What Market Isn't Gamed?

Today Shanghai's Composite Index lost nearly 9% of it's value. And the Dow Jones Industrial Average dropped nearly 200 points instantaneously right around 3:00 p.m. EST. When the stock (or commodity) prices go up or down value is neither created or destroyed, but shifted and/or consolidated. Wealth is nothing but a form of market leverage. The people running the stock markets do not even know what they are worth:

"The market's extraordinary trading volume caused a delay in the Dow Jones data systems," said Dow Jones spokeswoman Sybille Reitz. "We decided to switch over to the backup system, and the result was a rapid catch-up in the published value of the Dow Jones industrial average."

Spokesmen for the NYSE Group Inc. and Nasdaq Stock Market Inc. could not immediately confirm whether all closing share prices were valid. A spokesman for the Big Board said it experienced "intermittent delays and are currently assessing the situation." The Nasdaq said it was "confirming" the closing numbers.

I think market glitches like these also relate to SEO and marketing. The more reliant you are on any one source / technique / strategy the more often you run into glitches and the harder they hit you.

I think understanding the web and how search interfaces with other business models allows you to know many markets better than the market does. The hard part is investing without emotional attachment or greed. Read more about the drop.

A Proprietary Web Graph: Is Google Paying You to Edit Their Search Results?

Google works so well because they are scalable, but they are not adverse to paying people to review content quality, because they love human computation, just see their Google Image Labeler game. What if Google came up with ways to determine which users were real and trustworthy, and could give those users incentive to edit the search results for Google? And what if Google could give a similar incentive to advertisers and legitimate publishers?

What if just by reading this you are helping Google trust this site more?

Attention Data:

Google already is the market leader in tracking attention data on the active portions of the web. What if Google integrated attention data into their algorithm and to offset that decide to lower the quantity of links they would count in any time period or the weight they would put on them? What would that do to the value of link baiting? How can Google move away from links?

WebmasterWorld and Threadwatch both recently had great posts about a recent Google patent application about removing documents based on the actions of trusted users.

Google's Own Web Graph:

Google is setting up an alternate proprietary web graph outside of linkage data. Sure any single point of attention data may be gamed, but they are likely far more reliable when you triangulate them. And if a few data points fall outside of expected ranges for the associated site profile pay to have the data reviewed. Based on that review demote spam or further refine the relevancy algorithms.

A Complete Feedback Cycle:

Google is the perfect shopping mall. Google...

  • verifies the legitimacy of user accounts by looking at their history, comparing them to other users, and challenging them with captchas.

  • tracks click-through rates and user activity, associated with user accounts and IP addresses.
  • hosts a bunch of web content, which is syndicated on many channels, and can further be used to understand the topical interests of the account holders and reach of publishers.
  • asks for searcher feedback on advertisements
  • allows people to note URLs using Google notebooks
  • tracks feedback after conversions
  • puts themselves in the middle of transactions with Google Checkout

Why wouldn't they be open to using those and other forms of feedback to help shape relevancy?

Opening up AdWords to display content partner URLs is probably a pretty good example of them adding an advertiser feature for improvement of organic relevancy scores. If advertisers think a site is garbage and Google knows that most of that site's traffic only comes from search engines it would pretty easy to demote that site. AdSense publishers also have created blacklists.

Popularity vs Personal Relevance:

Google can triangulate all these data points to see beyond just how much hype any idea creates. They can understand user satisfaction and brand loyalty, which are far more important than just how much short term hype an idea can generate.

If 100 searchers with somewhat similar profiles to mine are loyal to brands x, y, and z then I am going to see them more often, even if those sites are not well integrated into the web as a whole.

Digital Identities:

Bill Slawski recently posted about Google's Agent Rank patent, and there is a push to create a distributed login system called OpenID. Google may not need a single login to track everyone. All they have to do is get a large representative sample of legitimate web users to get a pretty good idea of what is important.

As Bob Massa said, search engines follow people.

Personalization is not going to be what makes SEO harder. It is going to be linguistic profiling, attention profiling, community interaction, and layered user feedback that make it harder to promote garbage and easier to promote quality sites. I still see spammy link building working today, but I don't see it staying that way 2 years out.

Google AdWords to Show Contextual Ad Location URLs

Jen noticed that Google's Kim Malone announced that in the next couple months AdWords will start displaying content targeted ad locations.

Google AdSense pays most publishers crumbs for their ad space. People who are running AdSense ads are willing to sell ads. And sites that have AdSense ads on them are probably actively managed.

Is there a better way to get a list of relevant pages to acquire links from than to run a content targeted AdSense ad campaign and ping those webmasters?

New Keyword List Cleaner Tool

With many companies offering free keyword research tools I recently created a keyword list cleaner that can be used to help you format keyword data into a usable format. Use the SEO Book keyword list cleaner, grab the source code if you like it, or read here for background on the tool.

Valuing Digital Goods

Social networks are brutally tough to monetize, especially when you consider hardware costs.

In response to Facebook's gift giving feature, Danah Boyd and James Hong both recently posted about gift giving and digital goods. Facebook's gift giving feature is time limited and donates the money to a charity, which allows them to collect market feedback without much risk, but there are ways they could improve it.

Danah posted

I think that Facebook is right-on for making a gifting-based offering, but i think that to make it work long-term, they need to understand gifting a bit better. It's about status. It's about scarcity. It's about reciprocity and upping the ante. These need to worked into the system and evolving this will make Facebook look good, not like they are backpeddling. This is not about gifting being a one-time rush; it's about understanding the social structure of gifting.

James, a founder of HotorNot.com, wrote

We found, last time we ran the numbers, that sending flowers increased the likelihood of a "double match" on our system by 4x.. meaning as a signal, they are well received and really work.

If we had priced them low, the flowers would have been worthless to everyone.

Self-Reinforcing, Self-Promotional Bias

A large part of making business successful is leveraging your authority and using nepotism to extend your sphere of influence. If things look a bit circular in nature that is because they are. Nearly everything you consume has a self promotional bias, but is that any reason to complain? Wouldn't be even scarier if the things you enjoyed and associated with were self destructing?

Examples of Self Promotional Bias in the Media:

If a politician pushes bogus laws (that they know will never be passed) for self promotion and news coverage then why wouldn't the media companies that grant that exposure also grant themselves some leeway? Do you think a news company owned by GE is going to publish a cover story about pollution by GE? Do you think Fox News will stand up against their big advertisers (even when their advertisers are responsible for causing cancer)? Of course not.

The bigger something gets the more hidden stakeholders it has to appeal to. Very rarely do owners get the opportunity to speak honestly about large companies. In many cases they are obligated not to in order to maximize shareholder value. I have had VCs offer to invest in me multiple times but have refused time and time again because I don't want hidden stakeholders controlling my actions.

People discouraging institutional analysis may say Noam Chomsky's Manufacturing Consent is a conspiracy theory, but why would it be? What business isn't biased toward their own self interests? Self preservation is a core goal of any institution.

Broken Egos:

Many junk products exist with demand driven by hype, spam, and scammy multi-level marketing, but many
business models exists because we as consumers have holes in our egos and want to lie to ourselves to justify our own flaws and actions.

As technology replaces the roles of many workers while making communication cheaper and easier, people have to do more to earn a living and it is harder to create new ideas, so we have to do more cause driven things to feel purpose and meaning in life.

We want to believe that ethanol
is providing cleaner fuel
even if creating it takes more energy than it creates.

As for the environmental impact, well, where do we begin? As an oxygenate, ethanol increases the level of nitrous oxides in the atmosphere and thus causes smog. The scientific literature is also divided about whether the energy inputs required to produce ethanol actually exceed its energy output. It takes fertilizer to grow the corn, and fuel to ship and process it, and so forth. Even the most optimistic estimate says ethanol's net energy output is a marginal improvement of only 1.3 to one. For purposes of comparison, energy outputs from gasoline exceed inputs by an estimated 10 to one.

Bias in Consumption:

Why is Fox News so profitable? Because it isn't really news. It is biased entertainment sold as news:

A new study based on a series of seven US polls conducted from January through September of this year reveals that before and after the Iraq war, a majority of Americans have had significant misperceptions and these are highly related to support for the war in Iraq.

The polling, conducted by the Program on International Policy (PIPA) at the University of Maryland and Knowledge Networks, also reveals that the frequency of these misperceptions varies significantly according to individuals' primary source of news. Those who primarily watch Fox News are significantly more likely to have misperceptions, while those who primarily listen to NPR or watch PBS are significantly less likely.

Just like how we want to believe certain lies to make ourselves feel good, we also consume things
that reinforce our identities and worldviews.

How many decidedly centrist political blogs are successful compared to the number of strong democrat and strong republican blogs? It is easier to trust things that are easy to relate to, and trust has more value than objectivity.

I probably read just about every blog post that links to my site because I want to know why people are
talking about me. Is that a self serving bias? Absolutely. But why wouldn't I have that bias?

Changing Someone Else's Worldview:

It is much easier to sell someone something they want than to try to change their worldview.

An SEO thought they were going to change the image of SEOs on Digg by writing a letter about SEO. After getting many votes it was promptly removed from the Digg.com homepage.

It is even easy for a well rounded guy like Scott Karp to view SEO in a negative light after seeing so much negative coverage of the topic. Scott was more receptive to feedback than Digg because he only needs to change his opinion, he doesn't have to go against the group think consensus on Digg to change his content.

It is easy to be popular as a politician in the US by hating terrorists, gays, and gay terrorists. It is easy to be popular on Digg by hating SEOs. Neither of those mean that the blind hate is correct or has any value (other than realizing it creates a market that is easy to exploit - because as a market they are targeted and already letting others exploit them).

Many business owners create business models that explicitly are designed to take advantage of the blind faith, bigotry, ignorance, and hypocrisy core to many popular religions, or other large self-serving authority structures.

Fighting Noise:

As markets mature, market leaders have less time to learn (because they are so overwhelmed with things to do). Given that publishing costs have dropped to zero and web business models are so scalable, is it any wonder that market leaders tend to read less and do more testing on their own (especially if they became a market leader as a side effect of learning)?

Aaron Pratt has recently whined about the circular linking patterns of SEO elites, even having a guest post by Michael Goldberg, but a comment on that post by Ahmed Bilal was spot on:

In any such environment the good will rise and then naturally protect themselves by strengthening their following (herd). If you want to get to the top (topple them, beat them, match them, whatever), you have to build your own following, your own herd.

What are we doing about this right now? Are you actively finding, reading and linking to one new SEO blog a day?

If you want to be read, then you have to be interesting and you have to attract attention. That's the way it works best - asking for attention or saying that you deserve it won't help.

And yet on my recent blog post about the recent Google (update algo tweak refresh whatever) Aaron Pratt said this:

I am not seeing any loss/gain of earnings in Adsense which leads me to believe their is nothing going on.

Being a good SEO is about noticing patterns beyond your own experiences and surrounding yourself with others who can do the same.

Notice that I didn't outright call the latest Google Update an update, because Google heavily controls that language and wants to obfuscate examination of their changes (wait for the official word from Google on the data push / update / refresh / etc). Just how Google controls their update language, their self promotional bias and control of search related language is largely responsible for the public perception of SEO.

My Experiences With Authority:

Less than 5 years ago I got kicked out of the military. Since then:

  • I have been flown to a college and asked if I want to become a professor, but I think I wanted far more money than they wanted to pay. Since then I have created numerous passive income streams that far exceed what they would have paid.

  • I have had multiple VCs want to by a stake in my businesses, but turned them down.
  • I have been offered to get published by a major publishing house, but turned it down because it would have screwed up my business model. There is no business model in getting published unless you are publishing a thinly disguised advertisement or need the publisher for credibility.
  • I have been mentioned in the mainstream media numerous times. Not typically for the stuff I know best, but more for getting sued and for being the person who spent $8 registering BlackHatSeo.com. I have had done some long interviews that have never seen the light of day because I was far too honest.

Those were all opportunities at traditional forms of authority, and generally I turned them down because they were not worth the cost. The point here is that generally I am not a fan of most authorities.

Becoming an Authority:

If you are new to the market you do have biases against you: capital, market knowledge, relationships and attention. But you also have the advantage of being able to take the time to create really cool stuff and do lots of tests because people are not expecting you to do lots of things every day, and you can learn from mistakes of those who entered the market before you.

To get market recognition in a saturated market you have to come up with new, interesting, or innovative things. And if you can't do those you have to at least cause human emotions...do things that appeal to people and make people feel love or hate. Look how new SEOMoz is and they are already on the 1st page of Google for SEO and got a ton of media coverage.

If bias toward known authorities is something that is a common flaw with humans and all social structures there is little value in complaining about it. Instead accept it for what it is and let it feed into your marketing. Sure the Good Old Boy's club sucks, but if you don't offer solutions, then complaints about flaws in human nature are void of meaning.

Via (RCJordan (WMW))

"Resource" is an encomium bestowed only by users; "authority" is bestowed only by previously recognized authorities. Anyone who calls himself either one, is just an ego with vocal chords.

Google Algorithm Update / Refresh

Not sure if it is correct to call it an algorithm update, but a number of keywords I watch I have seen large authority sites get demoted in favor of smaller niche players with spammy keyword rich backlink profiles. I am seeing things like spammy new(ish) lead generation sites outranking fortune 500s and long standing industry association sites.

This is probably about the first update in a year that I have seen Google do anything major that bucks the trend of placing more and more emphasis on legitimate authoritative domains, although things are still shifting around quite a bit and will probably head back the other direction soon.

What are you seeing?

Update: Thanks for all the great comments below. I think Cygnus summed up the change best so far:

I see a few things that can probably be summed up as one change...the sandbox/trustbox was modified to be less restrictive on age and theme. I'm betting it'll tighten up again, but hopefully just on the theme.

To me, this was their way of tackling the ever-growing .edu spam. A lot of that is gone from some of the SERPs I watch; of course, now I see even more blogspots a few pages into the listings, so who knows how much tweaking they'll do over the next couple of weeks.

Certified By...

One of the easiest ways to strengthen a leading market position is to give others in your market incentive to place your brand on their site. It is even sweeter if it comes with a link to your site.

  • Is your financial commentary SeekingAlpha certified?

  • Is your nursing site syndicated to NursingVoices?
  • Is your blog a member of the 9 Rules network?

Strong networks tend to take flow some of the market leverage and market exposure from the most powerful voices to newer sites.

Too many of these types of endorsements make a blog look cluttered, but it probably doesn't hurt to have one or two, especially if your site is new to a market with many established competitors.

These types of endorsement links can also be created in other ways, such as powered by Wordpress, free template by x, and syndicating wigets.

Large Networks Adding New Editorial Content Formats

Many top destination sites are adding blogs and other publishing formats to their site to build their authority and market-share. This editorial content creates value, builds trust and authority, and allows for a more profitable blend of content and advertisements.

Yahoo! & Yahoo! Tech:

  • Yahoo! Tech has a holiday shopping guide and a holiday gift guide as well as user voting. Notice the anchor text on those first two links...they are naming some of their services specifically for keywords.

  • Yahoo! Tech also offers fake celebrity wish lists where they tell you what they suspect certain celebrities would like. Which is quite absurd considering one of their celebrities is a Yahoo! worker. How hard would it be just to go get their real wish list directly?
  • Yahoo! wraps content in a small bite size video format called The 9. Notice how The 9 packages content, links off to other sites where necessary, but often features other Yahoo! content. This news is packaged as though it is not an advertisement for Yahoo!'s various content properties.
  • What is scary is that the editorial is fairly lenient, occasionally adding real value. Yahoo! is posting tips on how to save money on Amazon.com.

Amazon:

Some of the large platforms have significant market leverage, capital, the ability to quickly test and track the results of tests, improving user feedback integration, recommendation engines, and are adding features to make ordering easier in higher priced and more complex verticals. Add all those forms of value creation and optimization to a blend of ads and editorial content and it is going to be hard to compete with them in the search results.

If you are a niche player and do not have a compelling editorial element or industry standard reference documents it is going to be hard to compete in a few years.

Create Value, Then Profit

Shane, an attendee from the first Elite Retreat, posted about why it is not best to monetize a blog right out of the gate:

So, your focus at the beginning has to be on attracting and retaining readers. You do that by having a great site, and nothing turns visitors off more than a brand new blog with just a handful of posts and ads splashed everywhere. It says to them that you’re more interested in making money than you are in providing good content. Who wants a site that’s all sales and no substance?

Tim O'Reilly noted that the failure of satelight radio is largely because they failed to put the customer first

Just remember how Google got their edge. It wasn't just pagerank and better search results, it was refusing to go the portal route, with intrusive advertising, and instead trying to figure out how to create a better user experience with advertising. Making ads non-intrusive and useful to their real customers was one of Google's biggest breakthroughs. (They will forget that at their peril.)
...
Today, you need to ride the wave of commoditization in both hardware and software, and build your value in new ways. Understanding those new ways is the heart of Web 2.0. And a big part of that is putting the user first.

Joel Spolsky recently wrote a great article offering Seven steps to remarkable customer service.

And, here I was, on this planet for forty years, and I couldn’t believe how much the three words “it’s my fault” had completely changed my emotions in a matter of seconds.

Seth Godin followed that up with a post titled Starting over with customer service:

I think the single factor that is killing this process and that is under the company's control is this: the desire to perform all customer service in real time.

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