Consultant to Agency - What I Learned From the Jump

I've been in the online marketing space since 1998. Somewhere around the year 2000, I stumbled into affiliate marketing. I played in very competitive spaces via SEO from the get go - and ranked. In 2007, in order to scale my affiliate marketing efforts, I co-founded MFE Interactive, a website publishing company, and built out several affiliate brands.

I'd always done consulting here and there throughout the years, but never on a regular basis. To be honest, I liked (and still do like) the affiliate (on your own schedule and no one to answer to but your bank account) lifestyle.

In 2009 I made my first foray into running a consulting company. I quickly found out that there was a lot to making the jump from consultant to agency - a lot of which I hadn't thought about, hadn't properly positioned myself for and I decided to sell my shares less than two years after venturing into that realm.

After 18 months of what my friends like to call "semi-retirement" and living very comfortably off the passive income I'd spent nearly a decade developing, I decided once again to start an agency and officially launched PushFire in May of 2012 and we're already a team of 13 and growing.

But this time I knew a bit more about what I was getting into and as a result, had positioned myself better for the task. I figured I'd share with you what I've learned about making the jump from occasional consultant to agency over the last three years in hopes that maybe someone else can be better prepared for "the jump" if and when they decide to take it.

Deciding Whether to Go Solo or with a Partner

I personally know what I'm good at and what I'm not. I couldn't see launching an agency - at least one you want to experience quick growth - without having a partner (unless you want to invest the salary to have someone handle a "partner" position as a paid employee). There is simply too much for one person to do for them to do it all alone - and fast.

My personal weakness lies in operations. I don't like being chained to the office every day and travel too much promoting the agency to be the person managing operations. My personal strength lies in business development, growth and strategy. My weaknesses make me a horrible COO. My strengths make me a good CEO. I've found that the absolute key to creating a successful partnership lies in making sure that your partner has strengths where you DON'T. In PushFire, my partner Sean and I compliment each other very well. I'm a veteran with SEO and link building. He's great with PPC management (something completely foreign to me). I'm good at business development and client strategy. He actually enjoys (and is good at) managing the staff and clients. That makes him a fantastic COO.

Before you rush to launch an agency solo, ask yourself if you can really handle every aspect of running said agency (or are willing to hire to fill the gaps). If not, ask yourself who you know that would be a great COMPLIMENT to your skill set. And then make sure you vet that they actually have the skills you think they do and that you can work as a team without wanting to kill each other and being "locked" into a company from a public perspective. Work quietly together for a few months and see how it goes (that is what Sean and I did for about 3 months). And if all goes well, make it official.

Business Formation and Operating Agreement

Once you decided to make it official you need to form your business. I actually own part of an incorporation service (an accounting firm owns the other half) so I got my advice on what KIND of company to form from my partners in that site since I didn't know all the intricacies of owning a business in Texas (where I'd recently moved). If you're not sure of what kind of company will work best for you (Incorporation, Limited Liability Company, S Corporation, etc) be sure to consult with an accountant or attorney to figure it out. It's a pain to change after the fact.

If you are forming your business with a partner, it is absolutely imperative that you have an Operating Agreement from day one. IMPERATIVE. The Operating Agreement defines your ownership (if it's not a corporation which issues shares), your roles and your responsibilities. Be sure to include what happens should a partner want to leave, should you want a partner to leave, should a partner die, should a partner get divorced - EVERY POSSIBLE THING THAT COULD GO WRONG SHOULD HAVE AN AGREED UPON SOLUTION IN THE OPERATING AGREEMENT AS SOON AS YOU BECOME AN OFFICIAL COMPANY.

I don't care if your partner is your parent, sibling, friend - you need an Operating Agreement and you need one from day one. Sean and I are married and we STILL have an Operating Agreement that details out every possible scenario and what happens in the event of it. And if there is one area where you stretch the budget and pay a lawyer (and NOT use some free template online) it is for the Operating Agreement if you enter into a partnership.

The Business Paperwork

Next up you'll need to file all that awesome paperwork with the IRS, state and in some cases even your county. Getting an EIN, getting a sales tax number, and getting local operating licenses (or even finding out if they're required). And if you're hiring employees, then you'll need to file paperwork to pay unemployment taxes, etc. I personally hired a local accountant to ensure we didn't miss anything in regards to these. I'd rather pay a modest hourly fee now than much more expensive government penalties later.

Business Insurance

If you plan to have an office and employees (which is likely because you decided to no longer be a sole consultant), then you're going to want to get insurance. The basics would be General Liability and Property Insurance and Workers' Compensation Insurance.

Additionally, because what we do for a living as online marketers is not an exact science, you'll likely want to look into getting Errors and Omissions (E&O) insurance too.

The GLP and Workers' Comp insurance was fairly easy to find and get setup. E&O was another story. Most insurance agencies I spoke with didn't handle "digital marketing firms" and it took me a long time to find a recommendation to a company that not only provided E&O for people who do what we do, but also was willing to include copyright infringement into the policy (say for an employee using a picture or content they don't have permission to use, unbeknown to you). I finally was referred to TechInsurance and was able to get all three insurance policies via them.

For the record, I was not compensated in any way for mentioning them - I just had a REALLY hard time finding an E&O provider and they had all the coverage I needed and at what I thought was a fair price. Cost for the policies will vary on a multitude of factors, including your personal experience at what we do, if you've ever been sued, etc.

Also know that if you plan to take on Fortune companies as clients, this insurance - and proof of having it - will be a standard requirement and they usually request that your GLP and E&O insurance covers you in the 1-2 million dollar range.

The Legalities

As an agency, you're going to need contracts if you weren't using them as a consultant. And you're going to want them to be drawn up by (or at least overlooked and approved by) an ACTUAL LAWYER.

We had a Master Services Agreement (MSA) drawn up as well as a Statement of Work (SOW) for each service type we provide (which at the moment is SEO, Link Building and Promotion and PPC).

We also had a Mutual Non-Disclosure Agreement (NDA) created. Additionally, if you plan to use contractors or employees, you'll need contracts drawn up for each (one for employees and one for contractors). While some clients require you to use THEIR contracts (they like to keep any legal disputes in their home territory) many clients will not have these types of contracts and you will need to provide them.

For the record, I don't "hold" clients into contracts. If a client wants to stop using our services they can do so at any time. We have a 30 day notice "out" clause (for either side) in our standard MSA. But we still have contracts that clearly state what we've been hired to do and what our (and the client's) responsibilities are. Even if you don't have clients signing "one year deals" etc, you still should have contracts. Cover Your Ass - it's a statement to live by as a business owner.

Finding Office Space

Since you're opening an agency, that means you plan to have employees - otherwise you'd remain a consultant. Office space is a tricky issue for a brand new company. You often don't need a lot of space in the beginning, but if your company does well and finds itself quickly expanding, you could find yourself outgrowing your initial space soon.

I'd recommend you'd do your best to find office space (at least initially) with a short term lease (which for office space is usually 1-2 years). Also, since most of your business - at least in the beginning - will be over the Internet, you shouldn't kill your budget trying to rent a Madison Avenue worthy space in the beginning (whether you should do it at ANY time is up to you).

We took a 1 year lease in an industrial building with a killer Chicago loft like interior and a great kitchen. From the outside, it looks like a trucking company (because we're next to one). But it's got a great look and feel on the inside and 90% of our clients will never come to our office anyway. The one year lease was key because we were way too small for the space when we took it and will be way to big for the space when our 1 year lease is up.

Additionally, don't stress too much over location. I talk with a lot of folks that ask us when we'll be moving from the small town we're in (Katy, TX) to the "big city" ten minutes away (which is Houston, TX). Sean and I just discussed this the other day and I don't know that we'll ever make that "move" so to speak. It is much easier to get local press coverage and be a "top" employer in a smaller town. And again, most of our clients will never come to our office anyway. I take my cue from Marty Weintraub, who, rather than ditch Minnesota for the more "tech" scene states as a newly minted Inc 500 company, instead chose to become a pillar business there.

Contractors Vs. Employees

I was very adamant from the day we launched that we were going the in-house, local employee route. It is tempting to work with long distance contractors - especially when you know they're talented but would never move. As a consultant, I utilized long distance contractors for years (and all of our long term contractors are "grandfathered in" to this new decision).

But if you plan to grow an agency, it's my opinion that you need people in-house to effectively do it. Especially when it comes to management positions. It's simply much easier to call a company meeting with in-house staff then to arrange a Skype call between 13 people. It's much easier to develop positive relationships and company camaraderie as well.

What to Know about Hiring and Having Employees

Hiring is a task you pretty much only learn via experience. You have to make sure you find people who will fit in with the company culture you want to build - so you'll need to put some thought into what that is before you start posting "help wanted" ads.

To attract great employees we've learned two things. The first is not to skimp on paying for a job posting, especially if you live in a smaller town. We post our ads on Monster.com and haven't been disappointed in the quality of applicants we've received by doing so. Prior attempts using more local services were a waste of time, especially when looking for people with online marketing and/or technical skills - they're all looking online.

Secondly, you need to offer benefits if you want to be competitive with the other companies around you. A great company culture and an exciting position usually don't make up for a lack of health benefits in the United States. We looked to our banking service to get us recommendations for small business health insurance.

They introduced us to Digital Insurance who got us a great quote for health insurance for our growing team (again, I'm only mentioning them because we found them to be awesome and extremely helpful). When looking at health insurance keep in mind that - at least here in Texas - you need 75% participation in your plan and need to pay a minimum of 50% towards the health insurance premiums of all your covered employees.

To give us an edge over competing employers, we decided to get a higher quality plan with a low co-pay and lower deductible and contribute more than the required 50%. Make sure that you consider your health insurance costs for your employees when deciding on salaries. Even if you don't have health insurance for the first few hires, when you DO implement, you'll have to contribute for everyone, regardless of if their salary took it into account.

Additionally, once you're past having one or two employees, you're likely going to need an HR manual. Our accountant was able to get us a standard HR Manual we were able to edit to fit our specific needs - and once again, have a lawyer look over the final product.

We also work hard to keep the team motivated. From team building events with prizes (our latest was laser tag, our next outing is bowling) to performance incentives (this month, we're giving away the New iPad as a performance bonus), you'll need to ensure your team is emotionally satisfied in addition to being financially satisfied to keep retention high. We appreciate our team and their dedication to the company and do our best to show them that.

Creating Internal Processes and Tools

Hiring employees means you're going to need to train them. In the beginning, you'll likely do this by doing it verbally, but when you get to the point that you're hiring frequently, you'll want internal training documents for your new team members to read first and for you to answer questions about later. And different jobs will likely require different processes and training documentation. We've been creating this as we go. But we've found that a lack of written documentation can cause confusion and frustration. So the sooner you can get everything on pen and paper, the better.

Additionally, at some point you're going to find yourself doing a lot of repeated basic processes that could be better handled by legitimate automation. We just hired our first developer for PushFire to begin building internal tools to not only make our team's job easier, but to make it less mundane as well. Be sure to keep an eye when hiring on if you're hiring because of a genuine need or because your current team is wasting time doing things they don't need to do. When the latter occurs, I'd look into hiring a developer to fill those productivity gaps with automation. We're already seeing the benefits of making our team's life easier.

In the meantime - don't try and reinvent the wheel. There are tons of great tools out there that can make your team more productive. From Raven Tools to Ontolo to HighRise to tons of other services - there is likely someone, somewhere with a tool to make your specific team's job easier. Seek them out. Then hire someone to build what ISN'T available as you grow.

The Books

My opinion? Never do the books yourself. EVER. Because saving yourself a few hundred to a few thousand in accounting fees could cost you BIG BUCKS down the road. We use FreshBooks for our invoicing and have an accountant who then downloads the FreshBooks data into Quickbooks.

I find FreshBooks easier (though I used Quickbooks until recently) and she prefers Quickbooks. Our accountant provides us with a Profit and Loss (P&L) statement every month and keeps track of our invoicing and cash flow. This allows us to ask her any information we need to know financially while keeping our eyes focused on the business growth and day to day operations. For now, we outsource accounting, but we know that at some point we will need to take it in house as we grow.

We also utilize the payroll services at our bank (Wells Fargo) because it's easy and they pay all the required taxes for us. Our accountant still runs our payroll, but through their service. Additionally, most payroll companies offer you a guarantee that if you're ever hit for them improperly accounting for taxes, that's on them and not you. To me, it's worth the (what I consider) small fee to utilize the payroll services.

I'm Still Learning

I'm by no means the definitive source on making the move from an individual consultant to an agency. I can't offer advice on financing or funding because we've bootstrapped ourselves the whole way. But I hope the above let's you know some of what to prepare for and what you'll need, at the very minimum, to launch a successful consulting agency.

Lastly, DREAM BIG. DO GOOD WORK. BE A GOOD PERSON, PARTNER, BOSS, CLIENT AND SERVICE PROVIDER.

P.S. If you live in, near or are willing to relocate to Houston? We're hiring. ;-)

The Social Media Ponzi Bubble Implodes

The Next Google?

Facebook had their first tranche of insider lock ups expire yesterday & the stock ended off over 5%. Anyone who has ever invested for a significant period of time knows what the following graphic looks like: the collapse of a bubble.

What has caused such a poor performance for Facebook?

For starters, this couldn't have helped:

If they committed to spending big bucks with Facebook, how could they be assured a return on their investment?

Mr. Zuckerberg's response, according to one of the attendees: "That's a great question and we should probably have an answer to that, shouldn't we?"

Also harming Facebook...

The Real Next Google

Users do not want social in search, but even if they did Google can turn it on with a flick of a switch.

If you want to invest in "the next Google" at a valuation above $100 billion then the best way to do so is to buy Google.

I won't claim that Google's growth there has also passed through to online publishers. It many cases it has not, as Google has begun dominating their own results & pushing competitors below the fold.

SEO is Harder than Ever

Breaking into search with a new site is harder than ever. That is reflected in the static nature of the ecommerce market and just how many ill informed opinions there are about Google's various updates.

Unless you are already well trusted or are willing to hack websites, brute force SEO is getting much harder. Even getting a boatload of exposure like the following graph shows may have zero impact on Google rankings.

Other important trends are:

This does not mean that the opportunity of SEO has disappeared, rather that strategy becomes far more important as the market grows more challenging.

Public Relations

Social media is sold as being revolutionary, but its impact is generally more marginal. What matters is funding the baseline message that then gets syndicated across networks.

Due to the Filter Bubble (& format concision) most people won't question the depths of where they are wrong or dig deep into the background of a story, but rather syndicate the payola headline & biased research that PR professionals wanted them to see.

Out-of-context facts only need to sound good in 140 characters.

Reputation Management

Occasionally a company can be so idiotic that their Progressive(ly) incompetent behavior creates a categorical example of failing their customers. But that sort of failure only matters if it gets shared frequently on blogs & media sites off the social media platforms.

I haven't heard of anyone spending big money to try to have a Tweet rank lower, but people spend significantly trying to drive down bad search results.

Most Tweets are largely forgotten after a few days. A bad search result can create a progressive self-reinforcing problem that lives on as long as a brand does.

Social Media Platforms Begin Lockdown

It isn't just Facebook that has had problems. A number of the other social stocks have tanked.

The problem with social media is that it's performance hasn't been particularly stellar thusfar & they have only just begun to start screwing over people playing on their platforms. A big part of what caused Zynga to miss so badly on their last quarterly result was:

"Facebook made changes to their platform that favored new game discovery," he said. As a result, Zynga users "did not remain engaged and did not come back as often."

That change is in addition to gutting companies that specialized in optimizing Facebook pages & other companies which worked closely with Facebook. Further, Facebook's edgerank limits how many of your subscribers see your own message. They want you to pay once to build a following & then pay again to access the audience of followers you already built.

It is not just Facebook that is locking down their ecosystem. Twitter is headed down the same path: "I sure as hell wouldn’t build a business on Twitter, and I don’t think I’ll even build any nontrivial features on it anymore."

Many mobile start ups are also suffering from the same "saturated ecosystem" problem.

More Social Media Sites Launch

The economic recovery has been uneven & while the above platforms are imploding it hasn't stopped some of the founders from creating more platforms that will also compete for attention.

Why Social Media Isn't as Exciting As Claimed

All Users Are Not Created Equal

There is a difference between targeted search traffic & the stuff that people sell as "unlimited traffic for $6."

Social media can drive some conversions with coupons, but it can also make people (who would have converted anyway) expect coupons and discounts to purchase. Part of the problem with attributing anything to social media is so much of it can be attributed to activity bias. Anyone who follows you & similar business & so on is going to be more likely to convert in those areas. That they at some point in time were on a large social network doesn't mean that the social network added any value to the sequence or caused a conversion.

Even if you know exactly how influential people are it still wouldn't mean that you would be able to influence them (generally the more popular someone is the less receptive they are to pitches). And generally speaking traffic on your site is worth more than traffic from social media sites, as it is already more targeted. This is why traffic exchange systems suck...those atop the pyramid suck most the real value out of it while those lower in the system give away their visitors for scraps.

The #1 rule of online traffic is that relevancy is more important than volume.

False Sense of Closeness & Empathy (Cuts Both Ways)

Online petitions have a low cost (go nowhere & click a mouse), so even in large numbers they usually don't mean much. Whereas people who go through barriers to entries & jump over hurdles are far more committed to a goal.

With sites like Twitter there can be a wow factor in that there is a false sense of closeness, but in reality many celebrities pay others to tweet for them and sell tweets.

And every bit as fake as the "celebrity who really cares about you" there are also the enraged non-customers who try to leverage social media to level the playing field. But in most cases those were never going to be good relationships anyhow. For most people the best solution is to ignore them.

Hits Can Be Somewhat Unpredictable

In addition to the fickle here today, gone tomorrow nature of social media, the results are typically quite unpredictable. What is even more challenging is that you can optimize for relevancy or virality, but to try to guarantee one you usually have to sacrifice signifcantly on the other. That means that either you can get links & audience, or you can create some conversions, but it is quite hard to do both.

Further, popularity on such networks tends to fade quickly (unless you keep going back to the well). But at any point in time even newer networks can decide to change how they feature you & cut out whoever they want to, and the more often you keep going back to the same network the more beholden you become to it. Invariably all these social networks that start off as being somewhat open close down & control the ecosystem to boost monetization as growth slows.

Signal Creation vs Amplification

It is easy to point to success like Double Fine & Ouya as proof of the power of some of these networks, but some of that success is due to past success. Anyone who loved playing Psychonauts would love to invest in helping to create another release.

P&G can lay off some of their marketing department because their brands already have such a strong share of voice across all mediums.

And Louis CK can sell a million Dollars worth of his own downloads and a hundred thousand tickets fast because he is already well liked.

Mainstream media writers can offer tips on how to have a dead cat bounce on Twitter. That isn't so hard for the mainstream media to do given how much they dominate Twitter trends & the top shared stories on Facebook. However if you don't have an organic audience channel & a built in cumulative advantage then likely either your story will go nowhere, or even if you share something great what will end up happening is someone else with more distribution will rewrite your story and displace you as the lead source.

Social media can have value as a signal amplification tool, but if you do not already have a separate audience base (via email, RSS, or some other similar channels) then time spent on social would likely be better spent building up some of those other channels first. If you are not building off an organic audience channel then social media promotions will typically fall flat.

Dominate a Small Pond

I don't think I would have done well with SEO if I spent most of my time on the largest sites when I was new to the industry. What helped me along was joining the great crew on SearchGuild who taught me a lot in a short period of time. On smaller sites we can become a bigger fish in a small pond.

The fatal attraction with large sites is that the audience is large, but it is largely inaccessible. The largest sites are the most appealing to the least interesting people. Or, put another way, we are most alike where we are the most vulgar & the most unique where we are the most refined. This is why even when we are on the large sites we typically pay far more attention to what our friends say or do than the ads on those platforms that take thousands of impressions to generate a single click.

There is nothing wrong with spending some time on social sites for fun, but if it becomes the bulk of your publishing time & effort you are probably contributing far more than you get back. Especially when you consider that a lot of the deep insights & continuations of stories that once happened on blogs has fell by the wayside for quick temporary Tweets that disappear into nothingness. Many companies have mistakenly abandoned blogging & will have to experience the pain of starting over when some of these networks go away to appreciate the depth of the error.

Why Marketers Promote Social Media

Addiction to "the New"

If you promote things that are new that buys further coverage because you are seen as being innovative.

Twitter allowed spam & had few people employed fight it. Why? More "users" equates to a higher growth rate, which equates to a higher market valuation on subsiquent investment rounds. Twitter stated that in 2009, 11% of their tweets were spam.

During a social media ponzi bubble a whitepaper about Twitter of Facebook has sizzle because it allows you to leach off the story of that broader platform. And so long as those companies are raising money or trying to go public they want to show the maximum growth possible, so they are unlikely to crack down on forms of marketing manipulation that help growth their platform size and valuation. After they are public though & growth has slowed their approach toward controlling their platform will become much more adversarial.

Google has been public for nearly a decade now & if you speak in the language of SEO that is a term that has already been well defined through the dominant market player.

A Desire to be Seen as a Broader Service

If you are only seen as being about "SEO" then anytime Google forces drastic changes onto the market you are seen as being of limited value & thus at great risk of being washed away. This is even more risky if you are leveraging up and trying to raise funding. But if you claim to be more generalist it allows the frog to turn into a prince, as you have more "growth" opportunities in the near future.

Give it a Different Name

A lot of people try to slag off SEO for self-promotion & then say "don't do spam like the SEOs, instead do x."

And if you read off the list of items that are represented in the "x" invariably it reads like an SEO checklist.

So why do people try to redefine SEO? A number of reasons:

  • if they can create a new term that they "own" then anyone who shares it is building the value of their company
  • they can use polarizing marketing to capture attention & then differentiate themselves from what they actually do by claiming to be doing something else
  • some of the most egregious SEO spammers (eg: Jason Calacanis) never could have got away with running their projects as they were without first distancing themselves from the SEO market

The MLM Factor

In most MLM schemes step 1 is often "follow us" with step 2 being "spread our message" (or, feed us your young, get your friends to hate you, sell your soul, etc.)

This same factor is baked into social media services. Rather than going directly to money though it uses attention as an intermediary.

I am not saying that asking people to follow you is necessarily bad, but if you tell people that social media will change the world and that they should follow you for tips then of course that is a great way to get a bunch of desperate, ignorant & shameless newbs to syndicate your spin. If those people are re-defining old school SEO techniques using a new vernacular they are both the customer (buying into the re-marketing of old concepts) and the product (evangelist spreading false gospel & generating social proof of value).

The above message is never stated in the various "correlation analysis" charts that aim to prove the value of social media to SEO.

Given how easy it is to manipulate social media, even if they are not doing well it is easy for someone like Ellory Bennette to sell the image of success.

Noise vs Signal

There are loads of ways to create a core baseline social "signal" on the cheap. Newt Gingrich was called out for having some fake Twitter followers. There are boatloads of services & tools out there targeting all the social networks & free hosts: Facebook, Twitter, MySpace, YouTube, Blogspot, Wordpress, Tumblr, StumbleUpon, Reddit, Digg, Pligg, and even Pinterest.

Given how Newt got "called out" for having fake followers, I wouldn't be surprised to see some marketers buying fake followers for other convenient targets to create a story to sell.

Selling a Bag of Smoke

While composing this, a spam email hit my inbox stating the following:

It's a fact: more people find out about your business on Facebook or Twitter than on search engines. Making these sites work maybe tricky for you, but it s business as usual for us. Let us improve your visibility and enhance your image. It s part of our complete Internet Marketing package. We ll be more than your friends --- we ll be your partners."

Social metrics are easily gamed. If you just want numbers not only are they sold by the social networks as ad units, but they can be had in bulk on sites like Fiverr.

Probably the best comment I have ever read about the "bag of smoke" concept was from Will Spencer:

SEO's like to sell social signals as ranking factors because social media marketing is an easy product to deliver while collecting good profit margins.

The fact that it doesn't work... doesn't seem to bother those people.

The "good guys" in the SEO business aren't the people who parrot Google's lies to a wider audience; the "good guys" in the SEO business are the guys who make their clients money.

Ignorance of Relevancy

Search engines may put out research about social networks like Twitter, but would Google count Twitter as a primary relevancy signal without owning Twitter? Color me skeptical.

Even more laughable than SEOs selling social media as the key to SEO is their open ignorance of the political nature of various relevancy signals.

  • Does Facebook sell likes? Yes. Why would Google want to subsidize a competing ad network? It isn't hard to notice Google's dislike for Facebook through their very public black PR campaigns.
  • The same sort of "why would I subsidize a competitor" issue is also in place with Twitter. They sell retweets & follows, so why would Google want to subsidize that?
  • Google counts YouTube ad views as organic views, but they own it & they only rolled out universal search *after* they acquired YouTube.

In summary...

Google Copyright Transparency Report

Google timed a nice Friday evening release to update of their policy toward copyright infringement.

Starting next week, we will begin taking into account a new signal in our rankings: the number of valid copyright removal notices we receive for any given site. Sites with high numbers of removal notices may appear lower in our results.

Wow. Sounds like trouble. Surely that means that YouTube's rankings are about to get torched.

Oh, nope. One quick exemption for the video king:

This data presents information specified in requests we received from copyright owners through our web form to remove search results that link to allegedly infringing content. It is a partial historical record that includes more than 95% of the volume of copyright removal requests that we have received for Search since July 2011. It does not include:

  • requests submitted by means other than our web form, such as fax or written letter
  • requests for products other than Google Search (e.g, requests directed at YouTube or Blogger)
  • requests sent to Google Search for content appearing in other Google products (e.g., requests for Search, but specifying YouTube or Blogger URLs).

Google does not state where the thresholds will be set & grants blanket immunity for themselves, yet they (illegitimately) emphasize that they are being transparent.

Only copyright holders know if something is authorized, and only courts can decide if a copyright has been infringed; Google cannot determine whether a particular webpage does or does not violate copyright law. So while this new signal will influence the ranking of some search results, we won’t be removing any pages from search results unless we receive a valid copyright removal notice from the rights owner. And we’ll continue to provide "counter-notice" tools so that those who believe their content has been wrongly removed can get it reinstated. We’ll also continue to be transparent about copyright removals.

YouTube vs Sites Cleaner Than YouTube

Courts have ruled that embedding a YouTube video is not copyright infringement. The EFF has mentioned that embedding a video is simply a link.

And yet, a UK student faces up to 10 years in jail in the US for founding a crowdsourced site which links to sites that allow you to watch TV online.

Kim DotCom suffered a militant raid on his house & had his assets frozen for running MegaUpload, which was a tiny spec of dirt compared to the size of YouTube.

On the copyright front YouTube was rotten from the start:

  • "In a July 19, 2005 e-mail to YouTube co-founders Chad Hurley and Jawed Karim, YouTube co-founder Steve Chen wrote: 'jawed, please stop putting stolen videos on the site. We’re going to have a tough time defending the fact that we’re not liable for the copyrighted material on the site because we didn’t put it up when one of the co-founders is blatantly stealing content from other sites and trying to get everyone to see it.'"
  • "Chen twice wrote that 80 percent of user traffic depended on pirated videos. He opposed removing infringing videos on the ground that 'if you remove the potential copyright infringements... site traffic and virality will drop to maybe 20 percent of what it is.' Karim proposed they 'just remove the obviously copyright infringing stuff.' But Chen again insisted that even if they removed only such obviously infringing clips, site traffic would drop at least 80 percent. ('if [we] remove all that content[,] we go from 100,000 views a day down to about 20,000 views or maybe even lower')."
  • "In response to YouTube co-founder Chad Hurley’s August 9, 2005 e-mail, YouTube co-founder Steve Chen stated: 'but we should just keep that stuff on the site. I really don’t see what will happen. what? someone from cnn sees it? he happens to be someone with power? he happens to want to take it down right away. he get in touch with cnn legal. 2 weeks later, we get a cease & desist letter. we take the video down.'"
  • "A true smoking gun is a memorandum personally distributed by founder Karim to YouTube’s entire board of directors at a March 22, 2006 board meeting. Its words are pointed, powerful, and unambiguous. Karim told the YouTube board point-blank:
    'As of today episodes and clips of the following well-known shows can still be found: Family Guy, South Park, MTV Cribs, Daily Show, Reno 911, Dave Chapelle. This content is an easy target for critics who claim that copyrighted content is entirely responsible for YouTube’s popularity. Although YouTube is not legally required to monitor content (as we have explained in the press) and complies with DMCA takedown requests, we would benefit from preemptively removing content that is blatantly illegal and likely to attract criticism.'"
  • "A month later, [YouTube manager Maryrose] Dunton told another senior YouTube employee in an instant message that 'the truth of the matter is probably 75-80 percent of our views come from copyrighted material.' She agreed with the other employee that YouTube has some 'good original content' but 'it’s just such a small percentage.'"
  • "In a September 1, 2005 email to YouTube co-founder Steve Chen and all YouTube employees, YouTube co-founder Jawed Karim stated, 'well, we SHOULD take down any: 1) movies 2) TV shows. we should KEEP: 1) news clips 2) comedy clips (Conan, Leno, etc) 3) music videos. In the future, I’d also reject these last three but not yet.'"

Broader Copyright Questions

There still are a lot of murky questions in Google's "transparency."

  • If a person embeds an image from Imgur, ImageShack, TinyPic, PhotoBucket or elsewhere & the page that has a hotlink gets a DMCA how does that count?
  • If a brand is large enough does it take many DMCAs to get hit?
  • Is there any analysis of the underlying business model of the site? What happens to document storage sites like DocStoc & Scribd, or even image sites like Pinterest?
  • What happens to sites that link at penalized sites too frequently?
  • What happens to ad networks that frequently fund such copyright violations?

HUGE Impact on the Web

Has anyone registered DMCASEO.com & DMCA-SEO.com yet? ;)

In terms of impact on the web for publishers, this change is every bit as big as Florida, Panda & Penguin. It may not seem so at first (as it will take time for market participants to consider the uses) but this is a huge deal. Consider some of the following scenarios...

  • You try to create something like YouTube for another form of content (Pinterest?) and it gets hit as spam for following Google's lead.
  • You offer a free blogging platform that competes with Blogspot, but it gets hit as spam for following Google's lead.
  • You decide to create a project like Google's book scanning project & you get hit as spam for following Google's lead.
  • You run an ad network & start growing quickly. As you grow some sketchier publishers enter your ad network. Like Google AdSense, a large portion of your ad network is filled with sites that have copyright violations on them. Suddenly working with your ad network gets people hit as spam because your business model is too similar to Google's.
  • You create a new social network & are struggling to compete with Google's preferential ranking & hard coded placements of their own network. You make your network more open to encourage growth & you get hit as spam.
  • If You are Amazon or eBay you can afford premium featured content to pull up your other listings. But if you can't afford their cost structure & hire freelance writers or work with outsourced workers to create some of your content & they use some copyright work without you knowing. But does Amazon now have to vigilantly review their reviews for plagiarism?
  • A competitor licenses some of their content as Creative Commons for years & doesn't mind wide use of it. Then you use it & one day they see you as a competitive threat and remove their Creative Commons license & bulk DMCA you. Or you have a lifetime syndication deal with a company, they later change the policy & claim that your documents are forged.
  • Getty images presumes you didn't license an image that you did & files a DMCA. At some point there is no purpose in targeting the webmaster or host...just go direct to Google knowing that you can create the equivalent of a "patent trolling" styled business model where you create a business model where it is cheaper for people to pay to have the issue resolved the quick way before they lodge a formal complaint. Some organizations might even have a subscription service set up where you pre-pay for immunity.
  • A former employee who wrote content for you claims you used it without permission. Or that same former employee used pirated images & longish quotes from other sources that they didn't disclose to you that they now highlight via DMCA.
  • You license data from a source & they do a mid-contract change leveraging the small print & have a bot lined up to send 40,000 DMCAs against you if you do not agree to the higher pricepoint.
  • Google is considering making an investment in your site & you want too much money. As an edge case near the threshold of this copyright limit you know you have immunity if you join the borg, but lack it if you don't work with them.
  • Big media players that play in the gray area will be fine, but smaller sites that try a similar model will be sunk by DMCAs and/or legal fees.
  • Your leading competitor realizes that your blog publishes comments by default with editorial review (and that even later has lax review) and then they file DMCA reports against you. Or they could just grab chunks of content from Google's leaderboard of complainers and post them into your web forum, knowing that those companies will file a DMCA report against you.
  • A site has some content public & some behind a paywall. With a page partially indexed, how does Google respond to DMCA requests when the alleged infraction is behind a registration wall or paywall?
  • A competitor (inspired by Google no doubt) hires off shore "contractors" to copy your site & then file DMCA reports against you in bulk. How long until people start uploading their own content to file their own DMCAs against certain sites with user generated content?
  • Even if your site is 100% legal, a combination of ignorance & crowd-driven vigilante justice can still take you down.
  • Any site that offers interactive features & has user generated content is at risk of being labeled as spam unless they have tight editorial control over user generated content. And at the same time, Google can enter vertical after vertical with scrape & displace garbage knowing that they don't have those editorial costs due to their self-granted blanket immunity.
  • If you do not register your sites with Google & counter claims (even bogus ones) then you are seen as being a spammer. And if you register with Google then when they don't like something one site does they can hit other sites all at the same time. No point going to the host or registrar, go direct to Google & start building up negative karma.

Why did Google feel the need to grant themselves blanket immunity from the policy?

That question was largely missing among the fanboi blogs & journalists who were encouraged by Google's "transparency."

24 Karat Pyrite On Sale for Only $100 an Ounce

If YouTube is going to win big, then that's a great place to invest, right?

Maybe not.

Some venture capitalists are investing in YouTube channels, but that is a fool's game.

  • Google is also investing in select channels (like Machinima). It is quite hard to outperform Google in returns while investing into a platform that they control & thus have better data on than you ever could.
  • As YouTube's dominance increases (and it will now that competing platforms with a similar business model will be smeared as spam), you can count on them offering premium partners crappier revenue share deals in years to come. They will offer nice deals to Warner Bros. & such, but the independent smaller players will get cut out of the ecosystem in much the same way as they did in Google's organic search results.
  • Google, prince of transparency (for everyone but Google), requires that premium publishers *not* disclose the terms of their deals: "The Partner Program forbids participants to reveal specifics about their ad-share revenue. Rates can vary depending on the size and demographics of the partner’s audience and an array of other metrics."

Note that I don't claim YouTube is a bad host for your own content, but that I am skeptical in applying the VC model to it with a belief that you can out-invest Google on their own site; particularly when they own the dominant platform, control the non-public revenue share rates, invest in competing channels & can offer free promotion + higher rates to anyone they invest into in order to dominate the category.

And the issue isn't just video either. The same dynamic can apply to just about any other infrastructural layer. For instance, Google could buy out a torrent site (say like uTorrent) and have that site gain immediately immunity for being part of the borg, while other sites that compete now absorb both greater editorial filtering costs & greater risks that destroy their ROI.

As Google continues to lock down search, you can expect more smart publishers to hedge investments in search and YouTube with investments in proprietary non-search applications that Google can't take away.

The Devil is in the Details

"We are optimistic that Google’s actions will help steer consumers to the myriad legitimate ways for them to access movies and TV shows online, and away from the rogue cyberlockers, peer-to-peer sites, and other outlaw enterprises that steal the hard work of creators across the globe. We will be watching this development closely — the devil is always in the details — and look forward to Google taking further steps to ensure that its services favor legitimate businesses and creators, not thieves." - Michael O’Leary, Senior Executive Vice President for Global Policy and External Affairs of the Motion Picture Association of America, Inc.

The concerned with Google pitching themselves as the preeminent authority on copyright is they have consistently played both sides of the fence.

When Google was competing against YouTube, this was how they viewed copyright internally.

Business Objectives Drive "Relevancy" Signals

Google is a big player in business online and off. They can sell private data exclusively & their online profits are so huge that they are now buying auto loan bonds.

Now that Google wants to sell premium content they (sort of) respect copyright (& are willing to hold the rest of the web to a higher standard than themselves to create this impression).

I have long believed that relevancy signals were often politically driven & that internal business development goals often lead or create various signals. Certainly that was obvious when Google+ was hardcoded in the search results. It was equally true when Knol outranked the original content sources. Google frequently pretends to be (belligerently) unaware of externalities, but when the issues impact their own business they gain an elevated sense of importance.

And these business objectives not only influence the relevancy algorithms, but also the editorial guidelines.

And even while Google is rolling out this "copyright violators are spammers" algorithm (which they are exempt from) they still chug on with their ebook offering:

They posted several of my 41 books up as free downloads (some were missing a few pages at most a single chapter) It took several e-mails from me pointing out that they were infringing copyright before they took them down. During the time my books were free on Google my sales of e-books fell dramatically. " - K C Watkins

When Google started scanning books an internal document stated: “[we want web searchers interested in book content to come to Google not Amazon” ... or, as put another way, in that same document, “[e]verything else is secondary … but make money.”

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How is Search Spam Defined?

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Creative Broken Link Building Tips with Jon Cooper

Here are some quick tips on how you can use blogrolls to compose a list of as many related blogs as possible, then checking those blogs to see if any of them return 404s.

A good free tool to use for finding blogs is the SoloSEO link tool, which will pull up blogs (and other assorted advanced search operators) based on the keyword you input.

After going through the ways to build the list, I’ll run through a few ways you can use it.

Step #1: Find a few blogs

Start off by finding a few related blogs that have blogrolls. The more blogs & the longer the blogrolls of each, the better. This is our seed list that will soon multiply itself.

Step #2: Multiply your list

Take the URLs of these blogs and throw them into Buzzstream’s blogroll list builder. In the example below, I just started off with one (an HR blog):

Once you hit Go, it searches the blog(s) and finds every blog in their blogroll (note: I was having issues with it in Chrome, so if you do as well, switch browsers):

Step #3: Rinse and repeat

Next, download the results as CSV. Open it up in Excel, then copy & paste the blogroll URLs back into the list builder tool (you might have to refresh/reopen the page).

Keep doing this until you have a sizeable list. The bigger the better, but as you keep expanding, you’ll run into the issue of irrelevant blogs entering the list, so just keep that in mind.

Step #4: Check the status of the URLs

Next, throw your list of URLs into Citation Lab’s URL Status Checker tool. This will check to see if any of the URLs in the blogroll are 404s.

Once the report is finished, you can export it as a CSV.

Step #5: Pick your poison

Now it’s up to you how you want to use this list for broken link building. Here are a few popular options:

1. Blogroll Links

Go down the list of 404s and plug them into any of the bigger link tools on the market, Open Site Explorer, Ahrefs.Com, or MajesticSEO. Scan their top links for any that are coming from a homepage. These are almost always blogroll links.

Go to these homepages and use the Check My Links chrome extension, because if one link in their blogroll is broken, then there’s usually a few others.

From there, reach out to the bloggers letting them know of the broken links. Then ask them if one of them could be replaced with a link to your blog since it’s related.

2. Dead Content Links

Once again, plug the 404s into the link tool of your choice. This time however, instead of checking their links, click on Top Pages section in the tool.

Find their most linked to content, double check each to make sure the page is no longer available, then plug those URLs into Archive.org to see what content used to be there.

Next you’re going to rewrite the content, but do your best to make it even better. If it’s a little outdated, then update it.

This content will not only attract links on its own with proper promotion (the old one did, the new one probably will as well), but you can now use this for broken link building.

Take the URLs of the broken, linked-to content and plug it into your link tool(s). Go down the list and find the most valuable links to that content, then reach out to the webmaster/blogger of those sites and let them know that page is broken.

Tell them that “you took the burden” of recreating it, and that for the sake of their readers, they should update the broken link by now linking to you.

Other purposes

You can also use the initial list of 404s to see if any of those domains are:

  • Expired & available to register
  • Available to purchase in auctions
  • Available to outright purchase

If they have enough links to them, you can put some content up and include a few links back to you. If you’re going to do this, make sure you put content up on their Top Pages, since these are already loaded with link juice.

Finally, you can take that list of blogrolls, remove all the 404s & duplicates, and use the Mozscape API (with excel) to find the most authoritative blogs in your niche. From there, build relationships, ask for product reviews, or anything else you can think of.

Final thoughts

So many of the tools we have ready at our fingers can be used in various combinations. Don’t be afraid to experiment.

What do you think of this process? What do you think can be improved? I’d love to hear your thoughts below!

Bio

Jon Cooper is an SEO consultant and the author of Point Blank SEO, a link building blog. Follow him on Twitter @pointblankseo.

A Quick Look at Cell Phone SERPs & the Mobile SEO 'Opportunity'

Mobile Ad CTR

Worstream recently put out an infographic where they suggested that 64.6% of search result clicks on highly commercial keywords are clicks on AdWords ads. Shortly before Google's quarterly announcement RKG put out their digital marketing report. In it they highlight how search ad CTR differs by device.

What causes a higher CTR on cell phones & tablets? A smaller search interface, which allows ads to dominate a larger portion of the screen real estate.

Screen Real Estate

Vertical iPhone = 1/3 of an organic listing above the fold.

Horizontal iPhone = all ads above the fold.

Vertical iPad is about 2/3 ads above the fold.

Horizontal iPad has about half of a single organic listing above the fold.

Vertical Kindle is about 2/3 ads.

Horizontal Kindle is 100% ads above the fold.

And the above interfaces are not going to look any less ad heavy as Google adds paid inclusion shopping results.

Controlling the Ecosystem

Google offers sitelinks when they think a search query is navigational in nature. In spite of that, for some brands they will still show 3 AdWords ads above the organic search results, in an attempt to force the brand to re-buy their own brand equity.

If you control what is above the fold (and can get away with serving nothing but ads above the fold) you can make a lot of money.

Curious case of small business and SEO

We all read the advice online: don’t build crappy links. Don’t use short term benefit tactics in SEO. But do we always heed that advice? Can we always afford to?

The latest reality check came in the shape of a small online business in the UK, Children’s Furniture Store (CFS). Jane Copland  tweeted about an online letter in which they announce that, due to Penguin update, they are forced to close their business down.

This really got me. Firstly, I hate to see a small business go under. These people put their hearts and souls into the business and it breaks my heart to see them being closed especially due to changes in Google algo. Furthermore, it seems from their closing letter that they were a victim of bad SEO advice and that reflects poorly on all of us. We have enough attention seekers out there calling us out for asshattery as it is so I would rather be pictured as someone who helps small businesses rather than the one that puts them under.

A lot of people started reaching out to Children Furniture Store’s twitter account, offering help and advice. Unfortunately, it was too late for them; they have already started folding up their business and have ceased trading.

I am sure this is not the only case that has or will have happened. As a matter of fact as a result of my activity on twitter around this, I was contacted by another small business asking for help on similar issues. Other people I know encounter these situations on weekly basis.

So why is this happening? Who is to blame for this? A business is closing down, people are losing their jobs, we can’t just dismiss it as “that’s life” and “business is hard”. We cannot learn anything from this case and other similar cases if we do not take a hard look at all the possible culprits responsible for these situations and try to understand what could have been done to prevent this from happening:

This is the list of guilty parties, according to my opinion, ranked by a decreasing amount of responsibility:

The business owner

The business owner is the most responsible party here. They probably didn’t mind when the money was rolling in and never thought about the “what if” scenario. These are the things that they did wrong:

  1. Never ever put all the eggs in one basket – I think this is the most common and widespread piece of advice given to website and general business owners, yet people manage to ignore it again and again. Had CFS had various sources of traffic (which they could have developed with the profits from the organic traffic) or even had they started developing offline business, Google Penalty would have hurt much less. This is true even if you are not using blatantly spammy SEO techniques, you never know where Google’s business goals may be tomorrow and when the line between what is kosher and what isn’t is constantly moving, you never know when you will find yourself on the other side of the line. Having additional sources of traffic/business immunizes (relatively) you against this scenario. Sometimes you have to bite the bullet and PAY for the traffic – for example Paid Search. Building a social presence would help too. Luckily they HAD kept their mailing list and were able to sell any leftover inventory using it – but mail is a good channel to optimize sales too.
  2. Get educated – there is a lot of SEO information out there. No one can follow all of it. But it is your prerogative as an online business to keep abreast of the most important best practices and pitfalls within the marketing channel that is providing you with the majority of your income. Had this business done their due diligence, they would know not to rely on only one stream of traffic, they would know that the practices used by their SEO provider are shady at best, they would know that they are paying too little for the SEO services for them to safely provide them with edge over their competition in their niche. They would also know what to do when shit hits the fan and not wait for a full year for the second hit which will ultimately decimate their business.


    In this case, the business owner did say that they spent a lot of time trying to read on the internet about similar issues – apparently they didn’t find any “real” advice. Should Business Owners learn to navigate online information a bit better? Or should we, as an industry, make sure that the information found on these issues is top notch? But more about that further down. In this particular case, the owner of the business did several things – tried reading about the possible problem, turned to an independent SEO (who told her to let the site die and start anew) and fired the agency that was probably the cause of all this. Still there was much more to be done and I hope other businesses will act differently in similar situations.
  3. Reach out – as their “we are closing the business” letter started circulating, more and more people started saying that they are willing to help. In a matter of minutes, both in public and private channels, a picture of what needs to be done to help this website started emerging. Getting this kind of analysis from industry experts can cost a lot of money, but if a business owner harnesses the benefits of the SEO community, either through Twitter, SEOBook Forum, Google Webmaster Central forums, SEOMoz Q&A forum, G+, Facebook groups, etc., they can get a pretty clear picture about what hit them and what needs to be done. They would be more aware of the risk levels involved with the SEO strategies they were using and would be able to move away from them much earlier, making the cleanup a more viable option. With all the misgivings of this industry, it has some of the most generous and helping people in it and this can be a tremendous asset for small businesses that are struggling to come with terms with the challenges involved in promoting your website in organic results.

SEO Company

  1. Spammy strategies – one look at the CFS’ backlink profile shows patterns of a backlink network.



    Further conversations with people that are connected to the company showed that this is indeed the case. Bunch of footer links, clearly paid-for blog posts, sidebar sitewide links from non-related sites in non-English languages… You took a small business that doesn’t know what they are doing, promised them wonders at three-digit monthly recurring price and it worked for a while. Did you warn them about the risks? Did you tell them that if Google decides to target these link-building practices, their whole business can go down the drain? Or did you encourage them to enjoy the party while it lasts? Did you instruct them to take the profits of these short-sighted tactics and invest them in diversifying their traffic sources? No you didn’t. You are no better than a drug dealer, reaping profits from the lack of knowledge of unsuspecting client, allowing them to risk their whole business and you should be ashamed of yourself for that. You sir, are an ass hat. 
  2. No responsibility – as the graph attached above shows, the CFS site was hit at two occasions, one in May 2011 and the other in May 2012. According to them, they have stopped working with you by the time WMT warning notices have arrived. Do you think that releases you from the responsibility for your work? What did you do in between those two dates? Did you take responsibility for CFS situation? Did you instruct them on how to fix their situation? How did you allow a business that found itself in a shitty situation, partially due to your actions, to get to the point where they have to close their doors? Do you honestly not care that people are going to be jobless because of the bad advice you have provided?

Google

Yes Google.

By allowing crappy linking strategies to work for so long, they have created a situation where the only viable option to stay competitive in certain niches was to join the bandwagon and use spammy links. You can stand on your soapbox only for only that long and preach “whitehat” techniques while your competitors are laughing all the way to the bank and cashing in. So yes, at some point they will probably be penalized, but until then they will have developed enough capital to be able to safely switch to some other domain/SEO strategy and have developed their brand to the point where they are practically immune from algorithmic changes. You have created a situation in which following your Best Practices was a financially unviable option for a lot of small businesses and for this you carry a part of the blame

Furthermore, you should realize that the information you give out about these penalties is not read only by sinister SEOs spending their days and nights trying to reverse engineer your precious algorithm. Why is it so hard to tell the business owner what is it they are getting penalized for? Tell them “your site has a large amount of paid links/unnatural anchors. You can find these links marked with a huge red exclamation mark in your WMT link report. Get rid of them”. Doesn’t Google have a responsibility of providing decent, informed content around these sort of penalties so that  a business owner can refer back to the source? When they penalize a business – shouldn’t it be their responsibility to say EXACTLY why? Is a bland, notification in GWMT sufficient?

When you Google “Penguin” or “Panda” etc – shouldn’t Google’s own written guidelines on recovery be ranked at top positions, so no one else gets scammed? Yes, it is not all Google’s fault that these businesses were told that it is OK to do whatever it takes to rank. Yes, Google does not owe anyone anything but it would be a sign of goodwill towards those that provide the content of the web for Google to crawl and serve ads on.

The SEO Community

How is the SEO community responsible? By greatly diluting the information space in our industry. The number of inane posts, all written in the same “10 ways unrelated-X affects your SEO-Related-Y” format, all based on conjectures and rehashed hearsay, make it almost impossible for a non-industry person to get to the meaningful information. I have seen articles with link building strategies that were covered in 2006 being peddled as “current” and “cutting edge” in 2012.

Without knowing the authors, companies they work for, their level of experience and history of their posting, there is no way that a person who doesn’t spend significant amounts of time wading through the noise created in the SEO space can know what is reliable and what not. Furthermore, the lack of propensity to call out crap information when we see one, complete avoidance of confrontation within the industry, limiting critical discussion on quality of content behind gated walls of private Skype chats and limited Facebook groups, makes the pruning of this jungle of nonsense an impossible task and for that all of us bear some part of responsibility.

I am really sad for CFS. It depresses me that a business can go under so easily from causes that could have been prevented. There are real people behind these websites, making their living, in spite of Google doing a lot to make their success harder (by promoting big brands and at a switch of an algorithm button making previously acceptable and successful practices - damaging). I hope that this post will help other businesses make sure that they are doing everything possible not to find themselves in a similar situation.

Many thanks to Rishi for helping with editing and some background info.


Branko Rihtman has been optimizing sites for search engines since 2001 for clients and own web properties in a variety of competitive niches. Over that time, Branko realized the importance of properly done research and experimentation and started publishing findings and experiments at SEO Scientist. Branko is currently responsible for SEO R&D at RankAbove, provider of a leading SEO SaaS platform – Drive.

SWOT Analysis for Web Publishers

The rapid changes in the search industry over the last sixteen months have left many web publishers wondering whether they should pivot their business models or exist the industry entirely. This is a difficult question for business owners who have invested years of their lives and much of their wealth in firms which may no longer be viable contenders in the "new" search industry.

SWOT analysis is a technique which business owners can use to strategically analyze their businesses in relation to their competitors and the marketplace as a whole. SWOT stands for Strengths, Weaknesses, Opportunites, Threats.

  • Strengths are attributes of the organization which provide an advantage in the marketplace.
  • Weaknesses are attributres of the organization which cause a disadvantage in the marketplace.
  • Opportunities are actions the organization could take to create an advantage in the marketplace.
  • Threats are events which could happen in the environment and cause the organization to be disadvantaged.

The first two areas, Strengths and Weaknesses, focus primarily on the internal attributes of the organization. The last two areas, Opportunities and Threats, focus primary on how the organization may be affected by external events.

Specifics for Web Publishers

Many firms in the same industry will share similar Strengths and Weaknesses. Even more so, most firms in any industry will be responding to similar Opportunities and Threats.

Strengths and Weaknesses

Take a look at your organization. If you feel that your organization has an attribute which makes it stronger than it's competitors, add that to your Strengths list. If you feel that your organization has an attribute that makes it weaker than it's competiors, add that item to your Weaknesses list.

  • Access to Funding
  • Brand Recognition
  • Domain Authority
  • Industry Connections
  • Technical Skills
  • Marketing Savvy
  • Vertical Expertise

Examples of Strengths might include:

  • We have ready access to venture capital
  • We own a widely recognized brand name
  • We own a PageRank 8 domain
  • I have Matt Cutts on speed dial
  • Our technical team members are experts in our platforms, development tools, and applications
  • Our marketing team members can make linkbait about lug nuts go viral
  • We invented this niche and our competitors have no hope of ever catching up

Examples of Weaknesses might include:

  • Our working capital is limited to what's in my wallet
  • Our top domain is a hyphenated .us domain
  • We're hoping to gain PageRank at the next update
  • Matt Cutts blocked me on Twitter
  • Our technical team is outsourced to Pakistan
  • Our marketing team is outsourced to Bangladesh
  • I read a book about this niche and it seems very exciting

Opportunities and Threats

The same event might be an Opportunity or a Threat, depending upon how your organization can respond to it. Search is a zero-sum game. For every winner, there must be a loser.

Take a look at your organization. If you feel that your organization has the ability to benefit from a coming change in the business environment, add that to your Opportunities list. If you believe that your organization is at risk from a coming change, add that to your Threats list.

  • Our niche (travel, local, etc...) is being taken over by Google (unless you are Google)
  • Our niche is being persecuted (gambling, medication) or promoted (green energy, section 8 housing) by the government
  • Our niche is being regulated by the government, which benefits large companies and hurts small ones
  • Our niche is being increasingly dominated by the top brands (unless you are one of the top brands)
  • Our niche is growing (iPads) or shrinking (Blackberries)
  • Profitability in this niche is rising (medical training) or falling (almost everything else)
  • Some marketing tactics may be filtered or penalized (directory submissions, blog commenting, profile building)
  • Significant competitors are entering (or leaving) the niche

Examples of Opportunities might include:

  • Legislation could force consumers or businesses to buy our goods and services
  • Government regulation could force small competitors out of the market, and we're a large competitor
  • Google is increasingly ranking the top brands for all searches, and we're a top brand
  • Our niche is growing
  • Profitability in the niche is rising
  • Our marketing tactics are being increasingly rewarded by the search engines
  • Our niche has significant barriers to entry which prevent competitors from entering the market

Examples of Threats might include:

  • Legislation could make our business illegal in our country
  • Government regulation could force small competitors out of the market, and we're one of those small competitors
  • Google is increasingly ranking the top brands for all searches, and we're not a top brand
  • Our niche is shrinking
  • Profitability in the niche is falling -- unless you can operate on thinner margins than your competitors and take their market share when they fail
  • Our marketing tactics are being increasingly filtered or penalized by the search engines
  • One of our competitors just did an interview with Forbes bragging about the high profit margins in this niche

Responding to the Results of Your Analysis

After listing your Strengths, Weaknesses, Opportunities, and Threats you should have a pretty good idea where your business stands. From here, it's time to take advantage of this new knowledge.

The web publishing industry is currently undergoing a major contraction. Some organizations will choose to continue in this business, while others will choose to pivot into related business or to exit the industry entirely. AdSense publishers may decide to move into affiliate marketing or selling white label products. Web publishers may decide to halt development on their own projects and offer their services as SEO's to large enterprises. Entrepreneurs may simply close their companies and accept positions with larger firms.

If your niche is travel, which Google is slowly taking over and Wikimedia is considering a push into, you might consider moving to a different niche, pivoting your web publishing business into an SEO firm, or moving into the nascent eBook market. If your niche is 3D printers, you might seek funding to stake out early market share in a niche that may be about to cross the chasm from the early adopter stage of development.

If you have deep knowledge, experience, and connections in your niche, you might try to stick with it and be the last man standing after your weaker competitors have failed. If your knowledge is less niche focused and more related to publishing and marketing, you might sell SEO services or take a job with one of the huge multinational brands which Google is currently favoring in the SERPs.

If you have access to large amount of venture capital, you might take advantage of that to become one of the large brands which Google prefers to rank. With enough funding, anything can be ranked well in Google. I would caution, however, against entering a niche which is likely to be on Google's roadmap. Google, in being able to control the order of search results, has an unbeatable advantage in promoting their own properties (YouTube, Google+, etc...).

As margins in the industry are falling in our race to the bottom, you may even find a significant competitive advantage in having a lower cost structure than your competitors. Lower costs create larger amounts of retained earnings which can be used to fuel development and growth.

Summary

The two most important aspects of SWOT analysis are to be honest with yourself and to take action based upon your analysis. As Virgil wrote, fortune favors the bold. Be bold in your honesty and your actions and fortune will smile upon you.


Will Spencer is the CEO of MemeBridge and Alpha Geek at The Tech FAQ.

Online Journalism: eHow, Journatic & Narrative Science

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CLARITY – Methodology for Picking the Right Agency


(Image Source – my poorly built logo creator)

In my long career as an Online Marketer, I have had to often pick an agency to partner with or to carry out the different mixes of online marketing, such as SEO, Paid Search, Affiliate marketing, Email Marketing, Analytics, Social Media etc etc. Fact is, I am a rounded marketer who, although spends time on SEO the most, understands and works in most online fields. This means I am often the go to person for brands when they want to pick an agency to work with.

One such day, while in the middle of listening to an agency pitch, I felt quite a bit perplexed. The two pitches I heard were vastly different, and I wasn’t happy with either. The core problem I had with agency pitches was around the following observations:

  • They tend to be too boiler plate. Replace your business with any other and it may feel that it doesn’t matter.
  • They miss the main questions that a business may want the answers for.
  • They miss the opportunity to really sell their USP (Unique Selling Proposition)
  • If they are customised, they lose some of the generic elements necessary
  • They often leave too much room for questions, which can take the process either way.

The above is often true, even if you have issued a clear brief to your agency as to what you would expect to see, or what questions you would want answered. Any agency can follow a brief and answer it, but very few in my opinion see beyond the brief. And as an experienced agency recruiter for brands, I would like to see much more answered within the pitch than I am still seeing.

Many agencies don’t make it CLEAR what they aim to achieve, nor do they try to CLARIFY what the businesses need or want.


Image Source: http://www.flickr.com/photos/nomad9491/2399208582/

So I formulated the CLARITY model for briefs, which could be a frame work for answering pitches – help you answer your brief, while allowing you to demonstrate much more than the questions at hand. CLARITY, in my opinion, is an agency model that would score very highly but would also form the ethos of an agency environment that is really geared to helping their clients.

At the same time, the model has helped me pick the right agencies over and over again, and as such could be used by in house Digital marketers to form their own judgement sheets.

Although many SEObook readers are SEOs, many are in the agency environment themselves having to pitch, or in house and may have to from time to time help pick an agency. Many are like me, interested in SEO, but involved in much more online and offline marketing. As a result, I felt that sharing my model may help at least a few readers.

Warning: This is a rather long post, and could sound a bit preachy.

Defining CLARITY

The model is a mnemonic that covers the 7 elements below:

  1. Communication
  2. Learning and Development
  3. Access to Support
  4. Respectable and Responsive
  5. Intelligence both in people and processes
  6. Technology and innovation
  7. Yield Based Approach

Communication


Image Source: http://www.flickr.com/photos/ventodigrecale/315084105/

When working with any outside agency, the type of communication is vital. The overall tone and approach as well as the individual team members all add to a business’s communication strategy. Some businesses like being overly formal, while others find that formal approaches are annoying and could hinder work. When picking the right agency for you, understanding how they communicate with clients and amongst themselves is extremely important to make sure that the working relationship is a healthy one.

For example, how your agency dresses and behaves in meetings is fairly important – it is a subliminal communication signal. As part of a pitch process I was involved in, one very talented SEO turned up, but was wearing ripped cuff jeans.

The Head of Ecommerce was at the meeting and was not impressed that for such a large pitch, the key person delivering was in scruffy jeans.

Result? They didn’t get the gig because the Head of Ecommerce was distracted by the fact that this person hadn’t bothered to dress appropriately.

My tips to people running a pitch:

  • Find out what the communication standards are for the business – do they favour email over phone, or vice versa?
  • How do the key stakeholders behave, dress or communicate? If they are formal in their communication, you may have to resort to matching their style, or loosen up if they are a team that prefer informal approaches.
  • Keep your presentations clear and concise, and ALWAYS identify your communication strategy, especially things like reporting regularity, formats, availability of account holders, and even down to how you would deal with a crisis situation that requires communication out of hours.
  • When presenting or pitching, make the objectives clear – many a pitch goes a bit haywire if the summary of the presentation or of the overall service isn’t clear.

Learning and Development


Image Source: http://www.flickr.com/photos/smemon/4984567320/

In the digital world, things change daily. And sometimes small changes make big difference – take the latest Penguin Algorithm update from Google. The change in the way Google is treating a majority of low quality links has caught many an agency unprepared to turn around quickly - and to my knowledge a few, if not a majority, have since drafted communication to their clients about the change and what it means for their SEO.

As part of a pitch process, identifying the potential for such large scale impacts on channels is important – but more important is to show that your team is up to the challenge. It is important to indicate that your team is an ever learning, ever developing beast, and it may be worth showing some examples where you have bucked the trend, or foresaw changes and indicate how you managed to save, support or shift your other clients strategies.

For example, knowledge of your discipline isn’t enough – you have to garner some knowledge about your potential clients industry and changes occurring within it, such as legislation.

In one pitch I was part of, we identified that the client was suffering from Voucher Code site abuse – where the voucher code sites would consistently rank for long tails of the business. Interestingly, the client hadn’t picked up on the fact that the reason that they were losing a lot of organic traffic wasn’t because they had had ranking losses – rankings were all fine. The reason they were losing their traffic was because this voucher code site was ranking immediately below the clients sites with a discount offering! Our strategy tackled that by investigating the legislation, both applied and subscribed to within the voucher code industry in the UK, and as a result managed to craft a communication brief, which would enable the client from stopping the abuse.

We won the contract, and the work we did was implemented. In the end we came to an agreement with the site in question and they stopped. Clients SEO traffic and conversions soared.

A good agency has an arsenal of resources at its disposal – indicating these as well as how you constantly add to the armoury is very important – after all, often agency relationships with clients can span years.

Access to Support


Image Source: http://www.flickr.com/photos/pat-h3215/7500230750/

For any business, support is important. For any business with large budgets and complicated marketing campaigns, support is critical. Although most agencies work in a 9am to 5pm daily shift 5 days a week, many brands don’t see themselves that way. Their business online is churning round the clock, 7 days a week.

Which means a crisis, issue or even an opportunity may raise itself at the least possible convenient time. Although in a pitch these sort of issues aren’t expected by most businesses, I often find that if an agency covers it, they tend to get “bonus points” especially if they highlight likely scenarios and how they would respond to them out of hours. Although this point is a subset of communication, it is also important enough as a winning point to be isolated.

One SEO agency I hired for a holiday business proposed that during peak periods of the business refreshing site wide content, (an annual occurrence) they would send one of their content SEOs to sit with the content team to start optimising content as it gets written, and getting it to the publishing team within a very short period of time. Excellent foresight, and was one of the contributing factors to a contract that still runs 5 years on.

On the flip side, another agency pitching an email support platform worth $100,000 in fees a year to them insisted that they would prefer all the communication via email and had a very complicated tracking system that runs through to first line support, then second line and then finally to a specialist if the first two lines couldn’t solve a situation. This scared the client – sometimes you just can’t wait for three layers of conversations before actioning an urgent change - and as a result they weren’t short listed.

Respectable and Responsive


Image Source: http://www.flickr.com/photos/mafleen/402792862/

It sounds obvious that you have to be both respectable and responsive to potential (and current!) clients. However what you as an agency see as being “respectable” may not be necessarily what they feel the definition of the word may be.

Respectable also implies respecting your clients intelligence. One of the key primary things I teach to agencies is that they should research their potential clients carefully. By making your pitch too simplistic may offend their intelligence and could cost you.

Take for example a UK SEO agency that was pitching to a business I was consulting a few years ago. The pitch was about SEO and how they would help the business grow its SEO. Before hand, they had a list of all the attendees, which included my name and the name of the head of Ecommerce (who would at least have a rudimentary knowledge of SEO).

Now if you are pitching to me, you SHOULD know that I know a bit about SEO, if only you bothered to Google my name :)

Yet, in the pitch, the starting slide was an animated slide, which was a web with spiders running up and down it – explaining to us what a search engine bot was and how it crawls the web(!) apart from the fact that the animation was poor (a gif of a spider running up and down the web), they actually assumed that a multi million pound business that they were pitching to:

  • Need to see what a web spider is in a picth presentation
  • Be spoken to as if they were total amateurs

In addition, as I was in the audience I found this actually quite insulting – the fact that they hired me to be in the room meant that they were serious about a decent SEO strategy. The Head of Ecommerce had the same horrified response as I had – did the agency think we were complete idiots?

Needless to say, they lost the pitch in the first round.

Intelligence


Image Source: http://www.flickr.com/photos/mukumbura/4043364183/

To be perfectly frank, expect a serious pitch to be faced with some serious questions. At the same time, you would be expected to show real intelligence in the way you present and prepare for the meeting.

Displaying intelligence isn’t showing how many clients you have, or sprouting your company’s internal strap lines. It isn’t displaying how many results you have gotten for other clients.

Intelligence is more about:

  • How well you have both, understood and answered the clients brief
  • How well you have actually understood the clients business
  • Demonstrated a working knowledge of the clients business and THEN demonstrated how your activity would help
  • Demonstrated both creative and critical thinking, and looked into trying to future proof campaigns.
  • Indicate that the right people would be working on the right portions of the campaign. Make some of those people part of the brief

The worst case scenario would be that you have a really intelligent hands on SEO prepare your presentation, and then instead either get an account manager or sales person actually present it, without the SEO present to field any questions. Often the result is a disaster – yet this a very common approach. Believe it or not, this has happened to me at least three times. Neither the account manager nor the sales person actually knew any SEO (PPC in one PPC agency pitch). Which meant though their presentation was solid, they ability to field questions intelligently was fairly limited to “We can come back to you on that”.

Technology and Innovation


Image Source: http://www.flickr.com/photos/stuckincustoms/3232133635/

In the online world, when data flows (fairly) freely, technology has to be at the forefront to deal with that data, to rationalise, monetise and sanitise it. An agency coming in to pitch within the digital sphere needs to show (to me at least):

  • Usage of relevant tools and technology existent in the market
  • Development plans for new tools / or custom tools
  • An understanding of how technology available can be suited to your campaign

Similarly, an agency that doesn’t innovate is low on my “like” list. I would be willing to spend more time with one that has interesting ideas about innovating, than one that actually just rehashes ideas that exist in the market and brand them as their own.

One agency years ago insisted that they have “market leading” guides on SEO for internal staff - from content strategies to link building. When quizzed what kind of information they would share with the businesses content team for better SEO, we received a document that was clearly well set up, researched and written for the right audience. Sounds great right? Only problem was this was the SEOmoz guide that they simply wrapped up and presented to us. Seeing that I was on one of the top contributors to SEOmoz at that point ( I think I still rank in the top 10) I recognised the document and called them up on it.

Needless to say, I don’t believe they ever repeated that faux pas - and went out and had their own content written.

Similar situations exist when companies tell me of a revolutionary tool A or amazing platform Y - and in most cases they tend to be industry standards that they use and nothing out of the ordinary. Which is fine for a basic pitch – but for a stellar pitch you need to stand out.

Yield Based Approach


Image Source: http://www.flickr.com/photos/cambodia4kidsorg/3290848235/

Any campaign you build has to deliver a return. It doesn’t matter what the campaign is, it has to achieve its objectives. Which means if you have to pick an agency, the agency has to demonstrate the capability to not only come up with a plan or strategy that works for you it has to demonstrate that it understands what your businesses KPIs are.

This doesn’t simply mean an uplift in sales, traffic, but a clever demonstration of how the Return On Investment would be aimed at and achieved. If an agency cannot demonstrate a clear understanding of your businesses goals, and does not take the time to understand what the ROI of the specific channel being discussed should be, then they fail in using a yield based approach.

A few years back, an SEO agency pitched to me for a UK Holiday business. They were big on numbers by their own admission, and had a clear demonstration of how much it would cost us to rank for Keywords, and in fact had a clear chart identifying the top level “Category Killer” keywords.

They then went on to demonstrate how one of their current Holiday clients achieved those rankings with their help by spending the same figures that they demonstrated. The top level Keyword was “Holidays”.

2 problems with that.

First, if they already have a client in the space that they are working with to rank for those exact keywords, then I wonder to myself if the end result would become who spends the most to retain those positions. Which in itself is fine, I have no problem with agencies who have clients in the same niches, BUT, at what point does the competition with one client against the other show a negative return? If spend is the limiting factor, I wouldn’t want a competitor in that space to have the same resources as I do in terms of SEO talent, and then be simply beaten by their capability to throw more money at the campaign. Which wouldn’t be a worry, except if the agency was so willing to tell us exactly how much it cost their other client to rank, how can I trust them not to reveal the same data to our competitor?

The second problem with this scenario was they went straight for the proverbial jugular. They want to work on the money keywords (money for them!). A UK Holiday site may gain some sales on the back of ranking for “Holidays”, but I promise you that the conversion rate would be dreadful, and probably in the third decimal percentages.

If I had to pitch that gig, I would have started at the lower rung, moving upwards towards the chain to the category keyword “UK Holidays”. The spend to rank for most those would have equated to the total that the agency wanted as its fees, but the ROI for ranking for the RIGHT keywords would have been much, much higher. And an easier sell.

So the agency failed t understand the business, and as such failed to demonstrate that they could deliver the right ROI for them.

Conclusion…

If you have stuck with me so far, congrats (and thank you!). I am genuinely hoping that agencies that pitch, take something away from this post, and people who are paid to listen to pitches, do as well. I know that these principles have been successful for a large number of agencies when pitching, despite the fact that the agency didn’t realise that they were following a successful model.

The aim isn’t to follow my thoughts flat out, but learn form a person who has been involved I both sides of a pitch process, with a decent success rate in both, picking the right agency, and being picked for a campaign.

Rishi Lakhani is a freelance Online Marketing Consultant working with a number of brands and agencies in the UK, and spends a large portion of his free time on twitter. Follow him at: https://twitter.com/rishil

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