Recently I saw Barry Ritholtz mentioned that he was selling video recordings of a conference he put on for only $69, and some of the people who commented on his site wrote garbage like this:

These people have enough capital to try to trade the markets, but spending $69 for one of the most in depth and most current pieces of information about their livelihood is completely out of the question. Imagine having the gall to register on someone's site to leave a comment like "where can we steal your work from."

And yet this is normal (and expected) behavior on the web, even in fields directly connected money / finance / investing!!!

Every day I get some non-customers who acts that way as well. The noise does wear you down, and it really does highlight the problems with free. When some people get hooked on free they have no end to the demands, and no respect or appreciation for the work.

I personally handle all customer correspondence, which is why I recently had to increase prices to slow down our rate of growth. I am only 1 person. Customers rarely wait as long as a day for a response. This guy never sent in 3 requests, was rude and demanding and demeaning, is not even a paying customer, and expects free phone support for software worth hundreds of dollars that we give away for free.

Why would I care if that guy used our tools for free? Since he is rude I hope he can't use them, such that any competent competitor interested in SEO has a competitive advantage over him. And that guy's rudeness shows that he probably lacks the social skills to be successful on a large distributed social network.

When you chose your customers you are picking how much you will enjoy your job.

There are a lot of potential bad customers like that, and you don't even want to suggest they become a paying customer. The only ways to handle people that are that rude are to either ignore them or tell them off to let them know they are not welcome in your business. If you play nice with a person that treats you like a doormat then it will only get worse in time.

The person who needs a lot of support BEFORE becoming a paying customer rarely becomes a profitable long-term customer. The person who needs a price break today expects a larger one tomorrow. They keep squeezing margins until you are a commodity and the model no longer works. It is just a path to self destruction because if you cater to such people you do not raise them up to your level, you lower yourself down to their level.

This reminds me of an important business lesson from a Dan Kennedy book called The Ultimate Success Secret that a great friend recommended I read about a year ago.

When I first started in the "success education business," one of the few people in the country who was consistently effective at selling self-improvement audiocassette programs direct, face-to-face to executives and salespeople, gave me what turned out to be very, very good advice - he said: "Don't waste your time trying to sell these materials to the people who need it the most. They won't buy it. You should focus on selling to successful people who want to get even better."

Over the years, I've demonstrated the validity of this to myself a number of different ways. And I've developed an explanation for it. There is what I now call "the self-esteem Catch-22 loop" at work here: in order for a person to invest directly in himself, which is what buying self-improvement materials is, he has to place value on himself, i.e. have high self-esteem, but if he has such high self-esteem, he is probably already doing well and does not have a critical need for this type of information; he will get marginal improvement out of it; but the person who needs it most does not place much value on himself, i.e. has relatively low self-esteem, which prohibits him from buying, believing in or using self-improvement materials.

I used to be all about making everything (or as much as possible) free because I liked helping people, but really most people won't act on advice or respect it much unless they pay for it. Human nature is what it is, and there is no point fighting it. ;)

At some point we may need to test moving from offering any tools for free to making everything paid just to filter out that noise. Such a move would likely cost us exposure, but most of that exposure is not leading to any tangible business anyhow.

Anytime any of these words are in the name of an informational product or software tool you can be 99%+ certain it is a scam:

Money Words

• money
• cash
• wealth
• income
• unlimited
• rich

Automated Words

• automated
• automatic
• autopilot
• magnet
• easy
• lazy
• system
• blueprint
• plug and play
• turnkey

MLM Words

• network
• downstream
• empire

Social Power Words

• power
• secrets
• seduction
• hypnotic
• domination
• success

More Tips

Thumb rules...

• if your not sure what it does then its not worth buying.
• the quality of the product is often inversely related to the number of products the vendor has on the market.
• the quality of the product is often inversely proportional to the number of people who email you about it.

Why write blog posts like this one?

Our Support.seobook.com tickets often get filled up by people who bought some scammy products from some hyped up marketer (who we have nothing to do with) and beg us for refunds. I figure if I write a few more posts on topics like this maybe I will get a few less of those support requests from people who bought garbage from someone else.

The conventional SEO strategy goes like this:

• Research keywords
• Optimize site for those keywords
• Link internal pages using keyword loaded terms
• Get links from other sites with keywords in the link

These days, this strategy isn't working as well as it used to.

If a site isn't genuinely interesting and isn't worth remarking upon, it can be difficult to get links, attention and rankings.

These are essentially marketing problems.

By basing our SEO strategy on fundamental marketing principles, we stand a much better chance of dominating the rankings, no matter what niche we choose to target.

Audience

This document is intended for those who know basic SEO principles, but are new to marketing concepts and theory.

If you're new to SEO, there are helpful tips throughout the document, and links to further instruction on SEOBook.com.

Principles That Form The Foundation Of This Strategy

• 1. Market Analysis
• 2. Competitive Review
• 3. Positioning
• 4. SEO
• 5. Economics

Market Analysis

In the past, marketing was a last-minute ad on.

A company knocked out a product, then it was handed over the wall to marketing, whose job it was to get the product out into the market. Marketing put a colorful picture on the box, commissioned a jingle, and bought up millions of dollars worth of media time.

These days, marketing is more integrated. A product or service is designed with a clear audience in mind, although many SEOs might disagree, especially when asked to bolt an SEO strategy onto a Flash site consisting entirely of animation!

The internet offers us the opportunity to design with a clear audience in mind, but with a lot less risk than brick-n-mortar companies.

We can figure out if there is a market, and what that market demands, test that market, and then build a site to cater to that market. We can do this quickly and cheaply, using the power of search marketing.

Find Clear Space & Consumer Demand

Like SEO, marketing is part art, part science. Even if you cover the technical aspects of SEO, there is no guarantee you will rank well. Likewise, if you follow a marketing strategy, there is no guarantee of making money.

The trick is to find a place in the market that has two key aspects: clear space and consumer demand.

How do we find these places in the market?

Let's start with a basic marketing analysis.

Perform Market Analysis

Ask yourself three questions:

• What does the consumer need?
• How many consumer need this product/service?
• What is the buying process?

You must fill a genuine need in the market.

Is there demand? It's no good trying to sell something, be it a good, service or opinion, if there is no demand for it. For example, do you know why most blogs don't get read? It is because there is a very limited demand for opinions from unknown writers. Demand is spread very thinly across the opinion/news space, and supply is virtually infinite.

How do you find out if there is a demand for your idea?

The SEO has a valuable tool at his/her disposal for determining demand. Keyword research involves mining databases of previously searched for keyword terms to see if there are existing traffic streams (demand) they can tap into. Any volume of keyword searches indicates demand. Generally speaking, the higher the search volume, the greater the demand, although there are traps, which we'll get to shortly.

For those new to keyword research, here's a step-by-step, using the SEOBook Keyword Tool

Example Of An SEO Marketing Analysis - Gone Wrong

The SEO aims to build a revenue generating site.

The SEO undertakes keyword research and finds there are a lot of searches for Britney Spears pictures.

It turns out that there are approximately 135,000 searches for Britney Spears pictures each month.

Our first two questions - "What does the consumer need? (Britney pictures)" and "How many consumer need this product/service? (lots!)" - appear to be answered. So the SEO licenses a collection of Britney pictures, sets up a site that charges a small membership fee, and ranks well for Britney related keyword terms.

And fails to make any money.

Why?

There are various reasons, but the main reason is that the SEO failed to ask "what is the buy process?" Conventional SEO-led strategies often fail to include this step, however it is crucial if your site is to succeed.

The buy process is, as the name suggests, the steps a person takes when they are interested in buying something. Had the SEO examined the buy process, she would have realized people don't pay for Britney pictures online. Granted, this example is a little silly, but this problem occurs often, especially when search traffic is viewed in isolation.

Offline, people may buy gossip and celebrity magazines, but when online, they expect to look at Britney pictures for free. Online, the buy process for Britney Spears images simply doesn't exist, except in a very narrow B2B market between photographers and publishers.

So what happens next?

Choose Niches With A Commercial Imperative

The SEO, discouraged that his first idea didn't work, chooses to run ads instead. Where there is traffic there is money, right?

Again, this approach is likely to meet with limited success, especially when compared to other niches she could have targeted.

People looking for Britney pictures don't tend to be in a buying mode, and so advertising, especially action based advertising such as Adsense, is likely to go unclicked. The activity "looking at Britney pictures" doesn't have a strong commercial imperative, whereas an activity such as "buying toys", does. Such sites need a very high number of page views to make much money.

One way to determine if a commercial imperative exists is to examine the bid prices for Adwords. Almost always, the higher the bid price on the keyword, the more transactional the niche.

Think Of It From The Advertisers Perspective

The SEO also needs to understand the buy process in order to choose the areas which will be most effective for advertisers. The most effective Adsense sites, for example, are sites where visitors are looking to buy something. That's the only reason advertisers use Adwords - they need to sell visitors something*.

In reality, it's a little more complex than this.

Non-commercial searches can and do result in sales, however searches directly related to commercial activity - such as transactional searches - are most likely to result in higher income for your site and make for more profitable niches. See my article on the three types of searches, navigational, informational, and transactional for more information.

Ask yourself:

What makes someone buy something? Will they buy it online, or offline? Are they even capable of buying something over the internet? If visitors are in a buying mode, then what stage of the buy process are they at? Are they ready to buy right now, or are they looking for information?

Look at demographic details for competing sites and keywords to get inside the mind of the searcher. Don't just look at search volume, but also consider the intent behind the keyword, how you would monetize that demand, and the visitor value.

*The one caveat is to drive brand awareness, but this also has limited effectiveness. When was the last time you clicked on an adwords ad that focused entirely on building brand? And if people don't click, you, as the publisher, don't make money.

I hope I've impressed on you the need to evaluate keyword terms within a marketing and business framework.

Competitive Review - Strengths & Weaknesses

• Query the search engine results pages under the keywords you want to rank for
• Pick out the top ten sites in your niche. The top ten sites will usually appear under a mix of keyword terms relating to your niche
• Determine the strengths and weaknesses of the competition
• Determine the strengths and weaknesses of your own site, relative to the competition

Once you've decided on a niche to target, you then need to determine the level of competition within that niche.

A SWOT analysis can help you determine how your site compares to those already in the niche. SWOT stands for Strengths, Weaknesses, Opportunities and Threats. You perform this analysis on your own site, and the sites of your competitors.

You can can go into incredible detail with a SWOT analysis, but it doesn't need to be complicated. You simply need to determine what you're good at relative to the competition. Draw up a chart like this, and complete:

If you can't find any areas where you are better than the competition, either refine the niche, choose another niche altogether, or figure out a plan that will make you better than the competition. Ranking well doesn't really help, because a searcher will not stop at the first site they find.

Keep in mind that it is easier to be successful if you already know a lot about a market. Any experience you have lowers the investment needed to research the market and ensures you can write at a higher and more compelling level than people who do not know the market.

By doing a SWOT exercise, you'll also get a feel for any opportunities your competitors might be missing.

Positioning

• Undertake keyword research
• Look for a niche that is "worth remarking upon" and is new, or doesn't have a lot of existing competition
• Select a brand name and domain name the describes the niche ie. SEOBook.com. It is useful to include a keyword term
• Build a site that focuses exclusively on this niche, and no others.
• Conduct SEO campaign
• Monitor results.

What do you think of when someone mentions the name "Google"?

Search, right.

How about IBM? Computers. Hewlett Packard? Printers.

If you aim to be the first in the customers mind when they think of a keyword term, you can easily win the ranking game.

Be First

Who was the first president of the United state.George Washington. Who was second? Who was the first man on the moon? Neil Armstrong. Who was the fourth. It is important to be first. Being first is memorable.

But wait a minute! Google wasn't the first search engine!

Correct. However, they've overcome this by being first in people's mind when it comes to search. Yahoo was the first search service, and whilst it's star has faded of late, it is still a very wealthy company. It is no good being the tenth anything. Aim to be first. And if you can't be first....

If You Can't Be First, Be First In A New Niche

You'll face the problem of not being first whenever you enter an existing niche. And on the internet, that's "most of the time"

Look at the top sites in your chosen niche. If they got in early enough, chances are they enjoy the linking benefit that comes with being first. Typically, Google's linking algorithm favors long established sites, as opposed to newcomers. To find out why this occurs, check out Mike Grehan's "Filthy Linking Rich". Those who are first to occupy a niche have a much easier job of getting links because they are remarkable, simply by virtue of being unique.

So what to do if you arrive late to a niche?

Invent a new niche, and be first in that.

Say you sell holiday rental accommodation in Palm Springs. Unfortunately, there are a lot of holiday rental accommodation services in Palm Springs. So to differentiate yourself, you might decide to focus on "the cheapest rental accommodation services in Palm Springs". Or "the most upmarket rental accommodation services in Palm Springs". Or "the best rental accommodation guide for solo travelers in Palm Springs".

Focus on a new angle that your competitors aren't targeting. This is called market segmentation.

Make Sure The New Niche Is Worthwhile

One of the traps of market segmentation is that you might segment too finely i.e. there are not enough customers in your newly segmented niche to be worthwhile.

When you do your keyword research, look at the keyword volume for niche keyword terms. Are there any keywords that have good volumes AND cover an angle that you competitors aren't already targeting? Find a suitable keyword term, and make that your niche. Also, look at demographic details for competing sites and keywords to get inside the mind of the searcher. Remember, there needs to be a commercial intent.

Take Your New Niche For A Test Drive

This strategy has been used in PPC for a while, however it's outlined really well in the book The Four Hour WorkWeek by Tim Ferris.

Once you've decided on a new niche that you can be first in, you need to test the niche to see if it delivers enough revenue to make the effort worthwhile. You can test a niche quickly and easily by using PPC, like Google Adwords.

A lot of SEOs don't use PPC, but they're missing out on a tool that can save them a lot of time and effort.

For those new to PPC, check out Aaron's Guide to PPC.

Run a short Adwords campaign targeting the keyword terms that relate to your new niche. You may only need to run it for a week or two, and it shouldn't cost you more that a few hundred dollars. The aim is to answer the question: "do people who search on the keywords want to buy what I'm selling?".

Ensure your site has a clear call to action that will help you measure actual buyer interest. For example, a sign-up form offering more information, a sales inquiry, or an actual purchase. You don't need to have your site finished to do this. A basic three page site will do.

Monitor the campaign and do split/run testing on the ad-copy. This means you compare one set of wording against another. Helpfully, Google Adwords has this functionality built in, and they provide a free product called Google Optimizer if you want to test you page copy. Check out my article "Tested Advertising Strategies Respun For SEO".

Again, this exercise can be as simple or complex as you want to make it.

Start off simple, and change the wording to make the offer sound more appealing, and make a note of the wording that works best. You can use this wording in your title tags during your SEO campaign. The wording that receives a click in Adwords is also likely to receive a click in the organic listings.

If visitors are searching for your keyword, clicking on your ad, and moving to desired action, then you've found a great niche. Remember, most people will click the organic results rather than Adwords listings, so the fact you're getting click-through further demonstrates that there is little competition in your chosen niche in the organic results.

If you aren't getting click thru and/or sign-up/purchase, try the same strategy, but with different keyword terms. Keep going until you find a winner.

It is a lot cheaper in terms of time, effort and money to test keywords at this point, rather than commit to a brand and an SEO strategy that targets the wrong keyword terms, and the wrong niche.

Marketing Within The Niche

Choose a trading name, and domain name, that can be used generically, and, if possible, aligned with your keyword term.

One approach is to take a simple keyword phrase people are familiar with, and will search for, and combine it with something else. For example, SEOBook, AfterMail, FaceBook, HotelFind, etc. This approach works well if you don't have a large budget for brand building.

Non-descriptive brand names, such as Kellogs, or Mooch, don't work so well for SEO, especially for low profile companies, because people need to know your name before they search for you.

Become Synonymous With Your Niche

Consider SEOBook.com.

It's hard for anyone else to sell a book on SEO without people also stumbling across Aaron's site. Aaron has selected a keyword-loaded brand name that is aligned with the niche. He has also worked hard to dominate this tightly defined niche within the broader SEO market. Whenever someone promotes any book on SEO, Aaron is likely to benefit, because he is #1 in that niche.

If you dominate your niche, and the niche is relatively new, then any promotion of that niche will also benefit you. If you're a leader in your niche, and become synonymous with that niche, then latecomers and generic copycats will have a very difficult time competing with you. Any promotion of the beverage "Cola" benefits the market leader Coke, because they dominate their niche. Likewise, promotion of PCs will benefit Dell, promotion of smartphones will benefit Apple, and so on.

Position Against The Leader

Let's assume you're competing against an entrenched leader. What can you do?

Position yourself against the leader. For example, if the leader is offering "cheap SEO services", you might position by offering "valuable SEO services". You could warn people against using cheap SEO services by highlighting the problems and risks, and showing how your price is linked to achieving better value. Figure out what they're doing, and define yourself against them.

Avis did this against Hertz. They acknowledged they weren't the top of the rental car niche, but made a virtue out of it. They adopted the phrase "we try harder". The market dominance of Hertz became a weakness.

Barriers To Entry Are Your Friend

On the web, there are few barriers to entry. Anyone can start a website and copy your idea.

However, not everyone can start a Google. Or an Amazon. Or a Facebook. Those companies have barriers to entry in their markets, mostly to do with the scale of operations. It's very expensive to do what they do.

Look for areas where there is some difficulty in starting up. Does your idea require capital? Do you have valuable information that no-one else has? Do you have a pre-established reputation or brand? Does you idea require specialist software? Is the service or product unique, or difficult to obtain elsewhere? Such barriers will dissuade a lot of people from entering the niche, which means you'll face less competitive threat.

The lowest barrier to entry is the affiliate site where the supplier provides a template site. They might even set it up for their affiliates. For free!

See the problem?

If it's that easy, then there is no barrier to entry, meaning anyone can do it. Even with the best SEO in the world, it would be very difficult to defend such a site from the hundreds of webmasters who arrive tomorrow, the day after that, and so on.

So when you evaluate the competitors in your niche, also consider how difficult it will be for followers to compete with you.

SEO

• Build content. Get a list of 50 keywords and write a page on each. Include how-to's, generalist information, news (use Blog software), video, photos and maps. Tag all graphical content with keyword terms
• Write naturally, stay on a single topic per page. Forget keyword density, it is overrated
• Layout site. Place most important (money) pages at the top of the hierarchy, one step away from the home page
• Create a Google Site Map to ensure crawlability
• Once the site is complete, submit to the top directories. We recommend Yahoo!, BOTW, and Business.com
• Issue a press release. Ensure you include a link back to your site.
• Open Twitter and Facebook accounts, and update each time you add a page of content
• Add one new page of quality content to the site per day
• After 30 days, examine your stats. Look for long tail keyword terms, choose the most popular term, and write a page about it. Use this list of long tail keywords as article starter ideas
• Every 15 days, do the same thing again
• Remember to write a new page of quality content every day
• Find the top ten sites in closely related niches, and offer to write articles for them. Include a link back to your site

After six months, you should be ranking well, and your traffic should be climbing.

Need more detail? Join our team :)

*Hat-Tip to Brett Tabke's "Successful Site in 12 Months with Google Alone"

Economics & Risk/Reward

Are SEO visitors really free?

They're only free if you value your time at zero dollars.

Of course, you time is worth money, and this must be factored in. One of the great things about SEO is that unlike conventional adverting, your visitors don't stop arriving when you stop paying. The downside is that you must spend a lot of time up front, and with no guarantee of success. The search engines could also drop your site, at any time, and without reason.

So it's a good idea to ask yourself the following questions:

• What are my costs?
• What is the break even point?
• How long before I get payback?

A lot of SEOs will persist with sites that enjoy high rankings, even when the economics of the site don't make any sense. If this happens to you, bite the bullet and drop these sites, or convert them to another use. There is no value in ranking highly if the visitors aren't doing what you want them to, and/or they aren't spending money.

Once your put a value on your SEO efforts, you'll clearly be able to see how much your site is actually making you.

If the site is making money, that's great. If not, then try to determine if the problem is to do with marketing. Have you identified the niche correctly? Are you dominate within that niche? Is there sufficient demand?

Summary

SEO works best when it is integrated into your business and marketing strategy. There is no point ranking well for terms that don't advance your business goals. Find a profitable niche you can make your own, and dominate it.

Follow this strategy and lucrative search traffic will flow you way.

Yahoo Had No Leverage...

In case you didn't look at the stock market today, Bloomberg highlighted what investors think of the Yahoo! / Microsoft deal

“This deal was a big disappointment,” said Moran, an analyst in Boca Raton, Florida. “They needed this deal, and it shows in terms of how the negotiations were concluded.”

...Because Their CEO Did Not Grasp the Importance of Search

In the same article Yahoo!'s CEO justified the Yahoo!/Microsoft search deal as something that clears fog:

“The priority was not to do the deal,” Bartz, 60, said in an interview. “The priority was to get the fog away from the company. Yahoo got pegged as a search company and we’re not a search company. Search is only one aspect of what our customers do.”

To look at the highest margin and highest income piece of a business and call it fog is absurd.

How Search Sets a Baseline

Search is the most direct way to target ads at consumers. It is easy to establish a baseline values and measure change. It allows you to implement (and advertise) new product ideas at no cost.

The other important baseline evolving search sets is the difference between spam and value added content. If you have ever read any of Google's leaked remote quality rater documents you would see that the search result itself is a lower threshold to force the evolution of media.

Web Search Holds Everything Together

A lot of Yahoo!'s properties are somewhat average, but not remarkable. Some of them succeed ONLY because they are a part of the Yahoo! family of websites. Web search is the glue that holds the pieces together.

Search is the most profitable online ad market and having a big stake of that market allows them to promote their other business interests in a cheap & targeted way. Selling off the search assets does not suddenly put them in a strong competitive position.

It does not suddenly make their thin content sites thicker and more valuable. If anything it will make it harder for their other sites to compete as it will require them to be thicker to stay competitive when they lose the subsidy they were getting from search.

And Microsoft bought Yahoo! Search for $0:

Besides better exposure for its Bing search engine by placement throughout Yahoo!, Ballmer said, Microsoft hopes to improve the quality of its searches by analyzing over a decade of data Yahoo! has on how people search. The data improves search quality for everything from correcting misspelled words to likely patterns of search behavior.

Danny highlighted how much worse this deal is for Yahoo! than the deal offered last year in a side by side comparison and wrote a search eulogy. Yahoo! spent a couple billion dollars acquiring Overture/AltaVista, Inktomi, and AllTheWeb. And they sold it for $0!

Deal Terms

From Microsoft's press release:

• The term of the agreement is 10 years;
• Microsoft will acquire an exclusive 10 year license to Yahoo!’s core search technologies, and Microsoft will have the ability to integrate Yahoo! search technologies into its existing web search platforms;
• Microsoft’s Bing will be the exclusive algorithmic search and paid search platform for Yahoo! sites. Yahoo! will continue to use its technology and data in other areas of its business such as enhancing display advertising technology.
• Yahoo! will become the exclusive worldwide relationship sales force for both companies’ premium search advertisers. Self-serve advertising for both companies will be fulfilled by Microsoft’s AdCenter platform, and prices for all search ads will continue to be set by AdCenter’s automated auction process.
• Each company will maintain its own separate display advertising business and sales force.
• Yahoo! will innovate and “own” the user experience on Yahoo! properties, including the user experience for search, even though it will be powered by Microsoft technology.
• Microsoft will compensate Yahoo! through a revenue sharing agreement on traffic generated on Yahoo!’s network of both owned and operated (O&O) and affiliate sites.
• Microsoft will pay traffic acquisition costs (TAC) to Yahoo! at an initial rate of 88% of search revenue generated on Yahoo!’s O&O sites during the first 5 years of the agreement.
• Yahoo! will continue to syndicate its existing search affiliate partnerships.
• Microsoft will guarantee Yahoo!’s O&O revenue per search (RPS) in each country for the first 18 months following initial implementation in that country.
• At full implementation (expected to occur within 24 months following regulatory approval), Yahoo! estimates, based on current levels of revenue and current operating expenses, that this agreement will provide a benefit to annual GAAP operating income of approximately $500 million and capital expenditure savings of approximately $200 million. Yahoo! also estimates that this agreement will provide a benefit to annual operating cash flow of approximately $275 million.
• The agreement protects consumer privacy by limiting the data shared between the companies to the minimum necessary to operate and improve the combined search platform, and restricts the use of search data shared between the companies. The agreement maintains the industry-leading privacy practices that each company follows today.

What is not in the deal terms is that Yahoo! will slowly erode search market share to Bing. By the end of the 10 year period Yahoo! could become AOL.

SEO Stuff Up in the Air

As far as SEO goes, a lot of stuff is still up in the air. If this deal goes through, what happens to...

• the Yahoo! Directory (a wonderful link source)
• Yahoo! link data (they are the best free public source)
• Yahoo! SearchMonkey & BOSS
• Yahoo!'s paid inclusion

There is a good chance all 4 of them go away.

Increased SEO Costs & Increased Barrier to Entry

For established marketers there would be some major upsides as well...

• anyone with a well established website has a bigger advantage over new sites, and
• with less public link data link buying might become less risky as reporting paid links might decline, and
• it would be harder for competitors to clone your link strategy

Bing SEO Tips

If you have not yet read Bing's SEO Guide for Wembasters [PDF] then now would be a good time to get up to speed on it. When Bing launched we created a thread with a bunch of Bing SEO tips.

by Jonah Stein and Jonathan Hochman

The FTC recently announced guidelines for bloggers that requires that they disclose financial interests, freebies and paid reviews.  This decision is seen as a shot across the bow of pay per post networks and bloggers who are monetizing through affiliate programs.    The FTC has decided that compensation is the reason bloggers choose to write about a particular topic and that readers deserve to be informed about the financial relationship.    The FTC logic is simple, “As much as those bloggers who receive these gifts would like to claim this isn't the case, freebies like free laptops, trips, or gift cards are likely to influence a writer's opinion of a product.”  

On its face, the policy is defensible.   As crusaders against Virtual Blight, we applaud the intent of this decision.  Anything that raises the barrier to online scams, fraud and abuse even a little bit is a good thing. The FTC provides guidelines for responsible bloggers and theoretically eliminates a couple of the perks for bloggers, but it does virtually nothing to protect against fraud. 

Going after bloggers’ compensation to fight online fraud is reminiscent of the RIAA attacks on individual file sharers and is just as likely to succeed. The absurdity of the power and inertia of a government bureaucracy combating individual bloggers is only matched by the ludicrous assumption the government could ever move fast enough to keep up with professional scammers who jump from domain to domain, host to host and country to country with a few mouse clicks.  Prosecution could only be effective against mainstream bloggers with an established brand that are stationary targets, but these bloggers are not the right target.

Getting a proverbial free lunch in exchange for a presumably positive review may create the appearance that some bloggers are shills who lend their prestige and celebrity to their sponsors.  That perception is not unreasonable, but the same charge could be made against almost every athlete, actor, musician or American Idol runner-up who profits from our celebrity culture. 

Giving items to celebrities or other tastemakers in return for public exposure is a practice older than the printing press.   If the FTC really wants to send a message about compensated endorsements and freebies, the answer is not to go after the mommy bloggers who get a free 42-pack of diapers.  If the FTC were serious, they would begin arresting every actress wearing a designer gown to the Academy Awards and then round up the studio and network executives who rake in cash for product placements in movies and television shows.

Focus On Fraud

The statistics for online fraud are both staggering and predictable.  Instead of being distracted by the sizzling, sensational charges of payola that re-appear every generation, the industry needs to focus on the billions of dollars of online fraud committed each year.  According to the Center for American Progress, Internet-related consumer complaints are among the top ten in consumer complaints in 2008 and the number one complaint in four states.  These complaints run from auction fraud and non-delivery of ecommerce items to reverse billing scams.

By any definition, the perpetrators of online fraud are not bloggers.  If a review constitutes fraud because the reviewer was provided a free product or had some undisclosed relationship with the company who produced the product, then every journalist with a 401k full of mutual funds needs to hire a good lawyer.  Indeed, if bloggers are guilty of anything it is tabloid journalism -- writing low quality content with sensational headlines designed to attract visitors to their site in order to collect advertising revenue.  This may not live up to the highest journalistic standards, but the only crimes are against facts and the English language.

Criminals are the people and companies who create pyramid schemes, networks of spam blogs to sell diet products like Hoodia and Acai Berry cleanse, Google money trees and the myriad so called “free” offers that create recurring charges on your cell phone or credit card.

Criminals are the people who target kids’ sites to distribute Trojans, spyware and adware that infects our computers and tricks people into buying phony anti-virus products.  Most of us have either experienced malware nightmares ourselves or heard a friend’s sad story.  When online fraud is so prevalent, predatory and destructive, why are government resources being committed to pursue advertorial content?

Ad Networks Are the Key

The biggest thing these criminals have in common is that they perpetrate their scams by buying advertising through ad networks.  These networks have achieved the scale that makes it efficient for legitimate advertisers to reach millions of consumers and that makes them an ideal vector for scams, abuse and deception. 

In an unregulated auction-based advertising market place, fraudulent offers can often pay the highest bids for keywords. In FTC Going After Bloggers – Epic Fail, Aaron observes that ad networks that syndicate ads based on “maximizing yield efficiency“ are well suited to syndicate fraud. Advertisers of scams can afford to pay top dollar for ads because their profit margins are nearly 100%.

Ad networks are morally responsible as collaborators in interstate and international frauds perpetrated upon hundreds of thousands of victims each year.  Google, Yahoo, AOL, Microsoft and many others are far more culpable in consumers being defrauded than any blogger or network of bloggers.

In False and Deceptive Pay-Per-Click Ads, Harvard’s Ben Edelman estimated that as much as 70% of the revenue generated by some online scams actually wind up in the hands of the search engines.   He estimated in 2006 that Google and Yahoo were making over $200,000 a month from advertisements for screensaver software which contained spyware.  As of July 15, 2009, the top paid search results on Google for “screensaver” contain “add-on features” which include spyware, change your default browser settings, ad toolbars and otherwise aim to monetize by deceiving users.  Adding insult to injury, Edelman observes that many of these adware tools monetize by sending traffic through AdSense and DoubleClick, making Google a silent partner for adware companies like WhenU and Smiley Central.

Fight the Problems that Be

Scams and fraud not only harm the consumer, they foster the perception that the internet is not a safe place, hindering the growth of online business and delaying the transfer of marketing dollars from old media.  Instead of waiting for government agencies to step in and create regulations aimed at yesterday’s scams, as an industry we need to become proactive and develop a cooperative framework for mutual self-defense, a neighborhood watch designed to keep consumers safer while helping law enforcement focus resources on the most serious trouble makers.

The war on online fraud is going to be a huge struggle and one we are unlikely to ever declare victory.  The issues are complex, but the industry could significantly reduce the problem by creating a transparent mechanism to collect user feedback about advertisers.  Search engines and ad networks are quick to endorse behavioral targeting and social recommendations to boost earning per exposure.   For some mysterious reason, they have not applied these innovations to getting user feedback about advertisers.  

If the Internet is the cesspool that Eric Schmidt, CEO of Google says it is, one way to start cleaning it up would be to create a public reputation system for advertisers.  This would simultaneously reward honest companies while helping consumers protect themselves against the bad guys.   eBay created public reputations for buyers and sellers many years ago.  Why are advertisers free to operate without scrutiny? 

It seems straightforward to build an advertiser rating system to share relevant statistics and user feedback.  Why not provide the tenure of the advertiser, normalized click volume, the percentage of users giving feedback and a ratio of clicks to complaints along with a link to detailed reviews that could surface fraud, misleading advertising and scams?  If comparison shopping engines can do it, why can’t ad networks?

We don’t claim to have all the answers, but we see the problem and its sources. Government agencies need to ask the ad networks why they accept money for promoting fraud.  Ad networks need to grow up and behave like responsible businesses.