The game changed September 15, 2008.

As world markets came tumbling down, the future of many internet start-ups also turned to dust. The message from the financiers is clear - they will be no more money. Web watchers, such as TechCrunch, feature a deadpool of failed internet start-ups. That list is going to grow exponentially in the new year as company after company runs out of cash.

Not good.

However, history tells us that where there is chaos, there is opportunity.

After all, we've been here before.

Take, for example, this memo by Ron Conway, founder and managing partner of the Angel Investors LP funds who backed Google, PayPal, and more.

"....I was an active investor in 2000 when the "bubble burst" and remember it vividly and want to give you the SAME EXACT advice I gave to my portfolio company CEOs back then.I have pasted in the e-mails I sent on April 17th 2000 and May 10th 2000 and every word applies today. Unfortunately history DOES repeat itself but I hope we can learn from history and prevent the turmoil from occurring again. The message is simple. Raising capital will be much more difficult now".

Once of the benefits of market cycles is that history often repeats itself. This allows us to learn the lessons of the past, and apply them to the present.

I'd recommend you watch this presentation by Sequoia Capital, entitled RIP:Good Times.

So the good times are over. Now what? Sequoia recommends managing spending, revising growth and earnings assumptions, to focus on quality. lower risk, and reduce debt.

In 2000, Google was still a struggling start-up. The tech bubble had just burst. One year later, hijacked jets hit the Twin Towers, sending markets, and our collective notion of global security, into a tailspin.

Yet, it was during these seemingly turbulent times that Google rose to become the powerhouse it is today.

Part of that success was due to a focus on quality, careful spending (Google never spent a lot on advertising), network effects, and failure of the competition to grasp opportunities. Everyone else was distracted. Google remained focused on building value.

Research shows that companies that spend money on marketing during a recession tend to benefit the most.

Over the years hundreds of studies have been conducted to prove companies should maintain advertising during a recession. In the 1920’s advertising executive Roland S. Vaile tracked 200 companies through the recession of 1923. He reported in the April 1927 issue of the Harvard Business Review that the biggest sales increases throughout the period were rung up by companies that advertised the most. ....The findings of six more recession studies to date by the group present formidable evidence that cutting advertising in times of economic downturns can result in both immediate and long-term negative effects on sales and profit levels. Meldrum & Fewsmith’s former Senior VP, J. Welsey Rosberg reports “ I have yet to see any study that proves timidity is the route to success. Studies consistently have proven that companies that have the intelligence and guts to maintain or increase their overall marketing and advertising efforts in times of business downturns will get the edge on their timid competitors.

Marketing is an investment, not just an expense. And just like in the stock market, that investment can pay the biggest dividends when assets are under-priced, because everyone else is selling, not buying.

Let's look at a few features of a down market that you can turn to your advantage.

Down Market = Cheaper Ads

Advertising markets are cracking. One of the first casualties in an economic downturn is marketing spend. Not great if you sell advertising, but great if you buy it.

In down markets, you can get a lot more advertising reach for a lot less money than during boom times.If your strategy involves building brand awareness, then now might be a good time focus on this aspect. Being visible creates a sense of familiarity, and that's much easier to do when your competition isn't flooding the channel with noise.

Note: A lot of advertising spend will shift from traditional channels to the internet as people seek value.

We forecast that the Internet advertising market will continue to expand at a strong pace in the immediate future (with a predicted 31.4% increase in expenditure in the UK in 2008), and that it will experience a less steep but steady momentum thereafter, to 2012.

Fight In Short Bursts

One idea, often used by offline marketers on television and radio, is to bombard an advertising channel with short bursts of intensive advertising and then go off the air completely for a few weeks. It is a lot cheaper than maintaining a constant advertising presence, and with fewer advertisers to compete with, you costs should be lower, and your impact higher.

It's a high impact strategy that will fit well with sites looking to build brand.

Follow Warren Buffett

Warren Buffet is the worlds most successful investor. And what is Buffett doing at the moment?

He's buying assets while everyone else is selling.

Might now be a good time to buy up websites, too?

Competitors Cutting Costs And Losing Focus

One of the problems during the 1930s depression was that government cut spending. When government started spending again, the economy picked up. Governments have learned from this mistake, which is why we're seeing government making cash injections.

It's more complex that this, but the takeaway point here is that cutting costs and losing focus on the goal might also ensure you never reach it. Going into hands-off cruise mode could be costly.

If you have the cash, then sowing the seeds of growth now, whilst everyone else is navel gazing and slashing their costs, makes it hard for them to catch up with you again when they do start spending.

Diversify Marketing Spend

Take a strategic approach. Spending aggressively in a down market doesn't mean throwing your money at everything.

In this article, Recession Marketing, Amanda Stock outlines how you can diversify within a search marketing strategy:

It is also important to take a strategic approach when you diversify your marketing budget. For example, if you are currently investing the majority of your marketing efforts in a Pay-Per-Click campaign, you may want to allocated half of that budget to an SEO campaign which, in the long term, can increase the return on investment and decrease dependency on paid search.

Key Tips: Advertisers with a solid PPC track-record have an incredible advantage for venturing into organic search (SEO) because the PPC data such as which keywords converted best and which led to the highest volume of sales or average ticket price can now be a major factor in prioritizing the SEO targets. Since SEO is long term you want to be absolutely sure you’re targeting the right keywords long before you reach the first page for them.

Build Network Effect Advantages Into Your Work

But what if you're cash strapped?

Try to build network effects into your strategy. A network effect is the effect one user of a good or service has on the value of that product to other users. An example is the telephone. The more people who own telephones, the more valuable the telephone is to each owner. Similarly, auction and social network sites become more valuable the more people use them.

One marketing advantage of a network effect is good word of mouth. Word of mouth is the cheapest and most effective form of marketing there is. Again, because the channels are quieter during a down market, chances are you'll be heard more easily if you're one of the few outfits making noise.

In this article on Forbes, Roelof Botha, the venture capitalist who backed PayPal & YouTube, advocates taking word of mouth one step further, using viral strategies to boost consumer adoption:

A truly viral business is "like a disease," says Botha. "It needs to be transmitted from one person to another"--and the other person has to catch it. Once the next person catches it, he or she becomes a carrier too. Here are some good examples:

-- PayPal. If Bob sends Mary $25, Mary has to join PayPal in order to claim her money.

-- Evite. John e-mails you an invitation to his bachelor party but in order to read the details such as when and where, and to RSVP, you have to log onto Evite. E-card vendors work the same way.

-- Plaxo. A friend or business associate sends you an e-mail asking you to update your contact information. Once you log onto Plaxo to correct your phone number, you’ve caught the virus. Other services such as Birthday Alarm use the same strategy.

-- Skype. In the beginning, the only way you could make a free phone call over Skype’s Internet voice service was if the person you were calling was also a Skype member.

PayPal & YouTube also made it a strategy to be part of other networks. In so doing, they grabbed those networks audience share, and without the need to go into partnership.

eBay had an open software platform, which meant sellers could insert their own HTML code such as icons and visitor counters onto their auction pages. So PayPal built a tiny piece of code that allowed eBay merchants to include a PayPal payment button. By the time eBay got around to buying its own payment service, PayPal had infiltrated its business so deeply that eBay’s customers wouldn’t hear of using anything else....YouTube similarly benefited by becoming an insidious element on MySpace and other social networks and blogs.

Focus On Quality

Word of mouth comes about when you focus on being remarkable.

Learn the lesson of Google and PayPal, both of whom flourished during economic downturns. Provide a quality service, and people will use it, and talk about it.

Go back to basics. What is your value proposition? It needs to be compelling. When people are short of cash, they focus their spending on the the essentials, not the frivolous. Are you solving a real problem for people? Do you really know your customer? Ask not what they want, ask what do they need.

Focus On Essentials And Value

People who are worried about where their next dollar is coming from are going to be hesitant about signing up for expensive items, or long term deals. If you're selling an essential service or product, as opposed to a desirable product, you're going to find it easier. When the buyer has less discretionary spend, they're unlikely to be talked into non-essential deals.

Instead, focus on building relationships. This can be as simple as communicating well, showing integrity, and being passionate about what you do. When people do have more money to spend in the future, they'll remember you.

You know what would be really cool?

Your whole site redesigned in Flash!

We could really liven it up. We could do animated navigation! Edgy!

We're cutting-edge web designers. We've designed stuff that's won tons of design awards! Let's take your boring site and totally reinvent it! Make it interactive! Your visitors will love it dude!

Erm...uh-huh. Maybe not.

It's little wonder that SEOs often come into conflict with the web designers. Those designers who design-for-designs'-sake can cause serious problems when it comes to internet marketing strategy, and getting seen in search engines.

Thankfully, there are also enough good designers who do understand that web design is a balancing act.

On the flip-side, there are SEOs who underestimate the power of good design. It's one thing to get a visitor to a site, but what happens once they get there? If the visitor finds a design unappealing, confusing or lacking in credibility, they are likely to click back. The cost of not spending a few hundred/thousand dollars on good design could be significant.

If you're thinking of hiring a designer, and SEO and web marketing is important to you, then you need to make sure they follow a few guidelines. Here's a checklist that will help you and your designer come up with the ultimate, well-crafted design that both appeals to your visitors, and complements your marketing efforts.

The point of synergy between SEO and design lies mostly in structure.

1. Purpose/Know Your Audience

The first, and by far the most import aspect of web design, is to clarify the purpose of the site.

Write down these three questions, and answer them in as much detail as you can.

• Who will use the website?
• What will people use the website to do?
• How will people find the website?

Who Will Use The Website?

The "who" question is about meeting expectations.

If your audience are tree-huggers, they aren't going to respond to a slick, corporate site. It's like wearing a suit to an interview for a pool-guy position - the image doesn't fit the purpose.

Put yourself in the users shoes. What are their likes? Dislikes? What type of language do they use? How old are they? What is their demographic? Are they web-savvy? Can they read small fonts? Write down as many characteristics as you can in order to build up a profile of your user base.

When you first visit a competitor site targeting your audience, what attracts to you to it, and what annoys you? Why? What are your expectations?

Your site must reflect the values, needs and desires of your target audience.

Let's take a look at a couple of examples where the designer has got this right:

Smashing Magazine

The audience are web designers. People who are visually-oriented. People who want news about the latest trends and techniques. The design and format reflects these values and desires. It is based around large, bright attractive visuals. Text is kept to minimum. Smashing Magazine uses a blog format to facilitate the dissemination of news. All other functions are relegated.

UseIT

The audience for this site are people interested in usability, in particular, the writings of Jakob Nielsen. Nielsen has strong, and often divisive, views about the role of simplicity in web design. Some may say the site is not designed at all, but they'd be wrong. The site is Nielsen's theories and agenda made form. The design reinforces the idea that structure is more important than gloss.

What Will People Use The Website To Do?

What is the primary function of your site? The function needs to be crystal clear. What do you want users to do? Do you want users to sign up and discuss topics? If so, then you need to orient your design around serving that function. The layout, the graphics, and the text should all encourage a user towards taking that action. Relegate all other design aspects to secondary status. If the design gets in the way of a user completing that function, it isn't good design, no matter how pretty it looks.

How Will People Find The Website?

How the user will find the website is often overlooked be designers.

If visitors are going to use a search engine to find your site, then your site must be oriented around SEO. That means fast, crawlable, and content rich.

If users find your site because they are already aware of your brand, then seo considerations may be less important. The user merely needs to be assured they've arrived at the right site. Such sites usually put heavy emphasis on branding.

Will most of your uses find you via StumbleUpon? Again, there are design features that appeal to this audience.

2. Visual Culture

This is a summary for a course offered by the University Of Wisconsin. It sums up the nature of our visual culture well:

Ours is a visual culture. Our workplaces are visually saturated environments and our dominant pastimes (films, television, video games, and the internet) are visual media. Moreover, we communicate visually when we are trying to cross over cultural boundaries; think, for example, of the graphics devised for international signage. Knowledge is often communicated visually: scientists chart brain activity, economists graph fiscal trends, geographers map territory and detectives photograph evidence. The growth of the web as an information distribution system has made an understanding of visual design factors indispensable in every field of study. The visual also our access to the past. The earliest recorded communications are pictorial and artifacts are central to the reconstruction of history

This is where both the graphical element of web design, and spacial relationships on the page itself, play a significant role.

Graphics convey meaning in different ways to text. The saying "a picture is worth a thousand words" is apt here. Ensure your graphics reinforce the values and needs of your audience. Make sure the graphics help people, not hinder them. Too often, graphics are self-consciously used to impress.

Obviously, web design is not just about appropriate and pleasing graphics. It's also about form, and that includes text. What do you feel when you see a huge block of text in tiny print? Most people feel that, hey, this is work!

Spacial considerations are an important way to convey meaning, and also useful for SEO. Split pages up into headlines and short paragraphs. This technique serves two purposes. You can include extra keywords in heading tags, and you can focus attention where it needs to go. When people arrive at your site via a search engine, they will scan your page for their keyword phrase. Make sure they find it quickly and easily.

3. Clarity

Your website doesn't exist in isolation. How often do you glance at a website before clicking back or retyping your search query? Do you spin your scroll wheel immediately after arriving at a site, scanning for the exact information you require? No doubt you do it hundreds of times a day. Chances are, so does everyone else.

Therefore, clarity, both visually, and in terms of conveying meaning, is very important. If you can't convey to a visitor "you've found the right place" quickly, then you run the chance of losing that visitor.

All the linking and SEO in the world won't solve that problem.

4. Crawlability

Obviously, a website that can't be crawled is invisible to the search engines. Include a Google Site Map, and make your navigation text based, where possible. If you must use scripted links, then duplicate the navigation for crawlers. No matter what some designers might say, navigation is not the place to get funky. It's the place to get simple.

Consider cars. If you drive one car, you can drive them all. Why? The controls are all in the same place. Car designers don't get funky with the main control mechanism. The same goes for websites. Where navigation is concerned, stick to convention.

Personally, I'd avoid any designer who tries to get clever with navigation. They don't understand the web.

5. KISS

If faced with a design decision, go for the simple over the complex.

The web favors simplicity.

It's the nature of the beast.

6. Branding Is The Experience

Brand is often thought of purely in terms of identity. But this is an oversimplification.

Take, for example, McDonalds.

If people were asked to think of the brand of McDonalds, they'd think of the big, stylized letter "M". Or Ronald McDonald. But the McDonalds brand is made up of much more. The McDonald's brand is about fast service. It's about cheap food. It's about generic, yet tasty food. It's about the layout of the store. Every aspect of McDonald's store design and process is rolled into the brand. It's the entire experience. The M is really just a badge.

It's the same with websites. The brand isn't the graphical logo. The brand is the speed your pages load at. The clear layout. The ease of navigation. The tone of your writing. The fact you answer queries quickly. The fact it's easy to contact you in the first place. Your web design must not get in the way of these aspects. It must complement and reinforce them.

7. Speed

Your pages must load as fast as your visitors expect pages to load. And these days, that means Google fast! If need be, sacrifice graphics and features for speed. Speed is not just important. Speed is everything. It is too easy for a visitor to click back.

8. Read Point 7 Again

Really important. Really :)

9. Conflicting Agenda

One conflicting agenda between designers and SEOs often has to do with style over substance.

The main point of this post is to reinforce the idea that substance and style are inseparable. Both designers and SEOs must find a middle ground in order to arrive at one goal: a successful site. Avoid designers whose aim is to win awards, unless of course, winning design awards is part of your marketing strategy. The designers agenda should closely match your own.

10. Design Is Mostly About Structure

I was having a chat recently with a web designer who has formal graphic design qualifications, has won Webby Awards, runs his own web design shop employing 50 people, and has worked on multi-million dollar web projects. He's come round to admitting - very reluctantly - that on the web, graphic design doesn't really matter much. The design is mostly about structure. The information flow. Facilitating the interaction.

And he's right.

What we've often come to think of as design is more than just graphics and appearance. That's the icing. Design is about facilitating a process. It's about the way people move around and follow steps. A web site that makes that process complicated will not work, no matter how good the presentation.

A good designer will understand this.

Many do.

Try to avoid those who don't.

Further Reading

• Align Your SEO Strategy With Site Structure
• Brand Building Tips - On A Budget
• useit.com: Jakob Nielsen's Website
• A List Apart - Web Design Theory And Discussion

I was a bit disappointed when I saw Rand out yet another website recently. Why was the site outed? Because they were ranking for SEO company and Rand didn't feel that their backlinks should count (and Rand wanted another excuse to promote his new LinkScape tool).

In his post Rand...

• claimed that the site ranking #1 for SEO company was an embarrassment to Google and other search engines
• wrote "Outing manipulative practices (or ANY practices for that matter) that put a page at the top of the rankings is part of our job"
• wrote "Isn't the goal of a successful web marketing campaign to build a strategy that is legitimate to survive a manual review by the engines and strong enough to be defensible even to those who peer review or investigate?"

While some may not feel the post was outing, that was the intent of the post...to cause harm to the business highlighted, and to do so for potential personal profit. As Nick Wilsdon wrote:

Yes, Google probably already knows about them but that's not the point. Once a SERP or a naughty company becomes a public embarrassment, it then gets "cleaned up". Google can't be seen to be gamed. There's an element of politics involved.

ShoeMoney also spoke about that topic in this video, titled Don't Make Google Look Stupid

And that in itself becomes an issue. Sure most of us want to be able to have our sites pass a hand review and stand the test of time, but when things are covered with a negative connotation from a negative frame it makes Google more likely to act against the "spam"...even if it was something that was fine for years.

I had a lively conversation with a search engineer about one of my sites where he stated that he thought the site's marketing tactics were a bit spammy. 2 other search engines chose to promote that same site editorially with shortcuts. Because of who owns a site it can be seen as being spammy, while the same site is seen as the clear cut category leader worthy of promotion by other search employees who do not have anti-SEO goggles on.

Where this "out everything on principal" strategy goes astray is when a person's assumption of how the algorithms and editorial policies should work do not match what the search engineers believe. To appreciate that, consider the SEO Book affiliate program. It passed PageRank for years. And then Rand outed it and it stopped passing PageRank.

Recently Rand wrote that Google engineers said that affiliate programs should pass PageRank. So based on what Google engineers say in public, editorial links promoting my affiliate program should pass PageRank, but because Rand chose to out it, it probably never again will.

Shockingly, when asked point blank if affiliate programs that employed juice-passing links (those not using nofollow) were against guidelines or if they would be discounted, the engineers all agreed with the position taken by Sean Suchter of Yahoo!. He said, in no uncertain terms, that if affiliate links came from valuable, relevant, trust-worthy sources - bloggers endorsing a product, affiliates of high quality, etc. - they would be counted in link algorithms. Aaron from Google and Nathan from Microsoft both agreed that good affiliate links would be counted by their engines and that it was not necessary to mark these with a nofollow or other method of blocking link value.

Editorial affiliate links should count, but it was Rand asking "who does Google come down on" that was intended to harm my business to give himself a better competitive position. It was similar to the strategy of blasting Aviva to promote a list of directories people should buy - a profitable strategy, but not one with a north pointing ethical compass.

As to the absurdity to claiming that as a professional SEO's job to police the organic search results...I can only assume that a person stating such has never had a site hand edited (while seeing factually incorrect sites with spammier links and worse site designs continue to rank in the same results). If you read the Google remote rater documents you can see how things are open to interpretation. If you read the remote search quality rater documents leaked from 2003, 2005, and 2007 you can see how they changed over the years.

Years ago I might have thought reporting all spam was a good idea, but after experiencing and seeing the arbitrary and uneven nature of the editing it is not what I would consider a relevant mindset for SEO in 2008. When I was starting out in search my mentor told me "you can't really appreciate how the game works until you lose a site" and once you do, feeling like it is your job to out spam seems a bit small minded and short sighted.

If Rand really believes that "Outing manipulative practices (or ANY practices for that matter) that put a page at the top of the rankings is part of our job" then why does he offer a testimonial on the Text Link Ads website when Matt Cutts has clearly stated that buying text links is manipulative and outside their guidelines? Does he turn in his own clients for link buying?

Patrick's dedication to providing excellent services echoes in all of his employees and the company as a whole. Support and response times are exceptionally fast, and the process of buying links couldn't be easier. - Rand Fishkin

How can you suggest people should buy links and then out them for doing so? Someone is either being intellectually dishonest or economical with the truth.

When we talk about "trust" in terms of websites, we often refer to elements such as adding details such as you address and contact details, a privacy policy, and a guarantee. But trust is also a process.Trust is something earned with every interaction.

For example, once a music artist has built up a fan base, their new album is bound to sell more units than a new artist. The fans place a higher level of trust in someone with whom they have positive, prior experience. It's not just about the intrinsic quality of the music, it's also about the conditions that lead to a valued relationship. The same goes for websites.

Thinking of trust as a process can help build momentum, build your name, and build your reputation. In order to get users to engage with your site, they need to first place a level of trust in your site. Thankfully, the bar is reasonably low. You don't have to convince them to hand over their life savings, you only need to convince them that engaging with your site will provide them with value and not waste their time. And in order to keep them over the long term, you must maintain that trust.

Let's look at a few broad principles about trust as a process.

Ease Of Interaction

Make it easy for people to interact with the site. Learn the self-evident lessons of usability. Go beyond usability. Offer easy ways for people to interact. Why is interaction important? The most important trends in the web space in recent times have been about community and shared space. Think Facebook, blogging, Wikipedia, feed readers, and cloud computing. They're all about interaction, as opposed to the mid 90's web, which was mostly about top-down publishing.

Interaction will become an increasingly important factor over the coming few years, especially as the global recession bites deeper. Here's an exert from Jason Calacanis' latest email letter:

"The good news in all of this is that folks are going to be spending a lot of time online, playing video games and consuming things that are not expensive. They're going to be looking for "experiences over expenses. ...Why will there be a boom in traffic, engagement and participation?

Well, people will have time on their hands and the desire to socialize. Group behavior makes people feel better. One of the best cures for the blues is sharing a meal with friends.

Blogging became a phenomenon not because of some technological advance, but because between 2002 and 2005 there were a lot of unemployed--and underemployed--individuals with a lot to say and a lot of freetime. Bloggers like Peter Rojas, Michael Arrington, Nick Denton, Rafat Ali, Xeni Jardin and Om Malik broke out in the down market--not the upmarket."

Awards

People like to feel important. Offer them an award or an elevated status level. You see this technique used in forums. Members are given classifications, from Newbie through to Moderator. Bestowing moderator status not only assigns an administrative role in itself a form of hierarchy - but it also elevates their status within the community. Similarly, the granting of stars, boosting posts to sticky status, or boosting posts to the front page has a similar effect.

So long as an award process is transparent and consistent, people will come to trust in it, which, in turn, leads to greater levels of engagement.

Voting

People like to feel their opinion matters. Give people an opportunity to vote. Voting helps make people feel included, and that they are influencing outcomes. An obvious example of such a system is Digg. Digg is a community built around voting and a forum for expressing personal opinion. It could be argued that the downside of Digg is that some people's votes appear to matter more than those of others. The lack of transparency is, to my mind, Diggs biggest flaw. If people feel that voting is skewed, they are less inclined to trust the system.

Meet Expectations

Deliver what your users expect.

Google had a problem. They wanted to index subscription-only material, but clearly publishers did not want to give this material away. This led to a situation where Google users would click on a result, but not get the article they expected, based on their previous experience of using Google i.e. clicking on a result leads directly to the indexed content. This situation leads to a decrease in trust. So Google came with First Click Free. First Click Free allows users to skip over the subscription page on their first visit.

The lesson is to try and maintain consistency. If users get something other than they've come to expect, they'll leave.

A Sense Of Belonging

People like to feel they belong. Cultivate a sense of belonging, and look to include people, wherever possible. Be accessible. Talk in terms of the group, rather than the individual. Examine the language you use. Does your language speak of a sense of community, involvement, and shared values? Of course, this won't apply to every type of site, but if you've got a strategy based around user interaction, then look for ways to make people feel as if they belong. It might be something as simple as responding to people's comments in timely fashion, or providing a personalized welcome message, or using inclusive language.

Social Proof Of Value

People like to go where other people are. Think about ways in which you can demonstrate that other people use, and place a high value upon, your site.

Methods include visitor counters, positive mentions you've received in the popular press, recent comments on your site, feed reader subscription stats (like those offered by FeedBurner), third party traffic stats (from sites like Alexa and Compete.com) and quotes from known influencers. Make sure that people who are new to your site see these social proofs as soon as possible. Don't bury them deep - put them up front, loud and proud. Don't be afraid to blow your own horn.

Social proof is an increasingly important aspect of internet marketing. Some things gain currency for no other reason than everyone else likes it. No one wants to eat at an empty restaurant, even if the food is just as good as the heaving restaurant next door. People like to be where other people hang out.

To get there, you need to establish momentum. But how on earth do you build that momentum from scratch? The answer isn't pretty - it's hard - but there three concepts you are helpful.

Have a read of this article, Filthy Linking Rich & Getting Richer by Mike Grehan, if you haven't read it already:

"The great twentieth century sociologist Robert Merton dubbed it the "Mathew effect" as a reference to a passage in the Bible, in which Mathew observes, "For unto everyone that hath shall be given, and he shall have abundance; but from him that hath not shall be taken away even that which he hath." The Mathew effect, when applied to networks, basically equates to well connected nodes being more likely to attract new links, while poorly connected nodes are disproportionately likely to remain poor.....It has been proposed that "the rich get richer" effect drives the evolution of real networks. If one node has twice as many links as another node, then it is precisely twice as likely to receive a new link."

This is also known as cumulative advantage.

Also take a look at this article in the New York Times, entitled "Is Justin Timberlake a Product of Cumulative Advantage?". To summarize, the article talks about how social influence plays a large a role in determining the market share of successful songs as differences in quality.

"The long-run success of a song depends so sensitively on the decisions of a few early-arriving individuals, whose choices are subsequently amplified and eventually locked in by the cumulative-advantage process, and because the particular individuals who play this important role are chosen randomly and may make different decisions from one moment to the next, the resulting unpredictability is inherent to the nature of the market.....If one object happens to be slightly more popular than another at just the right point, it will tend to become more popular still. As a result, even tiny, random fluctuations can blow up, generating potentially enormous long-run differences among even indistinguishable competitors. "

So, popularity is an impossible process to replicate and systematize. Popularity is due to a combination of factors, which could include take-up by a few influencers, being in the right place at the right time, gaining the momentum affect as others get on board, and a large dose of luck.

However, there are, I think, three main lessons here.

One is the role of influencers. Influencers is a fairly broad term, which can include people who hold sway over large communities, to those who are merely inclined to pass on a good find to another person. You need to make it easy for those people to engage with your site. To trust you. It's old fashioned word-of-mouth, and it's still the most powerful marketing method there is.

In practical terms, try linking out to the inflencers and saying good things about them. Or bait them. Give them things. Make it easy for them to talk about you.

Secondly, identify the hubs with a sphere of influence. All communities have a few, central authorities around which the entire community orbits. Try to get seen on those sites, whether it's by buying advertising, posting articles, or participating in discussion.

Thirdly, leverage off a trust process.

SEO is an example of leveraging off a trust process. The user trusts Google to find the best results. The searcher searches on a phrase, and chooses a result from the left hand side of the page. The user will often choose one of the top three listings.

The key to achieving these things is tenacity. And to build and maintain trust.

In the following interview of Jon Stewart, Bill O'Reilly mentioned that Jon's audience was younger and left leaning.

Recent research from a survey of 3,036 Americans confirms that people who contribute content to the web are skewed toward being young, left-leaning, and more passionate about the sites they contribute content on.

In Online Communities and Their Impact on Business [PDF] Rubicon Consulting highlights the following:

Most frequent contributors are different from the average web user. They're more ethnically diverse; more technically skilled; more likely to be single; more likely to work in technology, entertainment, or communications companies; and more likely to be Democrats. But most of all, they are younger than typical web users. Half of the web's most frequent contributors are under age 22.

The common stereotype for the Digg crowd also applies across many other sites and industries.

That's not to say you should try to appeal to the Digg audience, but if a disproportionate amount of content is created by young liberals then there is business sense in appealing to that demographic. Appealing to the 10% of people who create content makes you look better to the other 90% of people who use the web.

If you look at a traditional user adoption curve the people to the far left are the people who have blogs and the people who leave feedback on other websites. The interaction with the loud users is what helps potential customers build confidence. These loud stakeholders are influencers.

A site which has more user generated content on it has the following benefits

• a broader range of unique textual content to rank against (which helps it build a larger organic audience)
• built in social proof of value/cumulative advantage (people think it is popular, and perhaps more authoritative, because others contribute to the site)
• built in loyalty (people who contribute to your site have a vested interest in spreading the word about your site, and seeing to the success of your site)
• more editorial reviews that turn searchers into shoppers into buyers (reviews increase consumer confidence and make them more likely to purchase)
• more inbound links (people are more likely to link at a page full of editorial reviews, and the people who review products are more likely to own websites)
• faster and cheaper market feedback
• a broader reach with new releases (particularly if you build an audience by offering an email newsletter or a regularly updated blog)
• lower traffic acquisition costs, lower marketing cost, and higher value per visitor (due to many of the above points)

The Rubicon research also states that young people are more likely to be influenced by online reviews, and are more likely to search online for support issues...so having a search accessible FAQ section can drastically lower customer support costs.