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

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

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

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

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

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

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

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

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

She later commented on the ideal credit card customer

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

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

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

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

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

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

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

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

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

Best,

Sandra

-----

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

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

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

1. Weak Domain Name

Google AdWords

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

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

SEO

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

Recommendations

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

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

2. All Search Traffic Driven to Homepage

Google AdWords

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

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

SEO

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

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

Recommendations

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

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

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

3. No Link Building

Google AdWords

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

SEO

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

Recommendations

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

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

4. All Links to the Homepage

Google AdWords

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

SEO

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

Recommendations

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

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

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

Google AdWords

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

SEO

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

Recommendations

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

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

6. No Focus on Quality

Google AdWords

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

SEO

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

Recommendations

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

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

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

7. Lacking On Page Optimization

Google AdWords

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

SEO

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

Recommendations

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

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

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

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

8. No Site Structure

Google AdWords

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

SEO

If your site is not structured well then...

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

Recommendations

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

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

9. Site With No Value Add

Google AdWords

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

SEO

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

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

Recommendations

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

10. Competitive Saturated Market With Inadequate Budget

Google AdWords

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

SEO

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

Recommendations

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

11. Picking a Market for 1

Google AdWords & SEO

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

Recommendations

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

12. Pick a Market Which Does Not Monetize

Google AdWords

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

SEO

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

Recommendations

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

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

13. Over-Aggressive Monetization From Day 1

Google AdWords

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

SEO

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

Recommendations

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

14. What Other Common SEM Errors do You See?

Free Inline Keyword Research Tool

WordTracker recently announced the launch of a new free Firefox extension that aids you in doing keyword research while blogging. The keyword tool works with any publishing software, and helps you ensure you work selected keywords into the content. The tool sits to the left of the browser window, and as you type, it will search your post and does an analysis of the text in your content to see if any of the phrases appear.

How to Use It

You can manually select keywords that you think would be highly relevant and then try to work them into the content. And when it is not possible to fit in a whole phrase naturally, you can always try to sprinkle those keyword modifiers that make up the phrase into your post's content. For instance, in the above post I worked in the words software, free, search, and generator into the content quite naturally in only a 4 sentence blog post.

“Bloggers often don’t take the time to do keyword research for each article they write – they just want to get their story out there. Now, bloggers have instant access to relevant keywords so they can easily produce optimized blog posts. That’s sure to bring them extra traffic.” Said Ken McGaffin, CMO at Wordtracker.

Free Keyword Research Guide

And with this tool Wordtracker offers a free companion keyword guide for bloggers from my buddy ChrisG worth checking out if you are new to blogging or SEO.

The AP reported that the FTC is planning on going after bloggers that make fake endorsements or get paid in products for coverage without disclosing it:

"New guidelines, expected to be approved late this summer with possible modifications, would clarify that the agency can go after bloggers--as well as the companies that compensate them--for any false claims or failure to disclose conflicts of interest," the article explained.

The rules could be quite strict, even extending to the practice of affiliate links--for example, a music blogger who links to a song on Amazon MP3 or iTunes that earns an affiliate commission in the process.

What is absurd (to me at least) is how inefficient this process is. What needs to happen is better enforcement on ad networks, search engines, and merchants. Follow the money downstream rather than hunting for nickels upstream.

The people who are making fake sites are doing so because they are paid to. And amoral ad networks that syndicate ads based on *maximizing yield efficiency* (like Google AdWords) are designed to syndicate fraud because it is easy for advertisers to pay a lot for ads when their profit margins are nearly 100% because they scam people.

Look how sophisticated some of the fake sites are here.

You will never track them down one at a time because many domains are internationally owned, anonymously registered, and some domain names only cost a couple dollars to register. Wordpress.com and Google's Blogspot are free, which leads to automated spam pushing scams:

Three out of every four unique Blogspot.com URLs that appeared in the top 50 results for commercial queries were spam, the study said. Blogspot is the hosting site for Google's blogging service. Blogs created for marketing purposes are sometimes referred to as "splogs."

They need to police the distribution vehicles through which the scams find consumers - ad networks. Any individual blogger can remain fairly anonymous, but ad networks can not scale to efficiency and create publisher and advertiser relationships without being well known.

One recent article talked about how clicking on certain keyword search results was a bit like Russian Roulette. Ben Eddleman explained the issue well in his article titled False and Deceptive Pay-Per-Click Ads. After he showed a long list of scammy pay-per-click ads he wrote:

Each and every one of these ads includes the claim that the specified product is "free." (These claims are expressed in ad titles, bodies, and/or display URLs). However, to the best of my knowledge, that claim is false, as applied to each and every ad shown above: The specified products are available from the specified sites only if the user pays a subscription fee.

These ads are particularly galling because, in each example, the specified program is available for free elsewhere on the web, e.g. directly from its developer's web site. Since these products are free elsewhere, yet cost money at these sites (despite promises to the contrary), these sites offer users a particularly poor value.

Ben continues to the appropriate conclusion

Google's inaction exactly confirms my allegation: That Google's ad policies are inadequate to protect users from outright scams, even when these scams are specifically brought to Google's attention.

Once again, to prove Ben's point, here are some of the government grant ads that the FTC warned about

This issue has been aired many times. Lets not forget that Google lied to the government and media when they said they cleaned up the government grant ads, and these fraudulent ads are still running strong today.

Most searchers unaware that search results have ads on them, and likely less than 1:10,000 are aware of Yahoo!'s Paid Inclusion program that blends ads directly into the organic search results. Most SEO professionals can not point out which Yahoo! Search Submit results are paid.

A 2005 Pew study found that most users were unaware of sponsored search results:

Only 38% of users are aware of the distinction between paid or “sponsored” results and unpaid results. And only one in six say they can always tell which results are paid or sponsored and which are not. This finding is ironic, since nearly half of all users say they would stop using search engines if they thought engines were not being clear about how they presented paid results.

Worse yet, Google's automated ad networks (AdSense + DoubleClick) are responsible for monetizing nearly 70% of online copyright violations.

These networks go so far as monetizing warez websites, and Google doesn't always disclose the ads they place on content websites, either. But may as well police everyone who is not a current business partner ;)

When Google wanted to fight paid text links they penalized the Text Link Ads website to send a message. It is far more efficient to police at the network level. Why can't the government do the exact same thing?

As many times as they have sued and/or fined ValueClick you would think they would notice the pattern.

Force ad networks to have editorial integrity. Make small gray text with reverse billing fraud terms of service illegal. Make the networks run a clean show. If they do that there will be little to no incentive for scamming consumers. And it is easier to force self-policing onto 200 ad networks than it is to try to police millions of bloggers.

Best Thing Since Sliced Bread!

Recently lots of internet marketers hopped on getting Facebook vanity URLs claiming them to be a second coming of domain names. But the problem with networks like Youtube, Facebook, MySpace, Twitter, etc etc etc is that you end up being someone else's user generated content, and it is virtually impossible to move a person from content consumer on those 3rd party sites into a customer on your site.

Social Media Traffic Typically Lacks Value

Most social media traffic is too fast and shallow to build a meaningful relationship from. Rarely are social media visitors worth as much as a penny.

Sure you can drop them at the top of a sales funnel, but then you still have to convert them. And the people who are ahead of the curve with technology are often the hardest to influence via advertising, and are the least receptive of offers unless they hear of them recommended from friends.

Social Media Mentions vs Independent Reviews

If someone recommends us, then I would much rather have that recommendation point at our site from their site rather than through a 3rd party website that might go away at some point. The third party recommendations on social networks tend to be brief/short/limited in context, so they don't carry a lot of weight toward selling something, and those mentions are often people whining about free stuff not being good enough and people recommending to their friends that they just grab a torrent of your work.

The natural bias of social media sites is toward people who value their time lowly (or else they would spend more of their time in tighter niche communities and/or in higher order business functions). Sure I have mentioned some of the recommendations for our stuff that people have done on social networks, but a link to a more in-depth review like this one is far more appealing because there is so much more context, and people who have read and followed that blogger for a while likely trust that review more than a random Twitter user trusts a 140 character recommendation.

Viral Does Not = Sales

Even the canonical example of proof of value of viral videos was not that successful. Millions of Will it Blend? video views helped the Blendtec company grow by less than a factor of 10. Many successful professional SEOs use SEO to increase the value of websites by that in less than a year, and have done so over and over again. With SEO you can create a million dollar business from scratch in about a year's time, largely because search has so much implied intent...so you don't need a huge traffic stream to monetize if you pick the right markets.

Domain Names vs Usernames

I was a bit slow to buy the seobook.org and seobook.net domain names, but recently bought the pair for less than $500. They allow me to further dominate brand related searches, while blocking potential competitors in the search results. For $500, that is not bad!

Some Facebook user named Peter Simik is squatting the facebook.com/seobook vanity URL and thinks I am stupid enough to pay $10,000 for it (assetize.com/accounts/view/210). I wouldn't give him $1 for it on principal. But there is not even a competitive threat there...people already have hundreds of connections to my real profile there, and few people are going to associate with the fake account.

More recently a couple readers highlighted that someone is on the newly launched Hunch.com website using my picture and our site logo to promote some crappy SEO website I have never heard of (hunch.com/seo-techniques/result/do-it-yourself/1928754/). That is obviously illegal, but it will only serve to undermine the trust in such 3rd party networks if they are full of fake & squatted accounts.

Protecting Your Brand

Services like KnowEm allow you to register your username on over 100 web2 sites to minimize any time wasting that might be created by someone hijacking your brand. Most of the web 2 sites will fail, but time is money, and it is hard to know which ones will be a success right from the start.

Even 1% of All Web Page Views Can be a Poor Business

Sites like Geocities , Anglefire, and Tripod were stars from about a decade ago, back when general web communities were hot then. And most of those types of sites failed.

A year ago MySpace was predicting great growth, but they have since rescinded on their big real estate deal, Google complained about how hard it was to monetize the traffic, and just earlier today the WSJ reported further job cuts:

MySpace announced plans to reduce its staff by nearly 30%, saying staffing levels were "bloated" and hurt its ability to be an efficient company. The social networking site, owned by News Corp., named a new leadership team earlier this year in an effort to reinvigorate the service. The move brings MySpace's U.S. work force to about 1,000 people.

As the Google ad deal is set to unwind MySpace, is downsizing their operation! According to Alexa, MySpace has over 1% of web's pageviews and they are struggling to make a business out of it.

How many of these general social media sites will be around in a decade?