Excellent Penn & Teller program on multi-level marketing. BTW, NSFW. Those who are easily offended, shouldn't watch it. Any of it. Not one minute.....

As Penn & Teller rightly point out....

Easy Money Is BS

These multi-level marketing schemes aren't limited to home parties for sex toys, BBQ accessories, and household cleaners, of course. They are rife on the internet. If you've spent any time in internet marketing circles, you'll have seen hundreds, no doubt.

Worst business ever.

What Is Multi Level Marketing?

Multilevel marketing is where the salesperson sells items on commission - with a twist. The real "opportunity" - supposedly - is to be had recruiting a downline. A downline consists of other commission-only salespeople who try to recruit other commission-only salespeople. And so on. Some may even sell a few products!

Apparently you're not allowed to refer to the triangular-shaped Egyptian icon anymore....

The Problem With Any Marketing Opportunity

One major problem with MLM, or any market opportunity, be it affiliate or otherwise, is the size of the market.

All markets are limited. All markets are limited because the number of people is finite. Some markets are significantly more limited than others. For example, the number of people who have $2K, or whatever, to spend on, say, a rapid-mass-cash-code-instant-money-generator is quite small.

That isn't to say there isn't money to be made, however the more people trying to flick products, or recruit a downline, and the more people trying to rank well in the SERPS, the less chance a paying customer will arrive via any one site. Claims about making a lot of easy money on-selling such products, therefore, should be taken with a large grain of salt.

Evaluating Market Size And Potential

Over-hyped marketing opportunities often fail because they attempt to sell commodity product into very saturated markets. Or, there may be very little demand for the end product. If there was a lot of demand, surely they'd invest money in experienced salespeople in order to grab market share ahead of competitors.

So how do you size up a market, MLM or otherwise?

If there was an easy way, well....life would be too easy :) Really, it all comes down to some educated guesswork.

Here's one simple way of thinking about it:

Market size = the number of buyers in the market x quantity of product purchased buyers in the market per year x price per unit

You could get a rough idea of the number of buyers by looking at search volume against keywords you deem to have some level of buyer intent. Estimating the quantity they buy depends very much on the product. Does it need to be replaced often? i.e. a battery. Or is it a one-off? i.e. A house? When multiplied by the cost, you can estimate the potential size of a market.

There are a number of methods you can use. Some more complex than others. All involve guesswork. However, it's important to have a rough idea when deciding where to best focus your efforts.

Quantifying the potential of a market is somewhat more difficult.

I could find out the size of the car market in the US using the above equation, but that doesn't mean I could successfully enter that market. I would also have to evaluate my abilities, the level of competition, and the level of investment required.

This is often the mistake rookie affiliates/multi/level marketers make. They get suckered by the potential numbers, without stopping to think if those numbers make any sense. Even if they do, then does that mean the marketer can successfully enter that market?

Really, the marketing approach - be it MLM or otherwise - is irrelevant. The key questions to ask when considering any market are fundamental ones: how big is the market, how many competitors are there, and how can I compete?

Recently, there have been a series of negative articles about content farms.

Content farms, such as Demand Media's eHow and similar low-cost content publication sites, are now deemed an industry "concern". "Industry" being the traditional publishing idustry, and concern presumably being "competitive threat".

A trade group called the Internet Content Syndication Council (ICSC) has been circulating a document entitled "Council To Counter Web Content Generators Growing Clout". They talk about "job threatened journalists" and "diminishing content standards". Look, see what happens when the proletariat gets their hands on the printing press! :)

The pundits have also weighed in. So many journalists, eh. Looks like an over-supply if you ask me :) Some of them could learn a thing or two from SEOs.

For starters, many seem to be working on the false premise that Google returns "quality" results. Since when has Google ever been about "quality" results? Google's aim is to return links the searcher finds relevant.

"Quality" and relevance may not be the same thing, and thinking in terms of an arbitrary notion such as quality is to misunderstand what Google does.

For example, if a searcher, with a below-average level of reading in English wants a quick answer to a question about the common cold, then who's to say a simple, peer-produced bullet-point explanation is less relevant than a doctoral thesis on the same topic? Everyone benefits when the answer is factually correct, of course, but there's nothing to say the content mill won't offer factually accurate content just because the production process is low cost. If geared towards rankings, the content may also offer the facts in a format the user finds more useful.

Google is mostly about utility. It's about providing value to the end user. "Quality" is very much in the eye of the beholder.

Let's also not forget Google argue that Adwords - advertisements - are content, which are also rewarded by a relevance algorithm. I'm guessing the council won't be arguing that advertisements can be a form of quality content any time soon.

And what does quality mean anyway? And who defines it? I think I can guess what the elitists at the ICSC may argue - they know what it is, and they will define it! Nice work if you can get it, I guess.

Solutions To The Content Crisis

One solution they offer to this perceived "content crisis" is to create a set of public guidelines for internet content, or an accreditation process for syndicated content.

Heh.

Reminds me of the SEO "best practices" debates of years past. The result will be the same, of course - they'll end up talking to an audience that consists entirely of themselves. Everyone else will be getting on with the job of producing content.

What concerns us is that most of these new content syndicators are producing low-quality articles that are link based,” said Tim Duncan, the ICSC’s recently installed executive director.
“They are designed to score high on search. That drives down high quality content.

Wikipedia, and white hat SEOs, might not agree, of course. Content can both be ranked well and be highly relevant. This is, after all, Google's aim.

Some ICSC members have even advocated reaching out to Google to urge the search giant to tweak its algorithm to give more weight to content quality in its search results

Hilarious. I think they mean "any content they think is quality" Perhaps Google can send them a regular cheque each week, too! I suspect money is the true driving force, as opposed to any real concern for editorial standards. Have you seen some of the trash the MSM serves up?

Quality stuff, certainly.

At the end of the day, quality standards arguments are pointless. Besides the confused frame of journalistic news vs Q&A-style content, the end user decides the level of quality they will accept and pay for on the internet. The real problem traditional publishing and the mainstream media is facing is that their business model is screwed. Their content production costs are simply too high, and they are being undercut. If they think that people want higher quality, then the answer is simple - produce it and let the visitor decide.

And get some good SEO advice, so they don't inadvertently bury it.

Google Joining In?

In a further twist, Google might be looking to join the content mills at their own game. An interesting patent, "Identifying Inadequate Search Content" identifies keyword areas where there is search demand, but low levels of relevant content. That's essentially what Demand Media does. Assuming Google don't/can't get into publishing for every vertical in existence, Google would do well to make this information publicly available.

Especially to their hordes of Adsensers ;)

How You Can Create A Successful Content Mill

Ignore mainstream media journalists and whiners who like to form councils.

Understand that Google is looking for relevant content. "Relevance" is, in the end, deemed by the searcher. If there are a lot of searches for "pay levels for doctors" and you publish a page that shows "pay levels for doctors", then you are producing relevant content and Google will reward you.

Google are, no doubt, measuring how relevant visitors think the information is, and there are various signals that could be used to determine this. These signals will not come from a council of elitist, self-interested old media. The signals will be based on user activity and user voting patterns. These signals must be scalable i.e. links, visits, timeliness, recommendations, frequency of appearance, re-quoting, etc.

Increases in "quality" i.e. content depth and accuracy - will come from end-user voting. If users want deeper answers to search questions, either Google will deliver it, or users will abandon Google and go somewhere that provides it. Perhaps that's what ICSC should do - start their own search engine ;)

Having said all that, a lot of samey, lightweight content won't survive in the long run, because Google likes to provide variety in their result sets. Look for ways to differentiate your content. Quality is only one - arbitrary - point of differentiation. You'd be better concentrating on aspects such as ease of access, readability, findability, relevance and freshness.

Keep the end user firmly in mind.

In information retrieval some words are powerful / potent. They are really descriptive and get right to the point of what someone is looking for. Other words have little to no value. The reason the concept of stop words came about is that you really couldn't tell much about a document by it including words like a, an, the, and, are, etc. The flip side of stop words are words which have a high discrimination value. Recently I was searching to see if there was a FedEx office in the town where my mom lives, and in spite of there not being one, Google still returned multiple pages (the home page and the store locator page) from the FedEx.com website in the search results. That was a great search result, and Google was smart to place more weight on the core concept word in the search (FedEx) while placing less weight on the location.

Words which have a low discrimination value may have a higher discrimination value when combined with neighboring words. Hot and dog might have a different meaning when they are next to each other. As explained in this Wired article:

Take, for instance, the way Google’s engine learns which words are synonyms. “We discovered a nifty thing very early on,” Singhal says. “People change words in their queries. So someone would say, ‘pictures of dogs,’ and then they’d say, ‘pictures of puppies.’ So that told us that maybe ‘dogs’ and ‘puppies’ were interchangeable. We also learned that when you boil water, it’s hot water. We were relearning semantics from humans, and that was a great advance.”

But there were obstacles. Google’s synonym system understood that a dog was similar to a puppy and that boiling water was hot. But it also concluded that a hot dog was the same as a boiling puppy. The problem was fixed in late 2002 by a breakthrough based on philosopher Ludwig Wittgenstein’s theories about how words are defined by context. As Google crawled and archived billions of documents and Web pages, it analyzed what words were close to each other. “Hot dog” would be found in searches that also contained “bread” and “mustard” and “baseball games” — not poached pooches. That helped the algorithm understand what “hot dog” — and millions of other terms — meant. “Today, if you type ‘Gandhi bio,’ we know that bio means biography,” Singhal says. “And if you type ‘bio warfare,’ it means biological.”

The concept of discrimination value also has value outside of search. If you get feedback from an anonymous person on a third party site it gets so much weight (maybe none). If you get feedback from someone who is not anonymous it gets more weight. If you get feedback from a paying customer it gets much more weight. One of the most powerful levels of discrimination is indeed payment. If a person pays you the (typically) you know who they are & they have expressed significant interest beyond what most people will do.

I think online business models which require payment from the typical user are not hyped and are not considered sexy because those sorts of models are often slow growth due to the penny gap and the requirement of greater trust to convert. Whereas a programming marketer can hear of a new network (say Pippers) and create 40,000 bogus accounts in an hour. The owners of Pippers can then talk about their explosive growth rate in the media, which earns them media coverage. In turn this increases their ability to raise capital and continue their "growth."

But many of the social networks end up being a bag of smoke that will fade because they aim to bucket people as beings in a database and are so broad as to have little discrimination value. I have been reading You Are Not a Gadget and he compared the depersonalization on the broad social networks to the beauty of an oud forum he is a member of. Much like charging for admission, obscurity is a filter which improves the level of discourse.

Compare the comments on *any* niche topic site to what you find on Youtube. If you can show me a site which is consistently worse than Youtube (outside of site like 4Chan which specialize in creating campaigns to try to make epileptic people have a seizure) I will buy you a beer then next time we meet. :D

My wife deleted her FaceBook account because she was annoyed at some people's behavior on it. Part of the problem with the social networks is that they are so broad and so frictionless that your activities on them really don't matter. As a marketer there are a couple ways to play such networks

• largely ignore them
• be friends with everyone
• use bots

As a marketer the first of those options means you are saving your time for higher paying areas, and the second of those options means more people seeing more distribution of whatever content you create. But many of the helpful aids are at best dubious short term opportunistic ploys. The third option means you are one of the people who is going out of their way to make the web worse, but many will. ;)

Generally any given month I haven't been on Facebook for more than 5 minutes outside of writing & targeting ads, or approving a few real "friends" and hundreds to thousands of other people who claim to be my friend. But if you message me on FaceBook there is a precisely 0% chance of getting a reply. :)

When FaceBook launched Beacon a few years ago they wanted to sell peer pressure as an ad unit. If brands can show that your friends did something then maybe that can help lead to a cumulative advantage sort of environment which has you follow along. Beacon was such a flagrant violation of user privacy that it was quickly shot down by the market. But with the new FaceBook like button, they are trying to use like button clicks to put your name on ads:

"Marketers have always known that the best way to sell something is to get your friends to sell it," says Sheryl Sandberg, Facebook's chief operating officer. "That is what people do all day on Facebook. We enable effective word-of-mouth advertising at scale for the first time."

In the short run it may work, but in the longrun I don't like the concept. The reasons are many.

• You can agree with one particular thing a person says and like it while being nearly diametrically opposed to their general philosophy on life. For example, when we launched that "How Google Works" infographic last week one of the reporters who wrote about it also mentioned how sleazy and nefarious the SEO industry is, and yet he was willing to promote the efforts of an SEO because it was published on a blog with a sister acronym in the domain name. :D ... Of the 3,000+ people who voted for us likely less than half of them know anything about me, or even my association with the site.
• You can like one product from a company, but not like their other products. I have worked with GoDaddy as a registrar for years. And I have had no complaints on that front. But they also sell some search engine submission service that I would cringe to see my name promoting.
• You click the like button once on one page. Years later the business you liked is trading in another area...they moved from remnant inventory to spyware, and you recommend them. ;)
• An individual can have multiple lines of work. You might like Thom Yorke's role in Radiohead, but you might not like his political views or his solo work.
• Imagine when someone buys a car that you passively recommended which has a manufacturer defect. One of their loved ones gets killed and you eat the blame.
• Just like businesses, people change over time. This is especially true in the area of business, where a former partner or friend goes out of their way to betray your trust and screw you.
• How do likes work with 301 redirects? How do they work when the content of the page shifts from genuinely useful to hawking trash with a hyped up sales letter?

A like doesn't have much discrimination value. And it shouldn't last very long. Why did you like something? When did you like it? Who knows.

Did you like Toyota right up until the brakes didn't work? After you get out of the hospital, how do you feel when your friend asks you why you are still promoting their products? Did you work for a digital sharecropper overlord like Jason Calacanas who required you to push their junk elsewhere? How did you feel when your friend asks you why you are promoting his trash after he canned you with 1 week notice while boasting how they are nearing break-even and have over 8 years of cash in the bank?

Once people experience that will they become jaded and stop recommending things?

And if there isn't a backlash against the like button then given enough time one of your friends will like almost anything. It doesn't matter the product/service/offer ... if your pool of "friends" is wide enough then one of them is receiving an affiliate commission for pushing something, one of them owed a favor to the merchant, and one of them liked the merchant because they picked up a tab in the bar last month.

A wave of 100 million blond hair 18 year old girls who are lonely have joined FaceBook friending up with the desperate and then promoting scammy wares to them via automated clicks of the like button. And then of course there will be services like SpikeTheVote.

Sure a fad might work in the short run, but given enough time and there will be friend recommendations for almost anything. Once the novelty wears of does any of it matter?

In time any database record can be an ad targeting mechanism. Will I be promoting some of the products my thousands of "friends" create or endorse by a click of the mouse which changes purpose after the fact?

At first online petitions were powerful because they seemed to have mobilized swaths of people. But then people realized that a vote represented nothing more than an automated form submission and clicking send. 2 clicks of the mouse. Not much discrimination value.

The other day a person contacted me about wanting to help me with ad retargeting on one of my sites, but in order to do so they would have had to have tracked my site. That would have given them tons of great information about how they could retarget all my site's visitors around the web. And they wanted me to give that up for free in an offer which was made to sound compelling, but lacked substance. And so they never got a response. :D

It is the same reason I don't use services like AddToAny on our websites.

Given that we live in "the information age" it is surprising how little people value data & how little they expect you to value it. But there are still a lot of naive folks online! Google has a patent for finding under-served markets. And they own the leading search engine + the leading online ad network.

At any point in time they can change who they are voting for, and why they are voting that way.

They acquired YouTube and then universal search was all the rage.

Yes they have been pretty good at taking the longterm view, but that is *exactly* why so many businesses are afraid of them. Google throws off so much cash and collects so much data that they can go into just about any information market and practice price dumping to kill external innovation & lock up the market.

Once they own the market they have the data. From there a near infinite number of business models & opportunities appear.

Google recently became the #1 shopping search engine. How did they respond? More promotion of their shopping search feature.

All those star ratings near the ads go to a thin affiliate / Google value add shopping search engine experience. Featured placement for those who are willing to share more data in exchange for promotion, and then over time Google will start collecting data directly and drive the (non-Google) duplication out of the marketplace.

You can tell where Google aims to position Google in the long run by what they consider to be spam. Early remote quality rater guidelines have highlighted how spammy the travel vertical is with hotel sites. Since then Google has added hotel prices to their search results, added hotels to some of their maps, and they just acquired ITA software - the company which powers many airline search sites.

Amongst this sort of backdrop there was an article in the NYT about small book shops partnering up with Google. The title of the article reads like it is straight out of a press release: Small Stores See Google as Ally in E-Book Market. And it includes the following quote

Mr. Sennett acknowledged that Google would also be a competitor, since it would also sell books from its Web site. But he seemed to believe that Google would favor its smaller partners.

“I don’t see Google directly working to undermine or outsell their retail partners,” he said. “I doubt they are going to be editorially recommending books and making choices about what people should read, which is what bookstores do.”

He added, “I wonder how naïve that is at this point. We’ll have to see.”

If they have all the sales data they don't need to make recommendations. They let you and your customers do that. All they have to do to provide a better service than you can is aggregate the data.

The long view is this: if Google can cheaply duplicate your efforts you are unneeded duplication in the marketplace.

Look at the list of business models Google publicly stated they were leery on:

• ebook sites
• get rich quick
• comparison shopping sites
• travel aggregators

3 out of 4 ain't bad. But even on the one they missed, they still have an AdSense category for it. :D

There are so many blogs on search marketing.

Then there are so many forums.

And Tweets.

So much SEO noise, and so little time.

So how does anyone make sense of it? The deluge can be overwhelming for the experienced SEO, let alone the poor beginner. If you are just starting SEO, here are the ten areas you should spend most of your time on when you're starting up.

1. Stop reading Blogs/Forums/Tweets/Facebook. Too much noise, takin' all your time :)

"SPAM = Site's Positioned Above Mine" - Greg Boser

2. Before you do any SEO, define your niche. What service does your website provide? Who are your readers/customers? What can you provide that your competitors don't? How are you going to deliver your services and make a profit? There's no point ranking well for a business that doesn't work at a fundamental level.

"Search is a "reverse broadcast system." In a broadcast system, advertisers spend lots of money to reach a mass audience, hoping to build desire for a product or service. But most of the audience is not interested in their pitches. Search is the reverse. Each search is an expressed desire, something that someone at a particular time actually wants. Advertisers can tune in to the "desire-cast" that’s going on." - Danny Sullivan

3. Set business-specific goals and include a time frame. "I want to make x in 12 months". "I want 20,000 RSS subscribers in 6 months". It's important to be specific. It's difficult to measure goals that aren't specific i.e. "be popular".

Never let your ads write checks that your website can’t cash. - Avinash Kaushik

4. Create interesting content. If you know your audience, you already know what content they will find interesting. If you don't, revisit #2.

I’m not even sure myself - Matt Cutts

5. Links. You need links Not just the Google-juice, PR-passing kind. Links are the arteries of the web, Traffic travels across links, so all links, crawlable or not, no-followed or otherwise, are valuable. Asking for links from people you don't know is pretty much a waste of time. It's a better idea to create fantastic content, then link out to the popular people who can spread the word. They'll follow their inbound links back to you. Make sure that what they find is remarkable.

The urgent can drown out the important. - Marissa Meyer

6. Do SEO. All that stuff you're no longer reading in #1? It all boils down to this: put keywords in your title tag, write on-topic content, make sure your site is crawlable, get links to that content, get people to talk about you. Repeat.

We're trying hard to find user needs that aren't being met at all- Larry Page

7. After a month, look at your keyword referral logs. Take those terms and plug 'em into keyword research tools. Create a list of 30 keyword terms that your audience would find interesting. Those are your article headings. Write 30 articles. Repeat.

8. Look at your competitors. Your competitors are ranking well for a reason. They're being mentioned elsewhere for a reason. What are they doing that you're not? Reverse engineer their sites i.e. who links to them, find out what articles they publish and find out who is talking about them, and why. Emulate them, then go one better. Either that, or stop competing with them directly i.e. define a slightly different niche.

We are currently not planning on conquering the world - Sergey Brin

9. Get social. Social media is often over-hyped, but the principles, and numbers behind it, are sound. Getting mentioned is the new link building. It's about building connections between people. Google has a problem. Using links as a measure of relevant content doesn't work as well as it used to, so you can be sure Google will be using an ever-more complex set of signals. These signals will involve the connections people make with your site. That's really what Google wants to know - who is most relevant. Consider the many different ways people can connect with you, and enable those connections.

10. Start reading the blogs/forums/twitter. The irony, of course, is that I've linked to some truly great resources and thinkers :)

If you've followed the ten steps above, you're 80% of the way there. The final 20% will take a while longer, and that's where the minutae comes in.

Keep in mind that some of the most lucrative SEO information isn't likely to be published in the public domain. Cultivate personal networks to get this information. This is true of any business endeavor.

Network :)