Panda 2.5...and Youtube Wins Again

On September 28th, Google rolled out Panda 2.5. Yet again Youtube is the #1 site on the leader board, while even some branded sites like MotorTrend were clipped, and sites that had past recovered from Panda (like Daniweb) were hit once more. In the zero sum game of search, Google's Android.com joins YouTube on the leader board.

It doesn't matter what "signals" Google chooses to use when Google also gets to score themselves however they like. And even if Google were not trying to bias the promotion of their own content then any signals they do collect on Google properties will be over-represented by regular Google users.

Google can put out something fairly average, promote it, then iterate to improve it as they collect end user data. Publishers as big as MotorTrend can't have that business model though. And smaller publishers simply get effectively removed from the web when something like Panda or a hand penalty hits them. Worse yet, upon "review" search engineers may choose to review an older version of the site rather than the current site!

With that level of uncertainty, how do you aggressively invest in improving your website?

Over a half-year after Panda launched there are few case studies of recoveries & worse yet, some of the few sites that recovered just relapsed!

If you look at search using a pragmatic & holistic view, then this year the only thing that really changed with "content" farms is you can now insert the word video for content & almost all that video is hosted on Youtube.

To highlight the absurdity, I created another XtraNormal video. :)

References for the above video:

Endless AdWords Profits

Sep 17th

"To thine own self be true"

In a word?

Prescient!

10 links in a single AdWords ad unit!

Then more ads below it. Then a single organic listing with huge sublinks too. And unless you have a huge monitor at that point you are "below the fold."

Negative advertising in AdWords is not allowed. So long as you build enough brand signals & pay the Google toll booth, public relations issues & reputation issues won't be accessible to searchers unless they learn to skip over the first screen of search results.

While it is generally against Google's TOS for advertisers to double dip in AdWords (outside of the official prescribed oversize ad units highlighted above), Google is doing exactly that with their multitude of brands.

BeatThatQuote is back yet again.

The line between ads & content is getting blurry. Mighty blurry.

Is it time yet for a new slogan?

Google: the sales engine!

Google+ Doorway Pages / Scraper Site

Sep 15th

Another friend sent me a message today: "just got a whole swathe of non-interlinked microsites torched today. Bastard! Just watching the rank reports coming in..."

I haven't seen his sites, but based on how he described them "whole swathe" I wouldn't guess the quality to be super high. One thing you could say for them was that they were unique.

Where putting in the effort to create original content falls flat on its face is when search engines chose to outrank aggregators (or later copies) over the original source. The issue has got so out of hand that Google has come right out & asked for help with it.

The big issue is that Google is often the culprit. Either indirectly through their ads programs & algorithmic biases or more directly through the launch of new features.

When Google launched Knol I was quick to flame them after I saw them ranking recycled content on Knol ahead of the original source. The Knol even highlighted similar works, showing that Google allowed Knol to outrank earlier sources of the same work.

In a recent WebmasterWorld thread Brett Tabke stated that Google is putting serious weight on Google+:

Some Google+ SEO factors now trump linking as prime algo ingredient. Google+ is already and clearly influencing rankings. I watched a presentation last night that definitely showed that rankings can occur from Google+ postings and photo's with no other means of support.

As Google+ grows - so will Google's understanding of how to use it as rankings signals.

We are not playing Google+ because we want too - we are playing Google+ because we have to.

I read that sorta half hoping he was wrong, but know he rarely is.

And then today Google hit me across the head with a 2x4, proving he was right again.

Business Insider is not some small niche site that Google can justify accidentally deleting from the web with 2 clicks of a mouse, yet when I was doing a *navigational* search, trying to find a piece of their content I had already read, guess what popped up in the search results.

Yup. Google+

What's worse is that isn't from a friend, isn't from the original source, is the full article wholesale, from Google Reader, and the source URL has Google's feedproxy in it.

If Google wants to add value to the ecosystem & insert themselves as a new layer of value then how can we do anything but welcome it. However, when they want to take 3rd party content & "wrap it in Google" it is absolutely unacceptable for them to outrank the original source with their copy of it, even if they feel the deserve to outrank it & have made multiple copies of it.

On large complex system I get that some advice will be self-serving and progress often comes with bumps and bruises.

But Google's dominance in search coupled with their dominance in display (from owning DoubleClick & YouTube) has led competing portals to team up to try to compete against Google with display ads.

And, if the big portals are struggling that much, then at the individual publisher level, how do you profitably produce content when Google takes your content & ranks their copy ahead of yours?

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New Google "Search Results" Bar

Sep 14th

I recently got put in a test bucket for Google's new layout with a "search results" bar near the top of the page. Generally this impacts the search results in a couple ways:

  • First off, it is a much better looking design. In the past when the search results would move up and down with Google Instant it really felt like a hack rather than something you would see on the leading internet company's main website. Now with the results fixed it feels much cleaner & much more well put together.
  • The more stable basic layout of the SERP will allow Google to integrate yet more vertical data into it while making it still look & feel decent. Google may have localized search suggestions & the organic results for a significant period of time, but the combination of them with this new layout where the search results don't move feels much more cohesive.
  • To get the white space right on the new layout Google shifted from offering 5 Instant suggestion to 4. The Google Instant results don't disappear unless you hit enter, but because the interface doesn't change & move there isn't as much need to click enter. The search experience feels more fluid.
  • The horizontal line above the search results and the word "Search" in red in the upper left of the page is likely to pull some additional attention toward Google's vertical search features, helping Google to collect more feedback on them (and further use that user behavior to create a signal to drive further integration of the verticals into the regular organic search results).
  • On the flip side of this, in the past the center column would move up & down while the right column would remain stationary, so I would expect this to slightly diminish right column ad clicks (that appeared at the top even when the organic results moved downward) while boosting center column clicks to offset that.
  • In the past, when Google Instant would disappear from view, that would pull the center column organic results up a bit.
    • This always-on bar shifts the pixels above the first search result from about 123 to 184...so roughly 60 pixels downward.
    • As a baseline, a standard organic listing with no extensions is about 90 pixels tall, so this moves the search results down roughly 2/3 of a listing, which should drive more traffic to the top paid search ads & less to the organic results below them (offset by any diminished clicks on the right column ads).
    • This is a much cleaner way of taking advantage of white space than some of the cheesy & ugly-looking stuff they recently tested.

I tried to line up the results pretty closely on the new test results to show what they look like with Google Instant results showing & after you hit enter. Scroll over the below image to see how the result layout doesn't really change with Google Instant hidden or extended.

And here is an example image showing how the location is sometimes inserted directly into both the organic search results and the search suggestions.

Here is an image using Google's browser size tool to show how end users see the new search results. Note that in this example I used a keyword where Google has comparison/advisor ads, so in markets where they do not yet have those you would move all the organic results one spot up from what is shown below.

Google Offers a New Definition for Doorway Pages?

Sep 13th

In the past doorway pages could be loosely defined as "low-quality pages designed to rank for highly targeted search queries, typically designed to redirect searchers to a page with other advertisements."

The reason they are disliked is a click circus impact they have on web users as they keep clicking in an infinite loop of ads.

This would be a perfect example of that type of website:

However, ever since Google started to eat their "organic" search results, the definition of doorway pages has changed significantly.

A friend of mine told me that the reason CSN stores had to merge into a "brand" was not just because that was the direction of the algorithm, but also because they were hit with the "doorway page" penalty. I don't know if that is 100% accurate, but it sure sounds plausible, given that... (UPDATE: SEE COMMENTS BELOW)

  • recently multiple friends have told me they were hit with the "doorway page" issue
  • on WebmasterWorld there are multiple threads from small ecommerce players suggesting they were hit with the doorway page issue
    • "Today we received messages in our webmaster tools account, for all but 1 of our 20 domains, indicating that Google considers them doorway pages. We have also lost all of our SERP's for those sites." - Uncle_DK
    • "I was rather disappointed to see that before banning the site the rater visited a very drab and ordinary page on my site. Not a smoking gun of some incriminating evidence of a hacker break-in or some such I was looking for. Also disappointing is the fact that they visited one page only." - 1script
  • another friend today told me that one of their clients runs numerous websites & that ALL of the sites in the Google webmaster tools account blew up, getting hit with the "doorway page" label (and ALL the sites that were not in that webmaster tools account were missed by the Google engineers)


Like almost anything else Google offers, their webmaster tools are free, right up until Google changes their business objectives and one of their engineers decide that he should put you out of business.

I *knew* the point of the Panda update was not to kill content farms, but to use content farms as a convenient excuse to thin the herd of webmasters & consolidate markets. A couple obvious tells on that front were:

  • the update taking so long to happen
  • the first version of the Panda update embarrassingly missing eHow
  • the update hitting so many small ecommerce websites, even as it somehow missed eHow

Part of the brand bias in Google Panda allowed corporate branded doorway pages to rank higher than ever. Google's solution to this problem is, once again, to punish the victim - wiping independent webmasters off the web.

What is the new definition of doorway pages?

Pages on non-brand websites, that are not owned by a fortune 500 company, which aggressively monetizes web traffic without giving Google a piece of the action.

If you are not a brand you can be wiped out at any time with absolutely 0 recourse unless you can damage Google's brand or harm their standing before market regulators.

If you want to be an independent webmaster you better study public relations. Start here, with Edward Bernays.

Wal-Mart has received a bad reputation for how their dominant control of the supply chain sucked most the profits out of some markets & drove some of their suppliers into bankruptcy:

Young remembers begging Wal-Mart for relief. "They said, 'No way,' " says Young. "We said we'll increase the price"--even $3.49 would have helped tremendously--"and they said, 'If you do that, all the other products of yours we buy, we'll stop buying.' It was a clear threat."
...
Finally, Wal-Mart let Vlasic up for air. "The Wal-Mart guy's response was classic," Young recalls. "He said, 'Well, we've done to pickles what we did to orange juice. We've killed it. We can back off.' " Vlasic got to take it down to just over half a gallon of pickles, for $2.79. Not long after that, in January 2001, Vlasic filed for bankruptcy.

Such strong-arm business negotiation tactics might be sleazy, but you know one thing Wal-Mart does do? They tolerate multiple brands from a single manufacturer. In fact, many leading manufacturers are creating down market brands to compensate for the economic malaise we are going through:

P&G's roll out of Gain dish soap says a lot about the health of the American middle class: The world's largest maker of consumer products is now betting that the squeeze on middle America will be long lasting.

As far as publishing business models go, if Google starts calling ecommerce sites that are part of a network "doorway sites" then Google isn't really allow that sort of testing, unless the content comes from a fortune 500 or is content conveniently hosted on Google.com. As a publisher or merchant, how do you ever grow to scale if you are not allowed to test running multiple projects & products in parallel & keep reinvesting in whatever works best?

Even the biggest publishers are breaking some of their core brands into multiple sites (eg: Boston.com vs BostonGlobe.com) to test different business models. If you have scale that is fine, but if you are smaller that same strategy might soon be considered a black hat doorway strategy.

Meanwhile...

Algorithmic Journalism & The Rise of Corporate Content Farms

Sep 12th

The "Best" of Big Media

Large publishers who lobbied Google hard for a ranking boost got it when Panda launched:

“A private understanding was reached between the OPA and Google,” an office assistant with e-mail evidence told Politically Illustrated. “The organization is responsible for coordinating legal and legislative matters that impact our members, and one of the issues was applying pressure to Google to get them to adjust their search algorithm to favor our members.”

At the same time, said "premium publishers" were backfilling their websites padding them out with auto-generated junk created by companies like Daylife, where some of the pages offer Mahalo-inspired 100% recycled content.

My suspicion is that Google did not care about the auto-generated "news" garbage for a number of reasons

  • it helps subsidize the big media interests
  • they don't want to hit big media & cause a backlash
  • it is quite easy for Google to detect & demote whenever they want to
  • it gives Google more flexibility going forward when deciding how to deal with issues (if everyone is a spammer then Google has more flexibility in deciding how to handle "spam" to maximize their returns.)

It is the exact same reason that Google says link buying is bad, while tolerating "sponsored features" sections on large newspapers:

Machine Generated Journalism

Where Google winds up in trouble on this front is when start ups that create machine generated content go mainstream. (Unless Google buys them, then it is more free content for Google!)

The leaders of Narrative Science emphasized that their technology would be primarily a low-cost tool for publications to expand and enrich coverage when editorial budgets are under pressure. The company, founded last year, has 20 customers so far. Several are still experimenting with the technology, and Stuart Frankel, the chief executive of Narrative Science, wouldn’t name them. They include newspaper chains seeking to offer automated summary articles for more extensive coverage of local youth sports and to generate articles about the quarterly financial results of local public companies.

Official sources using "automated journalism" is a perfect response to Google's brand-focused algorithms:

Last fall, the Big Ten Network began using Narrative Science for updates of football and basketball games. Those reports helped drive a surge in referrals to the Web site from Google’s search algorithm, which highly ranks new content on popular subjects, Mr. Calderon says. The network’s Web traffic for football games last season was 40 percent higher than in 2009.

How expensive cheap is that technology?

The above linked article states that "the cost is far less, by industry estimates, than the average cost per article of local online news ventures like AOL’s Patch or answer sites, like those run by Demand Media."

Once again, even the lowest paid humans are too expensive when compared against the cost of robots.

And the exposure earned by the machine-generated content will be much greater than Demand Media gets, since Demand Media was torched by the Panda update AND many of the sites using this "algorithmic journalism" were given a ranking boost by Google due to their brand strength.

The improved cost structure for firms employing "algorithmic journalism" will evoke Gresham's law. This starts off on niche market edges to legitimize the application, fund improvement of the technology & "extend journalism" but a couple years into the game a company that is about to go under bets the farm. When the strategy proves a winner for them, competing publishers either adopt the same or go under.

That is the future.

Across thousands of cities, millions of topics & billions of people.

Even More Corporate Boosts

Just because something is large does not mean it is great across the board. Businesses have strengths and weaknesses. Sure I do like love shopping on eBay for vintage video games, but does that mean I want to buy books from eBay? Nope.

Likewise, Google's friend of a friend approach to social misses the mark. Do I care that someone I exchanged emails with is a fan of an athlete who promotes his own highlight reels? No I do not.

In a world where machine generated journalism exists, I might LOVE one article from a publication while loathing auto-generated garbage published elsewhere on the same site.

Line Extension & "Merging Without Merging"

At Macworld in 2007 Eric Schmidt said "What I liked about the new device and the architecture of the Internet is you can merge without merging. Each company should do the absolutely best thing they can do every time, and I think he's shown that today."

If you don't have the ability to algorithmically generate content to test new markets then one of the best ways to "merge without merging" is to sell traffic to partners via an affiliate program.

Google has no problem promoting their own affiliate network, investing in other affiliate networks, or inserting themselves as the affiliate.

Google is also fine with Google scraping 3rd party data & creating a content farm that inserts themselves in the traffic stream. After they have damaged the ecosystem badly enough they can then buy out a 2nd or 3rd tier market player for pennies on the Dollar & integrate them into a Google product featured front & center. (It is not hard to be better than the rest of the market after you have sucked the profits out of the vertical & destroyed the business models of competitors).

Others don't have the ability to arbitrarily insert themselves into the traffic stream. They have to earn the exposure. But if other people want to play the affiliate game, they need to have "brand."

Affiliates Not Welcome in the Google AdWords Marketplace

At Affiliate Summit last year Google's Frederick Vallaeys basically stated that they appreciated the work of affiliates, but as the brands have moved in the independent affiliates have largely become unneeded duplication in the AdWords ad system. To quote him verbatim, "just an unnecessary step in the sales funnel."

In our free SEO tips we send new members I recommend setting up AdWords and adCenter accounts to test traffic streams, so that you have the data needed to know what keywords to target. But affiliates need not apply:

Hello Aaron Wall,

I just signed up for the Get $75 of Free AdWords with Google Adwords. After receiving an e-mail stating that I was to call an 877 number of Google Adwords, I was told in my phone call that affiliate marketing accounts were not accepted. I guess I confused by this statement. Is this in error? Or am I not understanding the Tip #3 for setting up an account for Google Adwords for promoting a website?

Thank you in advance for your time.
Sincerely,
Carole

The same Google which allows itself to shamefully carry a "get rich quick" AdSense category considers affiliate marketing unacceptable.

Non-AdSense Affiliates Classified as Doorway Pages, Not Welcome in the Organic Search Results?

The exact same thing is happening in the organic search results right now. Maybe not on your keywords & maybe not today, but if you are an affiliate, the trend is not your friend. ;)

I have heard recently from multiple friends that some of their affiliate sites were penalized for being doorway & bridge pages. At the same time, another friend showed me some BeatThatQuote affiliates ranking thin websites.

What is worse, is that in many instances, Google considers networks of similar sites to be spam. Yet at the same time the quickly growing Google Ventures is investing in companies like Whaleshark Media - a roll up currently consisting of 7 *exceptionally* similar websites in the same vertical.

Larger companies like BankRate can run a half-dozen credit card affiliate websites & an affiliate network. And they can create risk-adjusted yield by buying out smaller competitors, largely because Google won't penalize them based on the site being owned by a fortune 500. However the independent affiliate is forced to sell out early due to the risk that Google can arbitrarily decide they are a doorway site at anytime.

The absurd thing is that if independent webmasters don't include revenue generation in their website then they don't have the capital *required* to invest in brand & further improving their website. How do you compete against automated journalism when Google gives the automated content a ranking boost? And if you want to do higher quality than the machine generated content, how do you hire employees if you are not even allowed to monetize?

I suppose there is AdSense.

Even though AdSense publishers are Google's affiliates they are still welcome to participate in Google's ecosystem.

Risks to Small Businesses

Small businesses not only have to compete against algorithmic journalism, Google's algorithmic bias toward brands, arbitrary "doorway page" editorial judgements cast against them by engineers & significant algorithm changes, but they also have to deal with loopholes Google leaves in the system that allow them to be arbitrarily removed from the ecosystem.

Google showing you "closed in error" wouldn't be such a big deal if they didn't copy code, violate patents, deal in patents to spread their ecosystem, aggressively bundle & advertise, engage in price dumping, and behave in other anti-competitive ways to put their "incorrect facts" in front of billions of people.

The big issue Google is facing on the content quality front is the incentive structure. They have got that wrong for a long time now. They may think that these big changes are motivating people to improve quality, but realistically the lack of certainty is prohibiting investment in real quality while ramping investment in exploitation.

How can anyone invest deeply over the long term in a search ecosystem where Google...

Google would spin Performics out of DoubleClick, and sell it to holding firm Publicis.

Only one major force inside of Google hated the plan. Guess who? Larry Page.

According to our source, Larry tried to sell the rest of Google's executive team on keeping Performics.

"He wanted to see how those things work. He wanted to experiment."

The problem with that is that most honest economic innovation (eg: not just exploitation) comes from small businesses. Going into peak cheap oil where food riots are becoming more common & pensions are about to blow up, we need the kings of information to encourage innovation, rather than relying on doing whatever is easy & trusting established old leaders while retarding risk taking from (& investment in) start ups.

In some markets being successful means staying small, building deeper into a niche, and keep adding value until you have a strong position. However some ecommerce sites that were not associated with big brands were torched by the Panda update.

Betting on Brand

As Google has tilted their algorithm toward brand, some ecommerce companies that focused on winning relevant niches are now watering down their competitive advantages by betting the company on brand:

CSN Stores is today consolidating its 200+ shopping sites into a single ecommerce website under one brand: Wayfair.com.
...
So why the change to Wayfair.com? Primarily for obvious branding reasons: the company has long been spending a huge amount of money on marketing a lot of separate websites, and now they can focus on advertising just one.
...
Other reasons for the consolidation of the separate shopping site are search engine optimization – which was apparently much needed after Google’s recent Panda update – and the fresh ability to make recommendations to shoppers based on their collective purchase history.

But, as some brands abuse Google the same way the content farms did, is that a good bet? I don't think it is.

What is so Bad About Content Farms?

  • low quality
  • headline over-promises, content under-delivers
  • anonymously written
  • written by people who are often ignorant of what they are writing about
  • add nothing new to the ecosystem, just a dumbed-down reshash of what already exists
  • done cheaply & in bulk, in a factory-line styled format
  • contains frequent spelling and grammatical errors
  • primarily focused on pulling in traffic from search engines
  • exists primarily to promote something else (ads or the above-the-fold ecommerce product listings)
  • etc. etc. etc.

Such behavior is *not* unique to the sites that were branded as content farms & is quickly spreading across fortune 500 websites.

Big Brands Become Content Farms

A friend sent me an email which highlighted how a well-known brand was ordering thousands of pieces of "content" in bulk for their branded site.

Here is the email, with blurring to protect the guilty.

The only difference between the "content farms" and the branded sites engaging in content farming is the logo up in the top-left corner of the page. The business process from how the content is created, to who it is created by, to what they are paid to create it, to the interface it is ordered through, on to how it is published is exactly the same.

Many of the same authors who had some of their eHow "articles" deleted are now writing dozens of "articles" for fortune 500 websites.

When Panda happened & I saw corporate doorway pages (& recycled republished tweets) ranking I hinted that we could expect this problem. I thought it would start with parasitic hosting on branded sites & maybe a few opportunistic brand extensions.

Then I expected it would likely take a couple years to go mainstream.

But with the economy being so weak (and back in yet another undeclared recession, actually honestly never having left the last one) this shift only took 6 months to happen. At this point I expect it to spread quickly, especially as the economy gets worse. The above fortune 500 company is one that got a strong boost from Panda & as their downstream traffic from Google picks up over the next month or 2 you can expect many of their competitors to copy the strategy.

This isn't a US-only phenomena. A community member sent me the following, from another fortune 500 company.

Now that fortune 500s are doing almost everything that smaller players could do (but with more capital, more scale, more algorithmic immunity, requiring smaller players to link to them to be listed & in some cases while replacing humans with algorithms) AND get the Google brand boost the future is growing more uncertain for independent webmasters that lack brand, relationships, and community.

Big brands are basically pushed across the finish line while smaller webmasters must run uphill with a 80 pound backpack full of gear - in ice & snow, naked, while being shot at. What's worse, is that brands are now being bought, sold & licensed - just one more tool in the marketer's toolbox (presuming you have the cash).

disclaimer: I am not saying that all content farming is bad (I am fairly agnostic...if it works & people like it, then it works), but the above trend highlights the absurdity of Google's notion of whether something is spam based not on the offense, but rather who is doing it, especially as big brands just quietly turned into content farms.

Google Eats Their Organic Search Results

Sep 8th

"The future is already here — it's just not very evenly distributed." - William Gibson

Not only do they monetize via AdWords, but Google has 6 listings in the "organic" search results.

Any Google search engineer care to have a public debate as to the legitimacy of that search result set?

If an SEO gets half of the search results (for anything other than his own brand) he is an overt spammer. If Google eats half of the search results with duplicating nepotism across their own house "brands" then it is legitimate.

Making the above even worse, smaller niche brands are regularly disappeared from Google's index. Google has the ability to redirect search intent to one that is easier to monetize & more along a path they approve of. I was searching for a post John Andrews (webmaster of johnon.com) wrote about Google censorship & what did Google do? They used their power over the dictionary to change the words I searched for on the fly & then promoted their ebooks offering yet again.

Note that listings 1 & 2 promote the exact same book. Google just lists the content they scraped into multiple categories that deserve to be showcased multiple times. How many ways did Google screw up the above search result?

  • they auto-corrected the search query to an unwanted alternate search
  • in spite of auto-correction, they still allowed their other verticals to be inserted in the results inline right near the top (when rare longtail searches are auto-corrected, one would expect them to be more adverse to embedding such an aggressive self-promotion in the search results)
  • they associate content hosted by them as being about their brand simply because they host it (even though that piece of content has no relation to them outside of them scraping it)
  • they list it not once but twice, right at the top of the results (even though it is duplicate content available elsewhere & both pages are the same on Google, with the exception of one promoting a recent version of the book & the other page promoting a decade older version of the exact same book)

As a publisher you are *required* to keep spending more money on deeper editorial to avoid being labeled as spam or tripping some arbitrary "algorithmic" threshold. And as you do so, Google is humping you from the backside to ensure your profit margins stay low, scraping whatever they can within the limits of the law & operating the types of websites that would be considered spam if anyone else ran them. Once regulatory pressures or public opinion catch on to Google's parasitic behavior, they buy a brand & leverage its content to legitimize their (often) illegitimate enterprise. :)

Oh, and how about a quote from the Censored Screams book: "censorship, like charity, should begin at home, but, unlike charity, it should end there.‎"

Passive Online Income vs Sustainable Online Income

Aug 31st

Is there such a thing as "passive" income? Generally no. A person can cash out existing brand equity and exposure, but if they cash out too aggressively and/or do not reinvest enough then they are ultimately cashing out their market position and will eventually fade.

Does Google Make "Passive" Income?

Online there are some network effects that are hard to beat. MySpace had them over Facebook & only lost due to years of systematic incompetence & mismanagement. But if you are boastful about your business model competition will come and eat your lunch. Look at all the Groupon clones. And even Google has to claw and fight for every percent of search marketshare.

A person could say "well Google makes passive income" and I would counter that with "not really."

So far this month Google has made about a dozen search interface changes or tests & the underlying relevancy algorithms have likely had at least 3x or 4x as much change.

Keeping Google's Marketshare Costs Big Money

The propaganda Google spreads include statements like: "users keep coming back to Google even though they have a choice of a search engine every time they open a browser"

While Google maintains that their monopolist marketshare is due to user appreciation of superior technology, a ton of their exposure is paid for. I was helping a friend set up a new laptop and the amount of Google added to the machine made me feel like Google is the new Norton or Symantec.

If you use the Internet Explorer browser to access the web it comes with a Google Toolbar.

That toolbar defaults to enhanced features enabled.

Google not only pays to be the default search provider, but as part of that they also pay to have competition removed from the default options list!

Google also pays for Chrome to be installed in the laptop.

If you are curious enough to click on the pinned Chrome logo then when it opens they try to set it as your default browser.

If you do use Chrome regularly you see Chrome store ads bundled right into the browser.

Ads are also included within the interface of their online tools. For example, if you use Google Analytics they may recommend you try AdSense, AdWords, or their affiliate network.

The act of logging out of 1 Google service may trigger ads for another.

Google bundled chat into Google+ & they were fined by the FTC for bundling Google Buzz into Gmail, a violation of user's privacy.

Google's doodle drawings on their homepage may also promote their other offerings

Even if you don't use Chrome or the Google Toolbar in Internet Explorer then whenever you use Google they suggest setting it to your home page.

And even if you don't change your homepage, Google paid to be the default search box on Toshiba's default start page!

If you manage to somehow avoid all the above Google payola then they also pay other browsers (like Firefox) to be the default search service. Further, they then wait for those 3rd party browser plugins to have security issues & then do a bundled cross-promotion there, thus turning competing browsers into ads for more Google crap.

And when you go to update Flash, look where they tell you to search from

If your default search provider isn't Google when you install Chrome they use an option screen to help you change it, with Google being the first choice

Either Google is fibbing when they state how much of their existing marketshare is due to superior quality service, or they are hedging a risk of losing marketshare to Bing by buying placement everywhere they can. And to me this really highlights one of the big issues with truly "passive" online income. In spite of Google's success (& the great network effects they enjoy), even Google feels the need to spend hundreds of millions of Dollars a year buying exposure for their own browser, buying default search provider exposure in 3rd party browsers, and ensuring new computers are filled with promotional Google crapware.

Google also uses their browser's start screen to push beyond software into hardware...a cautionary tale for Android manufacturers after seeing Google acquire Motorola Mobility.

This sort of cross promotion is everywhere, from ads on Youtube promoting Chrome

to Gmail ads highlighting featured Youtube videos

and Google+ games having Chrome ads integrated as special items in the game

right on through to Google buying display ads promoting display ads.

Facebook realizes how powerful this cross-integration is & thus buys ads on Youtube as well.

But if you want to leave Google's ecosystem it takes a lot of effort, as Google is willing to advertise the Google alternative aggressively wherever they can.

Google recently extended their ecosystem of cross-referencing further by automatically adding Google Related to Google Chrome & the Google Toolbar, which recommends Google content within the browser no matter where you are on the web.

Google's bundling not only follows users around the web & personalizes ads, but it also bakes right into the core of their relevancy algorithms. Eric Schmidt stated "the internet would be better if we knew you were a real person rather than a dog or a fake person. Some people are just evil and we should be able to ID them and rank them downward."

Either you sign up for a Google Profile or you suffer the consequences! Forbes published (then quickly pulled) an alarming article titled “Stick Google Plus Buttons On Your Pages, Or Your Search Traffic Dies.” Wired followed up spreading a similar message & a new Google trusted stores rating system for merchants was also spotted.

With so many attempts at lock-in there is no surprise that some other browsers which have partnered with Google are considering moving on.

This is not to say that Bing doesn't do marketing as well. They just are not as slick about it.

Policing Advertisers Costs Billions

In addition to evolving their core relevancy algorithm, Google has to police advertisers who are willing to be deceptive, market counterfeit goods & use the lowest common denominator. When Google is too loose that can cost them a pretty penny: they just paid a $500 million fine to the US government for ads from Canadian pharmacies. The DOJ claimed Mr. Page knew what was going on:

Mr. Neronha said those efforts amounted to "window-dressing," allowing Google to continue earning revenues from the allegedly illicit ad sales even as it professed to be taking action against them. Google employees helped undercover Justice Department agents in the sting operation evade controls designed to stop companies from advertising illegally, he said.

"Suffice it to say that this is not two or three rogue employees at the customer service level doing this on their own," Mr. Neronha said in an interview. "This was a corporate decision to engage in this conduct."

Likewise, it costs Google a lot of money to deal with lawsuits that arise due to their business practices & lack of respect for copyright with photos, books & videos. They eventually had to develop an expensive video footprinting technology to adopt DRM features on Youtube.

And building the partnerships Google has to run Youtube isn't easy. They pay something like a half-cent per video view & if you create a site with a "no soup for you" message (like the above Google page) for markets where the finances do not work out then you are violating their search guidelines by cloaking, whereas Google overly-promotes YouTube in the search results and is free to count ad views as video views (once again, against Google's guidelines).

New Niche? New Lawsuits

Eric Schmidt highlighted how the lobbyists write the laws & then Google went out and hired over a dozen lobbyist firms. Anything that disintermediates search costs Google a cut of revenues.

While Groupon is still unproven as a business model, Google was willing to spend $6 billion to buy it in order to avoid the risk of missing out on a new form of local ads.

Mobile search now represents 12% of the search market. To look in their dominant search position onto the new devices Google:

  • build a new operating system to give away for free
  • paid carriers a revenue share (in addition to giving it away)
  • likely violated Oracle patents (that will likely cost them in the B's)
  • had other patent issues which required Google to spend $12.5 billion buying Motorola (that is nearly 1/3 of the cash Google has built up through their IPO & saved profits in the 10-year history of the company)

Sneaky ISPs Redirecting Search Traffic

What is worse for Google, is in spite their default status, their huge ad budget, and being large enough to be sued regularly, even all that isn't enough to keep all the traffic they pay for, as there is widespread hijacking of search traffic by ISP providers.

Google Isn't Passive, but ___ Is

Google may have bit off more than they could chew & are certainly doing anything but being passive. But maybe some other companies that make great money are doing so passively. Offline that is certainly true in many instances, but online passive companies tend to disappear.

Look at all the work Yahoo! has done with their news box & their sports vertical, yet when you back out the cash on the books & the foreign investments the company isn't valued at much above $0. AOL has also cratered. In spite of their huge traffic streams they are not growing with the market due to search bypassing them & niche players picking them apart one vertical at a time. Running a portal profitably & sustainably is anything but passive.

Even deep into the long tail at the other end of the equation the profits may be every bit as scarce. Demand Media's accounting techniques show that they were far better at growing revenues than growing profits & the company may never be profitable.

The Limits of "Search"

Google & Bing keep eating more of the value chain through content scraping & a more interactive search experience that include new ad formats, like coupons & product ads with pictures.

In addition, search companies are challenging the boundaries of search by creating vertical media & ad networks that compete against a wide array of publisher websites.

The Huffington Post

Autonomy / Fast Search

Groupon

BankRate

MapQuest + TomTom

The Yellow Pages

Dell / HP

That "Shady" Competitor

When Google talks about "protecting users" one of the case studies / angles they push is the health angle:

The paid post at the top happens to be about brain tumors, which is a really serious subject. If you are searching for information about brain cancer or radiosurgery, you probably don’t want a company buying links in an attempt to show up higher in search engines. Other paid posts might not be as starkly life-or-death, but they can still pollute the ecology of the web.

While Google was using the life-or-death approach to policing link buying outside of their AdWords ad network, Google was knowingly selling search ads to Canadian "pharmacies" providing illicit drugs in the US. The official settlement document lists how Google insiders knew work-arounds to the automated systems & were working directly on managing the ad accounts associated with the illegal activities. Google had done so for over a half-decade & only changed their approach *after* they knew a sting operation was underway.

For those scoring at home, this has been Google's approach to the health vertical:

  • 3rd parties buying links that *could* influence search results for important health topics = morally reprehensible
  • Google selling links *within* the search results for important health topics to criminal organizations = totally reasonable

Given the above investigation, it is not surprising that they shut down their health records initiative. They had already spent all their credibility.

Google may protect you from some third parties, but Google can not protect you from Google. :D

Not only can Google hardcode the algorithms toward promoting certain websites (while editorially discriminating against other webmasters for doing the exact same thing), but Google also actively invests in the publishing ecosystem, which pits them directly against anyone who doesn't receive their largesse.

Webmasters are told that having networks of similar websites is spammy. And yet, Google invests is a company that owns about 7 copies of the exact same business model in the exact same niche as a roll up.

As we saw with BeatThatQuote, Google owned-and-operated websites get penalized for a shorter duration of time for the same offense that other websites get penalized for longer periods of time for. It was only through *repeated* exposure of the absurdity on SEO blogs that Google decided to treat their own property like they treat a typical webmaster.

You can also do nothing wrong, but have your model undermined by looking too similar to a company that is exploiting Google's relevancy weaknesses & forces Google to apply retribution. A lot of small ecommerce sites were purged in the content farm update. What is so sad about that is that if not for accounting games & selling stock as a business model a lot of the biggest "success" stories in the content farm might not even exist.

While the above section focuses on Google, it could be about any competing business that touches the web...a bank which uses bogus accounting driving smaller banks out of business, a company that receives no bid government contracts associated with bribes & uses those "profits" to price dump in related fields, an ISP redirecting your traffic, etc. No matter how clean a business model looks at a glace, there is some gray area where businesses meet & exceed the numbers quarter after quarter.

Look, for example, at the sorts of links NetZero puts in some of their customer emails

And those links point at the illegal "fake news" styled $1 trials (with endless unstoppable recurring billing).

Look closely at any mainstream media site & you will run into those ads.

Are Passive Revenues Impossible?

It really comes down to how you define passive.

If your site doesn't evolve & isn't aggressively marketed then eventually a search engine or another competitor will pick away at your advantages until you are soon found ranking #2 then #3 then #7 then #20 then invisible. Or you might get clipped by an algorithm all at once in a sudden stop torch job that makes your site essentially invisible, or it may be a slow & painful debt by a thousand cuts.

This is one of the reasons I generally prefer to have a site with a 30% or 50% profit margin over one with a 90% or 95% profit margin. Sure high margins are great while they last, but if you don't reinvest enough over time an algorithm or a competitor will eventually torch some of those high margin projects.

When it comes to online income, passive and reliable are not synonyms.

If you saved the margins you made while they were there then you are lucky, whereas if you adjust your lifestyle to that level of income & don't save anything then dark times have appeared.

It turns out having passive frugal spending habits & active savings habits are crucial if your lifestyle relies on "passive" income. ;)

Buying Google AdWords Ads on Brand Keywords?

Is Paid Search Incremental or Cannibalistic?

Earlier this month Google referenced a "study" they did which showed that 89% of AdWords ad clicks were incremental (meaning that they were clicks that the website would not have received if they relied on organic search results alone).

As part of that "study" they stated that "indirect navigation to the advertiser site is not considered." Why did they chose to exclude that segment of traffic? Because they advertiser would have got almost all of it anyway. They never really defined what indirect navigation is though, so you are left to guess as to what qualifies as being part of that segment.

The "study" also stated:

A low value of incremental ad clicks may occur when the paid and organic results are both similar and in close proximity to each other on the search results page. This increases the likelihood of a user clicking on an organic result as opposed to a paid result. Close proximity occurs when the ranking of the organic result is high, placing it near the paid results. Organic results triggered by branded search terms tend to have a higher ranking on average and this may lead to a low IAC value.

So which keywords should you advertise on? And which keywords are buying the milk when you already have the cow for free? According to Google:

A low IAC value does not necessarily suggest a pause in search advertising is in order. In fact, for many advertisers with a low IAC, it is still profitable to invest in search advertising. To evaluate the economic benefits of search advertising, an advertiser must run a calculation incorporating their individual IAC, conversion rates, and conversion revenue. The below equation can help determine whether search advertising is worthwhile on a case by case basis.

Is an Experiment Required?

Google later suggests that a more rigorous test would include a split test experiment that compares a control group against an ad group with paid search ads held back. They then suggest that "many advertisers are adverse to conducting such experiments due to the setup costs involved and the potential revenue impact from having a hold-out group."

What I don't buy *at all* is the suggestion that such studies need to be rigorous & expensive. On the organic search front, Google Webmaster Tools already offers organic search CTR stats by ranking position & ranked page:

And since Google is heavily promoting adoption of the +1 button, they also offer A/B split data for how that button impacts search performance.

If Google provides this data for free for organic search then why (other than protecting their own revenues) do they suggest this data is hard to attain for paid search? If Google respected their advertisers & wanted the advertisers to advertise based on complete data they would make this data available automatically, like they do with the +1 button data.

No "Study" Required

Here is my big problem I have with Google suggesting that I need a quantitative study to know if I should buy my own branded keywords:

  • I know I am going to get almost all the clicks anyhow (Google removed "indirect navigation" from their study for a reason, and 3rd party studies have shown how directly cannibalistic these ads are)
  • the whole point of building a brand is increased affinity with users & not needing to pay for incremental distribution driven by brand demand. To spend money to build brand only to have to keep rebuying the existing brand equity is quite a futile exercise.
  • in the bid auction Google sets arbitrary pricing floors at the keyword level to squeeze advertisers (almost nobody is bidding on "seo book" but if I do Google will want $2 or $3 per click)
  • even if I go through said "quantitative study" I end up needing to re-test it every so often as Google arbitrarily juices the ad prices to increase their revenues
  • when Google offers the enhanced long sitelinks they are doing so because they think the search query is primarily navigational, yet they still put ads above the organic search results, which IMHO is pretty dirty
  • and the dirtiest bit of it all (that smells the worst) is that competing against you in the ad auction is not only arbitrary pricing floors, but also Google itself, which buys keywords against your brand (using their own monopoly money)

Larger Sitelinks Drive Down Competition

Google recently expanded sitelinks in the organic search results to make them take up a huge portion of the above-the-fold screen real estate, driving down attempted organic search brand arbitrage & negative reputation issues.

Driving Down the Search Results

Using features like Google Instant, a Google+ promotional bar & longer AdWords ad copy, Google has been aggressively pushing down the search result set so fewer listings appear above the fold.

Each month there is another test of some new feature that pushes the organic search results downward.

Zero Moment of Burning Ad Budget

Google promotes a concept called "the zero moment of truth" suggesting that you need to advertise just about anywhere late in the conversion cycle to "be there" and reinforce your messaging.

However, with enhanced organic sitelinks, the brand owns so much of the search real estate that it will lose limited traffic to competitors if it doesn't buy AdWords on its branded keywords. Further, given the ability to block certain sitelinks & edit the page title & meta description you should be able to control the copy on your branded organic listing to make it look and feel like the ad copy you would use in AdWords.

There are some nuanced exceptions though, as brands are not always well aligned with how people search...

When You Should Buy Your Brand Keywords

Short Term Specials & Promotions

If you have an event coming up that you need to promote for a short duration of time then running AdWords ads is a great way to instantly get exposure for that campaign.

Certain Misspellings

In the past if you misspelled keywords Google would put the spell correction right at the top of the page. More recently they have decided to put it below the AdWords ads. So on this type of ad (where Amazon already ranks #1, but has the organic search results pushed down by the ad & then a spell suggestion) I think that ad is burning money.

In other cases, like where you don't rank high in the organic search results, buying AdWords ads on common misspellings is a much smarter idea. For instance, I think this is a smart ad buy by Agoda.

However, in the longrun, if I ran Agoda, I would point a few misspelled links at my website to boost my rankings for common misspellings.

One way to reach misspellings and longertailed searches for your brand is to use an embedded match, where you bid on agoda and then use -[agoda] as a negative keyword.

Brand is Shared By Multiple Companies

Mercedes Benz is burning a bit of their ad budget by advertising where they are irrelevant.

Certainly it makes sense for them to buy exposure for the branded keywords, but in the above examples they should put -kingston as a negative keyword.

When Google Runs Negative Ads

In some cases Google ads promote negative messaging. For instance, while using Gmail I saw an ad suggesting that I should "uninstall McAfee" in a computer that did not even have it.

Buying branded ads in those cases would likely make sense, if for no other reason to compete with & block out risky negative ads that could go viral. Whether Google should even allow such ads is another question for debate.

Big Money Markets Full of Spam

Google was recently clipped by the DOJ for a half-BILLION Dollars for running illicit ads promoting Canadian pharmacies. The DOJ went so far as highlighting that Larry Page knew what was going on & intentionally allowed these ads to run:

Mr. Neronha said those efforts amounted to "window-dressing," allowing Google to continue earning revenues from the allegedly illicit ad sales even as it professed to be taking action against them. Google employees helped undercover Justice Department agents in the sting operation evade controls designed to stop companies from advertising illegally, he said.

"Suffice it to say that this is not two or three rogue employees at the customer service level doing this on their own," Mr. Neronha said in an interview. "This was a corporate decision to engage in this conduct."

After the above instance, Google is perhaps going to be "guilty until proven innocent" where they are running sketchy ads.

In the short run it is likely appropriate to still run branded keyword ads while the issue is getting sorted out, but if you see anything like the following on your branded search results it probably makes sense to fight it on the public relations front in the background while opening the wallet to protect the brand publicly.

And since most major pharmaceutical corporations are routinely fined for running illegal ads, I don't understand why these pharma corps don't have a black hat SEO (or 3) on staff to help manage the search results.

If Google wants brand then give it to them in spades. ;)

Google Appends Prior Search Query

Aug 28th

Smart SEOs have been preaching brand for years and years now (& so has Google if you read between the lines).

For some time Google has appended prior search queries in AdWords. In some cases they also show ads for related search queries, append your location to the search query for localization, spell-correct search results based on common search trends, and (as the Vince update showed) they can also use search query chains & brand related searches as a signal.

As far back as 2008 Google sugested previous query refinements for organic search, but they haven't been very prevalent thusfar IMHO.

While researching another article, I was searching for some browsers to see how search engines were advertising on various keywords, and after searching for Firefox I later searched for SEO & saw the following:

This is yet another way brand familiarity can boost rankings. Not only are you likely to score higher on generic search queries (due to the Vince & Panda updates), but having a well-known brand also makes Google more likely to recommend your brand as a keyword to suggest in Google Instant, makes people more likely to +1 your site, and it now also can impact the related organic search results further if people search for that brand shortly before searching for broader industry keywords.

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