Bundling & Selling Content

Jan 26th

The WSJ let the "our content will be free" story spread for months to generate public relations related coverage and to misdirect competitors before announcing that they are going to keep their subscription service:

Mr. Murdoch made his latest comments at the World Economic Forum in Davos, Switzerland, in answering a question. "We are going to greatly expand and improve the free part of The Wall Street Journal online, but there will still be a strong offering" for subscribers, he said. "The really special things will still be a subscription service, and, sorry to tell you, probably more expensive."

The Wall Street Journal has enough trust, connections, and signifigance to keep charging for their best stuff.

Many other websites do to, but as exclusive content rather than part of a package. Bundling packages of similar content channels (like blog feeds) will not work for the following reasons:

  • there is already virtually an unlimited amount of competition that is free
  • the free content plays an important role in making it easy to subscribe
  • Easy subscriptions provies lots of subscribers, social proof of value, and limited risk to subscribers. From those, cumulative advantage kicks in.
  • Free content cuts marketing costs to ~ $0.
  • People hate micropayments.
  • Taste is personal. Some people who like sites similar to this one absolutely despise me. And the other way around is true.
  • The incremental cost of having more customers means that you need to charge more than $1 if you are going to establish a sustainable relationship with them.

Illegal & Illicit vs Who's Getting Paid?

Jan 26th

Central hubs on the web fight off manipulation to keep their status and profit margins in tact. A side effect of this war on control over information access is the butchering of the English language.

Digg is Illegal?

Digg's CEO Jay Adelson said:

I'm sure there could be blackmailers out there. We absolutely know that every single day, people try to game our system. Users are involved in illegal or inappropriate activities all the time. They try to set up fake accounts to promote a story. The thing is, we make changes to our algorithm on a regular basis. We plan for that.

Notice how he put illegal and inappropriate right next to each other, as to equate them. This comes from the same company that published this:

We had to decide whether to remove stories containing a single code based on a cease and desist declaration. We had to make a call, and in our desire to avoid a scenario where Digg would be interrupted or shut down, we decided to comply and remove the stories with the code.

But now, after seeing hundreds of stories and reading thousands of comments, you’ve made it clear. You’d rather see Digg go down fighting than bow down to a bigger company. We hear you, and effective immediately we won’t delete stories or comments containing the code and will deal with whatever the consequences might be.

If we lose, then what the hell, at least we died trying.

Sure you can buy votes on Digg, and they arbitrarily ban websites. But does controlling a bunch of worthless traffic give them the right to butcher language to push their business objectives?

Google is Illicit?

Michael Gray's continued debate about the war on links spurred on additional conversation.

Why is the Yahoo! Directory Considered a Legitimate Link Buy?

In addition to what Jim said, I also believe the following play a role:

  • They predate Google.
  • Google needs some sort of baseline.
  • The directory business model is horrifically inefficient and poses no risk to Google's market dominence. (Yahoo! demoted it in favor of Yahoo! Answers. Even the Google Directory, a DMOZ clone, has a higher PageRank than the Yahoo! Directory does.)
  • Few other sites are comparable to the Yahoo! Directory (especially after the Google directory purge of 2007), so it is not a technique that can't be easily and profitably be replicated like paying for reviews.

The truth is independent link sellers often exercise more control than directory editors do.

The entire Business.com directory of over 65,000 categories is managed by 6 editors (source). How could they possibly review stuff as well as you or I do? They can't. But if we all do our business in a direct to direct exchange fashion the central networks and search engines do not get a cut of the action.

Why Google is Different than Digg

Unlike Digg users looking to waste time, searchers have real targeted intent and real value. In response to Michael Gray's post Danny Sullivan said:

But if he wants to stand up to Google, take the lead and block him from crawling his site -- and encourage others to do the same. ... No one has a right to Google traffic. Follow the rules, as stupid as they are, if you want it. If don't like the rules, sure, complain about them -- but don't argue they're robbing you of anything that is supposedly "yours."

But unplugging from Google is not as simple as blocking them in robots.txt. They can still pay others to steal your work and wrap it in their ads.

They change the guidelines on an as needed basis (use nofollow or else), apply them unevenly (why is TLA penalized when TextLinkBrokers still ranks?), and if they don't like you they can penalize other businesses associated with you.

Michael pointed out that the Google's Webmaster Guidelines butcher the word illicit. In response Danny wrote:

Michael, illicit as used on the Google Webmaster Guildelines page is defined by however Google wants to define it -- in that case, doing stuff against the guidelines.

When the networks screw people over it is the fault of "users" or "the algorithm," but when the central networks do not like what we do we are "criminals performing illicit acts."

You know what is illicit? Adultery. And Google ads recommend it.

Recently Google has been more than fair to me, but if they want to use the language they are using to try to control others, they need to clean up their ad network. Just because an ad has a high CPC and gets a high CTR does not mean that it is not immoral or illegal. Plenty of people commit crime.

Google Local Becomes a Destination

Jan 25th

As mentioned on SearchEngineLand, the Google Local onebox may now include up to 10 links in it. The increase from 3 to 10 results was allegedly due to usability testing, but them using text smaller than the rest of the text on the search results doesn't really conform to good usability standards either.

Start your search on Google

Clickthrough to a Google map

Clickthrough to the top review site there - still get Google maps

While Google is playing catch up maps will remain open and free. Google Video lost to YouTube because of the viral nature of YouTube. And that cost Google $1.65 billion. Google will not make the same mistake with maps and local.

Most local plays are not viral, and those which have developer platforms limit usage. In a few years Yahoo! will be wishing they begged people to spread that data far and wide to build a leadership position in the market, which is what Google will do via syndication.

If Google can drive a lot of traffic to their local listings and start encouraging user reviews that gives them another way to keep users on the Google network and monetize the search results.

Self Investment 101: Are You Measuring OPPORTUNITY Cost?

Jan 24th

When you evaluate the actual opportunity cost of business opportunities, most client relationships, equity stake deals, and other partnership opportunities fall short of what you could do on your own. The only ways it works out is if their is a symbiotic relationship through different approaches that balance out each other's shortcomings, or if you can learn something from working with them.

Problems With Many Opportunities

  • Unwilling Clients: Many clients are unwilling to change their sites to add unique content or value to them.
  • Employee / Slave Wage: Work for equity stake partnerships where the partner provides the domain name and you do everything else are both lopsided and useless.
    • At any time the partner with lots of domains can decide to screw up the project you are working on together, and has 0 time investment and limited capital risk by only putting one or a few domains into the partnership.
    • 6 months or a year after working with you they can take all the knowledge you spent years learning and apply it to their more valuable names while giving you nothing for teaching them everything you know. They were not teaching you how to buy domains why they were accumulating them for years. Why give all that knowledge up for a slice of a slice of a slice?
    • Buy an alternative average quality domain and keep all the equity. Build it up with sweat equity and learn your market. Buy great domain names when you can afford them.
  • Follow the Crowd: Many marketers try to saturate a field with affiliates marketing their products and teach affiliates how to market that same product as a piece of the product that is sold. The margins on those opportunities get compressed with each additional competitor you sell that product to.
    • Many marketers show stats out of context, use meaningless sample sizes, and/or lie about the hows and whys.
    • People hype opportunities long after they no longer exist because they are addicted to the easy profits still rolling in from old work building out an affiliate network.

Are You Moving Up the Value Chain?

I am not against any of the above models as a starting point, as everyone has to start from somewhere. But if you....

  • love business
  • love what you are doing
  • want to create a sustainable business
  • can afford short term risk for long term stability

...you need to build equity from your work, and have a controlling stake in the outcome. If it sounds to risky to change then at least start building a site for yourself in your spare time.

What If? ...

Sure it would have been nice to have been an early programmer at Google, but for every Google there are thousands of market losers. Investing in yourself is the best investment you can ever make, and you one have to be right once.

What happened if you invested in Google a month ago? It seems those who just bought into that market hype just lost a couple dollars. Will Google go back up? Most likely. Will they increase in value at a rate as quickly as you can? Not likely.

SEO Kaleidoscope: Exploring the various facets of search engine optimization

Jan 16th

Guest Post by Hugo Guzman

Here’s the thing about SEO. Everybody thinks they’re an expert.

From the greenhorn working out of their (or their parents’) garage, to the recent college grad working in the marketing department of Fortune 500 corporation, to the seasoned and often burned-out veteran working at a name brand interactive agency, there are literally hundreds if not thousands of “search engine optimization experts” both in U.S. and the world at large.

And the reality is that very few of them really understand what SEO is all about. Sure, a lot of people know what keyword research is, or how to mine for link targets. But true optimization goes much deeper than that standard set of deliverables.

I currently work for one of those brand name interactive agencies, Zeta Interactive, and if there’s one thing I’ve come away with from my experience in this field it’s that finding and retaining good SEO help is not easy. Both from a site-side and link-building perspective, the workload is extremely heavy, often forcing SEO employees to choose between quality and timely delivery of recommendations. Furthermore, interactive agencies have a nasty habit of failing to take true ownership over the clients they manage and viewing SEO with a pair 2002 glasses, making the job of a truly scrupulous SEO purist extremely demoralizing at times. Add a high level of competitiveness among agencies and the result is a high level of turnover and relatively low number of truly qualified applicants. And did I mention the endless stream of meetings, calls, presentations, and contractual legwork?

When one of my colleagues ponders the cause of this most exasperating of working conditions, I always offer up a painfully simple response; all of the really great SEOs don’t need a day job.

What do I mean by that? Well I’ll tell you if you promise not to get offended. And before I do, please bear with me as I explain a little bit about my own SEO background.

In my former life, I was a salesman. I hated my job and was looking for a more fulfilling way to make a living. A client of mine turned me onto SEO back in 2002, explaining to me just how despite a six-figure advertising budget and a team of marketers and programmers he was simply unable to rank organically for the terms associated with his products. The client basically told me that if I could figure out how to do that for him, and others, that I could probably make a whole lot of money.

That sounded like a plan to me.

Fast-forward to 2004. After roughly two years of working for local search firms in Miami, taking on my fair share of small consulting clients, creating small personal web projects, and writing as much as I could in the various SEO discussion forums, I landed a gig in the marketing department of CBS Sportsline as an SEO coordinator (among other things). I felt like I had finally made the big time. No more foraging around for small business contracts with little monthly budget. No more collection calls to delinquent clients. I was now in charge of SEO for a Fortune 500 company. I should be on easy street from here on out, right?

Wrong.

I quickly found out that corporate bureaucracy and office politics prevented me from implementing many of the most cutting edge techniques that would have given sportsline.com the competitive advantage it needed to set itself apart in the organic space. Mind you, this lack of implementation wasn’t due to incompetence on my part, because I did so well at my position that I was quickly put in charge of cbsnews.com and various other related properties, and was retained by CBS Interactive as a consultant after resigning from my position in the summer of 2005. It was just that certain individuals within the organization were either too lazy or too shortsighted to understand the significance of SEO in terms of both traffic and brand awareness.

Ironically enough, many of Sportsline’s stiffest competitors, specifically in the uber-competitive “fantasy” sports genre, were non-corporate entities that were able outmaneuver corporate behemoths like CBS due to their SEO agility and vision.

So I got to thinking, “man, these independent site owners are working for themselves and whipping the pants off the big boys. Now that’s what SEO is all about!”

Mind you, all this time, I had been developing my own small sites and working feverishly to establish a presence in the major SEO communities such as WebmasterWorld, SEOchat, and several others. I wrote features for SEOchat, served as a consultant to various prominent entities (mostly in the paid link arena) and began to make connections with other bright SEO minds like Rand Fishkin and Aaron Wall.

Little did I know, that soon thereafter, guys like Rand and Aaron would make a permanent mark on the SEO community and establish themselves as true SEO rock stars.

I, on the other hand, chose to pursue an entrepreneurial opportunity of my own, accepting a position and a majority stake at a startup by the name of Real Football 365, Inc. Based on my experience at Sportsline, I figured that it would be easier to reach the Promised Land in the sports genre than the SEO genre. Plus I happen to absolutely love football!

It was while working on www.realfootball365.com that I learned what true SEO is all about. Not so much because of my efforts or results with that site (hell, that site still has plenty of SEO shortcomings) but because I gained access to dozens of successful site owners that make a comfortable living doing something that they love. And the best part is that they’re able to dominate competitors with much deeper pockets and diverse resources because of their know-how in the organic search space.

For my own part, I learned just how important a role content plays in SEO (hint: Google is telling the truth. Content is king). I also experienced the joy of working on something that was at least partially my own and the freedom of experimenting with the most radical of SEO-related initiatives.

Most importantly, from a business perspective, I learned the value of developing professional relationships with industry peers and how catering to your base of users, whether they be customers or readers, is a crucial SEO skill. In fact, there are many skills that seem vaguely related, or completely unrelated, to the SEO discipline but are in fact the centerpieces of a truly successful SEO campaign.

Aaron often discusses some these facets on this very blog, but I feel that many enterprising optimizers soon forget the lessons being offered up, giving into the ever-present allure of keywords, meta tags, and paid link considerations. I’m not saying that traditional SEO skills aren’t important, but rest assured that the difference between the average “SEO expert” and guys like Aaron does not lie in the ability to properly construct a title tag.

So what did I mean when I said that the great SEOs don’t need a day job? It’s simple. Great SEO requires an entrepreneurial spirit and an understanding of the underlying business and marketing considerations that will help a particular company be successful. Failing to understand this, whether you’re a garage marketer, in-house optimizer, or agency SEO, will ensure your continued failure to ascend from good to great.

I think about this every day as I juggle multiple clients at my agency gig up here in NYC and continue to consult for realfootball365.com from a distance, hoping that small site eventually pays the way to my early retirement and to that ultimate personal jump from good to great. In the meantime, I’ll remember my humble beginnings and remind my coworkers to avoid the explicit ineptitude that made me laugh at agency SEO proposals back when I was an in-house evaluator.

If you’re also in the business of “selling” SEO (whether to small businesses or large corporations) or have otherwise fallen short of my definition of great SEO, don’t be offended. Just continue to pay close attention to guys like Aaron and always remember that some of the greatest SEO minds of all time don’t even hang out in SEO hubs like Sphinn.com or WebmasterWorld. They’re busy implementing new business initiatives and raking in the spoils of their non-SEO related web empires.

Could Google Become the Ultimate Commodities Trading Platform?

Jan 12th

Many SEO Book readers have seen Google Trends before, but did you know that Google Checkout also has a trends feature? Google has those touch-points, email data (now with a mailing list feature), AdWords bid data, conversion data, analytics data, and search referral data.

A recent research paper reviewed Google's internal Prediction Markets [PDF]. Three key quotes from that research...

Biases

Google's prediction markets are reasonably efficient, but did exhibit four specific biases: an overpricing of favorites, short aversion, optimism, and an underpricing of extreme outcomes. New employees and inexperienced traders appear to suffer more from these biases, and as market participants gained experience over the course of our sample period, the biases become less pronounced.

Arbitrage opportunities

As further evidence of short aversion, in order book snapshots collected each time an order was placed, we found 1,747 instances where the bid prices of the securities in a particular market added to more than 1, implying an arbitrage opportunity (from buying a bundle of securities for $1 and then selling the components). In contrast, we found only 495 instances where the ask prices added to less than 1 (implying an arbitrage opportunity of buying the components of a bundle for less than $1 and then exchanging the bundle). The median duration of these arbitrage opportunities was about 2 minutes.

The effect of proximity

An important caveat to our results is that they tell us about information flows about prediction market subjects, many of which are ancillary to employees' main job. this may explain why physical proximity matters so much more than work relationships - if prediction market topics are lower-priority matters so much more than work relationships - if prediction market topics are lower-priority subjects on which to exchange information, then information exchange may require the opportunity for low-opportunity-cost communication created by physical proximity. Of course, introspection suggests that genuinely creative ideas often arise from such low-opportunity-cost communication. Google's frequent office moves and emphasis on product innovation may provide an ideal testing ground in which to better understand the creative process.

Google's new mailing lists wipes out the need for many boutique email services. They know what features they are going to roll out before anyone else does. And they have market moving data before others do. Google's AdSense is the fuel that drives web innovation. And they can decide at any time if a competing service is no longer viable to push it toward its demise.

Virgin real-time data + arbitrage identification algorithms + understanding investor flaws + algorithms to target mental flaws + direct and indirect market influence = $

As I see it, competitive forces between traditional publishers, market saturation from the bottom, and market influence from the likes of data hoarding companies like Google are going to quickly commoditize anything that is sold as information. To survive you need emotional touch-points that consumers share.

A friend of mine was a leading affiliate for an information product, selling over $300,000 worth of someone else's service. How did they reward him? They cloned his sales channel and killed his business model. Everything that is not a memory, brand, or experience is becoming a commodity. What prevents you or I from becoming a commodity?

You become what you surround yourself with, and when you push out you attract the right people or the wrong people. Threadwatch, for example, attracted the wrong people, or perhaps the wrong mood and tone from the right people. But you could also engineer the silicon valley in your industry if you work hard enough.

In the information age, where marketers

  • have granular controls
  • can remain anonymous
  • can market brands in minutes
  • leverage reverse billing fraud and computer destroying viruses
  • can distance themselves from the fraud via affiliate programs or pushing blame on algorithms

there are a lot of scams to be wary of. Especially when there is so much information being produced to where content is published in biased sound-byte format to whore for attention. The stakes for calling someone out are big, because you need attention to profit, and unfortunately, the structure of the web has changed:

Google and it's copy-tition were designed 10 years ago. But the web has changed significantly in the past decade. Google was built to index a web that no longer exists... a web where people still engaged in social linking behavior, for one thing.

But there are lots of experts who keep learning and change with the markets. Some people give because they like to learn and they are not driven by short term profits. Teach a man to fish, etc.

Each day we chose who we want to listen to, who we want to be like, who we want to like us, and why we want them to like us. Those relationships are the only thing that prevents us from becoming commodities.

"You're lucky in life if you have the right heroes. I advise all of you, to the extent that you can, pick out a few heroes. There's nothing like the right ones." - Warren Buffet

My web heroes thusfar are Tim Berners-Lee and Seth Godin. Who are yours?

The Difference Between Selling Something and Giving it Away

Jan 5th

I think these two comments do a nice job of showing the difference between how people perceive something they paid for and something they got for free. If people do not have a tangible opportunity cost they often tend not to respect or value the product or service.

Compare these side by side reviews:

  • the person who bought it thought it was one of the best ebooks they ever purchased.
  • the person who won a free copy thought it was dry, above their head, and has 0 respect for copyright, offering to trade it

To build up publicity and mindshare you have to give away value, but the same product often has a vastly different perceived value based on price point and how they got it. It is so hard to win marketshare by lowering price, but easy to win marketshare by increasing (real and perceived) value.

Many Big SEO Firms Make Chicken Scratch

Jan 2nd

I recently got a copy of AdAge's year in review. Since the 2001 web bust almost every job field in advertising is flat or down, with the exception of a sharp growth in the number of people working as marketing consultants. AdAge also listed the top 20 search marketing firms. I think the 2006 numbers for the 20th firm had like 5 million in revenues with something like 260 employees. Some companies may not want to be on such a list for competitive reasons, but the companies on the list are likely rounding up on the numbers and counting whatever they can as revenue. That comes out to revenues of less than $20,000 per employee, which stinks when you consider that if you deliver any real value to the clients and are growing your business some of that spend needs to go into

  • doing market research
  • buying PPC ads
  • marketing your own consulting business
  • office related overhead
  • employee benefits
  • travel
  • taxes
  • creating custom software
  • buying links
  • etc.

Some of these companies have been around for 10 years and have CEOs who go to 20 or 30 conferences a year. I have been on the web less than 5 years and am already getting burned out on conferences. I could not imagine going to that many conferences when we have kids. And none of these companies made as much per employee as I do. Even my wife, who is still quite new to the web, is doing far better than these firms are at producing return. I am afraid that she might be beating me come this time next year. Gulp :)

The same day I read AdAge, another magazine about SEO came in that I do not remember subscribing to. Out of the whole magazine, I only saw 2 names I even recognized. I think many of the people who wrote articles also bought ads from the same site. Along with the magazine was an offer for an SEO contest where you pay a $5,000 entry fee, with the promise that the winner will be shopped to CIOs of fortune 500 companies.

  • First off, what firm is going to pay $5,000 to enter a contest?
  • Second, what client worth having is going to want to pay consultant rates only to have have third parties looking over their marketing? I have consulted some fortune 500s, and I can tell you that some of the ideas proposed by them and some of the ideas I proposed might not look pretty to third parties. If something works only because it is exclusive then where is the value in sharing it?
  • Third, what fortune 500 company that has not got into search yet is going to be impressed by some arbitrary paid award? And which of them got to the size of a fortune 500 company while moving that slowly on a large market (like search) without being the type of company that would research the background of such an award?

My partners and I are quite selective with what clients we are willing to take on, and we price toward the high end based on our brand strength and experience, but in most cases we only get a fraction of a fraction of the value created. I do not think that the SEO market is bleak though, I just think that companies who believe in it ultimately bring it in house, and after they have an in house team there is only so much they can pay external consultants before the competency of the in house team is questioned.

To appreciate how many people have an in house SEO team, even a search engine tried hiring me a while back, but that would have been a big pay cut. And I can not tell you how many times I have seen a mainstream media company write an article trashing SEO only to have someone from their in house SEO team send me an SEO question via email a week later.

As marketers we have to keep moving ourselves up the value chain. There is only so much value you can provide as a third party consultant. Adding 100 extra employees means that you are adding bulk workers for automation, but the best marketing can not be automated. And if you want scale it pays much better just to own your own site and network. Give me 200 SEOs (or maybe just 5 of them), a designer, a programmer, a few writers, and 5 years, and I should be able to create a BankRate, Monster.com, or a WebMD in whatever markets I aggressively pursue. And, according to the market, that pays much better than consulting work does.

Wal Mart SEO Services

Dec 27th

Anyone surprised that Sam's Club offers SEO services?

I think I am going to fight back by selling Chinese made US flags for 3 cents each. :)

How to Save Over $1,000 on Next April's Tax Bill

Dec 27th

The year is almost out, and tax time is just around the corner. Here are some tips for SEOs and web marketers on how to lower your income by increasing your expenses.

  • Donate to Charity - want to do some good? Why not donate some cash to a good charity?
  • Domain registration - make sure your domains are registered for at least 5 years.
  • Buy a better name - does your domain name suck? Now is the perfect time to buy a better one.
  • Hosting - have hosting bills coming up soon? Pay them early.
  • Directory registration - if any of your good sites are not yet listed in BOTW, Business.com, JoeAnt, or the Yahoo! Directory then submit before the year is out
  • Yahoo! Search Marketing - if you are a big user of Yahoo Search Marketing you can pay a few thousand extra in advance
  • Affiliates (& other Marketing Costs) - do you have payments that are typically done on the first of the month? Consider paying them early.
  • Website design & custom programming - need new features or a fresh look to take your website to the next level? Make that down payment made in the next couple days.
  • Software & tools - thinking about trying out a piece of software? Now is a great time to buy.
  • Sell loser stocks - did you buy CountryWide at $45 earlier this year? Get the writedown you deserve.

What are your best tax tips?

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