Alternative Energy, Alternative Media, & Asset Bubbles

Jan 21st

If you have ever wondered how the mainstream media works, watching Manufacturing Consent does a great job of displaying its sordid underbelly. The bias is not always this obvious, but it is always there:

The most recent issue of Harper's has an article by Eric Janszen about financial bubbles throughout US history named The next bubble: Priming the markets for tomorrow's big crash. A couple key quotes:

We have learned that the industry in any given bubble must support hundreds or thousands of separate firms financed by not billions but trillions of dollars in new securities that Wall Street will create and sell. Like housing in the late 1990s, this sector of the economy must already be formed and growing even as the previous bubble deflates. For those investing in that sector, legislation guaranteeing favorable tax treatment, along with other protections and advantages for investors, should already be in place or under review. Finally, the industry must be popular, its name on the libs of government policymakers and journalists. It should be familiar to those who watch television news or read newspapers.

The media rides the story up and rides it back down. We always need something to talk about. It happens to the media offline just like it does to niche publishers online. But the memory and analysis are short and shallow, quickly pointing a finger at a false cause, fixing symptoms like antidepressant drugs do:

The U.S. mortgage crisis has been labeled a "subprime mortgage crisis," but subprime mortgages were only a sideshow that appeared late, as the housing-bubble credit machine ran out of creditworthy borrowers. The main event was the hyperinflation of home prices. Risks are embedded in the price and lurk as defaults. Even after the faith that supported a bubble recedes, false beliefs continue to obscure cause and effect as the crisis unfolds.

It puts the formation of the alternative energy market in a fascinating perspective, especially as I finished reading about the demise of ACA and hung up the phone from an automated call from a sleazy telemarketer company calling me at 8pm, stating their partnerships with non-profits to help consolidate the debt that I don't have due to the country's current credit crisis.

When economic fraying appears at the weak edges of the market it hints that more is to come. Long time bulls are turning bearish and the stock markets are hurting worldwide. And so history repeats itself for the people, yes.

Web Publishers: Are You Ready for Your Ad CPM Rate to Drop 30% in 2008?

Jan 18th

Carl Fremont of Digitas thinks their might be online CPM rate contraction in 2008. Google helped provide one form of CPM contraction when they changed what part of an AdSense ad block is clickable. Markus Friend said that knocked his CTR down by about 60%.

Markus Friend also highlighted that Google controls about 40% of the (heavily consolidated) ad market:

90% of Advertising revenues are made by the top 50 sites and the top 10 sites take 70% of that, with google taking 40% of all Online US advertising.

This CPM compression is going to cause many late movers to crank out content with more ads on it, further lowering their CPM and direct readership until they are financially insolvent. But then again, the web could use another bust cycle to clean up the meaning of the word "content". Shoddy intrusive ad networks like NetAudioAds should not be featured as the next big thing in the WSJ.

In a recent interview, Nick Carr said he expects the ad consolidation trend to continue

It's the aggregators that are the big winners, at least in economic terms, not the legions of individual contributors.

Over the past 20 years, we've seen that the automation provided by computer systems has tended to concentrate wealth in the hands of a small slice of the population. I expect that trend will only accelerate in the years ahead. If you're one of the digital elite, you've got it made. If not, the prospects are less bright.

What is the solution for publishers? How do prevent yourself from being absorbed by the commons? Develop meaningful relationships, be remarkable, and sell direct. Hugh on owning an idea:

Social Markers are a prime form of social shorthand, that people use to STAKE OUT the ecosystem they're occupying. So why do I find this such a useful term for marketers? Because obviously, if your product is a Social Marker in your industry ecosystem [the way the iPhone is in the mobile world, or Starbucks is in the coffee world, or Amazon is the book world, or Google is in the search world, or Whole Foods is in the supermarket world, or Virgin is in the airline world, or English Cut in the bespoke world etc etc] you will have an AMAZING competitive advantage to call your own.

And if the product your company makes is not a Social Marker, I guess the first question would be, "Why the hell not?" Quit your job and start over.

One of the easiest ways to claim an idea is to turn its launch into an event, and differentiate it from everything else you are doing. Buy the matching domain name if you can. :)

Bonus cool link: Bill Slawski mentioned a Yahoo! patent about moving away from the random surfer model to a user sensitive PageRank. Now if they could only apply some good ideas in the SERPs. And no, this does not count. :)

Triggit - the Easy Way to Monetize Accidental Rankings

Since Google largely tends to favor ranking informational websites over commercial websites, some authoritative blogs tend to rank for valuable queries based on posts they make in passing.

Even if you had no intent to monetize a post, it just became easier to monetize accidental rankings. If you use analytics to track your stats and notice that you start ranking for some good keywords you can use Triggit to embed links to merchant products directly in the text of your blog post.

Shoemoney created this quick video to show how Triggit works

Unlike the automated ad solutions like intellitxt or AdSense, these Triggit ads

  • look like other regular links on the page (so they should get a high CTR)
  • can easily be applied on a page by page level (so you do not have to clutter up every page to monetize the few pages that can make a lot of money)
  • link to products recommended by the editor (to preserve editorial integrity)
  • can link to merchants that pay via affiliate payout or CPC (offering multiple monetization models)
  • allow you to keep your pages clean (and easy to link at) until they rank, then have you add monetization after you have a leading market position for related keywords

Triggit ads are easy to set up and should require little maintenance on the end user's side, but they are still a small start up, so if you start doing well with them make sure you remember which pages do well so you can keep monetizing the pages if the Triggit partnership stops working, and so you can track which pages you should try to monetize more aggressively and/or build links to.

As blended semi-editorial in content ad networks like these evolve, the distinction between optimization and spam blurs. And since Google has a similar product, it is going to be hard to view this in a negative light without looking hypocritical in the process. From Google's pay per action page:

Text links are hyperlinked brief text descriptions that take on the characteristics of a publisher's page. Publishers can place them in line with other text to better blend the ad and promote your product.

For example, you might see the following text link embedded in a publisher's recommendatory text: "Widgets are fun! I encourage all my friends to Buy a high-quality widget today." (Mousing over the link will display "Ads by Google" to identify these as pay-per-action ads).

Though the maximum length of a text link is 90 characters, we've found that shorter links perform better because they allow the publisher use the link in more places on her/his site and in different context. The maximum length is 90 characters but less than 5 words is best. Even better, just use your brand name to offer maximum flexibility to the publisher.

Social Media vs Influencing Thought Leaders

In most markets worth being in and with most sustainable business models, sales is not a one time event, but a process. You first have to create awareness, then build trust, then finally make the sale. Do all 3 happen at once for some people? Sure, but probably not for the majority of customers.

My big issue with hyping social media is that most things that are popular on social media sites do not actually build credibility, and that you are going to have marginal success building your brand if you start by focusing on these broad third party communities rather than YOUR TOPICAL COMMUNITY.

When I first started getting well known there was no Digg. There was a Slashdot, but exposure on Slashdot did not make or break me. What really sent my personal brand on a sharp upward trajectory was when Danny Sullivan mentioned me. Because he felt I was comment-worthy many other people suddenly thought I knew what I was talking about and that I was trustworthy.

That perception of trust, audience, and personal-brand that Danny had spent years building was in some part transferred to me. Am I as well known as he is? Of course not, but while sites like Digg have audience they tend to lack that perception of trust and personal-brand that transfers BUYING CUSTOMERS to your site.

If a person who has trust and a broad base of readership recommends you that creates immediate sales. I see that in my daily sales data and my affiliate statistics. If you get featured on social media sites it does not lead to many sales. Perhaps that exposure leads to awareness, which can further be enhanced by writing about that community, buying banner ads from sites like Lead Back, or by writing other create subscription-worthy content, but generally in content editorial link from a trusted expert creates more sales than exposure on a nearly automated hollow social news site.

If your site is new to the market and you want some exposure you have two options

  • eat Taco bell for a month, take the world's biggest crap, then write a leading 10 step how-to guide on how-to polish it, or
  • create things that people INSIDE YOUR COMMUNITY will find useful

One of those strategies will get you in the Guinness book of world records. The other will make sales.

Does your content build trust?

Wikia Search Launch Not Really a Launch

After much hype Wikia Search just launched with a dummy index. No surprise the launch was received badly. Worse yet, none of the alleged human relevancy tools are available. Wasted opportunity. Google has at least another year of having no real competition.

SearchGuild, My Favorite SEO Forum, Goes Offline

Dec 24th

My buddy Patrick Münzinger just informed me that SearchGuild went offline - forever. SearchGuild is the forum that (along with NFFC, a few other mentors, and a few lucky breaks) took me from near bankruptcy to knowing enough about this market to be exceptionally profitable and be able to help many other people do well.

While many other forums were polluted with useless noise, syndicated spin and half truths from search engineers, self promotion (submit your site to MY directory AND buy MY services), bogus ethics claims (what is a white hat anyway?), and tactical misinformation ... SearchGuild was the one that taught me to test stuff and to gain enough confidence in myself to make my opinions matter and make my decisions profitable. Guys like Chris Ridings and Lots0 may have seemed cranky, but they were blunt and honest. They helped people just because they liked helping. The web could use more of that.

But when SearchGuild was profitable the profits were donated to charity, and even though the site's popularity has been maintained, ad revenues dropped, and so that great service no longer exists as a hobby in spite of the great value it offered. In the last 5 years my 2 favorite sites about search were Threadwatch and SearchGuild, and now they are both dead because they had bad business models. This is yet another sign to me that you really have to charge what you are worth if you create value for others, or eventually it dries up. Thanks for the 5 great years SearchGuild.

Drupal is the Wave of the Future

Dec 21st

If you have not yet heard of Drupal, it is the open source CMS that powers this site (and many sites far more robust and popular than this one). I think I am pretty good at predicting web trends, and 2 or 3 years from now Drupal will be about as popular and well known as Wordpress and Wikipedia are today.

Drupal is more powerful than what the average blogger needs to run their site, but it has so many features and options that it can allow you to bolt many things onto your blog that you would not be able to do very easily with something like Wordpress or MovableType.

Understanding Why Generalist News is a Commodity

Dec 21st

In my last post about how contextual advertising targets the weak and poor, I promoted the idea of niche publishers shifting to sell niche products and services directly as a better means of monetization. Dan Root asked why many of the leading news sites are dropping their pay walls. The answer is that future relevancy is driven by the point to economy, and news is a commodity.

The business models for news companies rely upon regional based monopolies that are quickly eroding.

Domain names and community activity largely supplement or replace the need for much of the generalist news or syndication based business model. I used to live in State College and talked to the guy who owned StateCollege.com. The local paper was doing worse and worse every year, and with a small aggressive staff, better technology, more interactive ads, and a great domain name beat them.

And the news that is worth money spreads fast OUTSIDE OF the pay wall. Does WSJ want the pageviews for breaking a news story, or do they want to see the TechCrunch post about the WSJ story get those pageviews?

If you do not think news is a commodity take a look at this image. It says it all, IMHO.

Is Result Diversity Enough? Search Offers a Reflection of What?

Pay Per Post Already Dominates Many Business Models

Search engines toe the company line fighting against spam, but are paid posts any worse than sponsored research? The day before Matt posted about some lowbrow PPP ads used to equate paid post with bogus information on brain tumors, I posted about how some scientific research is polluted by commercial interests, and an SEO Book contributor by the nickname of RFK left this great comment:

I was just going to comment on this issue on Matt's blog, since he went on a rant about paid posts being bad for personal brain surgery research. Really.

The irony is that most/all of the articles that he would prefer to see on the Google SERPS are researched, assembled and ghost written by pharma companies. Having worked with a number of clients in the medical field it's become more and more apparent that the "studies" published by well-known academics are most often based on research by the drug companies, scripted by a hired copywriter and given to the academic to sign off and publish under their byline.

This begs the question: what's more harmful, the illiterate drivel of a $10 Pay Per Poster or a biased supposed medical study published by a respected researcher? Obviously Google can't control what papers are published, but they shouldn't be pretending that restricting competing paid advertising practises is about returning better content.

The Copy & Paste Culture

As a joke, years ago I created a rather offensive seedy website (with low quality information on porn, drugs, and gambling), and a professor diametrically opposed to my worldviews sourced that site as a credible source. If he was that intellectually lazy with his own professor profile page, how much intellectual laziness goes into the average web page?

As media empires crumble the recycling effect of online information is only going to get worse. While I may not agree with all of the research, the Report on dangers and opportunities posed by large search engines, particularly Google highlighted how journalists start research using Google, and even have a way to warp Google for other writers:

More and more, initiatives to maintain journalistic quality standards complain that also journalistic stories are increasingly the result of a mere "googlisation of reality". One drastic example is described by the German journalist Jochen Wegner [Wegner 2005]: A colleague of him did a longer report on a small village in the north of Germany. He reported about a good restaurant with traditional cooking, a region-typical choir doing a rehearsal in the village church and about a friendly farmer selling fresh agricultural products. If you type the name of the small village into Google, the first three hits are the web sites of the restaurant, the farmer and the choir. And if you compare the complete story of the journalist with the texts on the web sites found by Google, you will see: As a journalist of the 21st century, you don't have to be at a place to write a "personal" story about it. Google can do this for you.

When you think of that publishing trend, think of how well Wikipedia ranks, and how Wikipedia often reflects the public relations campaign of the largest market participant it gets a bit concerning. It gets even uglier if you think about the erosion of publishing based business models, and their increasing reliance on public relations firms to give them stories as they drastically cut staffing levels.

The Race Toward The Edges of Reality

The types of publishing that will dominate the web are

  • those selling content as service: the value add of service will allow them to develop relationships with readers which help them market their content while still being able to provide honest value and compete in competitive marketplaces
  • those giving away content to push commercial services: if you can gain enough attention, respect, and credibility you can charge well for your work. You can even sell what others give away, see the above category.
  • those creating content from passion: they don't need to be profitable if they are doing it for fun or because they are passionate
  • those with extreme bias: a biased article is remarkable and more citation-worthy than a vanilla article
  • public relations spin: essentially Pay Per Post, also without disclosure
  • those creating thin content: consumer generated content, repackaged ideas as link list linkbaits, and/or copy and paste of one of the above groups
  • profitable advertisements: with automated integration or editorial selection causing these to have exposure in the above content types even if they are not well ranked in the organic parts of the web. The ease of tracking these ad results will effectively warp many of the above categories of information.

Biased content is easier to reference, syndicate, and subscribe to than more balanced content because we are more aligned to communications messages that match our worldview. And much of the passion driven content is tied to a strong bias (like hate sites). Which means that search engines can try to display a diverse set of search results, but as time passes they will reflect more biased groups of opinions and far fewer balanced articles.

Your Feedback Needed

Maybe it has always been this way though? Do any reporters read this blog? I would love your comments on concepts similar to result diversity in offline publishing, especially contrasting it before and after the web.

I wonder if my roll as an SEO makes me interested in such issues? Do other SEOs (perhaps you) find macroeconomic and publishing trends interesting? What other topics do you find yourself losing hours to every week?

Be Afraid, Be Very Afraid

Brian Clark just hit a home run with his post about how we let fear harm our productivity.

I want to create more things like The Blogger's Guide to SEO, with the goal of pushing myself up the value chain by creating better brand touch points. I am hoping to launch a big site in the next month and want to add some cool new features to SEO Book.

Many of my projects have went far slower than they should have, largely because I have been far too busy, but also because I have let fear, laziness, and routine guide me toward accepting the needed excuses to wait until tomorrow. Once you get beyond self sustaining it is easy to sit comfortable and make up fake work just to keep yourself busy.

One of my favorite parts about being somewhat well known online is that I get to talk to others that are well known and far more successful than I am, and hear what they think in a way that is unfiltered by the need for professionalism or public relations. Tips, strategies, ideas, motivations, and human flaws unmasked - stuff you just wouldn't read on a blog - because if you did they would lose money for sharing. Unfiltered conversations where people are human and real to a level that inspires me to do better things and curb the fears that hold me back. In the end it makes you more confident because you know you can help others out, they can help you out, and everyone has some amount of fear guiding them toward action or inaction.

At the end of the day, Google and other market participants are not our biggest competitors, we are. Having said that, I might take a break from blogging for a week or two and slow down blogging for the rest of the year so I can start digging in on doing some of those big projects that have been lingering about.

[Update: A friend of mine recommended I read Dan Kennedy's The Ultimate Success Secret, which states that control = responsibility and responsibility = control. If this post resonates with you this book is well worth a read.]

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.