For SEO".

Again, this exercise can be as simple or complex as you want to make it.

Start off simple, and change the wording to make the offer sound more appealing, and make a note of the wording that works best. You can use this wording in your title tags during your SEO campaign. The wording that receives a click in Adwords is also likely to receive a click in the organic listings.

If visitors are searching for your keyword, clicking on your ad, and moving to desired action, then you've found a great niche. Remember, most people will click the organic results rather than Adwords listings, so the fact you're getting click-through further demonstrates that there is little competition in your chosen niche in the organic results.

If you aren't getting click thru and/or sign-up/purchase, try the same strategy, but with different keyword terms. Keep going until you find a winner.

It is a lot cheaper in terms of time, effort and money to test keywords at this point, rather than commit to a brand and an SEO strategy that targets the wrong keyword terms, and the wrong niche.

Marketing Within The Niche

Choose a trading name, and domain name, that can be used generically, and, if possible, aligned with your keyword term.

One approach is to take a simple keyword phrase people are familiar with, and will search for, and combine it with something else. For example, SEOBook, AfterMail, FaceBook, HotelFind, etc. This approach works well if you don't have a large budget for brand building.

Non-descriptive brand names, such as Kellogs, or Mooch, don't work so well for SEO, especially for low profile companies, because people need to know your name before they search for you.

Become Synonymous With Your Niche

Consider SEOBook.com.

It's hard for anyone else to sell a book on SEO without people also stumbling across Aaron's site. Aaron has selected a keyword-loaded brand name that is aligned with the niche. He has also worked hard to dominate this tightly defined niche within the broader SEO market. Whenever someone promotes any book on SEO, Aaron is likely to benefit, because he is #1 in that niche.

If you dominate your niche, and the niche is relatively new, then any promotion of that niche will also benefit you. If you're a leader in your niche, and become synonymous with that niche, then latecomers and generic copycats will have a very difficult time competing with you. Any promotion of the beverage "Cola" benefits the market leader Coke, because they dominate their niche. Likewise, promotion of PCs will benefit Dell, promotion of smartphones will benefit Apple, and so on.

Position Against The Leader

Let's assume you're competing against an entrenched leader. What can you do?

Position yourself against the leader. For example, if the leader is offering "cheap SEO services", you might position by offering "valuable SEO services". You could warn people against using cheap SEO services by highlighting the problems and risks, and showing how your price is linked to achieving better value. Figure out what they're doing, and define yourself against them.

Avis did this against Hertz. They acknowledged they weren't the top of the rental car niche, but made a virtue out of it. They adopted the phrase "we try harder". The market dominance of Hertz became a weakness.

Barriers To Entry Are Your Friend

On the web, there are few barriers to entry. Anyone can start a website and copy your idea.

However, not everyone can start a Google. Or an Amazon. Or a Facebook. Those companies have barriers to entry in their markets, mostly to do with the scale of operations. It's very expensive to do what they do.

Look for areas where there is some difficulty in starting up. Does your idea require capital? Do you have valuable information that no-one else has? Do you have a pre-established reputation or brand? Does you idea require specialist software? Is the service or product unique, or difficult to obtain elsewhere? Such barriers will dissuade a lot of people from entering the niche, which means you'll face less competitive threat.

The lowest barrier to entry is the affiliate site where the supplier provides a template site. They might even set it up for their affiliates. For free!

See the problem?

If it's that easy, then there is no barrier to entry, meaning anyone can do it. Even with the best SEO in the world, it would be very difficult to defend such a site from the hundreds of webmasters who arrive tomorrow, the day after that, and so on.

So when you evaluate the competitors in your niche, also consider how difficult it will be for followers to compete with you.

SEO

  • Build content. Get a list of 50 keywords and write a page on each. Include how-to's, generalist information, news (use Blog software), video, photos and maps. Tag all graphical content with keyword terms
  • Write naturally, stay on a single topic per page. Forget keyword density, it is overrated
  • Layout site. Place most important (money) pages at the top of the hierarchy, one step away from the home page
  • Create a Google Site Map to ensure crawlability
  • Once the site is complete, submit to the top directories. We recommend Yahoo!, BOTW, and Business.com
  • Issue a press release. Ensure you include a link back to your site.
  • Open Twitter and Facebook accounts, and update each time you add a page of content
  • Add one new page of quality content to the site per day
  • After 30 days, examine your stats. Look for long tail keyword terms, choose the most popular term, and write a page about it. Use this list of long tail keywords as article starter ideas
  • Every 15 days, do the same thing again
  • Remember to write a new page of quality content every day
  • Find the top ten sites in closely related niches, and offer to write articles for them. Include a link back to your site

After six months, you should be ranking well, and your traffic should be climbing.

Need more detail? Join our team :)

*Hat-Tip to Brett Tabke's "Successful Site in 12 Months with Google Alone"

Economics & Risk/Reward

Are SEO visitors really free?

They're only free if you value your time at zero dollars.

Of course, you time is worth money, and this must be factored in. One of the great things about SEO is that unlike conventional adverting, your visitors don't stop arriving when you stop paying. The downside is that you must spend a lot of time up front, and with no guarantee of success. The search engines could also drop your site, at any time, and without reason.

So it's a good idea to ask yourself the following questions:

  • What are my costs?
  • What is the break even point?
  • How long before I get payback?

A lot of SEOs will persist with sites that enjoy high rankings, even when the economics of the site don't make any sense. If this happens to you, bite the bullet and drop these sites, or convert them to another use. There is no value in ranking highly if the visitors aren't doing what you want them to, and/or they aren't spending money.

Once your put a value on your SEO efforts, you'll clearly be able to see how much your site is actually making you.

If the site is making money, that's great. If not, then try to determine if the problem is to do with marketing. Have you identified the niche correctly? Are you dominate within that niche? Is there sufficient demand?

Summary

SEO works best when it is integrated into your business and marketing strategy. There is no point ranking well for terms that don't advance your business goals. Find a profitable niche you can make your own, and dominate it.

Follow this strategy and lucrative search traffic will flow you way.

Less Than 100 Spots Left

Jul 30th

Today is the last day to lock in our current price, as tomorrow we increase our prices 50%. It looks like we decided to do the price increase just in time too, as we have added 378 new members this month and we are rapidly approaching our 1,000 member limit.

If you are already a subscriber, thanks a bunch...you make this site possible! If you are not yet a subscriber and were thinking of joining here is the link.

Why Buy The Milk When You Can Get the Cow for Free?

Jul 30th

Yahoo Had No Leverage...

In case you didn't look at the stock market today, Bloomberg highlighted what investors think of the Yahoo! / Microsoft deal

“This deal was a big disappointment,” said Moran, an analyst in Boca Raton, Florida. “They needed this deal, and it shows in terms of how the negotiations were concluded.”

...Because Their CEO Did Not Grasp the Importance of Search

In the same article Yahoo!'s CEO justified the Yahoo!/Microsoft search deal as something that clears fog:

“The priority was not to do the deal,” Bartz, 60, said in an interview. “The priority was to get the fog away from the company. Yahoo got pegged as a search company and we’re not a search company. Search is only one aspect of what our customers do.”

To look at the highest margin and highest income piece of a business and call it fog is absurd.

How Search Sets a Baseline

Search is the most direct way to target ads at consumers. It is easy to establish a baseline values and measure change. It allows you to implement (and advertise) new product ideas at no cost.

The other important baseline evolving search sets is the difference between spam and value added content. If you have ever read any of Google's leaked remote quality rater documents you would see that the search result itself is a lower threshold to force the evolution of media.

Web Search Holds Everything Together

A lot of Yahoo!'s properties are somewhat average, but not remarkable. Some of them succeed ONLY because they are a part of the Yahoo! family of websites. Web search is the glue that holds the pieces together.

Search is the most profitable online ad market and having a big stake of that market allows them to promote their other business interests in a cheap & targeted way. Selling off the search assets does not suddenly put them in a strong competitive position.

It does not suddenly make their thin content sites thicker and more valuable. If anything it will make it harder for their other sites to compete as it will require them to be thicker to stay competitive when they lose the subsidy they were getting from search.

And Microsoft bought Yahoo! Search for $0:

Besides better exposure for its Bing search engine by placement throughout Yahoo!, Ballmer said, Microsoft hopes to improve the quality of its searches by analyzing over a decade of data Yahoo! has on how people search. The data improves search quality for everything from correcting misspelled words to likely patterns of search behavior.

Danny highlighted how much worse this deal is for Yahoo! than the deal offered last year in a side by side comparison and wrote a search eulogy. Yahoo! spent a couple billion dollars acquiring Overture/AltaVista, Inktomi, and AllTheWeb. And they sold it for $0!

Deal Terms

From Microsoft's press release:

  • The term of the agreement is 10 years;
  • Microsoft will acquire an exclusive 10 year license to Yahoo!’s core search technologies, and Microsoft will have the ability to integrate Yahoo! search technologies into its existing web search platforms;
  • Microsoft’s Bing will be the exclusive algorithmic search and paid search platform for Yahoo! sites. Yahoo! will continue to use its technology and data in other areas of its business such as enhancing display advertising technology.
  • Yahoo! will become the exclusive worldwide relationship sales force for both companies’ premium search advertisers. Self-serve advertising for both companies will be fulfilled by Microsoft’s AdCenter platform, and prices for all search ads will continue to be set by AdCenter’s automated auction process.
  • Each company will maintain its own separate display advertising business and sales force.
  • Yahoo! will innovate and “own” the user experience on Yahoo! properties, including the user experience for search, even though it will be powered by Microsoft technology.
  • Microsoft will compensate Yahoo! through a revenue sharing agreement on traffic generated on Yahoo!’s network of both owned and operated (O&O) and affiliate sites.
  • Microsoft will pay traffic acquisition costs (TAC) to Yahoo! at an initial rate of 88% of search revenue generated on Yahoo!’s O&O sites during the first 5 years of the agreement.
  • Yahoo! will continue to syndicate its existing search affiliate partnerships.
  • Microsoft will guarantee Yahoo!’s O&O revenue per search (RPS) in each country for the first 18 months following initial implementation in that country.
  • At full implementation (expected to occur within 24 months following regulatory approval), Yahoo! estimates, based on current levels of revenue and current operating expenses, that this agreement will provide a benefit to annual GAAP operating income of approximately $500 million and capital expenditure savings of approximately $200 million. Yahoo! also estimates that this agreement will provide a benefit to annual operating cash flow of approximately $275 million.
  • The agreement protects consumer privacy by limiting the data shared between the companies to the minimum necessary to operate and improve the combined search platform, and restricts the use of search data shared between the companies. The agreement maintains the industry-leading privacy practices that each company follows today.

What is not in the deal terms is that Yahoo! will slowly erode search market share to Bing. By the end of the 10 year period Yahoo! could become AOL.

SEO Stuff Up in the Air

As far as SEO goes, a lot of stuff is still up in the air. If this deal goes through, what happens to...

  • the Yahoo! Directory (a wonderful link source)
  • Yahoo! link data (they are the best free public source)
  • Yahoo! SearchMonkey & BOSS
  • Yahoo!'s paid inclusion

There is a good chance all 4 of them go away.

Increased SEO Costs & Increased Barrier to Entry

For established marketers there would be some major upsides as well...

  • anyone with a well established website has a bigger advantage over new sites, and
  • with less public link data link buying might become less risky as reporting paid links might decline, and
  • it would be harder for competitors to clone your link strategy

Bing SEO Tips

If you have not yet read Bing's SEO Guide for Wembasters [PDF] then now would be a good time to get up to speed on it. When Bing launched we created a thread with a bunch of Bing SEO tips.

Does Hitwise Read SEO Book?

Jul 29th

A couple days ago in a blog post we published this image.

And that image recently appeared in a copyright HitWise "advanced SEO" presentation

Whenever we share their data / research / charts on our site we try to attribute them. Not only did they offer no attribution, but they also cleansed our logo from our branded image. In the above image you can see

  • they just happened to use the same scale and title and colors AND
  • how the logo was removed AND
  • how the line at 700 (where our logo was) is darker than the other lines AND
  • how the line at the 600 level is broken slightly toward the right side slightly (like we accidentally did on the original image when we took the screenshot)

This sort of activity is from a marketing company that thinks our site is important enough to pitch new releases to.

Who is the guy working for a multi-billion dollar company that markets stolen content from recent blog posts from blogs with 30,000+ subscribers without expecting to get caught? I hope they get fired.

And if this sort of corner cutting speaks for any of Hitwise's other business practices you are best off avoiding them.

An Open Letter to Online Ad Networks

Jul 28th

by Jonah Stein and Jonathan Hochman

The FTC recently announced guidelines for bloggers that requires that they disclose financial interests, freebies and paid reviews.  This decision is seen as a shot across the bow of pay per post networks and bloggers who are monetizing through affiliate programs.    The FTC has decided that compensation is the reason bloggers choose to write about a particular topic and that readers deserve to be informed about the financial relationship.    The FTC logic is simple, “As much as those bloggers who receive these gifts would like to claim this isn't the case, freebies like free laptops, trips, or gift cards are likely to influence a writer's opinion of a product.”  

On its face, the policy is defensible.   As crusaders against Virtual Blight, we applaud the intent of this decision.  Anything that raises the barrier to online scams, fraud and abuse even a little bit is a good thing. The FTC provides guidelines for responsible bloggers and theoretically eliminates a couple of the perks for bloggers, but it does virtually nothing to protect against fraud. 

Going after bloggers’ compensation to fight online fraud is reminiscent of the RIAA attacks on individual file sharers and is just as likely to succeed. The absurdity of the power and inertia of a government bureaucracy combating individual bloggers is only matched by the ludicrous assumption the government could ever move fast enough to keep up with professional scammers who jump from domain to domain, host to host and country to country with a few mouse clicks.  Prosecution could only be effective against mainstream bloggers with an established brand that are stationary targets, but these bloggers are not the right target.

Getting a proverbial free lunch in exchange for a presumably positive review may create the appearance that some bloggers are shills who lend their prestige and celebrity to their sponsors.  That perception is not unreasonable, but the same charge could be made against almost every athlete, actor, musician or American Idol runner-up who profits from our celebrity culture. 

Giving items to celebrities or other tastemakers in return for public exposure is a practice older than the printing press.   If the FTC really wants to send a message about compensated endorsements and freebies, the answer is not to go after the mommy bloggers who get a free 42-pack of diapers.  If the FTC were serious, they would begin arresting every actress wearing a designer gown to the Academy Awards and then round up the studio and network executives who rake in cash for product placements in movies and television shows.

Focus On Fraud

The statistics for online fraud are both staggering and predictable.  Instead of being distracted by the sizzling, sensational charges of payola that re-appear every generation, the industry needs to focus on the billions of dollars of online fraud committed each year.  According to the Center for American Progress, Internet-related consumer complaints are among the top ten in consumer complaints in 2008 and the number one complaint in four states.  These complaints run from auction fraud and non-delivery of ecommerce items to reverse billing scams.

By any definition, the perpetrators of online fraud are not bloggers.  If a review constitutes fraud because the reviewer was provided a free product or had some undisclosed relationship with the company who produced the product, then every journalist with a 401k full of mutual funds needs to hire a good lawyer.  Indeed, if bloggers are guilty of anything it is tabloid journalism -- writing low quality content with sensational headlines designed to attract visitors to their site in order to collect advertising revenue.  This may not live up to the highest journalistic standards, but the only crimes are against facts and the English language.

Criminals are the people and companies who create pyramid schemes, networks of spam blogs to sell diet products like Hoodia and Acai Berry cleanse, Google money trees and the myriad so called “free” offers that create recurring charges on your cell phone or credit card.

Criminals are the people who target kids’ sites to distribute Trojans, spyware and adware that infects our computers and tricks people into buying phony anti-virus products.  Most of us have either experienced malware nightmares ourselves or heard a friend’s sad story.  When online fraud is so prevalent, predatory and destructive, why are government resources being committed to pursue advertorial content?

Ad Networks Are the Key

The biggest thing these criminals have in common is that they perpetrate their scams by buying advertising through ad networks.  These networks have achieved the scale that makes it efficient for legitimate advertisers to reach millions of consumers and that makes them an ideal vector for scams, abuse and deception. 

In an unregulated auction-based advertising market place, fraudulent offers can often pay the highest bids for keywords. In FTC Going After Bloggers – Epic Fail, Aaron observes that ad networks that syndicate ads based on “maximizing yield efficiency“ are well suited to syndicate fraud. Advertisers of scams can afford to pay top dollar for ads because their profit margins are nearly 100%.

Ad networks are morally responsible as collaborators in interstate and international frauds perpetrated upon hundreds of thousands of victims each year.  Google, Yahoo, AOL, Microsoft and many others are far more culpable in consumers being defrauded than any blogger or network of bloggers.

In False and Deceptive Pay-Per-Click Ads, Harvard’s Ben Edelman estimated that as much as 70% of the revenue generated by some online scams actually wind up in the hands of the search engines.   He estimated in 2006 that Google and Yahoo were making over $200,000 a month from advertisements for screensaver software which contained spyware.  As of July 15, 2009, the top paid search results on Google for “screensaver” contain “add-on features” which include spyware, change your default browser settings, ad toolbars and otherwise aim to monetize by deceiving users.  Adding insult to injury, Edelman observes that many of these adware tools monetize by sending traffic through AdSense and DoubleClick, making Google a silent partner for adware companies like WhenU and Smiley Central.

Fight the Problems that Be

Scams and fraud not only harm the consumer, they foster the perception that the internet is not a safe place, hindering the growth of online business and delaying the transfer of marketing dollars from old media.  Instead of waiting for government agencies to step in and create regulations aimed at yesterday’s scams, as an industry we need to become proactive and develop a cooperative framework for mutual self-defense, a neighborhood watch designed to keep consumers safer while helping law enforcement focus resources on the most serious trouble makers.

The war on online fraud is going to be a huge struggle and one we are unlikely to ever declare victory.  The issues are complex, but the industry could significantly reduce the problem by creating a transparent mechanism to collect user feedback about advertisers.  Search engines and ad networks are quick to endorse behavioral targeting and social recommendations to boost earning per exposure.   For some mysterious reason, they have not applied these innovations to getting user feedback about advertisers.  

If the Internet is the cesspool that Eric Schmidt, CEO of Google says it is, one way to start cleaning it up would be to create a public reputation system for advertisers.  This would simultaneously reward honest companies while helping consumers protect themselves against the bad guys.   eBay created public reputations for buyers and sellers many years ago.  Why are advertisers free to operate without scrutiny? 

It seems straightforward to build an advertiser rating system to share relevant statistics and user feedback.  Why not provide the tenure of the advertiser, normalized click volume, the percentage of users giving feedback and a ratio of clicks to complaints along with a link to detailed reviews that could surface fraud, misleading advertising and scams?  If comparison shopping engines can do it, why can’t ad networks?

We don’t claim to have all the answers, but we see the problem and its sources. Government agencies need to ask the ad networks why they accept money for promoting fraud.  Ad networks need to grow up and behave like responsible businesses. 

Framing Your SEO Firm

Jul 27th
posted in

Framing is when you use language to set the agenda.

Framing is short for "frame of reference", meaning "a set of ideas, conditions, or assumptions that determine how something will be approached, perceived, or understood".

This is a very important concept in marketing, and business in general. By using an appropriate frame of reference, you can manage how people perceive you.

Seo Is Spam?

For example, "SEO Is Spam" is a frame. It defines the terms of the debate ie. SEO is either spam or not spam. Would we frame the couriers this way? Couriers are spammers? Why do the terms "SEO" and "spam" necessarily go together?

They don't. That's a deliberate construct.

SEO is spam/not spam is an attempt to frame SEO as undesirable by associating SEO with a pre-existing pejorative term. That frame came from the search engines, and it has stuck with the industry since the days of Infoseek.

Who is ranked as the #1 ethical SEO company in the world?

Some SEOs have contributed, too, of course, but it has served the search engines well. No matter what side of that debate SEOs take, they have already lost. They've been forced to argue within a negative framework.

Getting The Frame Wrong

My personal view if that if you start by framing your SEO service solely in terms of ethics, you're probably losing business.

It's a red-flag.

Potential clients would undoubtedly see such a frame in terms of "where there is smoke, there is fire". Would you trust a car dealer who, upon meeting you, launched into a long explanation of why car dealers have a bad reputation, but he's not like the other dealers, no sir? Why even bring it up? I'd think that he was trying too hard, and really all I'm interested in is buying a car.

Sell me on that instead.

It's the same with potential SEO customers. What are they really looking for? Once you've answered this question, then you can begin to work on your frame.

How To Construct Beneficial Frames

Politicians use frames all the time.

For example, Al Gore framed the environmental issue as “man made global warming.” Bush re-framed it as “climate change.” Those different frames imply different things. One implies "we can do something about an impending disaster by changing our habits", the other frames man in a passive role, because climate change is a natural occurrence.

Both those frames supported the underlying political message.

Same goes with business.

Marketers know that the way a statement is framed influences how customers respond to it. Tell a group of base jumpers that 1% of all base jumpers die horrible deaths, and you'll get few people signing up. However, tell them that 99% live, and it sounds a whole lot more appealing.

A friend of mine told about how he handled an irate customer by carefully framing his response in terms of options. The customer hadn't received his goods - although they had been sent out - and was quite angry about it. My friend listened to the problem, and rather than debate about shipping delays, the offensive language of the customer, and other factors, he replied "I hear you. You'll get one of two things - a complete refund, or a replacement package sent overnight delivery. I just need to find out which option you want".

The customer, given a limited frame, calmed down, opted for the replacement package, and later published an article in, using this story as a great example of customer service. He also became a repeat customer. Using options can be a great way to frame, although care must be taken to present options that are meaningful. Trying to force people to take options they don't actually want, won't work.

SEOBook isn't framed in terms of individuality, ethics, or morality. It is framed as a community-based SEO training site that will help you learn, rank and dominate. There are also mentions of exclusivity, and frequent explanations of value. This is what customers want, and Aaron frames the service in terms of these needs.

So when you're pitching your goods or services, think carefully about the frame of reference.

Make it positive. Make sure it resonates i.e it touches on attributes the customer actually wants. If the customer perceives widespread dodgy practices, then it is a good idea to address them, but be reluctant about framing your service in such a way to everyone. No good comes from starting on the back-foot.

A good way to frame an SEO business is to talk about solving problems and providing benefits i.e. lack of traffic/more traffic, lack of business/more business, lack of exposure/more exposure etc.

Let this flow through into the language you use. And the language you avoid.

What is a Natural Link Growth Profile?

Jul 25th

One of the common questions we get is how to build links for a new site. In our training site we offer our 12 week link building roadmap and a list of directories to submit to, but I also thought I should discuss link building in general. A good basic rule of thumb (though a bit conservative of one) is to build links in a manner where every month you build as many or more links than you built the prior month.

Graph of 3 Different Link Profiles

3 Common Link Building Strategies

  1. spiky. if the spikes are associated with news and viral marketing then that is not a big problem, but if they are sorta bought links, low quality links, etc. then this is sorta the worst way to do it.
  2. linear. not as bad as spiky...but not as good as geometric. this is where a webmaster tries to build the same number of links each month.
  3. geometric. this is where link building starts off slow, but then keeps getting better each month.
  • If a website is a real website that is generally a useful utility and did not do any viral marketing this would be the most natural profile of how to build links
  • The reason links keep building faster is that exposure breeds more exposure and if the site is genuinely useful and original some people will link to it even without you asking. This phenomenon can be described through understanding cumulative advantage and self-reinforcing authority.
  • Plus as you build a useful site and do some social networking it builds social capital that can be leveraged when doing future promotions of featured content.

Some Caveats...

  • While I try to do geometric when I can, sometimes we build links a bit spike because sometimes we do things in a rushed series or sometimes we do viral marketing.
    • The viral stuff is not harmful...if you do quality viral stuff you want big spikes of links from it because those will be very hard links for competitors to try to clone. But odds are that some of our links might only count partially when we build them in spikes and there is no viral story associated with it.
    • If we know we are going to be somewhat spiky then we try to spread it out and pace it a bit with a month to a month and a half in between each build effort (rather than do it all in the first week).
    • When launching linkbaits you can't guarantee which ones will work and which ones will not. But the key is to launch them regularly. You wouldn't want to do a couple of them that go viral in the first month, and then follow up by doing none for the next 6 months.
  • Brand new sites only get partial credit for links until their own site ages a bit and gets trusted more.
  • Older sites that are pretty well trusted with a strong foundation of links can be quite spiky with no problem at all.
    • BUT older sites that only have a few links and suddenly build a ton of links real fast can end up with ranking issues.
    • After sites are established enough they may not need to work on doing too much link building (especially if they are pulling in many organic links due to the exposure from their current rankings and/or other distribution channels like email and blogging). BUT if they do nothing and the competition keeps investing in link building then eventually they will catch up.

Link Anchor Text

It is also worth noting that you don't want to use the exact same anchor text on every link. Using a variety of related phrases (seo blog, seo blogs, search engine optimization blog, etc.) would be far better than just using the exact same anchor text over and over again.

Many Types of Links

You can be successful by primarily building 1 type of link from a class of websites, but if you can get links from a variety of types of link sources that will make your site strong and rankings stable even if one class of links gets deweighted. Todd Malicoat's Balancing the Link Equation is the canonical resource on that topic. And the more diverse your link profile is the harder it will be for a competitor to clone your work.

Raising Prices in a Recession? WTF ;)

Jul 25th

The #1 SEO Community

Since the end of last year (when we started working with Conversion Rate Experts) we went from sorta not caring too much about conversion rates to making it a priority. Part of the reason we originally did not worry about it was just because I wanted to keep adding value to the service and make sure that the quality of the site was far better than any competing site. That goal has been achieved, and recognized by our customers and in the marketplace amongst SEO experts. Today I just saw Wiep Knol write this, and it motivated me to write this post.

Small & Tight Knit > Big & Bloated

After improving conversion rates we started growing briskly, and we are getting close to our upper limit of 1,000 subscribers. Since we are a small(ish) company we don't want to grow too quickly, or get bloated to the point it harms the quality of our customer experience.

Many competing services want to act like a Wal-Mart or McDonalds, and have 10,000's of customers that they quick serve. But I like to keep things small and cozy. We want maintain the current atmosphere where we have established a more limited and higher value site where we have the ability to interact directly with our customers every day to create a deeper, richer, and more valuable experience.

Our Customers Love the Site

Last week one of our customers made this video, which helped up realize that our customers are seeing the site the way we hoped.

Under-pricing

Originally we under-priced the site to ensure we could get enough people through the door to build a strong and sustainable community. If you fail the launch its hard to get a second try. But given that we have one of the 5 strongest brands in the space and that we work directly with our customers it does not make a lot of sense to be priced as a value play, especially after our membership has been growing so rapidly.

Most SEO firms take $10,000 (or more) and then do virtually nothing with the money. There are some good ones on the market, but very few of them are looking for customers. Almost every week I hear another story about $10K or $15K down the drain and it only further reminds me how little we charge for the value we offer.

Our site educates webmasters and is interactive to ensure returns. When customers participate on the forums the value they get will exceed what most get for $10,000 at the average SEO firm.

Unlike most large SEO firms, we do not have 1 person working the conference scene to generate leads and send them back to interns and fresh college graduates. When you join our site you interact ***directly*** with us. In a little over a year I have made over 10,000 posts in the forums.

"You saved my site, seriously, I don't know if this ever would have been solved otherwise - every SEO company I have been in touch with (50+) over the past six months was unable to identify the problem and you picked it apart in five seconds.

I'll be recommending your site to everyone I know in this business! Thanks so much again Aaron, you saved my site"
- Daniel E. from Toronto

On the value for money scale this site is just the opposite of most SEO firms...we pour our hearts and souls into it and go out of our way to be helpful. And many of our members are amazing SEOs who are gracious & share a lot of great tips & strategies.

"I wanted to learn, so I could see what they were doing, having spent over a grand!! I can now see they have really done very little.

In a couple weeks with your training program I'm actually starting to see results, and I've not even started the link building side. It makes me wonder what on Earth my SEO company have been doing for the last 6months!!! I'm going to go it alone and just use the seobook.

So thanks for producing such a great site to help people like me : ) " - Michelle

Price as a Signal of Value

There are a lot of $1,000 and $2,000 info-products on the market that are watered down re-hashes of what we offer, and most of them come with no customer support and no interactivity. Given that price acts as a signal of value and quality, currently we are way under-priced, particularly for the level of customer service we offer. Inside the forums when asked if we should increase our prices 100% of the responses were yes.

The good thing about increasing price is that the more something costs the more people respect it and act on it since the opportunity cost is higher. And when people listen to our advice they get a strong ROI.

"Everyone knows I love to razzz the black magic snake oil SEO industry but honestly out of the very small handful of guys that give a lot of value Aaron is at the top.

I HIGHLY recommend you check out his SEO training program."
- Jeremy Shoemaker

Aren't You Being Greedy? We Are in the Worst Recession Since the 1930's

Publishing a network of sites is a competitive strength we have over most SEO websites. We have real market data from a number of sites in many competitive markets, keep launching new sites, and have many commercial successes - driven through a wide array of strategies. This makes our understanding of the web far richer than a company which only runs a site about SEO.

Running this site is part of our competitive advantage for our other sites (because SEO is core to many of our marketing ideas), but when you adjust this site's returns for opportunity cost, this site's earnings are far below our other top websites. And sometimes the magnitude of difference is almost unbelievable. Sites we started many years after this site make similar amounts on far less effort with far less maintenance cost. This site is over 90% of my work time, but at most about 1/3 of our profits.

Higher Prices Increase Customer Quality

When I sold the ebook by itself the $79 price point was high enough to filter out pikers while still being accessible to many people. But when the get rich quick and make money online email list spamming internet marketers started hyping SEO it polluted the customer pool and was a big part of why we had to change our business model to deeper relationships with our customers at a higher price-point.

When we shifted our business model from ebook to a membership site our average customer quality increased sharply. We already have great customers, but figure that the best way to slow down & manage growth is to increase price. In August we will increase our prices to $150 a month. Search is a market worth $10's of billions of dollars a year, and SEO can provide amazing returns. But if this site is to keep consuming most of my work time then I need to increase its earnings.

We plan on adding lots of new content features and tools to the site throughout the remainder of the year. Current customers keep their current subscription rates, but subscribers after the August 1st date will have to pay 50% more than our current rate.

SEO Business Planning - Allocating Capital

Jul 22nd
posted in

Following on from our posts on SEO business planning, let's take a look at allocating capital. We'll also take a close look at one of the most important areas for SEO consultancy start-ups: advertising and marketing.

Allocate Budget

Never a truer phrase was said than "you need to spend money to make money". Thankfully, in the SEO game, you don't need to spend a lot, like brick-n-mortar companies need to do in order to get going.

How do you decide where to spend your money? Do you go by gut feel? Do you quantify and measure results? Whatever approach you use, the end result is that any spend you make should ultimately grow revenue.

Common Areas Of Capital Allocation For SEO Companies

Let's take a look at three areas in which a start-up SEO company will likely spend money. Equipment, staff, and sales and marketing.

Equipment

The SEO business isn't capital intensive. Many SEO consultants need little more than a computer with an internet connection. If you hire staff, then obviously you'll need somewhere for them to work, but besides that, capital investment is minimal.

Staff

If you're a sole operator, obviously you have no fixed staffing costs, other than the wage you choose to pay yourself.

You'll likely need to budget spend for outside contractors for doing work you can't do yourself, or work that it isn't worth your time. For example, if you're a sole operator, you'll want to spend as little time as possible on non-core activities. Non-core activities are activities that don't lead to revenue generation, such as administration and accounting.

By the way, a good accountant is worth their weight in gold. By ensuring that you claim all the deductions you're entitled to, you have more money to invest in your business. You can write off a part use of your home, your computers, your internet connection, travel and more. Accountants are relatively cheap, and their fees are more than covered by the tax savings they produce.

If employing people, figure out the total cost of an employee and their likely return in terms of revenue. Costs can include office space, equipment, training, travel, insurance, employment agencies, management overhead, and payroll tax. Employees obviously need to generate more revenue than they cost to employ, but so long as this calculation runs in your favor, you can keep adding employees, which will keep adding to revenue.

Advertising & Marketing

So how do you get new business in through the door? Do you employ sales staff? Rely on word of mouth? Advertise in trade papers? Speak at conferences? Buy PPC? Undertake SEO?

Any new SEO business should allocate sufficient resources to advertising and promotion. Without awareness, there are no customers. And without customers, there is no business. On the flip side, spending a lot of money on marketing and advertising that doesn't lead to increased revenue results in no business either.

Methods of Establishing An Advertising Budget

"Half the money I spend on advertising is wasted; the trouble is I don't know which half." - John Wanamaker, US department store merchant

No method is ever perfect. If we knew our spend would always result in profit, business would be very easy. Here's the most common method of determining the appropriate level of advertising spend.

Calculation Based On Percentage of Sales

Advertising is a cost, just like staff and equipment. It's also an investment in your future. How do we know how much to spend on advertising?

Typically, businesses allocate advertising on a percentage of sales basis. They take their total sales figure for a given period, and ear-mark a percentage of those figures for advertising in the next period. Advertising spend should move in tandem with sales.

Here is a more detailed calculation, aimed at retail, but also appropriate for SEO:

Take 10 percent and 12 percent of your projected annual, gross sales and multiply each by the markup made on your average transaction.Deduct your annual cost of occupancy (rent) from the adjusted 10 percent of sales number and the adjusted 12 percent number. The remaining balances represent your minimum and maximum allowable ad budgets for the year.

So what percentage do you use?

This will vary, but as a guide, look at what other SEO companies are spending on advertising. Join trade organizations to get hold of these figures.

Be careful not to duplicate these percentages exactly, because your business situation is unique. There might be times when you spend a lot more on advertising than others, especially if you are aggressively targeting new markets, or looking to out-compete your rivals. There will also be times when you spend a lot less. For example, you might have more work than you can handle, and advertising would just exacerbate the problem! SEO consultancy can be a difficult business to scale up easily due to skill shortages.

The important take-away point is that advertising should move in tandem with sales, most of the time. If advertising spend is not related to sales, then it is easy to spend far too much, and have little to show for it. Spend and measure, spend and measure. Repeat.

What if you have no sales figures?

If you're a new SEO business, you won't have any past sales data to go on. This is why it's important to be aware of what other SEO companies are spending. If you've been going a while, you'll have some past data to work with, but keep in mind that past earnings might not be indicative of future earnings. There will be a fair bit of estimation and forecasting either way.

Always Set Objectives

Set clear, specific objectives when allocating capital.

An objective such as "boost profits" is too broad. Go for something specific, such as "sign up 30% more customers than the month before".

Next, figure out which channel will reach your target market. Conferences? Trade publications? PPC? SEO? Web? TV? Radio? A mix?

Whatever channel you choose, be sure to measure performance against your stated objective.

Unless you're trying to build a significant brand to spin off to someone else, such as YouTube, that objective should be grounded in increased revenue. Few, if any, SEO companies can operate at a loss for long, so base your key objectives, and your spending, around increasing revenue, and ultimately - profits.

Peaceful Coexistence: 6 Reasons to Love Google

Jul 18th

I tend to be somewhat cynical toward Google because I generally do not trust authorities and they CAN and DO kill many web based businesses that are too reliant on search. But to offset such posts I figured it would be cool to do a counter post on reasons to love Google

They pushed search. Back when search was unprofitable they believed in making it better rather than being at least 80% as good as the next portal. Search was eventually going to become big no matter what, but they largely are who pushed it becoming so big so fast. And search makes marketing more efficient because users feel they are in control when they search for information, even if in doing so they find your advertisements & offers. A search driven marketing strategy also allows you to build relationships by people finding you while looking for topics you published content on. This enables genuinely useful sites to bolt on services for sales without needing to worry about having to get as much value out of each person as a hyped up salesman because the website with real utility will typically reach far more people.

In time Google may become more self-serving with their search result biases, but for now they still do not have a paid inclusion program and they are nowhere near as self-serving as some competing companies like Yahoo! are.

They make SEO somewhat challenging. About a month ago a friend of mine launched a site and ranked it in the top 3 for some money keywords in Bing. Unless you are the U.S. government you typically can't do that in Google. The complexity of SEO presents a barrier to entry to new market participants, but once you are already established that barrier to entry helps protect your profit margins. And if you sell SEO products and services you know that there is going to be a market in need for a long long time.

In 2003 when I started SEO I was broke, in debt, new to marketing, unemployed, and within 6 months of opening Dreamweaver (to create a rant site rather than a marketing site!) I ranked in the top 10 for keywords like search engine marketing. I believe similar things are possible today with sweat equity, but the time delay is typically much longer and/or you need to operate at a much higher level than the stuff I did back then. In a way, this barrier to entry causes a lot of the worst parts of the web to disappear because it requires more commitment and/or investment to compete.

AdWords = instant market feedback. AdWords allows you to test a business model idea before building the business. And it gives you instant feedback from relevant market channels that you may not be reaching. It is one of the cleanest distribution channels with one of the smallest overlaps with other marketing channels:

Consumers who buy after clicking a competitive (non brand) paid search ad are the least likely to have been to the site previously through a different channel. In our research, only 10 to 20% of buyers who touched a PPC ad last came through any other channel previously. Compare this to affiliate traffic, where 60 - 75% of buyers came through another channel first.

Once you can convert cold leads from search it is much easier to convert warmer leads that are recommended via word of mouth marketing, affiliate arrangements, and other editorial & marketing channels.

Google furthers the value of this channel by baking a/b split testing directly into AdWords, creating valuable tools like their Website Optimizer, making their Analytics tool (somewhat) free, and even putting free conversion optimization presentations online:

AdSense offers a fast and easy baseline revenue stream. Many years ago advertisers had a big advantage over smaller publishers due to asymmetric information. While contextual ad networks have depressed the CPM rates of many large bloated "premium" publishers, they have also gave smaller publishers the ability to easily, quickly, and automatically test monetization potential. From that baseline publishers can look to improve the model by...

  • using custom AdSense channels and/or tying AdSense into Google Analytics to get more data to learn what sections of their site earn more
  • use that data to work on optimizing + promoting high earning content and/or creating more content covering similar themes
  • advertising similar offers that are advertised on their site

Vastly improving productivity. Like search, email was a vast wasteland of non-innovation (at least amongst the mainstream providers) until Gmail came out. They made it larger, faster, and more convenient. And they made obvious improvements (like adding search to email). A lot of my productivity that I take for granted comes from features in Gmail. Without Gmail evolving email I doubt I would be able to service nearly 1,000 customers while also having time to do marketing, work on building other sites, spend time reading, and have a bit of time for playing and working out.

Their document collaboration is great, and the recent addition of forms (that you can embed into pages for free) is killer.

A Free MBA Marketing Course. If you follow Google, know where they are moving, and understand the intent behind many of their moves it is better than any marketing course you could take.

Some recent examples.

  1. Appealing to geeks by using Tri Force in their logos.
  2. Making it easy to insert a directions widget directly into web pages. (And then being smart enough to market it directly to commerce webmasters through existing channels).
  3. Marketing their maps offline by creating pointers of favorite locations of celebrities. This is perfect marketing because the recurring cost is $0, and it spreads virally by promoting the egos of well known people, and makes other businesses look more credible. Win win win.
  4. Marketing to young people + making their software suite a default by giving it away to schools: "For more than two years, Google has approached colleges and universities with a near-unbeatable offer: provide unlimited hosted e-mail and other applications, all branded by the institution and delivered free of charge."
  5. Striking deals with people who influence large audiences.

And what is more remarkable about the above 5 points is that all of them are reasons to talk about Google and they are things that were mentioned just from this past week. There is a reason to talk about Google every day, even if it seems like some of us publishers are becoming broken records in doing so.

Hating Google in context. I do disagree with many of their policies, but I think a lot of blame goes toward Google when market forces commodize existing business models. But they are just another market force pushing the evolution of media. That means they will commoditize a lot of businesses and business models. When it is done hypocritically (I could write another post on this topic!) I think it is fine to complain, but it is typically more profitable to keep evolving your business model to make it keep adding value and make it less reliant on search.

And the less reliant you are on search the more reliant search becomes on your content. If you keep adding value every day then your business is not likely to see any risks with search traffic. If you were more like Google (to where people had new reasons to talk about you every day) you wouldn't need search traffic to build a sustainable business.

SEO Business: Getting The Numbers Right

Jul 17th
posted in

What were the reasons you started your SEO-related business?

Perhaps you're thinking of starting one up.

A survey published in New Business UK found the following:

  • 41% went into business because they were passionate about their idea
  • 39% wanted the freedom that came with being their own boss
  • Only 7% cited money as being the reason

It's interesting to note that the biggest obstacle people faced with starting their own business was a lack of money. 44% cited lack of money as being the biggest obstacle.

Whatever your reason for starting, it's clear that money is important. The one thing that is guaranteed to kill any business dead, no matter how good the idea or how many customers a business signs up, are bad numbers.

How Are You Going To Make Money?

In a previous post, we looked at SEO business planning.

In short, a business plan doesn't need to be complicated, it's just a plan of where you're aiming, and how you intend to get there.

Here are a few further important points to consider.

Obviously, the most important thing to do in business is earn more than you spend. Fail to do so, and the business fails. That means flash offices, expensive chairs, flying business class, etc all must wait until profits allow such expenditure.

So it's a good idea to model oneself on Scrooge McDuck, at least in the early days!

The one thing you'll have the most control over is costs. Keep these as low as possible. Pay yourself the bare minimum you need to live. If you're hiring staff, offer them low salaries and revenue share. You may have noticed there is a start-up culture where fun, hip-ness and enthusiastic participation is emphasized. This is almost always because the owners are trying to keep their costs down. The benefit to the employees is seldom coming from wages, so the job has to be made attractive in other ways.

Keep a look out for hidden costs. What is the true cost of attending that conference? What does it really cost to hire and keep employees? What is the cost of scaling up? Does your office equipment need regular servicing? What are the costs of maintaining a lot of customers? Hidden costs are, of course, hard to spot, and hard to generalize. Be aware that any new variable you introduce to your business will incur costs of some description.

Economic rent, or making a profit over and above the cost of the inputs, is the key target you should aim to be above in your forecasts. If you make $100,000 a year from your business, and take it all in salary, that means that your business makes nothing. Your salary is a cost.

Do your projections allow you to make a profit over and above the salary you pay yourself, after all other expenses are deducted? If so, you've got a business that is likely to thrive, and you you may one day be able to sell.

It's surprising how many business owners don't include their salary as cost.

Break Even Analysis

Here's the meaty bit.

How can you determine, very quickly, if your idea will fail?

You need a break-even analysis. A break-even analysis shows you the amount of revenue you'll need to bring in to cover your expenses, before you make a profit.

Knocking up a break-even analysis is a great way to trial an idea before you put it into practice. After mapping out a simple, back-of-the-envelope business plan, it's the first thing you should do. If you can make these numbers work, then the rest of your detailed business plan can flow from there. If you can't get past a break-even analysis, then the rest of your plan will likely fail.

Here are the components of a break-even analysis:

  • What are your fixed costs? i.e rent, insurance,power and other set expenses and overheads.
  • What is your sales revenue?
  • What is the gross profit on each sale? i.e. the money left over after the selling costs are taken out
  • What is your average gross profit percentage? Divide your average gross profit figure by the average selling price.

You should now be able to easily calculate your break even point. Divide your annual fixed costs by your gross profit percentage to determine the amount of sales revenue you'll need to bring in to break even.

Is your break-even point higher than expected revenues? You'll need to change your cost structure (make cuts), or increase the profit potential of your sales.

Can you do without employees? Work from home? Sell your product for a higher price? Target a more lucrative market?

If you can make the numbers work at this point, move on and create a fully fleshed-out business plan. If you can't make the numbers work after a few tries, then dump the idea and try another. Pat yourself on the back for being smart enough to run a few numbers, before wasting a lot of time and effort executing a bad idea.

Most people jump straight to the latter.

Business Plans For SEO Businesses

Jul 15th
posted in

Often, in our rush to get ahead and do things, we forget to plan.

Do you have a business plan? Do you have a business plan, but haven't updated it in a while?

A business plan need not be complicated. A few bullet points scribbled on the back of an envelope can constitute a business plan. A business plan is simply a description of what you intend to do, and how you intend to do it. The advantage of having a plan written down is that your business becomes a lot easier to visualize.

There are a lot of resources available on writing business plans, but few address the specifics of SEO-driven businesses.
In this article, we'll cover business plan basics, then delve into the specifics of SEO related plans.

The Importance Of Writing Things Down

We all make lists. Why? Probably because our memories aren't that good. A list also helps to focus attention. There's something about the very act of writing things down that makes a nebulous action concrete.

The same theory applies to business plans.

For Whom Are You Writing The Business Plan?

Is you aim to attract VC? Get a loan from the bank? For internal staff to be clear about direction? For your own use? Depending on your answer, your business plan will have different requirements in terms of the information provided.

Business plans typically consist of the following components:

  1. Executive summary
  2. Products & Services Description
  3. Market Analysis
  4. Competitive Analysis
  5. Strategy & Implementation Plan
  6. Financial Plan

Business plans aren't just for start-ups, either.

As a business transitions through different stages as it grows, the plan needs to change. You might want to figure out the best way to invest or fund expansion. A new financial period may be beginning. What are your plans for the next financial year? Do you need to refinance? Are you taking on more employees? Does your old plan fit your new reality?

The Three Levels Of Business Planning

Short Plan

A plan could be as short as one page. Answer the following questions.

  • What is your concept?
  • How much money will you need to execute your plan?
  • How do you intend to plan to market your business to customers/clients?
  • What will your cash flow look like, and over what time frame?

Simple questions, right. Many business ideas can be adopted or dismissed on those four questions alone, saving you a lot of time, money, and opportunity cost. However, such short plans aren't suitable for seeking investment.

Presentation Plan

The essential difference between a working plan and a presentation plan is style and appearance. The tone is serious, and it usually comes complete with charts, forecasts and diagrams designed to convey to people that you've put a lot of consideration into your venture.

Presentation plans should be free of industry jargon. Investors like a lot of due diligence, especially when it comes to outlining competitive threats and market opportunities.

Working Plan

A working plan is a plan used to operate your business. Like a short plan, it is less formal in terms of style. It is used internally to ensure everyone has enough information to be on the same page.

SEO Business Models

Ready to dive into SEO as a full-time occupation?

Before you make that leap, let's take a look at a few business models you can choose from, and weigh the pros and cons of each.

For SEOBook.com members, I've written two, detailed business models in pdf format. These can be used as guides for planning your own SEO business model, and projecting your finances and revenue.

Client Service Model

This model includes seo agency and independent consultant.

Learn Business Strategies from Clients

There are some great advantages in this model, especially if you're well versed in SEO, but new to business. One advantage is that you get to see how other businesses operate, and get a close look at someone else's marketing strategy. If you're new to SEO, then it can be a good idea to get an agency job first. This way, you can learn the process of SEO, and how to win and negotiate with clients. View this as a training course if your eventual goal is working for yourself.

In terms of working for yourself, there are huge rewards, and huge challenges.

Focus on Business

One challenge is to describe how you're going to get new clients, how you're going to service those clients, and determine if you have enough time to service these clients and still make a profit. Often, SEOs focus on the technical aspect of the job, which is important, but the business aspects are what will make or break you, not your skills.

Billable Hours

The client service model is essentially about billing hours. The more hours you bill, the more money you make. Given that there are only 24 hours in the day, of which around half you could reasonably expect to consistently work (and still have time for sleep!), it is important to plan how much time a diverse range of tasks will take to achieve. These tasks include sales, accounting, billing, administration, purchasing, computer maintenance, and, if you get some time left over, SEO!

In order to scale up the number of billable hours, SEO service providers usually add more people. If your aim is to run as a sole operator, that's fine, just make sure you've got enough hours in the day to do what you need to do and make a profit, and consider outsourcing as much of the drudge work as possible.

SEO Publisher Model

This includes affiliate, Adsense and other content based models.

If you can get a site ranked well, then why aren't you doing it for yourself, rather than someone else?

Cost of Entry

The "cost of entry" to launch a website is almost zero. This is both a pro and a con. It's a pro, because you can easily bootstrap (meaning you can self fund) your venture and once you have rankings, you then sell the traffic to the highest bidder, by way of advertising, or revenue share, or both. There is little downside risk, other than it won't work. You've may have lost some time, but compare this with the loses associated with a failed brick n mortar operation!

The major downside, of course, is that anyone can compete with you.

Increasing Competition

The SEO publisher model used to be a lot easier than it is today. There was a time that SEO was a mystery to most webmasters and site owners. The biggest downside now is the level of competition. As we face more and more competition, this puts downward pressure on revenues, and only the determined will make good money.

Hard Work

However, there is still a lot of money on the table if you execute well, are determined, and prepared to put the work in. It's a cliche, but those who tend to work the hardest and smartest, benefit the most. A neuroscientist who worked with seven-time Formula One Drivers Champion Michael Schumacher said that he had never met anyone who worked so hard. The guy had natural talent, but it was the sheer hard work that put him above the other talented competition.

Same goes with SEO. When there is a lot of competition, you need to be more determined than your competition in order to succeed. If you've got a good work ethic, and thrive on competition, then an SEO publisher model might be a good fit for you.

Rather than asking "is this good enough to rank #1" you have to be willing to put in the extra effort to build a moat if you want to play where the big boys play. Aaron outlined his competitive strategy here.

New Markets

The obvious way around saturated markets is to look for new markets. If there are a lot of SEOs doing affiliate for any particular company or niche, then you're exposing yourself to a lot of competition. If it is easy for you to sign up and start as an affiliate, then it is easy for everyone else, too.

Instead, consider looking in keyword areas where there are few, if any, affiliates operating. If there is sufficient traffic in the niche, then approach companies directly and negotiate pay-per-lead or private affiliate deals. It can take a bit of effort up front, but the payoff is that you might have a keyword area all to yourself. Most people attracted to the affiliate area will be too lazy to do this.

Scalability

The SEO publisher model can be scaled more easily than the SEO consultant model, because scaling is as easy as publishing a new site. Once that site is revenue positive, you can further increase its rankings, start another, and so on. Many of the requirements are easily outsourced and do not require extensive , time consuming client interaction. But again, there are only 24 hours in the day, so once you're up and rolling, try to outsource as much as possible.

Get The Business Plans

If you are a subscriber you can download the business plans here, and for SEO professionals there is a secret confidential bonus worth over $500 located here.

It is Time to Regulate Ignorant Anonymous Guest Posts on TechCrunch

Jul 13th

TechCrunch published an anonymous attack piece on search engines...both the organic and paid side. Lets deconstruct some of it, shall we?
techcrunch.com/2009/07/13/the-time-has-come-to-regulate-search-engine-marketing-and-seo/

"It’s now conventional wisdom that search engine optimization, representing the organic result sets on any search query, is more voodoo than science."

And it was conventional wisdom that you needed to own tech stocks because "this time it is different". And it was conventional wisdom that housing goes up forever. We didn't care when fraud was looting trillions of dollars, but now you need to be compensated for your own intellectual sloth & laziness? Please.

Most of the market is willfully ignorant and mislead. Just like in most big money markets. Nothing new there.

What about public relations and branding and other forms of marketing? Most people are ignorant of the influence, so should we just ban marketing? Without marketing do consumers get more or less choice in the marketplace?

If strong search rankings are an unfair advantage then are good domain names and memorable 800 phone numbers also worth regulating out of the marketplace?

To most people rocket science and evolutionary biology and even basic economic literacy are more voodoo than science...does that mean we should shut them down? Shall we run society based on the will of the handicapper general?

"In addition, consumer behavior dictates the top three results on any search page are all that matter. "

They may be most important, but you can still build a real business by ranking a bit lower on the search results. Also people search for billions of unique search queries each month, so its not hard to rank in the top 3 for something.

Keep a lean business if you want to use search as your primary distribution channel. Invest in slow sustainable growth as opportunities present themselves.

The line "all of your eggs in 1 basket" also comes to mind. If search bounces around then try to offset that risk by building other distribution channels including offline, word of mouth marketing, repeat customer sales, affiliate marketing, building a strong brand, etc.

"And at any one time, the controller of these borders (that is, the search engine itself) can change and manipulate those rules – and that can substantially decrease or destroy all organic traffic coming to your website, without notice and without your knowledge."

Use analytics to track your search traffic. If your site has its rankings destroyed and you do not notice then you either didn't have much of a business, or are not investing properly in knowing your market. Either way you would deserve failure if you were reliant on a traffic stream and were not actively measuring it.

"Because the rules of organic and paid search change frequently – and remain undefined — agencies and other traffic brokers can win big; through their experience, they’re capable of reverse-engineering these rules. This means that, as this market matures, individual businesses have a diminishing chance to actually compete and gain search market share. That, in turn, puts them in a position of not only needing to hire an agency in order to find any traffic, but also making it more expensive overall to build businesses on the web."

The same analogy could be stated for businesses buying up key real estate locations and building efficiencies into their supply chain model - like a Wal Mart or a McDonalds. The same analogy can be made for huge online networks that cross promote new sites. The same can be said for banks that are too big to fail while smaller ones are slaughtered off and sold to the big ones.

If business owners are too lazy or cheap or ignorant to invest in one of the highest ROI business functions of the last 100 years then how can anyone have sympathy for them? There are millions of dollars worth of tips on this site shared freely. And people can get direct help with their site for as low as $100. If they can't afford that, then they should not be on the COMMERCIAL web.

"The only real solution is disclosure. Transparency. Those traffic generators that use rule-based algorithms to determine result sets must publicly disclose their methodologies. That is the means by which all businesses can compete freely in the organic and paid search marketplaces."

Except this is not true. For numerous reasons

  • as the algorithms grow more complex, the transparency of them would still only benefit a few key players while setting a high barrier to entry for small businesses. all this would actually do is drive small businesses out of the marketplace faster. we outrank corporations worth $10s of billions of dollars for keywords that are important enough that they target them on their homepage titles. make the algorithm transparent and there is no way we could compete at that level.
  • if algorithms were transparent automation and testing would be abused by larger established trusted websites. some news companies already use robots to write content. give them a high PageRank, offline distribution, algorithmic immunity, and the source code to the algorithm and I can't imagine how I would be able to compete against them.
  • media and marketing are rarely if ever transparent. and when they are it often backfires because people feel they were influenced and/or used. manipulation in the traditional media world goes on all the time. I suppose it is time to write another post about media transparency

Can Hyperbole Generate $50,000 Corporate Speaking Engagements?

Jul 13th

Lots of people are writing about the economic secret that is the free pricepoint:

As Anderson himself says, “I’ve got a lot of kids and college isn’t getting any cheaper.” His own strategy, one outlined by Dyson way back when, is to charge little or nothing for his writing and use it to generate lucrative speaking gigs. “You can read a copy of this book online (abundant, commodity information) for free,” he writes (not noting that the free offer expires shortly after the printed book’s publication), “but if you want me to fly to your city and prepare a custom talk on Free as it applies to your business, I’ll be happy to, but you’re going to have to pay me for my (scarce) time.”

But much of the debate is only on a philosophical level by career journalists trying to make extreme claims to get enough publicity to justify overpriced corporate speech fees. Hey, it worked for Tim!

The problem is that even when you look at the canonical examples for the argument for free, they don't always follow suit.

Is Google "Free"?

Google's free search results? They aren't free of self-serving bias, and that bias is expanding.

During an upgrade test of their Google Apps landing page (attempting to improve conversion rates on the PAID version) Google "accidentally" lost the link to the free version. After that issue got exposure the link came back, but it still shows the limits of free. The free option becomes more obtuse/confusing/obscure to make the paid option more appealing.

Free remains readily accessible if their are great hidden costs. But many services start off free, give people the perception they are transparent, and then start monetizing.

Free Can Be a Dangerous Word

Free is only free when you ignore the hidden costs!

McAfee analyzed the first five search results pages of 2,600 popular keywords across five search engines: Google, Yahoo, Live, AOL, and Ask. They analyzed both organic and paid listings and counted the number of links that led to pages that McAfee’s SiteAdvisor tool flagged as dangerous. The study ultimately reviewed more than 413,000 unique URLs.

McAfee’s study also found that certain categories of keywords were more riskier than others. Searches related to “lyrics” and “free” had both the highest average risk and highest maximum risk.

Tragedy of the Commons

Free is good at gaining awareness & distribution and in commoditizing competing products & services. Free also works if you are creating a platform you want others to build off. But it also sets the barrier to entry really low. Either you want to have meaningful value added relationships with paying customers or you don't. When you mix free and paid too closely the free people provide so much pollution that they destroy value.

  • look at the blog comments on any dofollow internet marketing blogs that do not require registration
  • look at the free SEO forums that have been polluted to bits, some of which where people sell stuff they don't have permission to sell
  • consider how Google ended supporting their free search API in flavor of promoting a useless one.
  • URL shortening services removed a bit of friction and became a huge spam tool

Free often promotes classic cases of the tragedy of the commons.

Copyfraud

Many people point at Wikipedia as a sign of the future. But Wikipedia takes content with significant costs, rewrite and/or directly plagiarizes it, and then wrap it in Wikipedia goodness. Unsurprisingly, the book Free re-wrapped a lot of Wikipedia in a hardcover and sold it for $27 (without attribution, naturally). Copyfraud for the win!!!

It is basic hedonistic economics 101: everything should be free except whatever pays ***my*** income. ;)

The Next Big Thing

Free quickly escalates a business up the user adoption curve, but it also leaves the business vulnerable because it is hard to build deep relationships, continue to add value, remove marketplace friction, stop spam, and do it all for free. As a free company gets bloated it creates opportunity for the next big thing:

There will always be a company that replaces you. At some point your BlackSwan competitor will appear and they will kick your ass. Their product will be better or more interesting or just better marketed than yours, and it also will be free. They will be Facebook to your Myspace, or Myspace to your Friendster or Google to your Yahoo. You get the point. Someone out there with a better idea will raise a bunch of money, give it away for free, build scale and charge less to reach the audience. Or will be differentiated enough, and important enough to the audience to maybe even charge more. Who knows. But they will kick your ass and you will be in trouble.

Most People are Short Term Focused & Greedy

Not only does free suck as a sustainable business strategy, but donation based systems rarely work well because most people feel entitled and ignore reality until it smacks them in the face. In the grocery store a few weeks ago I gave $5 for colon cancer research and the cashier was floored and wanted to announce it. Something that a huge portion of people will have problems with is not worth giving $5 for unless we can see the immediate return. Meanwhile the crooked US healthcare system charges you 10x normal rates if you don't have health insurance. Pay up, now or later!

Entitlement

Activate the mindset on the free pricepoint and entitlement comes about. And the perception of value is lower.

I remember an email I got about 6 months ago about a blog post I offered 18 months or so ago where I gave people free personalized SEO tips. The person commented in the email that most of the people who got the advice never implemented any of it. And why would they respect it? They got it free so they assumed it was worthless. Basic economics I guess.

If it is free people assume it lacks value and that you owe them free support.

At some point after you have enough exposure it makes sense to erect barriers to entry to cleanse the bottom 10% to 20% from your pool of potential customers. Will some of them complain? Absolutely. But in many cases they were not going to have a positive business or social value anyhow. Better to cleanse them out early than waste hours of your life dealing with those types of people.

What is a "User"?

Last week 1 person wrote a blog post about how I lost them as a free user when I required logging in to download our Firefox extensions. This person already had a free user account but did not remember their password and was too lazy to do a password reset. They wrote about "that’s where you lost me as a user" to which Sugarrae responded "And who cares. You’re a USER. Customers are who make him money. Considering you’re too lazy to reset a password and you believe you deserve this free tool as much as you deserve to breathe, you’ll never be worth keeping around from a business standpoint. People like you don’t go places." Harsh, but true.

Structural Change

There has been major structural change which leads to lower distribution costs and increased competition for attention. Both of which are driving down the upfront cost of consuming information.

But with the lower costs come hidden costs.

Hidden Costs

Media relying on free means that it needs a lot of exposure to keeps the lights on. This increases noise, hype, misinformation, and investments in culturally constructed ignorance. The fair price for free knowledge will be lots of hidden costs. Most free news won't be worth the price, but the trend has already been set. And the average person's view of economics and media are short-sighted and simplistic.

Buy tech stocks. This time it's different. Houses always go up in value forever. Follow the crowd. Eye on the buzz. Lemmings off the mountain.

We are creating a media ecosystem that is looking a lot like Idiocracy:

Media businesses based on "free" typically build a brand by offering unique high value content, charge premium ad rates, bloat out their content & water it down to try to goose the ad revenue & appeal to a bigger user-base, and eventually end up creating something that has no lasting value.

Maybe some forms of structured knowledge like college textbooks and science publishing are due for some type of major disruption. But sifting through the garbage online is not getting easier (unless you are quite sophisticated). Especially when you consider that the tools to do so are aligned with advertising interests. Trusting machines that are set up to exploit your personal flaws is a non-trivial cost which you will likely never be able to understand fully or calculate.

Economics to the Rescue

Real relationships still have cost. Once you have an imbalance between supply and demand price is the natural way to sort it out. Make it better than free and charge for it. You can further segment by offering a variety of products & services across the price spectrum and packaging it for different markets.

There are plenty of people out of work with plenty of attention but not enough income to live on. What is holding back many of them is thinking that they have to do everything for free. The web rewards free stuff with recognition, comments, links, emails begging for free personalized consulting, and lots of other noise...but then what?

Maybe rather than debating free there should be a few more articles on how to build small work at home businesses using the web. And maybe a few more on how to transition "free" attention into real profits. That part is just assumed by the career journalists/speakers, but what do they ever sell beyond articles, books, and speeches? Not everyone is going to be able to give $50,000 corporate speaking gigs.

There are lots of legitimate ways to make money using the web, and they rarely get any coverage unless they are hyped or mischaracterized. Tell us how we can make a living shooting videos of our "mean kitty" and debate the philosophy of free. But then again what else should we expect from FREE media?

Who is the #1 Domainer in the World?

Jul 12th

Obama has been known to use domain names to go after emotionally charged empty words that are easy to support (like change), but now the government is going after commercial keywords like cars.

Cars.gov was launched on June 30th and is already ranking #3 in Google for cars!

What does it do to the value of cars.com when cars.gov is a co-opted business deal between the government and select auto companies (which the government may have confiscated some of your money to prop up and is now propping them up again via rebates and direct marketing to compete directly against you once more)?

Who has a link network large enough to compete with the United States government when they are at the core of what Google considers to be the clean & trustworthy parts of the web? In 2007 Matt Cutts stated:

But, certainly, all of the things that have good qualities of a link from a .edu or a .gov site, as well as the fact that we hard-code and say: .edu or .gov links are good - and when there are good links, .edu links tend to be a little better on average; they tend to have a little higher PageRank, and they do have this sort of characteristic that we would trust a little more.

(Update: Google's Matt Cutts stated there was no hard coding of .edu and .gov links & stated the above quote sorta came out of a mis-interpretation or transcription error on a run on sentence.)

Imagine launching a 1 word domain name late into 2009 in a multi-billion dollar field and ranking it above the fold in less than 2 weeks. The government just did that. And they can do it at will. Over and over again. For free :)

Now if you invest in a big keyword rich domain name you not only need to worry about Google and the market, but now you have to worry about how the government might start competing against you.

What might happen to the value of mortgage.com or credit.com or health.com when the government launches the equivalent government portals co-sponsored by whatever relevant multi-billion dollar corporations pitch the idea to a congressman from their district?

If the equivalent .com sites are thin arbitrage sites they will gain value as misdirected visitors stop by. But longterm the trend has to corrode value of domain names. If they are real sites they may lose out by finding themselves below the fold for their own brand if the government pushes hard enough.

Once politicians realize the value of domain names how long will it be before there are .gov domain names for every aspect of life? Diet.gov anyone? Are you ready for love.gov?

Staying Motivated Running a Virtual Business

Jul 9th

I've been self employed most of my life and once in a while, I hit the motivational pit. Lack of motivation was easier to combat when I ran a business with customers. Being accountable for my actions drove me to get up early in the morning and commit my end of the bargain.

However, running websites and publishing premium content is an entirely different animal. I've been doing it full time for almost 4 years now and while we're making a decent living out of it, my motivational juice has dried up. It has nothing to do with lack of passion. I truly love what I do and would not trade it with any other job. It is tougher to maintain a routine when you have no customers because sometimes they can be hell to deal with and that is enough to keep you alert. I also think contentment plays a role in ones waning motivation in business. I've been happier in the last 8-9 months and not only did that bleed my motivation, it also packed a few pounds around my waist and thighs.

I wrote this post to share what I did in the last couple months to reverse the trend and revive some of my motivation back.

1. Create a to do list DAILY and be accountable for every item. Aaron does a good job with this and it rubbed off on me.

2. Have variety with work duties - Lately, I've been doing a lot of offline marketing and it's absolutely awesome because I'm not as tied in front of the computer.

3. Associate with like minded people - It's better if they're more successful than you :) A few months back, Aaron and I met up with Andrew Frame of the Ooma fame. His entrepreneurial energy was contagious and his product, disruptive. I guess I'm extra fascinated with his company because they now carry Ooma at Costco and...it's a tangible product. Andrew is a forum member and it made me proud to see a lot of high caliber minds at our forum.

4. Reward yourself - Only after you've completed the tasks in the to-do list. You will also realize that completing the tasks is already a reward in itself. Fulfillment can be addicting and soon, you will back on track with your motivation.

Interview with Rae Hoffman AKA Sugarrae

Jul 7th
posted in

I have been a longtime fan of Sugarrae's blog (and some of her old posts back in the day on WebmasterWorld). She has been on the to interview list for a few years and we just recently finally did one. :)

How did you get into publishing and affiliate marketing?

In 1997 I had my first child and a few weeks later he suffered a massive bilateral stroke (he had a stroke on both sides of the brain at once, instead of on only one side as with usual strokes). My dad sent me an old office computer to research treatments and I built a small webpage on Homestead that told his story. I started to get emails from other parents who were searching for information on pediatric stroke (at the time, there was little information out there). Long story short, I founded the first international support group for parents and families of pediatric stroke survivors. I was spending a lot of time on the site and started to investigate the possibility of making some side money with it and stumbled into affiliate marketing. I built my first site and everything clicked from there. I loved the whole process of creating and marketing (via organic SEO) an affiliate site – and luckily for me, it seemed I was pretty good at it. I’ve got zero formal training... but I’ve got a decade of experience behind me now.

You have been pushing hard for people to evolve the affiliate model and add value. What are some of the easiest ways affiliates can do that? What are some of the most creative and intensive things you have done to increase the quality and value of your sites?

I’m a big believer in longevity. It’s no secret that I’ve dabbled in the blacker side of things in the past, but as the engines got smarter, it became clear to me that building a site that ranks because it should (meaning it is the best resource on the topic) and not because I’ve manipulated that weeks algorithm was the key to being successful long-term in the organic listings. That said, I still focus a lot on SEO and the algorithm, but the core of what we do is build good sites. It is a lot easier to get links when you deserve them. Campy? Yes. Supports myself and my entire company? Yes.

I wish I could say there were “easy ways” to add value to an affiliate site. But, that ability to create a POD is what separates the few from the many, in my eyes. Scour the sites you’ll be competing with and see what they are offering and then decide how you can make it better. See what they’re missing and create it. Maybe you’ve found a site with great information, but no way for the community to become involved with it. Re-create that good information, add even more to it and then add a community aspect. Every site is different and sometimes it takes us a long time to find our POD for them.

For instance, I’ve been in the telecom market for a long time. It was my first commercial industry. When we decided to build a site about prepaid wireless, we looked around at the competition. CNet had short reviews of only the major companies and no user reviews (at the time), About.com’s info was a bit of a mess and hard to understand. So we built a site that offered editorial reviews of twice the number of providers CNet did, with information broken down into layman’s terms and that were three times as detailed as the information of either fore-mentioned big brands. We also added the ability for users to leave reviews of every provider. Today we have editorial reviews of 25+ companies, we have over 3000 user generated reviews (more than any other site with prepaid information to our knowledge), we have a comparison tool, we run a blog focused on the prepaid industry and we even moderate panels at the Prepaid Press Expo. We have the best and most complete site on prepaid cell phones in existence. We rank because we should.

With BB Geeks, we focused on the “newbie user” while all the other sites focused on providing BlackBerry news or information to BlackBerry pros. It allowed us to find a crack in a competitive market and build ourselves a very loyal following and a very strong brand in the space. We also made early use of Twitter and targeted the same segment of folks – people looking for help using their BlackBerry.

Going Cellular was a bit trickier. I was stumped for a while. So many cell phone sites... How do you take on Engadget Mobile and Howard Forums? I admittedly shelved that project for a long time – I couldn’t find our POD. Then one day, something a friend said to me earlier about a project he was working on sparked an idea. We have a TON of reviews between all of our telecom sites – 4000+ in total. And everyone always focuses on the reviews by provider. But, we all know that sometimes, T-Mobile may have great coverage in one area and crap coverage in another. So, I got the idea to take our large database of reviews and make them searchable by geographic location. It is a hard thing to replicate if you don’t have the review volume to pull from. But we did (and get more daily). So it works. We just released the tool so let’s hope it works well.

I’ve always maintained that Google doesn’t hate affiliate sites. They hate thin affiliate sites. We’ve done our best to create the type of value add Google, and consumers, are looking for.

Do affiliates need a lot of money to compete in the market? Or can they win with little investment provided they are willing to put in a lot of effort?

I don’t think you need a lot of money to compete. Granted, it was easier to say that five years ago (if only I’d worked even harder then), but the opportunities are still there. But, if the less money you have to invest, the more time you’re going to need to put in. People sometimes wrongly think that I had all this money laying around when I started. I hear “Well, I’d love to do that, but I don’t have the money to build those kind of sites.” I didn’t either in the beginning. I was the designer (in spite of being what I like to call artistically impaired), programmer (even if I barely scraped by – and nowadays, with WordPress, it is much much easier to “get by” in that department), content writer (I knew crap about telecom when I started – I learned, learned, learned the field) and marketer (please sir, can I have a link?). I was a one man band in the beginning. I still like to think people can claw their way into any market they choose with the right plan and right dedication. I have employees now, but that was because I couldn’t scale without them.

Do you see offline networking as being a key component of affiliate marketing strategies? Do you do it to promote any of your brands?

We network offline all the time. We run ads in targeted offline publications for our very niche sites (the ad prices tend to be lower and the return higher). For our telecom sites, we attend the major conferences like CTIA, WES, the Prepaid Press Expo, etc. It makes it a lot easier to develop contacts in the industry. Just like SEO’s go to SMX, PubCon, etc. You have to network face to face sometimes for better results. There is a cost associated with it, but we usually get a good ROI on attending. And if we don’t, we don’t return.

Google's Eric Schmidt made a public comments about "brands being how you sort out the cesspool" ... does this statement concern you? Has Google done anything over the past couple years that made you view them differently from a competitive standpoint?

I didn’t really get too concerned about it. As I mentioned, we build our sites to BE affiliate brands. If we’re doing things right, we should come out okay. As for Google and competitiveness, they’ve made it a lot harder on the smaller guys and the up and comers. But, that was to be expected. They haven’t made it impossible by any means. But they have made it harder.

Given Google's 2-tier justice system (penalizing smaller webmasters while giving big brands a pass), why do you think some well known SEOs still publicly out websites?

My number one answer would be “fame”. Too many people in this industry play the fame game. I personally have never outed a site, publicly or privately for doing anything against search engine guidelines and never will. The other reasons people tend to “out” sites is for competitive sabotage (my opinion is that if you’re being beaten by someone, fight harder... In the end, you’re site will be better and stronger for it) or because they think they’ll impress engine reps and make connections. The engines are not our friends (though I truly like a lot of the engine reps themselves). I’m a strong believer in Omerta in this industry [waves to Matt].

What makes you decide to start a new site? Do you have to love the topic, or can you make a profitable site around a topic where there is $ even if you do not care for the topic?

I always say you don’t need to love the topic, you need to learn TO love the topic. To make the best site, you have to be willing to either immerse yourself or pay to immerse someone ELSE in a topic. I find industries where I see opportunity.

Do you try to make money off every site you build? Or do you invest more in the sites that really take off, while spending less capital and effort on the lower end sites?

If the industry is small and the site will only make 3 or 5K per month, then we build a site that will only take a day or two or three a month to maintain after the initial build to keep the ROI in position. For sites with much higher revenues, we put in a lot more time – but for a much higher return. I personally like the smaller niches. It takes more sites to hit bigger numbers, but the competition and upkeep is relatively low.

Do you ever view sites as self-sustaining and stop investing into them? If so, how do you decide when?

It depends on the industry. We don’t have any “active” site that we don’t at least spend a few days a month on. We do have some sites we deem “inactive”... Meaning they didn’t do what we hoped so we shelved the site. We might come back to it later or we might let it earn whatever it does until it dies a slow death. I don’t ever want to get complacent with a site we consider a “winner”. That’s when you give the competition the opportunity to do what we’ve done to our competitors in various sectors. Donald Trump talked about that in Think Big and Kick Ass. He got comfortable and lost his A-game. You can’t do that. We never stop trying to make “active sites” even better. We have to do it before our competition does.

You dub AdSense as "webmaster welfare" and seem to much prefer affiliate revenues to AdSense revenues. Do you have any sites in illiquid affiliate markets? How do you monetize them?

I try my damndest to keep AdSense at less than 20% of our revenue. I don’t like being dependent on one company, who doesn’t even tell us what rev-share we’re getting. It makes me nervous. I also don’t like to be dependent on one affiliate program either. Diversity is a good thing. We have a few in illiquid affiliate markets. Some are “future plays” meaning that they don’t have affiliate programs now, but we think the topic will eventually get big and the monetization opportunities will come. But we don’t spend heavy time on those. We usually research before we dive in to make sure affiliate programs are available.

Some of your tweets, blog posts, and past interviews have showed a bit of a distaste for all in one webmaster solutions. What tools (cms, ads, design, seo, etc.) do you consider to be key to your successful fast growing publishing enterprise?

Our CMS was built in house, as our most of our internal reporting tools. I’m actually pretty simple. I like to look at a lot of things by hand. It probably isn’t the most valuable spend of time, but, it works for me. I’m a big evangelist of the Thesis Theme and we use that on several sites (and hybrid it with the CMS) and the folks who we hire to skin them do sexy work. I think we use Open Ads for the CPM based advertising. I use some of your tools too. I also use Compete (for competitive intelligence) and Basecamp (to organize everything). Like I said, I’m pretty simple on the tool front.

It seems a lot of the SEO discourse at the public level has dropped off sharply in quality (but not in quantity) over the past couple years. Some people (like me) have created private sites, but a lot of the old timers that I consider mentors have sorta disappeared from the public discourse. Do you think this is a temporary shift, or a trend that is likely to continue? Are many of these other people moving on to other private communities?

A lot of the old timers have a distaste for the fame game. If I wasn’t now also running an Internet marketing company, I’d probably be underground too. It’s easier to just do your thing and make your money. They work on pushing their sites and not themselves. I still meet with a lot of the folks you probably consider old timers, but at non-conference gatherings and small meet-ups. With so many people willing to out someone to get their blog to the Sphinn homepage, you become very careful with who you trust. Just like the engines have made it harder for small brands, fame-seekers have made it harder for people to make it into many folks “inner circles”. SEO Bloggers are like reality TV stars... Most don’t have the talent, they just have the platform to pretend they do.

Do some of the cultish behaviors in the SEO industry surprise you? What can the industry do to clean up such behavior, or is it just a fixture?

I don’t read many blogs or belong to many communities, so I tend to shield myself from a good portion of it. The rest, I’ve learned to mainly ignore. Every once in a while, someone will really get under my skin. I don’t think we will ever be rid of the behavior to be honest. We just have to learn not to react from it or be distracted by it.

A lot of new webmasters have a remarkable sense of entitlement while being exceptionally lazy. Do you think this new breed of webmaster has been led astray by get-rich-quick scammers, or do you think the game getting harder and more expensive is causing more people to beg for short cuts?

I think it’s a combination of both. Sometimes I wonder if people realize the amount of time and effort it took for the “bigger guys” to get where they are. Get rich quick schemes are like “amazing weight loss pills”. You know they don’t really work or everyone would be rich and skinny. But, you like to believe it, because it means you can ignore the fact that the real answer for achieving anything you want in life is actually hard work. Not everyone deserves a trophy.

What books, blog posts, forum threads, offline events, etc. were key to you becoming so successful with your online business?

Wow. Well, Steve Krug’s “Don’t Make Me Think” was instrumental for me early on. It really helped me learn to monetize. The “game changer” for my career was probably “E-Myth Revisited”. That book was what made me decide to scale from my kitchen to an office in downtown Guelph with a staff. WebmasterWorld was also a big source of training for me in the early days, along with a private forum I belonged to back then. My first PubCon also was a game changer, because it made me see that I really did have a career and was good at what I did. It gave me a lot more confidence.

Recently you moved back into the consulting model a bit, which sorta surprised me because I always saw you as the super-affiliate type who would avoid client work because you loved doing stuff your way. What brought you back to the client model?

It surprised me too LOL. I’ve taken on occasional consulting clients over the years... It was interesting to see mistakes and issues I don’t deal with day to day in my own sites. It also helped keep me sharp with working on site types Sugarrae and MFE doesn’t build. I don’t have a lot of patience, so dealing with a lot of client work has never been my style.

Back in January, Lisa Barone and Rhea Drysdale decided to head out on their own and create a consulting firm. They contacted me because while Lisa is an expert in blogging, branding and social media strategies and Rhea specializes in ORM and social media with a very strong SEO base, they both felt they lacked the business experience of running their own company. They were both becoming first time entrepreneurs and felt my experience with running companies, in addition to my expertise and “brand” in affiliate marketing, monetization and SEO, was something they needed/wanted in addition to their own skill-sets. Being able to leverage my talents to create a consulting firm and create strategies for client sites, without having to be the person managing clients on a day to day basis, was what made me decide to give it a go. We’ve been very successful thus far, especially considering everyone said we were nuts to launch in the middle of a recession. I expect pretty big things for the company.

Given how well you do with affiliate stuff, I would imagine you are quite selective with client work. What type of client is ideal for Outspoken Media?

It’s funny you mention that. When we first launched the company, we immediately started getting leads from potential clients. I’d decide to turn down half of the leads (one of my responsibilities with Outspoken is business development – AKA, deciding who we work with) without ever even speaking to the potential clients. Of the 50 percent with did speak with, we’d usually end up referring half of those out. I think Rhea thought I was insane at first. One of the first lessons (based on my own feelings) in entrepreneurship I gave her was that we didn’t want to take any client willing to shell out cash. We want to work with good sites, where we think we can make a big impact and with good people. I didn’t want to fill up our roster with “anyone willing” and not have room to take on the clients that would keep us challenged and be awesome to work with down the road. Of course, it was likely easier for me to be calm with taking that route since Outspoken isn’t my sole source of income. But I think Rhea and Lisa have seen that the leads haven’t slowed and our client roster keeps filling and trust that strategy now. So yeah, we’re pretty picky.

That said, it doesn’t mean anyone we’ve turned down or referred out was a “bad client”. Sometimes we turn down clients due to conflict of interest (either with current clients or sites that are direct competition to any sites owned by Sugarrae and MFE Interactive), ROI reasons or for budgetary reasons.

The ideal client for Outspoken Media is someone who believes in us and trusts us to do what we do best.

----

Thanks Rae. To read more of her latest thoughts on marketing, affiliate business models, the internet, or life in general subscribe to Sugarrae and her consultancy PushFire.

1 Page, Many Modes of User Interaction

Jul 7th

We launched our SEO training program close to a year and a half ago and are still flush with optimization opportunities from a conversion standpoint. Working with Conversion Rate Experts got me much more motivated about fixing a lot of the holes. Over the past 6 months we have probably made an average of about 1 conversion improvement per day.

A lot of stuff does not need to be hard to do...it just takes a bit of time and a bit of creativity, and a willingness to respond to customer feedback and conversion data.

Conversion Oriented Graphics

In the past all of our conversion oriented links were simply text links. Recently I picked up a nice set of buttons and am enjoying using them where it makes sense to. :)

Maybe I should put one here

Maybe that is not the perfect graphic, but it is a conceptual upgrade, and a position we can build from.

Optimizing User Experience

Erm... lets see. Where was I. Oh yes, the homepage of our training section in the past was almost the same if you were logged in or not. That confused some people as to their account status and probably cost us some members who did not like it. And since it was the page we ranked #1 in the organic search results for seo training it did not do us any favors with prospects who discover us via a search on that keyword. We were simply wasting traffic for one of our most valuable keywords. :(

But due to the magic of PHP's wonderful elseif there is a different user experience for each of the following:

  • logged in subscriber - welcome page and link to modules
  • logged in free account - upsell to paid account
  • not logged in - login box in case they are already a subscriber, followed by an upsell to paid account

Each of the above groups of people has a different set of goals. One wants to access what they bought, while the other 2 are more interested in learning more about becoming a customer. This is something we should have done long ago, but I have always been so focused on answering forum threads, keeping up with news, and trying to create new tools that it took till now to get around to it.

Packaging Value

When you look at the user interaction on a site there are lots of ways to package and re-package ideas that don't have to be spammy or cheesy, but add legitimate value to the strategy. If you have made hundreds or thousands of blog posts there is probably some value that can be reformatted, recycled, and repackaged.

In the past people could download SEO for Firefox, the SEO Toolbar, and our Rank Checker for free and we got nothing in return (except for thousands of customer support emails on free products). That's not entirely true. We got links & rankings, but we likely got more support emails than links and we were wasting an opportunity to establish a lasting relationship and drive people toward conversion.

People still can download those tools for free, but now we require them to set up a free account and log in to get the download links. This type of strategy helps us by...

  • giving some people the option to get a free auto-responder with the tools
  • allows us to remind people of the value of the free tools (which also increases perceived value)
  • allows us to cross-market the free extensions at the same time to increase the actual value of the user experience (more tools = more value)
  • puts a barrier to entry between us and the worst freeloaders (no more thousands of support emails from non-customers!!!!!!!!!!!!!)
  • gives us another chance to sell our premium services (on the download page)

There are lots of ways we could further enhance perceived value. Giving people the option of buying the tools for $100 each would really help a lot more people see the value in installing them for free. So many opportunities and ideas, yet so little time. ;)

Toward Relationship Marketing

As data continues to get commoditized and competition increases many savvy marketers are moving towards relationship marketing. Rather than selling right away people try to pull you into a sales funnel. The guys who only wrote pitchfest hawkish emails now have blogs. A blog is one effective way to help establish a relationship, but why not have 5 or 10 different conversion paths that lead to the desired goal?

The cool thing is that our current user experience (while still being far from perfect) looks and feels much better than it did when using the brute force pop up we tested for a few months. The experience is much more soft-sell and value driven while creating more conversions. Win win.

Appearing Transparent is Profitable, Being Transparent is Not

Jul 2nd

Are Microformats the Next Big Thing?

John Andrews has a great post about structured data & SEO. My take on the idea (for most businesses anyhow)?

It is an arbitrage play. If you are the first person in a space to do it really well and can parlay that into testimonial links and case studies that is great. But give it 5 years and the search engines will have sucked even more blood out of most businesses.

About marketing a while back I wrote that it is "packaging and the stuff that don't matter" because increasingly packaging is becoming one of the most important ways to create / build / add value.

Standards Based Structure Commoditizes Data

The more you structure your data in standard formats the more value you give away to the intermediary, which will display it all in their search results without giving you much value. Which will also make it easier for well funded competitors to steal your work - without attribution, of course. Rather than giving away tons of raw data it makes sense to put it in a format that is both branded and harder to copy without giving attribution - like an image with your logo on it.

People Steal

I recently saw a person try to promote a tool they made to me which was carrying an image that I made without giving attribution to me. That had a 0% chance of being successful without attribution. I saw another person push marketing one of our web scripts that he stole off of one of our site. Because of how we made the JavaScript accessible, we created more competition for ourselves. How much worse would that competition be if it was just raw verified data?

Where Radical Transparency Has Value

Some customers claim they want radical transparency, but being transparent rarely has any business value beyond

As Seth put it

Radical transparency often excites people because of the radical part (it’s new! it’s scary!) than the transparent part. Playing poker with your cards face up on the table might get you some attention at first, but in the long run it’s unlikely to help you win a lot of hands.

Given that, it is far more profitable to appear transparent than it is to actually be transparent.

Transparency as a Marketing Angle

Tim O'Reilly was excited to announce a new government transparency program that claimed "In making this data publicly available, we are providing unfettered access to investment performance to its true owners - the American people," but as I commented on his post

Nice claim in theory. And yet the Treasury and Federal Reserve didn't want to admit how they were spending our money AT ALL. They sat in congress with bogus "I don't recall" statements that would make Alberto Gonzales proud.

Transparency out front while brazen looting is occurring out back is sorta pointless. Its dishonest marketing.

Tim responded with "Applaud their efforts and help them, don't sit on the sidelines and complain. ... These guys aren't accepting the status quo. They are trying to change it." If you looked at the trillions of Dollars that were recently looted by the bankers you wouldn't notice any change, except for the fact that the US Dollar keeps losing value and is now worth change.

Are those bankers pushing for greater transparency? No. They are pushing in the opposite direction.

Once some of those career criminals in the banking system go to jail then I will start to applaud the government's efforts.

Creating Value vs Building a Business

As search engines continue to consume the web I think that trend of commoditization highlights the increasing importance of social networking & branding & building direct trust in the minds of prospective customers.

If the only way a person adds value is through creating perceived value then they are still miles ahead of the person creating tons of value and giving it all away.

Update:

Google Maps is now a leading real estate destination - overnight!

Copywriting guru Michael Fortin is more eloquent than I am, and recently published a related post titled Don’t Be Transparent, Be Authentic Instead.






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