Steve Balmer on Search Innovation

In the above interview Steve Balmer states that search innovation has slowed down over the past 5 years compared to the 5 years prior. While committing to pouring billions of Dollars into the search market, Steve Balmer does not think that search has kept up its rate of innovation. But this perception is actually a fib. A lie. One that Steve must tell himself AND the media in order to try to gain press coverage for Bing and justify what will amount to a very expensive competition in the search marketplace. And it is a lie the media mush push to be able to write about / hype THE NEXT GOOGLE!!!!!!

Search Innovation is Speeding Up

The reason I know that search keeps speeding up is that I write about it. We offer subscribers a monthly newsletter, have forums that we participate in daily, and blog about the latest developments in search. This past month I have done a week of traveling and 2 conferences, but I have absolutely struggled to keep up with the all the changes recently (in spite of closing our site off to new members). Frankly I am amazed at how Danny Sullivan is able to put conferences together and still keep up with everything!

To understand the search game you must first understand that Google is first and foremost a public relations driven company which sells itself as a technology company. This is precisely why they market their browser/operating system as a browser and not an operating system...to avoid the regulations on (and comparisons with) Microsoft.

Recently Googlers have felt threatened by the media, Bing, Twitter, Facebook, and Wolfram Alpha. You can see this by looking at how Matt Cutts posted a 30 day challenge not to use any Microsoft projects, by all the daily innovations and releases Google is offering, by their promotion of a vaporware micropayment system, and by reading the recent 5 part interview of Eric Schmidt, Udi Manber, Amit Singhal, Scott Huffman, and Matt Cutts they did with BusinessWeek to remind the world how innovative Google is.

Google has went as far as advertising their advanced search tips on many search queries and even SELLING SEARCH AS A LIFESTYLE!?!?!

Now some of the changes may not be noticeable to the average searcher because Google has become more refined over the years. But it does not mean that the market lacks innovation. I thought it would make sense to put a post together to highlight some of the ways search has changed so far this year.

Under the Hood Innovation

Google stated they plan to support their rel=canonical tag across domain names and let you set URL parameters for them to ignore.

A few months back Google announced their new caffeine index, but some of the algorithmic changes are far more subtle. When Patrick Altoft tried to dissect some of the ideas behind the Vince/brand update he quoted this killer post from the always impressive Tedster

Here's my current idea. I believe that Google's staff contains more statisticians than any other specialty. The algo is, more and more, driven by statistics and probability. These statisticians watch query data as well as backlink data. That's what jumped out at me while re-reading this patent: backlinks PLUS queries.
....
This is my current brainstorming area, and it's why I recommend the idea of ATTRACTING backlinks more than "building" them. Backlinks alone cannot create a statistically correct footprint for a growing, thriving website. Even though such a "dummied-up" impression has been a working tool for improved ranking in the past, it's a tool whose future is getting more and more cloudy.

Creating a legitimate looking link profile by doing nothing but push marketing keeps getting harder as Google refines what they are looking for as a natural link building profile based on better statistics. If your link building efforts revolve around public relations, publicity, and brand then you are good to go. But if they are mechanical and aggressive you can use fairly similar link building strategies on 2 parallel sites and see one rank while the next is stuck somewhere in Google hell. From the above linked 5 Googler interviews you can see how Google is constantly working to improve localization, word relationships, indexing, and spam detection. QDF + universal search further complicate the search results.

Filtering Information

Beyond the core ranking algorithms there are also new ways to sort through information.

Google has added many options / filters / lenses to view search through, including links to...

• vertical databases (like Videos, News, Blogs, Books, Forums, and Reviews)
• results within specific time frames
• ways to navigate related searches (via Related searches, Wonder wheel, Timeline)
• additional filters (like displaying images from the page, more text, fewer or greater shopping sites)

Thinking through those type of filters with universal search in mind (and Google's new caffeine index in place) you could see how Google can further alter the search landscape on a query by query basis. Give me something fresh, give me old trusted stuff, give me at least 1 authoritative review, etc. In select markets this can be further refined by editorial partnerships like the health onebox.

Here are recent SEO results. And when authoritative SEO related sites (like SEO Book, Search Engine Land, SEOMoz, SE Roundtable, Search Engine Journal, Search Engine Watch, etc.) publish fresh posts they quickly get mixed into the top 10 to 20 search results (similarly to how Google News results get mixed in). As Google tests mixing in different types of results they can track user response on a per query basis, and bucket different related keywords together.

Inspired User Interface Innovation

A lot of the innovations come from competing search services. Consider that

• Google's SearchWiki (and SideWiki) were heavily inspired by Wikia Search.
• Yahoo! implemented search suggestion features widely before Google did.
• Ask 3D pushed about a lot of the universal search sort of ideas.
• Google tried to clone Youtube, right up until they were forced to buy it.
• Bing launched a new visual search service.
• Wolfram Alpha forced Google to create and evolve the Google Squared service.
• Yahoo! SearchMonkey pushed microformats, which are now becoming more popular across competing search services.
• One of Microsoft's best Bing innovations was putting the ads closer to the organic search results - which was quickly copied by Google.

Single Listing? Double Listing? Triple Listing? Quadruple Listing?

In the past sometimes sites would be able to get a double listing and/or sitelinks. Recently I saw a quadruple listing

Google is better surfacing forum posts in search results, has tested displaying breadcrumb navigation in the search results, and is returning internal link anchor page-links directly in the search results.

Google has made results from site: searches extensible

Search Business Model Innovation

Paid search is so easy to grasp that Google's test case is LITERALLY a pet stick!

In spite of the ease of marketing Google is not happy leaving that as is.

Google is testing using machine learning algorithms (and current Google AdWords advertiser data!!!!!!!!!) to set flat rate search ad pricing for small local businesses. And they are rumored to be launching a LendingTree clone.

Google ***is*** the competition, and they keep taking more of the web for themselves.

They are also ramping up their ad exchange. Traditionally Google has tried to credit the last click with most of the value since they are the #1 search company. But brand advertisers buy branded display ads based on mushy feely impulses...and so search can't keep taking all the credit forever if Google wants to expand the online ad pie to become a $100 billion company. As display ad clickers fall off a cliff, Google is beginning to show view conversions (conversions where an ad was viewed but not click) to further justify fuzzy brand spend. Hey if they have ads on 80% of the WWW then you are going to think those ad views created some conversions, even if they were ignored.

It doesn't matter what regulations appear, advertisers feel the need to buy those ads because that is where the distribution is. Currently Google (and Facebook) have such domination over advertisers that they can mass ban them and shut them down overnight as desired, in spite of the economic climate.

There is going to be continued innovation in the online advertising space as marketers better test / recommend / track / explore / learn how to better automate blending ads and content.

Google is testing ads tied to location pages and product ads directly in the search results.

Further marketers are studying how ads sometimes sell something other than what they were created to sell, and there is research being done on ad fatigue and relevancy.

Media Innovation

Google has been buying maps marketshare through cross promotion, a fairly flexible API, collecting user data, and clever promotional tie ins with the likes of Monopoly. China might crack down on Baidu's music piracy, and Google has distribution deals to buy marketshare as long as China allows it to happen. Increasingly Google is procuring the source of record for a greater and greater number of classifications of information types. They are already pushing their power meter, have Sony distributing their browser, and patenting some types mobile consumer reviews. Alas everything is information!

Google is learning to read more content in new formats like AJAX and is getting better at spitting content back out via a quick view of PDFs and mobile printing devices.

Google has begun trying to tie search volumes to economic activity, with their economist claiming that the economy is improving. Others, like Kayak, have followed suit by sharing their data in an easy to reference format.

All this additional content creates more competition and lowers profit margins for web publishers. And affiliate marketing will continue to grow harder. Increasingly successful media is going to need to bake self-promotion in its core, and profitable media will become more of an interactive service.

Why Write a 5 Page Blog Post With ~80 Links in It?

3 reasons...

• to help me collect my thoughts and share them with you, our readers! :D
• to point out that anyone talking about a lack of innovation is search is speaking from ignorance, hyping public relations messaging to the media, and/or lying
• to help push to save Yahoo! Boss. By some measures it might be bigger than Bing AND it if it stays around it will help ensure that search keeps innovating at faster and faster rates with healthy market competition

Remember how the news media wanted Google to come riding to the rescue and save them, and their failing business model?

Well, Google might have found a way.

This should be of huge interest to anyone who produces content on the web.

IF

...it comes off.

Micropayments

Google is planning to roll out a system of micropayments within the next year. Micropayments, as the name implies, are small payments - a cent or even a fraction of a cent - and the idea is that micropayments can be used to pay for accessing web content.

Google sent a paid content proposal to the Newspaper Association of America outlining their ideas. Micropayments will be an extension of Google Checkout, Google's PayPal competitor.

While currently in the early planning stages, micropayments will be a payment vehicle available to both Google and non-Google properties within the next year,” Google wrote. “The idea is to allow viable payments of a penny to several dollars by aggregating purchases across merchants and over time.”

Micropayments are not a new idea, of course. People have been suggesting micropayments will be the next big thing for quite a while now. Jakob Neilsen got it rather wrong in 1998:

I predict that most sites that are not financed through traditional product sales will move to micropayments in less than two years. Users should be willing to pay, say, one cent per Web page in return for getting quality content and an optimal user experience with less intrusive ads. Once users pay for the pages, then they get to be the site's customers, and the site will design to satisfy the users' needs and not the advertisers' needs."

Will Google be the first company to make micropayments work? It remains to be seen, but if they do, this will be the biggest game-changer on the web since PPC.

The Decline Of News

The news industry have been howling as their outdated business model falls apart. Their days of running regional oligopolies are fast coming to end, eroded by the ubiquitous web and the low cost of online publishing. The media is fueled by advertising, and as their readership fragments, the value to advertisers drops.

But what happens if 100% of a newspapers revenue came directly their readership? Micropayments may make this possible.

The big question is: who would pay for the garbage the media serves up? Why should we pay for regurgitated press releases and stories about celebrities shopping expeditions?

Micropayments could help increase the quality of news. Paid news outlets, like STRATFOR charge $349 for annual membership. How can they do this? By providing a level of analysis and research you don't get from mainstream media. Clearly some people are prepared to pay for news that isn't driven by advertisers and the lowest common denominator.

However, the subscription price is still a barrier for most. But what if micropayments, by introducing economies of scale, made it possible to get quality news, analysis and content for a few cents a week? What happens when the price is so low you barely even notice you are paying it?

The scale of the web, plus the tiny charging increments, could be a game changer. And not just for news. This opportunity applies to anyone in the web content business.

How Would This Work?

Nielsen may have got the timing wrong, but he had some good ideas about how a micro-payment system should work:

A true micropayment system would operate invisibly and simply accumulate charges on the user's monthly bill without an explicit confirmation for every click. That's exactly how electricity bills and long-distance telephone bills work. True, people wouldn't make many long-distance calls if they first had to discuss the fee with an operator (though we certainly made calls back when we had to talk to a long-distance operator and acknowledge charges for each call). In any case, telephone companies now simply add up the calls and put them all on a single bill. Intellectually, you know that it costs money to use the phone and turn on a light, but if you want to talk to somebody, you pick up the phone. And if the room is too dark, you switch on the light. You don't go out to the meter every few minutes to check on your electricity bill.

A micro-payment system should be quite different from existing payment systems. You won't be asked to fill out your details each time. Rather, it would be as simple as a click of a button, and tracking and billing would happen in the background.

Google Extends Their Reach

With Adsense, Google cleverly figured out a way to click the ticket on content it didn't own or produce.

The problem with Adsense is that it works best when placed on content heavily geared towards commerce. Micropayments opens up a business model for other types of content, content that is not easily aligned with a commercial imperative.

Imagine the potential for high quality, non-commercial content. Imagine the potential for channels like YouTube. On demand television and movies for a few cents. With micropayments, the volume of content Google could click the ticket on gets much, much bigger.

But the big question remains....

Will users pay the price?

What do you think?

Poscript by Aaron: Clay Shirky published an article in 2003 about fame vs fortune & micropayments. And, while I have generally been skeptical about micropayments, we recently had an interesting thread about this topic in the forums that changed my perspectives of the topic.

Just before last week's SES conference Google announced the launch of their new caffeine infrastructure:

For the last several months, a large team of Googlers has been working on a secret project: a next-generation architecture for Google's web search. It's the first step in a process that will let us push the envelope on size, indexing speed, accuracy, comprehensiveness and other dimensions. The new infrastructure sits "under the hood" of Google's search engine, which means that most users won't notice a difference in search results. But web developers and power searchers might notice a few differences, so we're opening up a web developer preview to collect feedback.

In the new infrastructure so far I think there is...

• an increased weighting on domain authority & some authoritative tag type pages ranking (like Technorati tag pages + Facebook tag pages), as well as pages on sites like Scribd ranking for some long tail queries based mostly on domain authority and sorta spammy on page text
• perhaps slightly more weight on exact match domain names
• perhaps a bit better understanding of related words / synonyms
• tuning down some of the exposure for video & some universal search results

You can check out the new results here and CompareCaffeine.com offers side by side comparisons of new Google + old Google - similar to the recent blind search service which compared Google, Yahoo!, & Bing results.

As highlighted by Matt Cutts, the aim of the infrastructure change is to allow further evolution of search...so if you analyze the results a bunch now then what you are aiming for might look quite different than the search results which appear in November.

An article in The Register offers background info on Google Caffeine, and additional analysis has been done by David Naylor and Bill Hartzer.

This WMW thread mentions some relevant background on Google's approach to storage. In his post on the update John Andrews mentioned how smaller chunking of data could allow the algorithms to make SEO more challenging (or at least more holistic):

Smaller chunks means faster SERP generation…. and possibly more specific quality management (smaller more specific binning of URLs if desired) How this plays out for SEO is interesting now… and especially whether or not we will be able to influence various aspects independently from the whole.

The ROI on effective SEO campaigns is simply unbelievable, and Google is going to do everything in their power to diminish the ROI of algorithmically focused optimization efforts. As the cost of memory drops and the algorithms improve, the next couple years might separate the men from the boys in the SEO space. Those improvements will drive many SEO practitioners into parallel fields like niche publishing and public relations. 5 years ago was the perfect time to start building your empire. But starting today is far better than starting tomorrow.

In one of the more absurd public privacy invasions online, Google has announced they are going to use FICO scores to help advertisers target ads at consumers in different credit buckets.

I wonder if at some point in time if AdWords advertisers selling the scammy government grand & biz-op offers will get to use this data to target poor people with low credit scores. It only makes sense that Google would spin this positively stating that it is good for brand advertisers to find credit-worthy customers, which is the story that was marketed in the above linked piece:

Consumers with high FICO scores demonstrate some unique attributes that show they shop carefully for the best cards. For example, shoppers begin using search earlier in their application process, they use the term "best credit cards" at three times the rate of lower FICO shoppers, and they are more likely to use branded terms.

Consumers with high FICO scores use non-branded search terms more than branded -- approximately 60% of high FICO searchers. They tend to search on terms, such as "travel rewards," "low rate," and "balance transfer."

From a marketer's perspective this makes a lot of sense. Smart people who manage their credit well look for tangible benefits in their financial choices...they don't just blindly buy the brand.

The problem is that (so long as the current bankruptcy "reform" remains in tact and taxpayers bail out any banking losses) bankers have little to no incentive to reach people with good credit scores. People who pay their credit cards on time are seen as deadbeats while the least credit worth are the profitable market segment because they use credit ignorantly and accrue billions of dollars in unneeded fees every year:

Overall, we find that debt literacy is low: only about one-third of the population seems to comprehend interest compounding or the workings of credit cards. Even after controlling for demographics, we find a strong relationship between debt literacy and both financial experiences and debt loads. Specifically, individuals with lower levels of debt literacy tend to transact in high-cost manners, incurring higher fees and using high-cost borrowing. In applying our results to credit cards, we estimate that as much as one-third of the charges and fees paid by less knowledgeable individuals can be attributed to ignorance. The less knowledgeable also report that their debt loads are excessive or that they are unable to judge their debt position.

Bankers have historically hidden these fees in illegible 30+ page contracts, as mentioned by Elizabeth Warren

I teach contract law at Harvard Law School and I can't understand my credit card contract. I just can't. It's not designed to be read. Read the Government Accountability Office (GAO) study on this. The GAO looked at credit cards and they said: "Nobody can understand this stuff." Are you kidding me? And understand when you've got terms that say: "In effect, we'll charge anything we want any time we want for any reason or no reason at all," what's the point of reading it?

She later commented on the ideal credit card customer

Every credit card for a credit card company is like a lottery ticket. They're just waiting to see who's going to maybe stumble a little. Maybe get into trouble on a car loan. Maybe nothing at all except they just look vulnerable. They're just in the right zip code. They're just the right profile for people who won't be able to run any place else. And those are the ones you slam. Those are the ones you hit with the 29 percent interest rate, the 35 percent interest rate, the new fees. And then, because of course if you can't pay it, then you get hit with a fee for not paying or for paying late, for going over limit. And the game is afoot. With any luck at all from the credit card company's perspective, these people will become little annuities that will just keep generating profits for the credit card companies for months, for years, maybe forever.

The idea of only servicing legitimate debt needs of customers that can afford their credit card bills has made banking industry executives so angry that they are threatening hitting consumers with lots of bogus new "conveninece" fees:

Now Congress is moving to limit the penalties on riskier borrowers, who have become a prime source of billions of dollars in fee revenue for the industry. And to make up for lost income, the card companies are going after those people with sterling credit.

Banks are expected to look at reviving annual fees, curtailing cash-back and other rewards programs and charging interest immediately on a purchase instead of allowing a grace period of weeks, according to bank officials and trade groups.

This new consumer-credit profiling Google is offering will be far more profitable to use on the poor, the weak, the desperate, the ignorant, and the uneducated. In early research Lawrence Page and Sergey Brin stated

Since it is very difficult even for experts to evaluate search engines, search engine bias is particularly insidious. ... We believe the issue of advertising causes enough mixed incentives that it is crucial to have a competitive search engine that is transparent and in the academic realm.

So were they right back then? Or are the right now? They can't be both.

Update: Sandra from Google's PR team emailed me the following

I've included an outline of the research methodology below the body of this note. Please let me know if you have questions or need clarification on any of the below -- or anything else, for that matter.

Best,

Sandra

-----

* Compete conducted a clickstream analysis on their opt-in panel of 2 million US online consumers, to associate FICO score categories with sites in the Google Content Network.
o The analysis took a look at the online behavior of Compete's opt-in panelists who shopped for or applied for a credit card online between January and March 2009, for the 30 days prior to the application and/or research.
+ Compete, via a sister company that provides secure matching of certain characteristics (one of which is FICO scores) to anonymous/anonymized individuals in the Compete panel, segmented the opt-in panelists into one of three categories, based on their FICO score: Super Prime (720 and above), Prime (600 to 719), and Sub-Prime (below 600).
+ Individual scores and personally identifiable information were not used by Compete, nor were they received by Google.
o Google provided Compete with a list of all sites in the Google Content Network.
o Compete compared how panelists in each FICO band searched and where the panelists spent time on the GCN, and ranked each GCN site based on its ability to reach consumers in particular FICO score bands.
o The ranking/scores of the GCN sites were passed on to Google -- not any information about the credit scores of individuals.

There are a lot of parallels between Google AdWords and SEO, and a lot of the beginner mistakes are the same for both traffic acquisition strategies. I figured it would be worth outlining some of the most common ones to help save you money on your search engine marketing campaigns.

1. Weak Domain Name
2. All Search Traffic Driven to Homepage
3. No Link Building
4. All Links to the Homepage
5. No Link Anchor Text Variation
6. No Focus on Quality
7. Lacking On Page Optimization
8. No Site Structure
9. Site With No Value Add
10. Competitive Saturated Market With Inadequate Budget
11. Picking a Market for 1
12. Pick a Market Which Does Not Monetize
13. Over-Aggressive Monetization From Day 1
14. What Other Common SEM Errors do You See?

1. Weak Domain Name

Google AdWords

When I interviewed Perry Marshall about AdWords he recommended split testing URLs because the URL can and does have a major impact on your ad clickthrough rate.

Since Google factors click-through rate (CTR) into their quality scores, anything that influences CTR influences your click prices. And while competitors can and will steal your AdWords ad copy, they CAN'T steal your domain name.

SEO

There are many potential errors that can be made with domain names. Two of the more common errors are creating a domain name that is impossible to remember and creating a name that restricts expansion.

Recommendations

Some people feel the need to limit their domain name budget to $10, but it is a foolish strategy. Almost every piece of marketing you do will be influenced by your domain name. Your domain name has limited recurring costs associated with it, but can represent a huge recurring market advantage or disadvantage. Yeah for CreditCards.com, and boo for cheapest-online-apply-credit-cards-and-loans.info.

1. If you are using Google AdWords for a new product or a non-branded product then test clickthrough rates across multiple domain names.
2. Make sure your domain name allows you to expand as needed. This is sorta an error I made early on with this site...I had no idea how successful the site would become when I started it and did not anticipate us creating the #1 SEO training program back when I thought of selling an ebook.
3. Avoid names that are impossible to remember. If you intend to create something that is easy to market online and offline then your domain name must pass the phone test, which typically means avoiding hyphens & numbers. This is especially true if you are trying to build a big brand.
4. If you feel your company may expand internationally it is best to buy any matching domain extensions where you might intend to eventually do business.
5. Exact match domain names can create a big SEO advantage if you can afford them - since some engines may give them a relevancy boost and your domain name influences the anchor text people use when they link at your website.

2. All Search Traffic Driven to Homepage

Google AdWords

1 page can only be relevant for a certain sector of search queries. In an efficient market anyone who directs all traffic to the homepage will lose a lot of money.

Every additional click you force users to make has some amount of slippage. When using Google AdWords / pay per click marketing a small change in conversion rates can be the difference between sustained profits and sustained losses.

SEO

It is sorta impossible to make a page "optimized" for hundreds or thousands of popular keywords because eventually after you add enough different keywords in the page copy it ends up reading bad and it harms conversion rates.

With SEO efforts mis-directing traffic is not as obvious as it is with AdWords because you don't have to pay for every click. But giving users an irrelevant experience still means you are throwing money away and only operating at a fraction of your potential.

Recommendations

With the prevalence of Google (and web search in general) every page of your site is the front door. We navigate via search. So map out keywords against URLs and try to offer the most relevant user experience whenever possible.

Observe how we map out core keywords, variations, and modifiers.

Some Google AdWords advertisers take perceived relevancy one step further and use the search query to help define the page content through the use of keyword insertion into their page copy and/or altering the page based on geographic information based on your computer's IP address.

3. No Link Building

Google AdWords

The equivalent of links to AdWords is keywords in your AdWords account. If you only advertise on 1 or 2 keywords you miss out on a large stream of relevant traffic.

SEO

If you build it they will come is simply not true in the search game. If it was easy to rank for competitive keywords without links then few companies would buy AdWords ads. You can't typically rank a new site until you have some level of awareness. Search engines follow people. Links are seen as votes of trust.

Recommendations

With AdWords, don't just bid on 1 keyword. Look for additional relevant variations that make sense. If you don't mind splashing out $50 you can also look at what competing sites are advertising on using SEM Rush, Keyword Spy, SpyFu, and/or KeyCompete. There are so many new tools popping up in this market segment that I have not had the time to review them all.

For SEO, download SEO for Firefox and the SEO Toolbar and look at how many links competing sites have and how many domain names those links come from. You will likely need to build some number of links in the range of what competing sites have (from a similar set of sites) to rank. Today is the perfect day to start building links. And yesterday was even better. ;)

4. All Links to the Homepage

Google AdWords

Since you are buying the links from the search engines based on keyword, this problem would be corrected by solving issue #2.

SEO

A variation of the above thinking. Most quality sites have useful content somewhere that people link to editorially. If all your links point at the homepage then that means you are not using anchor text from external links to boost your internal page ranks. In most markets that creates a big loss considering that some of those pages would get a lot of traffic with just a few more deep links which would yield higher rankings.

Recommendations

Search is a winner take most market. Analyze your traffic patterns, rankings, and target keywords to ensure you are promoting key pages. Look at top competing sites and keyword ranking values to gain additional insights.

Create linkworthy content that people would want to link at and push market it. The objective (vs self-interested) viewpoint here is "if you did not own your site what is unique about it that would make you want to visit it every week and/or recommend it to a friend?"

5. No Link Anchor Text Variation (or AdWords Ad Copy Variation)

Google AdWords

You shouldn't use the exact same ad copy on all of your keywords. You should segment it out by trying to understand user demand and create compelling advertising text that is relevant to the search query, relevant to the user demand, and relevant to your landing page. If you use a single generic boilerplate ad copy you are loosing a lot of money because your ad will not look as relevant as some of the top competing ads.

SEO

When people link to things naturally there tends to be some variation involved. If all your inbound links say "my keywords" then that can look suspicious...particularly if you are buying lots of links.

Recommendations

With AdWords, at a minimum you would want to use dynamic keyword insertion. But if you sell a lot of different products then you should try to find a way to match up small groups of relevant keywords against a set of ad copy. Make your core keywords stand out on their own, and be willing to be somewhat less descriptive with low search volume backfill keywords.

With SEO you should try to mix up your link anchor text when you are manually building links. If you create original compelling content that people want to link at (and push market it to the right audience) then that will also pull in natural anchor text.

6. No Focus on Quality

Google AdWords

Some advertisers are compelled to go after "cheap" clicks. But some of the more expensive keywords are expensive because they are associated with significant and valuable consumer demand.

SEO

Google algorithms estimate the probability of a new site being quality or low quality. If you start off with 2,000+ "free" directory links you align your site with sites that are often of lower quality. Similarly, if you try to promote watered down or average content then few people will be receptive to those efforts.

Recommendations

There is nothing wrong with buying cheap traffic, but make sure you track the business value you get from that traffic. If you buy "cheap" traffic from 3rd tier ad networks and/or keywords without any commercial intent those will not build your business anywhere near as well as developing a solid traffic stream from valuable industry keywords on leading search engines.

Start your link building efforts with quality links first. As your site gets more trusted you can fill in some lower quality links as well, but you don't want to do it first, and you don't want to do it in bulk.

When you decide to do push marketing for link building make sure the content you are promoting is unique, original, useful, compelling, & citation-worthy.

7. Lacking On Page Optimization

Google AdWords

Quality user experience and usability are crucial to converting well. When users come from search to your site they are switching channels. The more cues you can give them that they are in the right place (like relevant page headings + navigation) the higher your conversion rates and visitor value should be.

SEO

For really competitive queries links are crucial, but you can rank for many less competitive keywords and keyword variations without lots of links (because there is much less competition for those keywords). And even if you have lots of links, it is still typically hard to rank for keyword phrases that are not in your page copy.

Recommendations

With Google AdWords you can reach many of the stray searchers by using a combination of phrase match and broad match, and then using negative match to filter out irrelevant searches.

For every person searching for "seo" or "sem" there are probably 10 people searching for more obscure queries like "how do I promote my business on Google?" You can see how our page about link building ranks for hundreds of related keywords.

This is probably the single most powerful graphic explaination of why having lots of useful on-page content:

With SEO you can reach a lot of the searchers by using alternate word forms, alternate word orders, related phrases, and keyword modifiers in your content.

8. No Site Structure

Google AdWords

If your AdWords ad campaigns are not well organized then you are likely losing money. A strong site structure also helps ensure that your AdWords account has a strong structure, which can aid profitability.

SEO

If your site is not structured well then...

• navigation will likely be hard or confusing
• some of your key pages may not get much of your link authority
• some of your unimportant pages may accumulate a lot of your link authority

Recommendations

Most successful websites have a structure in which key pages which are mapped out against user demand and search volume.

• Create separate AdWords campaigns based on goals. Perhaps you can have campaigns for brand related searches, seasonal offers, public relations, campaigns that are based on ROI metrics, and even backfill campaigns like misspellings.
• Some content management systems (CMS) have major errors with duplicate content and site structure issues. A review of that topic is beyond the scope of this article, but search for the name of the CMS and SEO prior to implementing it to verify there are no serious issues and/or that there are easy fixes on the market.
• Set up site categories and sub-categories that are aligned against the keywords people use to search for your products and services.
• If you blog (or publish content regularly) reference older related materials when relevant.
• If your content is in a database you can use automated contextual links to help fix some site structural issues and redistribute PageRank down toward lower pages in your site structure.

9. Site With No Value Add

Google AdWords

If your site does not add much value it can be quite hard to sustain profit margins in the AdWords market. Affiliates routinely copy the work of each other and drive up click prices, which kills profit margins.

SEO

My very first profitable website was a no value add website that I got some spammy links for. The site did make thousands of dollars in affiliate commissions (a gift from God at the time), but that income was only made ***because*** I was a bad speller and misspelled some casino brand names back before search engines integrated spell correcting aggressivley. Such a site would simply go nowhere today.

Google often considers sites without value add to be unneeded duplication and/or spam. If you ever get a chance to read some of the Google Remote Quality Rater Documents you can see what Google believes is associated with "value add."

Recommendations

• In competitive AdWords markets competing businesses are forced to keep improving their business processes and efficiencies to be able to afford increasing bids from competing businesses.
• If you have a lower lifetime customer value than competing businesses you may eventually be driven out of the market.
• With some seedy affiliate offers in many cases the only people with sustained profit margins are basically those who are surprisingly sleazier than the rest of the market or those who are barely breaking even themselves, but are using their blog to build a downstream of followers that they get commissions from.
• Some (perhaps most?) affiliate networks ***will*** shave your commissions AND steal your keyword list if you send them the data.
• If you don't have a value add and want to play catch up in a competitive SEO market you need to have some sort of competitive advantage (be it nepotism, domain name, market experience, etc.).
• Making paid things freely available, creating useful software or tools, and having deeper & better editorial are 3 great ways to add value and win marketshare.

10. Competitive Saturated Market With Inadequate Budget

Google AdWords

In some markets it is hard to compete buying traffic without having a strong brand. If Geico pays Google $30 a click, but only pays affiliates $10 per lead then there is no way an affiliate can compete against Geico on the core industry keywords like auto insurance.

SEO

Want to rank for hotels and insurance? Me too. But I am uncertain if I have the resources to do it from scratch in a lasting manner given the algorithmic trends promoting well branded business and how corporations are increasing their SEO budgets.

Recommendations

• Have big ideas, but set reasonable goals, and measure progress.
• Do the math in advanced to estimate how much you can afford to pay for a click.
• Pick and chose your spots in the Google AdWords market. If after you do significant testing and optimization a word is still losing money consider dropping it.
• Try to pick a market position you feel you can dominate. The #20 result for "insurance" produces traffic worth ~ $0. The #2 or #3 result for "pet insurance" yields much more.
• Make at least 1 incremental improvement to your web business everyday.
• Aggressively re-invest early profits into growing your website and building a moat.

11. Picking a Market for 1

Google AdWords & SEO

If there is no demand for an idea then it is quite hard to create demand through search engine marketing. Search engine marketing works best when it captures existing demand.

Recommendations

• Keyword research tools can give you estimates of search volume.
• Since AdWords is so much quicker and easier to test than building a full site and implementing an SEO campaign, you can use AdWords to test market demand and interest for an offer before spending money building and marketing a full website.
• It can be good to be out front of trends (as one of the easiest ways to win a market is to be the first person in it), but just as easily you can go after an established high money market with your own original spin or angle.

12. Pick a Market Which Does Not Monetize

Google AdWords

If similar competing business models have much higher visitor value you may have to change your business model to compete. Some low earning business models might simply be precluded from participating in the AdWords market in a meaningful way.

SEO

There is nothing wrong with building a site about a topic you are passionate about and interested in without knowing how well it will monetize, but if you are trying to build a business you should pick something with a high enough visitor value to create enough profit potential to make it worth the time and money investment.

Recommendations

If you are planning on participating in the AdWords market, but have a low margin business then you should look for ways to increase profit margins, customer order size, and lifetime customer value.

If you run an editorial site it can be a good idea to under-monetize off the start to build market momentum without people viewing you as a competitor, but it can be hard to bolt on a business model if you have spent a lot of time servicing the wrong market segments.

13. Over-Aggressive Monetization From Day 1

Google AdWords

If you are buying traffic there is no problem with trying to monetize it. But most website visitors will not convert.

SEO

Sell in line text links & have pop ups? Is ever other post an affiliate link? If so, why would anyone want to subscribe to an ad stream when there are many useful alternatives to look at?

Recommendations

• Since most website visitors will not convert to paying customers on the first visit, you should look to establish a relationship with them by giving them a free offer and/or some reason to come back to your website. You can see the offer we make at the bottom of our pages and on our join now page.
• Existing leading trusted sites that have built up a following benefit from cumulative advantage. If your site is brand new and driven by editorial content it is a good idea to give away more value than you capture. Under-monetize until you build enough market momentum to make your rankings stick even when you do monetize.
• Consider monetizing some areas of your site more aggressively while not monetizing other sectors of your site, but instead using them for public relations and link building.

14. What Other Common SEM Errors do You See?