SEO is a Zero Sum Game

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 ;)