Monday, July 6th, 2020

In 2008, Eric Schmidt let slip that Google would use brands as a signal to clean up the “internet cesspool.

SEOs ears twitched.

Quoted by CNET at the time:

Web crawlers aren’t particularly good at making judgments about the truthiness of digital matter, and the wisdom of the crowd can’t keep up with the river of data streaming online. Schmidt gave the magazine publishers hope for their future. Brands, he said, are the way to rise above the cesspool…

Schmidt was talking to magazine executives who were concerned about competition they faced from low-cost publishers, like you and me :)

Whilst we can’t know exactly what aspects Google’s algorithms will reward, it’s not difficult to see brand factors becoming increasingly influential in search results, both directly and indirectly. Schmidt may be talking about a level of authority that the brand possesses, so is therefore trusted as an “editor”, but there may be something else going on, too.

It might also be a question of clear subject/topic focus.

Establish A Brand

If your site has a very clear focus, in terms of brand identity, a number of search and social media benefits naturally follow. On-topic linking, context, and more. I’ll discuss this shortly.

A brand is more than a name, graphic or logo. A brand is everything you do, from the way your position yourself in the market, to how you answer your emails. Brand is the total sum experience you offer. It’s also a collection of keyword terms people naturally associate with you and your site.

Whilst it is expensive to create a national or international brand, you can create well-known brands in niches. Consider SEOBook, and SEOMoz. Those brand identities are clear, and I’m sure that a number of unique qualities for each brand springs to mind when those names are mentioned.

Ways To Establish A Brand

Philip Kotler, Professor of International Marketing at the Kellogg School of Management, identified the steps to developing a brand. Amongst those steps were:

  • Develop The Value Proposition
  • Choose A Broad Positioning For The Product

This sounds like marketing guff, but what does it mean in practice?

The Value Proposition

No one can be good at everything – there isn’t enough time and resources – so what is the one thing you are really good at? Is this a value people are willing to pay for?

Broad Positioning

Kotler identifies three alternatives:

  • the product differentiator
  • the low cost leader
  • the nicher

Which one are you?

It’s possible that a business can be all three, but such generalist businesses tend to be outgunned by businesses that are superior in one way. For example, Versace *could* do cheap items, but it would compromise their focus and confuse their brand identity, which equates to luxury.

Here’s how to translate these brand ideas into an SEO advantage.

The value proposition is based on the demand you identity. For example, if a business owner found keyword demand for the phrase “SEO services in Los Angeles”, then the value proposition is:

  • A locally focused SEO service provider

The business owner would be suited to providing “SEO services in Los Angeles”, presumably by virtue of their location, contacts, focus and experience.

The broad positioning would be “niche”. A catchphrase/byline may emphasize regionality, locality and accessibility for clients located in Los Angeles. The terminology used in the copy should reflect this niche approach – again, use words and phrases associated with both the service and the locality. When people link to such a site, they would naturally use terms that reflect locaility, because it’s an intrinsic part of the brand identity the owner has established. When people talk about this business on Twitter/Facebook etc, they will hopefully use the terms consistent with the brand identity. Whenever people talk about your site in a certain way, Google will surely follow.

All the ducks are lined up. Business focus, keyword text, link text and the frame of reference in which people can talk about the business. Simple, right? But how many sites lack this type of focus, and thus miss out on keyword associations?

Brand can also be about personality. Danny Sullivan may know a lot about general tech, but to most people, Danny is “the search guy”. He gets keyword-rich links, without having to ask. Aaron is “the SEOBook guy”. It’s hard to not link to Aaron without using the term SEO. Whenever people talk about them, people will naturally use search terminology in the same breath – in their keyword copy, link text and so on, which all flows through into SEO advantages. This benefits flows from having a tight brand identity.

The alternative is to be all things to all people, and this doesn’t work so well in 2010, either online or off. There’s just too much noise.

Building a brand is about building a a clear and established identity, and in terms of SEO, it’s about being associated with a specific list of keyword terms relating to that identity.

Could you sum up your brand identity as a list of keyword terms?

Ever wondered how to price your SEO services? Your products? Have you set your prices at a point where you can get the best possible returns?

Pricing seems simple, but there’s a bit of an art to getting it right.

In this article we’ll take a look at different ways to price, a few strategies to use, and why you might want to avoid charging everyone the same price.

Why Pricing Strategy Matters

Obviously, if we get our pricing wrong, we’ll miss out on business.

In order to increase profits, we could devise new services and products. However, by adjusting our existing pricing strategy on goods or services we already provide, we can squeeze out extra revenue with little effort.

To get greater returns from pricing, companies typically find ways to charge different prices to different customers.

Cost Plus Pricing

Cost-plus pricing is a common pricing method. Pricing of a good or service is determined by working out the total production cost, then add a profit margin. There’s nothing wrong with this method – cost-plus pricing is widely used – however it does present a few problems.

One problem is that cost-plus pricing doesn’t take into account the role of competitors. If we offer a SEO service at $15,000, arrived at by the cost-plus method, but our competitors offer the same service for $10,000 then our pricing clearly won’t work. We must price in accordance with the market.

Cost-plus pricing doesn’t take into account fluctuating demand. If demand for your products/services suddenly goes through the roof – say because you’ve been interviewed on nationwide television – they become scarce, and price should rise to reflect this scarcity.

Another problem is that it doesn’t take value, as perceived by the customer, into account.

Imagine that you’ve created a widget that enables a machine to work at twice the output it did before. The value to the customer is considerable, as they can now double their output with little extra investment. The total cost of building the widget may be low. Cost-plus pricing would typically underprice such a widget. Value based pricing would charge in line with the total value it creates for the customer i.e. the increased value of their output.

In terms of SEO, are you charging enough for your services if you charge a few thousand dollars, whilst your clients make millions? Thinking of pricing in terms of value provided to your customer is a key to increasing profits.

Let’s look at a method to accurately calculate a price for your goods or services.

Pricing Calculator

In the The Art Of Pricing, you can find the following method for setting prices.

Step One: Price & Availability Of Substitutes

Are there any substitutes for your product?
If so, how are they priced?

Step 2: Characteristics Relative to Competitors

What features do you offer that your competitors do not, and vice versa?
Do you customers value these features enough to pay extra for them?
Do customers value other characteristics, such as brand, established service levels, reputation, locality etc?

Step 3: Income

Can your customers afford your prices?
Are they less able to afford your prices than they once were?
Are there times of the year they can afford it, and other times where their purchasing power is constrained?

Step 4. Price/Strength Of Demand For Related Products

What are the associated overheads of owning your product? For example, if you sold cars, there are other costs involved that make up the total cost of ownership, including running costs, insurance and maintenance.

Step 5 – Market Environment

Has your product suddenly become high profile?
Has demand increased/decreased considerably in a short period of time?

This type of approach takes into account a number of variables when setting price, namely affordability, value, market conditions, and competition.

Some Issues With Value Pricing

Pricing, without taking into account overall business strategy, is a mistake.

For example, say there is a natural disaster where people lose their homes. A hotel may jack up the rates to ridiculous levels because it knows demand will surge, however the long-term value of the brand may be damaged if the hotel gets a reputation for price gouging.

Some companies may want to price at a level that gains them clients, but not revenue. For example, in order to build a reputation in the market, new SEO agencies sometimes provide services at a discount, or free, in order to get a few big name clients on their books.

Pricing Tricks

Let’s take a look at a few common pricing methods in practical terms.

The Law Of Three: If you go into a shop to buy a washing machine, you’ll likely be faced with a range of models. Nothing odd about this, of course. The shop is trying to cover all bases.

However, there is often something more subtle going on. Most people will buy middle of the range. The middle of the range feels “safest”. So, a shop will often have a ludicrously expensive model, and a very cheap model. The actual model they want to sell you is the priced in the middle of those two extremes. If the shop didn’t offer a ridiculously expensive model as a basis for comparison, the middle option becomes the expensive option, and you’re more likely to set your sights lower.

When you offer SEO services, try doing the same. Offer a bells and whilstles version that is highly priced, a mid option, and a cheap option. Typically, your customers will select the middle option. If you only offer two options, people typically choose the cheapest.

Auctions: Perhaps not applicable to SEO, but if you’re selling products, the auction system can be a great way to achieve better prices. Entire books have been written about the psychological effects of auctions, but it all boils down to the fact that people place different values on products based on their own needs. Those who want the product the most, pay the most.

Versioning – Offer slightly different versions of the same thing. See Apple and their iPad pricing. The cost of production of each model is probably near identical across the range, but by offering different versions, they can figure out who is prepared to pay more.

Versioning can often be more extreme when setting a wide price range. Conferences tend to offer coupons off retail price for early attendees, but so long as the full price has been seen publicly by some folks, this lends a perception of value that can be used in subsequent marketing & packaging. Some companies might run an in-person conference which charges thousands of dollars, and then afterwards, sell you a download version of it for a few hundred dollars, all the while anchoring on the “fact” that you just saved $1,000+ with your purchase. The “crucial” networking & intimacy benefits which were used to promote the in-person event soon disappear and the concepts of value and convenience (instant download, no travel required, etc.) are brought to the fore.

Segmented Pricing – Perhaps your buyers can’t pay the entire cost up front, but they can buy using other arrangements, like a monthly fee. Some clients might prefer bundle offers where everything is done for them, whilst others want to mix and match parts of your service. Offer different options so your client can fit their budget to your offering.

Differential Pricing – Offering coupons can grab those buyers who are very price sensitive, or looking to buy only if they perceive a genuine bargain. Your other customers won’t bother with coupons, so you can successfully run two different pricing strategies, one discount and one full price, by using coupons.

Markdowns – Obvious, but powerful. You advertise the usual price, but a line through it, and offer it at a reduced price. What’s not so obvious is when markdowns should be used. Markdowns don’t work so well on luxury items, as this can compromise their exclusivity value. Not much point owning a high-end garment is everyone has one.

Notice that luxury items either don’t display their price, or, if they do, its typically stated in rounded figures i.e. $1500. Budget items price in dollars and cents i.e. $39.95 or slightly under the next increment i.e. $99 as opposed to $100. The format of the price signals exclusivity, or lack thereof.

But Is This Fair?

Offering one price to one group, and another price to others may seem unfair. This is something you’ll need to weigh up for yourself.

However, keep in mind that if the differing price points reflect different levels of value, then the customer is deciding what they value most. If they want the full service, they should expect to pay full-service prices. If they want the lowest price, they may be prepared to wait or sacrifice some features. The customer decides what they value, and votes with their cash.

And they can always say “no” :)

Yesterday someone emailed me this quote

“People that pay for things never complain. It’s the guy you give something to that you can’t please.” ~Will Rogers

and I think it is true on so many levels. If you want real feedback from someone ask them to put their money where their mouth is. Few will, and so most free feedback is garbage.

But when you pay for something you are giving a much stronger/cleaner signal, which is easy to trust & value.

What a lot of SEO professionals don’t realize is that when they rent text links many of them are paying for their own demise. If you go through a central link broker that operates at scale you are telling them:

  • what areas your business is focused on
  • what keywords are important to you
  • what links you are buying
  • how much you think you will make from the marketing

That is fine if you are a huge company with tons of other quality signals which can’t be replicated. But if you are a smaller company, what happens when that link broker is also a web publisher? Hmm… xyz is spending $5,000 a month with us to promote that site…well they must be making some good money off it – lets clone it. ;)

The equivalent to trusting most your link buying to a single link broker would be doing a public export of all your bids and conversion data for PPC. You wouldn’t stay profitable very long with that strategy, and if you share your link purchase data with some of the shadier (and more well known) link brokers you can expect the same result.

A friend of mine recently mentioned buying some links and then seeing a number of sites pop up which seemed suspiciously associated with people who work behind the scenes at their link broker. Oooops!

Buying links from a central network is not only risky from a Google risk management perspective, but also from a “thanks for the data, fool” perspective.

When Teoma launched in 2002 GoogleGuy made the following comment:

“I just have one question. Are the Overture results on top an April Fool’s Day joke, or is that for real? ;)

Since then Google has put ads above their organic search results, done selective self-serving within their “organic” results, and built a business that is pulling in over $20 billion a year. It turns out aggressively carpet-bombing the web with ads is no joke. :D

But the net effect of that success is that many people know the value of links. SEO is a zero sum game, and so if you don’t engage in heavy self promotion you will remain obscure on 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.

On the web ideas (and business models) spread quickly. So as companies learn that Google encourages and pays you to pollute the web with garbage that is what many people will do. Google goes so far as to explicitly state what not to do, and many people view that as a checklist of opportunities, as it wouldn’t be on that list unless it worked. ;)

The lack of community and camaraderie within the SEO industry both remarkable & unsurprising give that the SEO industry is a bit of a canary in the coal mine in terms of adopting new best practices (or worst practices, in some cases).

  • At the lower end of the market people are operating like robots, mechanically spamming in a way that sure feels like crapping on the virtual living room floors in established public forums.
  • Just yesterday I read a blog post listing me amongst a list of resources where everything recommended had a link – except for our site. The lack of link was so bizarrely out of place that they literally had to explain why they didn’t link to our site. Crazy stuff, especially from an SEO “professional” who claims to like and value your work!
  • As attention becomes more scarce, many people are willing to do anything to get a bit of it.

Meanwhile Google has no issues funding that very “linkless” web pollution by paying the likes of Demand Media to syndicate their ads, and encourage the use of rel=nofollow on links while trying to build out the model for digital sharecropper overlords. Google has pushed so far on nofollow that content spam is the single most profitable SEO business model going today.

The end result of this business decision? Google becomes its own nemesis by funding spam:

This triple occurrence of Optimization by Proxy creates a self-reinforcing cycle where the made-for-adsense website owners are rewarded with cold hard cash for their efforts. What’s worse, this cash flow has been effectively subtracted from the potential gains of legitimate content producers. One can say that the existence of Google search/adsense/adwords makes all this commerce possible in the first place, but this does not make the downward spiral of inefficiency disappear.

What is even more strange about the above quoted article is that a Google search-quality engineer submitted it to Hacker News using “Sufficiently advanced spam is indistinguishable from content” as the title & wrote the following:

All of the fascinating things about signals are confidential for all of the reasons listed in the article, and Google has been sued so many times by sites that think they should rank better than they do that I can’t really give examples.

I think it’s safe to say though that there are a lot of people worried about and thinking hard about what the web is turning into and how to rank it appropriately.

Most of the content is no longer written by devoted hobbyists, people no longer link as often to things they like, and much of the content on the front pages of reddit, digg (and sometimes even hackernews) was put there by people trying to make your search results worse.

Given that Google pays for the creation of content and is the most profitable distribution channel for many webmasters, few businesses have anywhere near Google’s influence on “what the web is turning into.”

The smaller the corpus of voters there are the fewer people you need to influence to manipulate the search results. And so stuff like this becomes popular:

But if you have a live and flourishing link graph then efforts of spammy delight won’t be able to compete anywhere near as well against the best sites. The problem is the best sites often remain in obscurity & even when they spread through social networks most of those links use nofollow.

The powerful element of links is that they give search an informational bias. Most other forms of user feedback (even awareness) are to some degree driven by ad budget, which would give the results a commercial bias that would cut Google’s AdWords revenues.

Years ago on porn search Matt Cutts stated “One thing to consider is that our rankings (because of PageRank and the link structure of the web) often lean more toward information sites. You usually have to look a little more deliberately to find porn on Google.” And last year a Google search engineer on Reddit stated: “Incredibly, we take an active role in ignoring porn search. As in, we neither care nor not care about whether our changes affect the search for porn. I’m quite impressed myself at how good it is given this, and sometimes I wonder how much better it could be…”

The point being that Google can choose to be a passive reflection of the web, but they choose *not* to and have impacted the web by perverting the link structure. Even Google engineers admit “people no longer link as often to things they like” – this is not due to “scalable algorithms” – but due to a long history of calls for spam reports, calls for paid links reports, threatening to remove PageRank, pushing rel=nofollow out for a niche purpose and then claiming it to be a panacea, associating (non-Google!) link selling with bogus cancer cures, creating the AdSense API, excessive emphasis on domain authority, claims like “we are packrats at Google. We never seem to throw out information about the link structure of the web. :) ”, etc.

Yes any new webmaster can quickly rank any trashy content in Google – not on their own site – but on one owned and controlled by a Google arbitrage partner like Demand Media.

Google engineers focused on making their own jobs easier (by making links harder to get) rather than encouraging and promoting the advancement of the corpus of content & links/votes they rely on. The fundamental question for search is if the ecosystem is healthier with many micro-parasites or fewer macro-parasites. I always promote diversity as a good thing, but capitalism typically promotes homogenization to increase yields. That will work for Google right up until…

  • some of the large arbitrage players form their own ad network, or sign an exclusive deal with Bing
  • quality publishers pull out of search and people prefer to ask their own communities what is good rather than searching to find bland 3rd grade answers wrapped in AdSense

…at which point Google will start promoting other sites & building a new model. Or they will become irrelevant.

But Google is not required to go through that pain.

They could undo the years of FUD that destroyed the link graph by stating the importance of outbound links, and then putting a bit of weight on it. It is something that was hinted at in the past, but the focus on making links harder to get has undermined the utility of using links as *the* measuring stick for quality because “people no longer link as often to things they like.”

The Interactive Advertising Bureau (IAB) today announced the release of “Data Usage & Control Primer: Best Practices & Definitions,” a guide pioneered by the IAB’s Data Usage and Control Taskforce….

Has a competitor launched a new feature that concerns you? If so, how do you react?

Google, well known for their public relations expertise, does not like the idea of Facebook creating an (eventual) distributed ad network based on demographics data. In spite of Google personalizing search by default (without asking), Google opting you into behavioral targeting (without asking), & automatically opting you into Google Buzz (without asking), suddenly they are a company concerned with the privacy of people on *other* networks.

An effective attack typically should not look like it comes from corporate, but sound more like a list of alarmed concerns issued by individuals just like you. And so we get alarmed stories from the likes of Ka-Ping Yee, a software engineer for the charitable arm of Google:

Facebook’s new system for connecting together the web seems to have a serious privacy hole, a web developer has discovered.

“It seemed that anyone could get this list. Today, I spent a while checking to make sure I wasn’t crazy,” he wrote on his blog. “I didn’t opt in for this. I even tried setting all my privacy settings for maximum privacy. But Facebook is still exposing the list of events I’ve attended, and maybe your event.”

The best thing to do is disable your Facebook account and wait it out. It is easy to do, and you can always enable it later! :D

Generally I have not been a huge fan of registering all your websites with Google (profiling risks, etc.), but they keep using the carrot nicely to lead me astray. :D … So much so that I want to find a Googler and give them a hug.

Google recently decided to share some more data in their webmaster tools. And for many webmasters the data is enough to make it worth registering (at least 1 website)!

AOL Click Data

When speaking of keyword search volume beakdown data people have typically shared information from the leaked AOL search data.

The big problem with that data is it is in aggregate. It is a nice free tool, and a good starting point, but it is fuzzy.

Types of Searches

There are 3 well known search classifications: navigational, transactional, and informational. Each type of query has a different traffic breakdown profile.

  • In general, for navigational searches people click the top result more often than they would on an informational search.
  • In general, for informational searches people tend to click throughout the full set of search results at a more even distribution than they would for navigational or transactional searches.
  • The only solid recently-shared publicly data on those breakdowns is from Dogpile [PDF], a meta search engine. But given how polluted meta search services tend to be (with ads mixed in their search results) those numbers were quite a bit off from what one might expect. And once more, they are aggregate numbers.

Other Stuff in the Search Results

Further, anecdotal evidence suggests that the appearance of vertical / universal results within the search results set can impact search click distribution. Google shows maps on 1 in 13 search results, and they have many other verticals they are pushing – video, updates, news, product search, etc. And then there are AdWords ads – which many searchers confuse as being the organic search results.

Pretty solid looking estimates can get pretty rough pretty fast. ;)

The Value of Data

If there is one critical piece of marketing worth learning above all others it is that context is important.

My suggestions as to what works, another person’s opinions or advice on what you should do, and empirical truth collected by a marketer who likes to use numbers to prove his point … well all 3 data sets fall flat on their face when compared against the data and insights and interactions that come from running your own business. As teachers and marketers we try to share tips to guide people toward success, but your data is one of the most valuable things you own.

A Hack to Collect Search Volume Data & Estimated CTR Data

In their Excel plug-in Microsoft shares the same search data they use internally, but its not certain that when they integrate the Yahoo! Search deal that Microsoft will keep sharing as much data as they do now.

Google offers numerous keyword research tools, but getting them to agree with each other can be quite a challenge.

There have been some hacks to collect organic search clickthrough rate data on Google. One of the more popular strategies was to run an AdWords ad for the exact match version of a keyword and bid low onto the first page of results. Keep the ad running for a while and then run an AdWords impression share report. With that data in hand you can estimate how many actual searches there were, and then compare your organic search clicks against that to get an effective clickthrough rate.

The New Solution

Given search personalization and localization and the ever-changing result sets with all the test Google runs, even the above can be rough. So what is a webmaster to do?

Well Google upgraded the data they share inside their webmaster tools, which includes (on a per keyword level)

  • keyword clickthrough rank
  • clickthrough rate at various ranking positions
  • URL that was clicked onto

Trophy Keywords vs Brand Keywords

Even if your site is rather well known going after some of the big keywords can be a bit self-defeating in terms of the value delivered. Imagine ranking #6 or #7 for SEO. Wouldn’t that send a lot of search traffic? Nope.

When you back away the ego searches, the rank checkers, etc. it turns out that there isn’t a ton of search volume to be had ranking on page 1 of Google for SEO.

With only a 2% CTR the core keyword SEO is driving less than 1/2 the traffic driven by our 2 most common brand search keywords. Our brand might not seem like it is getting lots of traffic with only a few thousand searches a month, but when you have a > 70% CTR that can still add up to a lot of traffic. More importantly, that is the kind of traffic which is more likely to buy from you than someone searching for a broad discovery or curiosity type of keyword.

The lessons for SEOs in that data?

  • Core keywords & raw mechanical SEO are both quite frequently heavily over-rated in terms of value.
  • Rather than sweating trying to rank well for the hardest keywords first focus on more niche keywords that are easy to rank for.
  • If you have little rank and little work to do then there is lots of time to focus on giving people reasons to talk about you and reference you.
  • Work on building up brand & relationships. This not only gives your link profile more karma, but it sends you a steady stream of leads for if/when you fall out of favor a bit with the search engines.

Those who perceive you well will seek you out and buy from you. But it is much harder to sell to someone who sees you as just another choice amongst many results.

Search is becoming the default navigational tool for the web. People go to Google and then type in “yahoo.” If you don’t have a branded keyword as one of your top keywords that might indicate long-term risk to your business. If a competitor can clone most of what you are doing and then bake in a viral component you are toast.

Going After the Wrong Brand Keywords

Arbitraging 3rd party brands is an easy way to build up distribution quickly. This is why there are 4,982 Britney Spears fan blogs (well 2 people are actually fans, but the other 4,980 are marketers).

But if you want to pull in traffic you have to go after a keyword that is an extension of the brand. Ranking for “eBay” probably won’t send you much traffic (as their clickthrough rate on their first result is probably even higher than the 70% I had above). Though if you have tips on how to buy or sell on eBay those kinds of keywords might pull in a much higher clickthrough rate for you.

To confirm the above I grabbed data for a couple SEO tool brands we rank well for. A number 3 ranking (behind a double listing) and virtually no traffic!

Different keyword, same result

Informational Keywords

Link building is still a bit of a discovery keyword, but I think it is perhaps a bit later staged than just the acronym “SEO.” Here the click volume distribution is much flatter / less consolidated than it was on the above brand-oriented examples.

If when Google lowers your rank you still pull in a fairly high CTR that might be a signal to them that your site should rank a bit higher.

Enough Already!

Enough about our keywords, what does your keyword data tell you? How can you better integrate it to grow your business?

Anywhere there is controversy you will find many marketers who will opine and try to shine the lights on themselves about how wonderful they are and how much they help everyone else and how everyone should link to them in the controversy. But when the attention dies down it turns out few marketers hold true to their promises and stick with their principals.

It is usually the unsung heroes that make a difference, not as a cheesy marketing strategy, but because they believe in doing the right thing, even if it is at great personal cost.

Not sure if you remember the hoopla about Jason Gambert (professional douchebag) trying to trademark the word SEO, but many industry professionals were up in arms about it. In spite of some of the larger companies having big-jaws-a-flapping and in house legal teams, and the industry having perhaps some of the MOST USELESS AND SELF PROMOTIONAL cash flush “non-profit” trade organizations in the entire world (cough…SEMPO…cough), Rhea Drysdale was left to spend a couple years and $17,004.33 fighting the bogus trademark.

A few years back I spent about $35,000 to $40,000 fighting Traffic Power, and while it was painful back then, to this day I am glad I did it. But one of the things that surprised me back then was that for all the noise, few people cared enough to offer a $1 to help fight the good fight. Some friends helped in a big way…but I was still like $30,000+ in the hole and stuck dealing with a lot of stress.

Lets not leave Rhea with that feeling. ;)

Her Paypal email address is I just donated $566.81, and if about 29 more of us do the same, then we will help cover her legal expenses. Even if you can’t donate that much, every $ helps…given the size of the industry (and the alleged concern certain individuals showed) we should easily be able to cover 100% of her legal fees. Even at the $50 or $100 level, it will still add up quickly with your help. Please shower Rhea with links too…she earned them :D

Update: Its worth adding that Jonathan Hochman collaborated early in this case with Rhea and choose a different legal strategy. He also spent about $10k fighting this battle but the court threw out his challenge on a technicality, so while many of the other industry supporters were nothing more than self promoters, Jonathan is also a good guy here.

When Transparency is Valuable

If you are selling a site which you just want to get rid of and lack passion for then there is nothing wrong with being fairly transparent and shopping it for the maximum amount you can get at an auction or such. And if you have high growth and contact an investment banker to get a bidding war going then limited transparency can help then. But if you have a high growth site in a high growth field and there is only one company trying to buy your site then transparency is the opposite of leverage. It can only work against you.

Scam Website Purchase Offers: How They Work

Over the last couple days a company made a pretty fair offer for one of our websites. He did so knowing that I wasn’t going to give up our analytics data UNTIL the cash was in my bank account, and that he could infer a lot of the data from the search results. This was like the 5th time they tried buying the website and these points were made to them on every attempt.

The guy said “if that sounds good to you I will get a Letter of Intent over to you.” I said sure, and in return they were like “ok now we need access to all your stats for our due diligence document to fill out the LOI.”

And that is a big pain point / problem.


Data is Valuable

Data is valuable. Anyone who has the money to buy one of your best websites and has people scouring the web trying to make such deals probably has other sites in the same vertical. It is a near certainty. If you give all your data to someone *in an attempt to sell* what you may end up with is a weaker site and no buyer.

And if you know they already have other sites in the same space, well then you just shorted your own company’s stock in exchange for nothing but a clown outfit.

Why buy the cow when you can get the milk for free?

The people who ask you to give up all your business data, and want exclusivity on a deal while they mull it over and debate it and re-price it, while pillaging your analytics data are actually telling you “we think you are an ignorant jackass and lack respect for you.”

The sequence goes like: hello how about I buy that from you for $xx. Sound good? Here now give me all your data and I will give you a shady low ball offer of $y and then go buy a similar site from a more ignorant seller. We only buy at far below market rates! Don’t worry. We *WILL* use your data against you!

If they make and offer they make an offer. If they want to steal you data they want to steal you data. But if they already make an offer based on their observations there is no need to grab all the data to reposition the offer – in short it is a scam.

Business Reciprocity 101

A slimy business person doesn’t trust other people because they think everyone else is just as slimy as they are. So here is the test to use on such offers: tell them “sure you can have all my analytics data right after you give me all of their analytics data.” If they say you are being unreasonable then tell them to look in the mirror.

We have made quick page title change suggestions on a client website that have literally immediately brought in millions of Dollars for their business (and as consultants we only got crumbs for the value add), BUT if you have a competitor who is considering buying your site they can look for the areas where you are strong that they missed and simply clone them. If their domain is far more authoritative they just took a chunk of your traffic. And you gave it to them – free of charge.

We have had competitors clone some of our strategy in some areas, but on numerous occasions they have picked the wrong keyword variations or the wrong modifiers. If you just give them the data for free there is no guesswork. They WILL use their capital to steamroll over you.

Why NDA Contracts Are Garbage

Sure some such companies claim to be professional and that their NDA has some value. But does it? Do you actually have the capital sitting around to do a legal battle with a billion Dollar company with more in-house lawyers than you have total staff? What kind of ROI would such litigation earn IF you won it? What are the odds of you winning? Can you actually prove how the used your data? How much time, effort, and stress would go into such a battle?

Why Do People Purchase Websites?

If people are coming you to buy your site they are coming to you for a reason. There is some strategic value, or some level of synergy to where they feel they can add value to your position. As an example, a big company like Yahoo! or eBay or or Google or BankRate or or WebMD could…

  • use a purchase as a public relations opportunity to make the purchased website stronger
  • integrate it into their network to own more of the market and have better control over pricing
  • cross promote it on their network
  • cross promote other options in their network to that site’s audience
  • use it as a wedge to influence markets in way they don’t want connected with their core brand
  • expand their market breadth without diluting their brand
  • etc etc etc

The point being very few people buy a business based on thinking they can/will keep it exactly the same. Rarely do you buy a raw domain name based on its earnings…you buy it based on the potential for what you can develop on it, and the growth + opportunity you see in that market.

Is there risk in the growth? Absolutely. What successful investor hasn’t lost money? But that risk is discounted in the price of the site…after all, the future market growth and site growth are not passed onto the seller after the site has already been sold.

Have I lost money on some website purchases? Absolutely, but on average we have come out ahead. You don’t need perfect data to make a purchase so long as you have some good ideas on how to add value. You can have a few duds and come out ok so long as you have some winners and ride the winners hard.

What Data Discounts: It is Backwards Looking

Any attempt to get the exact earnings AND all the keyword data for a website for free is simply exploitative. It gives the buyer leverage while placing the seller in a vulnerable situation. It moves the purchase away from strategic value to some b/s multiples of earnings which rarely accounts for *why* the purchase is being made.

Is it a defensive purchase? Is it a purchase where there is an instant synergy and strategic value add? Do they have more data than you and do they see strong market growth in the near future?

Strategic purchases like YouTube don’t sell for over a Billion dollars based on a backward multiple of earnings. When companies buy important websites they don’t insult the owner with a 1, 2, 3, 4, or 5 year multiple. The S&P 500 has historically traded around a 15 or 16 multiple, so even a 6, 7, 8, 9, or 10 year multiple is not great if you have some strong strategies to increase organic search traffic, build new revenue streams, and improve conversion rates.

If a company trading at a 30x P/E multiple offers to buy your site for an 6x multiple, then they get a higher revenue cut due to their market position suddenly they have purchased your website for something like a 3x multiple… about 1/10th of what the market is valuing their enterprise at.

If they hold back some of the payout for a year then they are paying for a portion of the site out of future earnings, and the real multiple being paid is even less – maybe only 2!!!!

This quote from maximillianos at WMW explains why the give us all your data and we will give you some crappy multiple approach sucks for the prospective seller:

I opted to keep the site and put it on auto-pilot. That was about 9 years ago. Today the site makes more money in a month than what I almost sold it for back then. So maybe the sale falling through is not a bad thing.

In the search game increasing your rank by a few positions can cause a sharp increase in traffic.

Who wants to sell a site that is growing 100% every few months for some *stupid* multiple of backwards earnings? They would have to be an idiot. Certainly the public companies with a 30x P/E ratio are not trading at a 30x multiple because investors are looking backwards.

When you sell a site you must assume that they have more market data than you do. And they probably have more capital. Give them all your site specific data and you just diminish the value of your property while leaving you with no leverage.

Learning From Past Mistakes

But lots of people are stupid enough to give up the data. In the past I was one of them. A person who I mistook as a friend in our industry named a price for a partnership on one project, got as much data as he could, and then pulled out of the deal *at the price he named*!!! They claimed they lacked liquid capital, but at the same time they went on to make offers for other sites we owned (without knowing who owned them). Without even naming who the person was and only stating the above, in our forums another member guessed who it was *because the scumbag had done the exact same thing to him*

The guy was also snooping around one of my friend’s sites a few years back. And so that guy asked a friend of the snooper if the snooper was legit, and the response was “we are friends, but don’t trust that guy.” Too bad I didn’t hear that until after the guy screwed me over. But hopefully this post helps prevent you from getting screwed by fake investors and shady parties not actually interested in your properties.

Do They Eat Their Own Dog Food?

If someone tries to tell you that looting your data is part of their due diligence or purchase process send them a link to this post & tell them Aaron says hi.

Ask them how they disagree with it. And if they don’t disagree with anything in this post, then tell them to give you all their business data. Fair is fair.

And if they won’t share their business information with you then tell them to do the right thing


I am sick of seeing these companies take advantage of webmasters. And it appears the problem is far worse than I anticipated. Since publishing this post we have already received some emails asking for suggestions about selling sites without handing over all of their analytics data. If you want to ping us just email, and we will see if & how we can help out. :)

Jim Sterne, who has written six books on Internet advertising, marketing, and customer service, tackled the complex world of social media metrics in his morning keynote at SES London 2010. Sterne, who is also chairman of the Web Analytics Association and founder of the eMetrics Marketing Optimization Summit, revealed some findings from his upcoming book, which, coincidentally, is entitled “Social Media Metrics.”…