SEO is a Zero Sum Game

May 10th

In much the same way that people have developed banner blindness there will be an eventual blindness toward other forms of ads.

People only need to be screwed by a gem like the following about once before they lose trust in sharing *any* personal data with anybody.

The above example is a great example of the scumbag affiliate mindset. Find whatever loopholes in the law exist, and exploit them right up until they are illegal and you risk a fine. If it is profitable enough keep running it until you get fined.

The problem with such exploitative ads is that they ruin the game for everyone. And so the best networks backed by companies who intend to be around for decades typically don't want to run those nasty ads.

The alternative way to build yield is to be more efficient by knowing more. This is part of the reason Google and Facebook are trying so hard to collect as much information as possible AND give each other blowback for their efforts. If you know someone really well and have more data than anyone else then it can be quite hard for others to build a comparable yield. This is true for your own site, but is especially true in terms of creating a distributed ad network.

Distributed ad networks are quite powerful because over time the ad unit can change as personal preference and advertiser preferences change. And with each ad load the network is collecting more data, which can be used to make the network more efficient and price gouge advertisers.

Most online businesses do not aim to operate at the core infrastructural level though, and competition is even more fierce due to a lower barrier to entry. As information is shared publicly people try to clone it precisely (or, at a minimum, create heavily inspired renditions of it). The easier your business model is to clone the more expensive it is to share your information publicly. There are over 1 million AdSense publishers. With Google sharing data down to the page and keyword level that market will get pretty efficient pretty quick.

But techniques and business models can get worn out. Even ad clicks are heavily reliant on vertical and user type. Internet Explorer users have a much higher CTR than more sophisticated web users who are more aware of advertising.

In one market we sent out a few emails to relevant sites by hand and 2 of the 5 people bitched us out because another webmaster with a similar domain name had sent them about 100 emails in the last year, and wouldn't stop even when asked. The technique of investing thousands of Dollars into relevant content and then mentioning it to a few relevant people was, to some degree, killed ... at least in that vertical.

Wherever trust is placed abuse follows, and so we have what Brett Tabke eloquently described as Google's LinkLess Internet:

  • no one links honestly any more.
  • all links are suspect.
  • no one links freely any more.
  • those that do link freely are considered naive.
  • page rank is specifically worth money.
  • links are currency
  • articles that once contained great links - no longer link to story targets.

Google might care more about the damage they have done, but looking the other way has been too profitable. As Brett concluded: "Not by design, but think about this: if you click a link from Google and go to a page, and that page has no interesting off site links - then you are going to turn around and go back to Google."

When trying to organize the web there are always going to be philosophical points of view & business goals that are reflected in the relevancy algorithms. When Google was small and nimble they rooted for the little guy, embraced the affiliates who were their earliest advertisers, and claimed to be a uniquely democratic view of the web. As Google grew they realized that they were near the yield limits of direct marketing, and so they claimed brands are how you sort out the cesspool.

If you build brand you can create new search demand, but for most publishers search is a 0 sum game. For you to win somebody else loses. You are targeting the exact same existing demand as someone else is. It is certainly true for AdSense publishers and affiliates, as well as most other online publishing business models. Even offline publishers are willing to lose money so long as they can bleed dry a strategic competitor.

How are brands responding to Google's call to promote brands? They are exploiting the holes Google is gifting them:

More major media companies are looking for ways to find cheap content. Thomson Reuters, Cox Newspapers and Hachette Filipacchi have run articles supplied by Associated Content, one of several companies, such as Demand Media and AOL's SEED, that mines reporting from masses of freelancers for as little as $5 a story.
...
Though Mr. Keane and his media partners declined to provide details, an executive with knowledge of these deals indicates the media partners have paid anywhere from $75 to $120 per article as well as a share of any related ad revenue.

It gets a bit tiring to say brand is the solution, but water flows downhill. And so if Google wants to promote brands, who wants to promote the business models that have been banned from AdWords? How many second and third chances might you get if Google by default already hates your business model? If you have a term paper writing service that they penalized you are likely down for the count.

As a service provider understanding Google's business objectives helps you understand where it is easiest to build returns. If they already like something then you might only need to give it a small push to get it over the hump. If you are pushing something that Google is moving away from then you are pushing uphill the whole way.

Not every SEO client project makes money. In fact, at the start of new ongoing projects it is a near certainty that both parties start losing money. There is a different approach to each type of business, and it is far easier to be profitable promoting what Google wants to promote.

The same SEO technique is typically worth much more when applied to a strong brand than when applied to a small business. Recently there has been a bunch of GARBAGE misinformation polluting the SEO space about concepts like "the brands hiding on Google." Why? That is where the ad budget is.

Brands can practically fall over the finish line and still win - even with an incompetent SEO practicioner doing the work, so even as Google is promoting brands, SEO firms are lining up to claim brands are not getting a fair shake.

Truth is brands have it easy, and there are tons of ways to bake SEO into other advertising + marketing efforts.

There was a recent Google update which impacted many websites. Googlebot has been going crazy, but as some sites drop others went up. It makes little difference to Google, and they probably prefer to have the results mix up (even if it sacrifices relevancy a bit) because it prevents people from becoming too comfortable.

Part of why Google wants to mix new verticals into the search game is that the more people they have competing against each other the more leverage Google has over the game:

Google says users will be able to buy digital copies of books they discover through its book-search service. It will also allow book retailers—even independent shops—to sell Google Editions on their own sites, taking the bulk of the revenue. Google is still deciding whether it will follow the model where publishers set the retail price or where Google sets retail prices.

Google can be content running at a loss or break even in new verticals because they are buying marketshare which can be used to enhance relevancy. "We're quite comfortable having a diverse range of physical retailers, whereas most of the other players would like to have a less competitive space, because they'd like to dominate." - Dan Clancy. Once they have the marketshare and data, they can ramp up on pricing.

Google also unveiled a new 3 column search result layout, and has no intent of offering a broadly marketed easy way to revert back to the old version. There is a legacy URL that still works, but for how long is anyone's guess. The new search result layout allows searchers to dive deeper into various verticals. And some have speculated that the change to the layout could cost Google some ad clicks, but if it did those losses would be temporary. Many of Google's vertical search services have limited relevancy, and the inline integration in the regular search results was hit or miss (I once saw a Philip M. Parker auto-generated book at #2 in the organic search results for a competitive keyword). :D

But when you think of the types of verticals Google is now promoting, to some degree you could almost think of them as ad channels / categories where Google is buying market data and/or taking a second bite at the apple on monetization to grow the search pie.

  • Where are most videos hosted? Youtube.
  • Discussions? What do most free web forums & QnA websites use to monetize their websites? AdSense.
  • Books? Google Editions is launching in the next couple months.
  • Updates? Google will eventually likely buy Twitter.
  • Product search? Could that eventually tie into the Google affiliate network?
  • Maps & Local? There is an ad for that ;)

If Google knows you want something local or recent then those are just additional dimensions to target ads against. And if many users like vertical x after searching for something then Google can use that usage data to promote that vertical more aggressively in the regular search results. Google can optimize everything from search suggest right on through to ad targeting.

And as paid content models mature, Google's focus on verticals ensures they stay at the heart of the transaction flow, giving them the data needed to improve relevancy and recommend featured paid content.

In the broader sense of marketing, I think the idea that SEO is primarily fulfilling demand is one of the reasons many people dislike the business model. The idea of being one of many shifting choices doesn't sound very exciting to most people, especially if they don't know much about the relevancy algorithms:

in this post industrial information age, if you are just one more entry in an algorithmically defined index, the index algorithm makes even the most amazing employee the digital equivalent of a 1909 Ford production worker. Ford didnt care if you were the most productive in the plant. Google doesnt care if you are the most valued brand in the index. They will assign their own value to you. You are just one more entry into an equation. An equation that you dont have access to.

The bigger issues with simply filling existing demand are that you miss some organic start up opportunities because you are not growing the pie. You miss the transformational business models. You won't create a Paypal or a Skype or a Google with an SEO oriented strategy. And even if it is successful, it can be quite bland and boring as you are not covering new ground:

The technology business is fundamentally the innovation business. Etymologically, the word technology means “a better way of doing things.” As a result, innovation is the core competency for technology companies. Technology companies are born because they create a better way of doing things. Eventually, someone else will come up with a better way. Therefore, if a technology company ceases to innovate, it will die.

These innovations are product cycles. Professional CEOs are effective at maximizing, but not finding, product cycles. Conversely, founding CEOs are excellent at finding, but not maximizing, product cycles. Our experience shows—and the data supports—that teaching a founding CEO how to maximize the product cycle is easier than teaching the professional CEO how to find the new product cycle.

The other big problem when you are just selling existing solutions into existing value systems is that it often means you promote outdated products, hyped crap, and anything that is in a bubble. And if you think otherwise, take a look at the ads on your website and see if they promote the best solutions, or the solutions which produce the highest yield.

All throughout history man has fought for and stole what is his. Some legally gained, some not. But even the legal systems are a reflection of the most profitable business models. It's why Warren Buffet believes that derivatives are financial weapons of mass destruction, except for *when he owns them* ... and it is why no bankers are in jail and bonuses are at record highs when unemployment is still so high. Most the recovery was fraudulent ponzi finance and the individual has to fight for whatever scraps they get. For most people search presents the same type of opportunity as a debt-based finance system, where success seems just within reach, but is not.

I am just as guilty as anyone else on that front, but it does feel good to run at least 1 or 2 websites which aim to have meaning. I just wished they provided as much yield as the other stuff does. :D

As search gets smarter perhaps one day they will!

But for now search is still a zero sum game ;)

Published: May 10, 2010

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Comments

May 10, 2010 - 1:42pm

Great article, and my favorite part is the tremendous amount of natural, relevant outbound linking that you did.

For that, I and many in the community are truly thankful.

And for those of you new to the blogging game or simply unaware of the disservice you do by not linking out, take heed of Aaron's example.

May 10, 2010 - 1:48pm

There is so much here, I will make a short comment.
Googles main problem is search engine spam. If they don't conquer that soon they will start taking heat like Microsoft.
This new Mayday update looks like it is targeted at that. Many of my sites have gone up. If they can serve up good results again, people will tolerate their games. I have one site that the main search engine is Google images. They are using it to find what they want because the main index is not what they want. People are frustrated with the non reliant results. I suspect they are frustrated with ezine sites also.
History has shown that no one can keep market share forever. Just ask GM. Google will loose market share to other systems. Its just a matter of time.

May 10, 2010 - 8:51pm

Fantastic article combining relevant SEO information with larger themes. Well thought out Aaron!

You alluded a lot to part of the deep nature of capitalism and what drives it (perhaps without meaning to emphasize this theme?). I'm curious, do you have any opinions on how this system we have that is rewarding the "already rich" and the "too big to be punished" could be improved or where it is fundamentally flawed? Not directly an SEO topic but clearly connected.

May 10, 2010 - 10:50pm

I don't think capitalism itself is the big issue, but regulatory capture would be one of the big issues. And two other cross themes which sorta help understand the current marketplace are increasing wealth disparity / consolidation of wealth, and understanding how technology impacts economies.

If you go back far enough (say like 1000 years or so) the GDP of nations was roughly equivalent to the size of their populations. Improvements in technology and communications allowed for the consolidation of wealth in certain societies. But as the costs of technology and communication drop to ~ 0, their is a reversion toward the mean happening...where living standards will start to become a bit more level in many countries around the world (which does not bode well for countries deep in debt). So if a person's lot in life was largely great because where they were born, then in many ways they will have to work harder to earn that lot.

There are a few countries which try to control immigration and prop up the labor wages at the low end of the market (like Switzerland), but in most countries globalization will take a large toll on the wages of those who are doing cog-like labor. Those sorts of jobs keep getting offshored / outsource and the remaining few are fought for by the likes of illegal immigrants and unemployed people just happy to have a job.

If one lacks ambition, now is not a great time to be alive in a high living cost society. However, if one is ambitious and works hard then they should be able to benefit from the lowering costs of technology and labor. But the key is to build some sort of platform that rises above the noise, and then to keep reinvesting into growth and learning and acquiring market leverage.

May 11, 2010 - 11:13am

Man I just love your articles! A few thoughts/questions:

---we know google likes to start out in dribs and drabs before its true purpose/intention is revealed (nofollow for example)...and they can be very patient about it evolving to where they want. Question: Do you see a time where Google will actually penalize a site for linking out (doesn't matter if it's a straight link, scripted link, nofollowed link, blocked link)? Or where only big brand/authority sites can afford to link out (say some sort of penalty/authority leak rather than an outright ban)? Purpose being to ensure Google remains the traffic funnel rather than a visitor "escaping" through a link off to another site? Is that something to start accomodating/preparing for now (ie. if you regularly "source" content--think lifehacker or boingboing or news sites, or rely on outside content creators--think guest writers or interviews)--would now be a good time to consider/plan an exit strategy so a good portion of your content won't have to be pulled before it kills your domain? This is all creepy/theoretical...but what if that's google's ulimate goal (to be the only traffic funnel)--because sooner or later that's the only area of growth left for google to tap into? That quote from Brett Tabke really hit me.

---notice how the big brand/$5 journalism trend is only happening online (they aren't moving this practice to print or tv or radio). Increasing ad inventory and search engine traffic sure...but could this be an intentional land grab back? Traditional media has lost a lot from us regular folk (webmasters/bloggers)...is there some incentive there to kill off as many of us as possible? And...would google prefer to see that? Initially I'd say no way, google makes too much money from us 'po folk...but look at what they've done to affiliate marketing. I don't know what the big networks are experiencing (like commission junction for example)...but if good #s of their affiliates aren't maintaining money/sales, then don't merchants have to turn to google to maintain their reach? And didn't google re-instate brand bidding (and now they have brand quick links in their results).

---building/developing communities and social followers is going to get even more important than ever before (if brands are going to saturate the first couple pages of serps) and will likely be the only thing that keeps some of us alive. You have to create something of real value with an evergreen lifespan to achieve that...but like you hinted above...is that where the money is?

Things sure do get interesting around here...wonder what the net will look like in 5 years?

May 11, 2010 - 12:09pm

If anything, I would suggest Google will likely have to come up with some bogus excuse to encourage more outbound linking...if the search results become too much of a dead end then there is a very really risk that people will go to the other portions of the web where linking is more common.

The problem now is that so few people vote with linking (cleanly) and so many of the people who are voting with links are doing so with manipulative purposes. Google either needs to try to widen out the pool of links they look at (maybe by encouraging more people to link in different way) or start placing more emphasis on other signals of relevancy.

There is a bit of an economic incentive to kill off people or businesses consuming a resource (if fewer people are living off them then you can take a bigger cut of the profits) & tilt the playing field toward those you like.

An extreme example, but you can research increased United States arms support and "foreign aid" into countries like Turkey and Iraq while they were murdering their populations.
http://www.youtube.com/watch?v=zKhOG3c_gAE

If Google wants reporting from company x to exist, but company x is not profitable, then who would Google rather subsidize with those ad Dollars? Company x, or an independent webmaster built around arbitraging and exploiting opportunities without adding much value? Probably company x.

The already have their news service and put it inline with the regular search results when it is new. The key then, if you view those sorts of companies as competition, is to either look thick enough to enjoy the same benefits, or attack from another angle...like you mentioned with communities.

But Google can't just cut out the independent webmaster 100% because we are so efficient. In part Google likes using us as a wedge to force the media to become more efficient than they are. The Demand Media backfill content wasn't what they were hoping for, but every move has unintended consequences. ;)0

As far as communities being where real money is...well it might not be the highest yielding strategy for most people today, but as opportunities dry up and markets consolidate it is good to have something with some legitimacy and momentum such that if/when you need to lean into it there is something to lean into.

May 11, 2010 - 11:55am

Hi Ya,

I came across your blog and am unable to save it to my other fav blogs via NetNewsWire for my Mac. No contact pages to ask the question, but seeing that this post instigated it...

Any help would be gratefully received as to why NetNewsWire cannot find the feed.

Best,

Mardi

May 11, 2010 - 12:11pm

Did you go to our feeds page Mardi? It has many subscription options on it
http://www.seobook.com/feeds.shtml

May 12, 2010 - 6:43pm

it's inevitable taht affiliate marketers who are only driven by get rich quick mentality can only be bought into line with regulation, it's inevitable!

May 14, 2010 - 7:45am

I always enjoy those posts when you make them (probably even more now that you post them less frequently - the same way I enjoy a big pizza more when I eat it once per week than if I ate it every day :D).

I still need to visit all the links about brands (& read this post another time), but if I understood you (not just, now but in the recent past), then you believe it's utterly important to be (considered) a brand - in order to get search traffic, right?

This question will make me seem a bit clueless, but..how can the average webmaster who isn't as big as BMW leverage that knowledge? I assume it's all about making the effort to find a niche/an unfilled need that is small enough so you can conquer that niche and become synonymous with it (which some might call becoming the authority..or "the brand")..in order for your site to be the brand (in that niche)....and then your chances of not being overlooked by Google should be fairly high, right?

In other words, trying to build a website on "learning Spanish" would be a horrible idea as you wont become the brand for that (unless your budget is big enough..), but building a website on the topic of "portuguese listening comprehension" (if you can create the best site/most extensive resource for this (in case this need isn't filled already) should help you become the brand/the authority in that niche (something that everyone with a website on learning portuguese and a section on listening comprehension basically has to link to)...

..and by being the brand/synonymous with a niche, you shouldnt have trouble getting SE traffic (and probably do well with other means of traffic, too)...

Did I get y our point? or am I totally off?:D

I mean - you can only become a "brand" in a niche, that isn't too big for you/your budget, right?

May 14, 2010 - 11:04am

about 4 comments up from your comment I tried to answer many of your questions in the comment you just made.

May 14, 2010 - 2:29pm

Hm admittedly, I didnt really get that when Iread it..will read it again, thanks for pointing me towards it.

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