Ads Are Content: It Doesn't Pay to Separate Church and State

Aug 20th

Any independent webmaster who has been making good money on the web for a few years has realized that blending ads in content, or distributing ads as content, is much more profitable than a clean separation of church and state. Jakob Nielson recently wrote about usability research showing that people ignore ads unless they look like content and are in the content area of the page. Once a publisher has enough distribution they claim it is unethical to blend content and ads, but if you look close enough at the publisher and advertiser relationships there are overlaps in virtually every category and on every site. There are numerous well known sites in the search space that would never give me any exposure until AFTER I bought ads at their site, which mentioned me regularly after my ad buy.

Here are a few examples of how ads influence editorial:

Some advertisers get mentioned just because they advertise a lot, while many publishers create content around high profit niches, and others organize their editorial content based on votes and usage data that can be bought (indirectly) through their ad network (think StumbleUpon and Google AdWords).

If your solution to the issue of low profit margins in publishing is to aggressively blend low value ads then you are eventually going to fail. As a publisher then there are at least 7 major ways to compete against others who are practicing and profiting from the blend, without being labeled as unethical, or undermining your own growth potential:

  • branding & positioning: create a brand or service that sounds informational and content-like even though it is an ad (think Bankrate, which likely pays virtually nothing to syndicate their ads as content to many major newspapers)

  • free samples: much like Bankrate syndicates information to newspapers you can also allow people to access a lot of value for free, then charge for a deeper access (think Compete.com profiles and their Search Analytics product)
  • segregate: keep your main content stream free of ads, build authority, and create an offers section on your site
  • be pure: don't publish any ads, wait until you have a strong brand, and then launch a better business model than competing channels
  • indirect revenues: use your site to build mindshare, brand awareness, status, and expertise. then cash in on that via indirect revenue streams
  • move yourself up the value chain: instead of selling AdSense or similar related ads, sell one of your own products and services. you can typically place these ads in-line without as much scrutiny or brand damage as blending someone else's ads in your content (see below)
  • free user content: if you can create a platform and rule-set that allows others to build value on your idea while drawing enough of an audience to sort signal from noise you can profit heavily from that (think forums, Technorati tags, Yahoo! Answers, Digg, or Google)

Do you have any additional ideas for profiting from integration without being labeled as unethical?

Question Copyright Video

Aug 14th

A friend recently sent me a link to this Google Video about the history of copyright law, where Karl Fogel, of Question Copyright.org, debunks some myths surrounding copyright. MYTH #1: Being an Artist was unprofitable before copyright law existed.
FACT: Completely false, see below:

MYTH #2: Copyright was created for artists.
FACT: It was the exact opposite. When copyright was created in the Middle Ages of England, it was about censorship. The printing press had just been invented, and people were publishing of all kinds of writings and reprinting text from throughout history. Parliament feared it, so it set up a corporation with powers to enforce an exclusive printing monopoly.

MYTH #3: Copyright protects artists.
FACT: It protects the publishers, and few artists earn the majority of their income from it. In fact, many artists see no money from it at all--it all goes to their publishers.

MYTH #4: Copyright prevents plagiarism.
FACT: Thanks to technology like the Internet, attribution of original authorship is easily detectable, especially when works are published. In many cases, plagiarism (e.g. taking the successful work of one artist and re-selling it under your name) is even EASIER to detect by performing a Google search than via the United States Copyright Office.

---

Copyright laws made more sense in the age of printing presses, but in the age of the Internet it is irrelevant. Distribution does not require significant investment by publishers. In the video Karl also said the following quote about what he thought fair copyright law should resemble:

Your name can not be stripped and no one else can claim credit for it. That is credit, reputation is a non renewable resource. It can not be replicated. It can not be copied. To the degree that someone takes credit for your stuff, that's the degree to which you lose credit. It is always proportional.

I agree that current copyright law is messed up, but so is the way that Google handles what they deem to be search spam.

A work can be a collection of keywords and a navigational structure as much as it is a set piece of content. Trusted sites keep building more trust due to their visibility while untrusted sites have to send email spam or do other types of buzz related marketing to gain awareness.

If Google pays someone to steal your work and sets your (non-transferable) reputation at zero search is not a honest business model, especially if they have any hope of changing the world's perspective of copyright law, which they may need to do if they want to keep their current profit margins.

Censorship, Movie Ratings, & Marketing

Aug 14th

Most large industries have regulatory bodies or rating systems which aim to keep power where it lies. I recently watched Kirby Dick's This Film Is Not Yet Rated, a film about the MPAA ratings board.
The MPAA ratings board is composed of what is deemed as typical moral parents, but they play up to support large movie studios. If a film is rated NC17 some studios won't release it, and even if they will it is hard to advertise the movie.

Matt stone, one of the creators of South Park, mentioned that when he tried to get an independent film reviewed they gave it a NC17 rating, and would not say why because they said if they gave specific reasons they would be practicing censorship. Later on he got Team America reviewed, and they gave him a laundry list of what specifically needed to be changed to avoid an NC17 rating.

Some of the absurdity of the movie ratings game include the likes of good ratings for violence in movies (especially without blood), but non missionary sexual intercourse is not proper. The support for violence in unsurprising given the absurd number of movies that run military ads prior to starting the film. The military is not only a leading advertisers, but if a producer needs military stuff to create a movie, the pentagon has to view the film before public does.

Virtually every large market has some form of censorship / reviews board. The stuff they censor is likely a large market waiting to be tapped. If they are unwilling to target those markets because of fear of blowback from advertisers that presents a large targeted audience and strong monetization strategy for independent creators.

Every Brand is an Ad Network

TechCrunch recently highlighted how most of Glam's growth has come from the combination of shallow pure SEO play to pump pageview stats and syndicating their ads on other related sites to further pump the success story, all while the network is projected to lose over $20 million this year. But VentureBeat also noted that the growth is significant enough that Google wants to do a custom ad deal with them.

Marchex recently had a brutal quarter which drove their stock price down to $9 a share. Their site development process was far too broad and far too shallow. They need to start developing their top domains or sell them off to someone who will leverage them for their full value. In response to Marchex's down quarter Sahar Sarid asked what they should do and got this brilliant comment:

What is the business model here… we got out sites indexed by Google but the users had a shit experience and BTW our indexed sites make nothing compared to if we just parked them. Come on - it not really very hard to figure it out- take the top 30 golden domains and build them into authority sites NOT openlist scrape sites but bankrate.com’s

Keep in mind that when you create one Bankrate.com you get the leverage to charge advertisers more, which allows you to spend more on marketing. As you increase that spend search engines are willing to look the other way if you create a bottomless pit of near identical white-labeled search spam.

As markets consolidate, 2 of the biggest determiners of who will win a market are going to be
brand perception and AdWords ad budget.

  • Brand perception: Google gives brands a discount on AdWords ad prices while price gouging smaller competitors, which subsidizes the value of building a brand. If BMW spams, Google is afraid to remove BMW from their index for very long. If a smaller site does something that is borderline gray and comes under scrutiny Google may penalize the domain and pay an AdSense spammer for stealing that content and keeping it in the Google index. It all feels a bit like the mafia, but this is Google's way to extort you and kill smaller market players without being branded as a corporate criminal.

  • AdWords ad budget: if you are blowing millions a month on Google AdWords then Google will be more likely to white list your sites and less likely to penalize you for white-label clone sites, robotic content, subdomain spam, or bought links.

Even if you lose money on the main brand, it still allows you to backfill with high margin garbage with limited risk from Google. What are the odds of Google doing anything about this BizJournals spam? If you want to monetize garbage you have to put one star brand at the center of it to mitigate you risk profile.

General News is a Worthless Commodity

Aug 9th

I get cold called about twice a month pitching a newspaper subscription, but as we are able to subscribe to specific channels, generalist news lose relevancy, and loses profitability.

The NYT is rumored to be dropping its paid content wall. As generalist publishing moves toward free it still will not be enough to create strong sustainable profits:

"The New York Times is a strong and respected brand however the type of content they are writing about [in columns] is available everywhere," Borrell explains. "Their niche is strong writing and this is not a strong enough niche to charge readers for."

As long as news is just data, those profits are going to move to the aggregators who can cut deals with any publisher and dump any they dislike. Not surprising to see Google turning Google News into a destination, such that they can learn more about the news business and gain more leverage over anyone in that space.

What types of publishing business models will stay profitable?

  • Niche Industry Leaders Publishers in fields with few competitors, or content which is so good (good as in one or more of the following: evokes emotional response, overtly biased to match user bias, focused, consistent) that people chose to subscribe to that channel as a proxy for that entire industry. If you have your own distribution and a large following you don't need search engines to sell stuff or influence markets.

  • Honesty in Fraud Markets The AdSense business model is undermining the credibility of information. If you are serving customers making big purchases or customers who have been taken advantage of, many will want to pay a premium for peace of mind.
  • Conversion Experts If you can pay more for traffic than anyone else you can't lose. There will always be an arbitrage option available for you. Get enough leverage and get a fatter margin, which allows you to recruit and teach a pool of affiliates to make you money. If you can write content that converts you will get paid more per word. Google pushes CPA ads and today Yahoo! today just announced their traffic quality center.

Trend Gold for Google News Publishers

Most search trends typically last more than a day. Since Google integrates news results right in the first page of the search results all a news website needs to do is look at popular searches, Amazon best sellers, top Amazon movers, new items on Amazon, and hot items on eBay, write a vanilla piece of content, throw ads on the page, and cash a check.

Reporters no longer have to research public demand. All they have to do is look up the ad value and write about whatever makes the most money interests them. In some cases publishers may let a robot write the story for them!

Straw Man Marketing & Information Pollution

One of the easiest ways to get your message across is to be different and denounce a currently popular meme. Dan Thies recently referenced a person who is launching their marketing brand by calling the long tail crap. Even if they know what they are talking about with some forms of marketing it undermines their credibility to talk about search marketing with no appreciation for the tail.
This is a growing trend with information in general online. Marketers with a for profit agenda, a reason to create spin, or no knowledge of a field create ratings, reviews, or half compiled resource list at a market and get people to talk about them

  • for being useful (to those naive and new to the market, or those featured in the compilation) and

  • for being inaccurate (for those who know the market and realize that the lists are marketing garbage)

As marketers like you and I fill industries with information pollution it gets harder and harder for the novice web user to know truth from fiction.

The net effect is that we all buy more lies and garbage, become less trusting and more cynical, and small businesses end up having more similar externalities to large businesses, where the profiting company does not take into account any of the downsides to the pollution they created to generate profit.

Some publishers feel absolved of any wrongdoing when they rely on a third party ad network for ad targeting, but profit driven ad network are amoral. Why would someone pay $3 a click for free ringtones if there wasn't some sort of reverse billing fraud on the backend?

Catching a Thief Red Handed

Sometimes people borrow and rewrite content, but it is just plain out sick when they steal your site design and content without the decency to even bother changing it. Tonight in the SERPs I saw a weird site that looked awfully similar to a friend's site.

You judge the similarities between the content at CollegeScholarships.org (original site) and at ScholarshipsInTheUS.com (thief). Their site design looked similar to the original, until the site went offline. A few of his internal links even point at the real site! Earlier tonight I called the number that was on the WhoIs data of the site stealing content. He was mad someone called and bothered him, but claimed he did not have anything to do with the content theft or domain. Within hours of the phone call the site was offline.

I bet they hope my GoDaddy representative doesn't look at the link to Google's cache I just sent them, and that they hope their Google AdSense account doesn't get banned. If either of those happened that would be a real shame.

The Anonymous Web of Theft

I am not listing a name or the AdSense account number here because someone may have spiked the guy by putting false data in the WhoIs or publishing someone else's AdSense code to try to get them burned. What is to prevent me from doing that to someone who I don't like?

Part of the great strength of the web is that it is anonymous...so that people like you or I can do what we like and find a way to spread our ideas and profit from them (I use the term profit loosely there...I am not just talking about money). But I think some of the central network operators need to take on a bit more responsibility in who they are willing to partner with.

Google's Lack of Respect for Copyright

The real issue I have here is not just with the content theft, but also with the central networks on the web. Google is currently lobbying to soften up copyright warnings, largely because they have no respect for copyright.

Google's Youtube Copyright & Piracy Claims

Google claims they can fingerprint video content to prevent piracy and copyright violation (although the world is still waiting for that technology). If Google can fingerprint duplicates to remove them from the search results, and claims they can even find copyright video content, then why do they allow 100+ page websites that nearly 100% match current sites in their index to run AdSense ads without doing either of the following

  • flagging the site for automated or human review to compare it to related content sites before approving ad distribution

  • notifying the other publishers of the potential content theft being sponsored by AdSense

Maybe they are slow to getting around to that because doing the right thing would cost them a couple dollars. But delaying on that issue is actually going to cost the web as a whole, because if people think that by publishing anything online that they are granting someone permission to steal it and Google permission to run ads on it then Google isn't encouraging the production of the high quality content needed to make their search service more relevant and more useful.

eBay Also Supports Theft

Google isn't the only large network which openly and proudly profits from theft. eBay, which has made $10,000's from my Paypal payments, is allowing this dirtbag to sell my ebook on eBay over and over again. I have sent complaints using eBay's internal system, and talked to my Paypal representative, but so far they have not yet banned the thief and I am stuck monitoring eBay for theft that eBay's policies clearly and openly encourage.

Making Anonymity Work

Yesterday a leading search engineer at another search company informed me that he thought my book was good, but it was being distributed by another thief on another site. Here I am with a Technorati top 100 ranked blog, thousands of subscribers, millions of inbound links, giving these large companies tens or hundreds of thousands of dollars, and still eating crow.

How are new entrepreneurs to compete on the web if many of the central networks place a $0 value on content? How is that good for the long-term health of the web? Unless you sell ads, are syndicating misinformation or public relations spin, or have a large back-end up-sell you are screwed.

If the web is to remain anonymous the large networks need to make it easier to inform you if they are partnering with thieves to share in the profits from stealing your content. Or perhaps they could put a little effort into avoiding the issue by limiting their partnerships.

What is Content? When is Publishing a Commodity?

People Tolerate (and Expect) Ads:

As Google's ad network gets more efficient and Google controls more bits, almost everything in any commercial market is going to sell something, subsidize another commercial interest, or have ads on it. To appreciate how much this trend will grow, just read the comments on my post about using custom search engines. Many of the comments are insightful, but almost nobody appreciated that not having ads in your internal site search result was a value add for a commercial site. If you look at blog search results for shower gel you will see Google's version of the web. Google and Microsoft already own in game advertisement firms. With Google bidding billions of dollars for part of the US wireless spectrum you can bet that there are going to be even more ads between content producers and consumers.

It doesn't matter what ads appear on the publisher site if they didn't sell the ads directly themselves. Somehow the publisher is off the hook because they didn't know, and it wasn't Google's fault because the system is partially automated.

Newspapers Practicing Arbitrage

Google killed some of the scraper AdSense garbage, but now arbitrage is going mainstream, with newspapers leveraging their brands to publish thin content from freelance writers. Think of newspapers buying ISP data or mining their server logs and suggesting writers create content about crap that got a lot of traffic when Google featured their story on the homepage in the past.

Newspapers Practicing Automated Garbitrage

The above trend is going to make the most competitive keywords even harder to rank for as there will always be at least one fresh news story about every high value topic.

  • This just in...make money with the best forex platform!

  • This just in...mortgage rates are at all time lows!
  • This just in...online education is more affordable than you thought!

Google has already proved that they don't mind large publishers creating robotic content and building its authority with spammy links. Did you know that BizJournals offers Google searchers a credit card application service? If I posted similar content on this site Google would kill it.

Anyone Can do Public Relations

Beyond the recycled content, the movement will also be fueled by lazy underpaid writers who will heavily rely on social media and others work for story ideas. If you are good at spamming social media then the mainstream media will act as your megaphone without requiring you to hire a PR firm.

When is a Link Buy Legitimate?

Most profitable publishing enterprises are moving toward producing lower quality content. As a publisher, a brand is nothing more than something that allows you to practice arbitrage while appearing that you provide a valuable service. It allows you to get extra exposure and charge a higher rate for your ads.

The only difference between a smart strategic ad buy and a text link sale that Google wants you to report is the publisher's rate card.

Google Ringtone Search (Beta)... the Utility of Search & the Value of Relationships vs Data

Jul 17th

Google recently announced they are offering an ad free search service to small businesses for as little as $100 a year. They are also rumored to be working on creating a mobile search offering to search for ringtones, cell phone games, and other high margin cell phone services:

With the new system, users would search for a piece of content -- such as ringtones -- and would get back a list of companies that provide it, with links letting them easily purchase the material. Eventually, Google would charge companies for high placement in the search results, much as it does with "sponsored links" on Web search, the people familiar with the company's plans said.

If this proves effective, why wouldn't Google create search services for real estate and student loans? Off the start they likely wouldn't be any dirtier than those markets already are.

The local sites (or other niche sites) that die are the ones that don't have a supportive community...the ones that can roughly be described as data. But as you move your site away from data toward community building and user experience you increase its marketability, profitability, and longevity.

John Scott recently said

when the Internet becomes a community more than a marketplace, the community oriented merchants have the advantage.

Most general music lyric sites will lose over 90% of their traffic and value in the next 2 years. Niche value add sites like SongMeanings.net will increase in value.

Some newspapers are fighting off their own irrelevancy by publishing more ads, and becoming more irrelevant. The reason WSJ.com is worth $5 billion is because it will be one of the last newspapers surviving after many competitors are marginalized. Its brand and business relationships make it unique.

The next step for search is moving away from age and citation based trust toward user satisfaction based rating. In a recent interview Jakob Nielson said:

Of course, the big thing that has happened in the last 10 years was a change from an information retrieval oriented relevance ranking to being more of a popularity relevance ranking. And I think we can see a change maybe being a more of a usefulness relevance ranking. I think there is a tendency now for a lot of not very useful results to be dredged up that happen to be very popular, like Wikipedia and various blogs. They’re not going to be very useful or substantial to people who are trying to solve problems. So I think that with counting links and all of that, there may be a change and we may go into a more behavioral judgment as to which sites actually solve people’s problems, and they will tend to be more highly ranked.

Part of that will include collecting user feedback and personalizing results. For the commercial parts of the web, much of this will be done by search engines pushing more aggressive ad units (while using non-ads to test how far they can go), licensing content from premium publishers, and making more transactions direct to funnel traffic internally while minimizing the downside of bait and switch marketing. If Google controls the transaction they know the lead value AND the customer satisfaction stats. If something that was once good becomes spam Google controls distribution and monetization, and can kill it without a second thought.

If you are in a market that is likely to get commoditized what does your site do that makes it more than just data?

Pages






    Email Address
    Pick a Username
    Yes, please send me "7 Days to SEO Success" mini-course (a $57 value) for free.

    Learn More

    We value your privacy. We will not rent or sell your email address.