17 February 2011

Me, Google and the Tinfoil Hat

So I'm kind of excited that the search industry is finally getting some mainstream coverage. I think it's funny that SEO seems to be getting more attention than paid - in the industry, there's a kind of SEO-as-underdog perception. (Also SEO-as-cowboy, but that's a different post.)

If you haven't read the NYT article about JC Penney gaming Google's natural SERPs, go read it now. Then come back and re-read that last sentence, and it will make much more sense.

I've been reading a lot of shrieky stuff online which loudly condemns JC Penney for cheating. Dude, using black-hat techniques is unorthodox for sure, and also pretty stupid for a site that you want to keep around for the long term, which JC Penney presumably was going for. But I don't see how breaking Google's guidelines is immoral - white and black hat are just opposite faces on a coin, not laws meted out by the justice system on behalf of you, the voter. (If JC Penney's SEO firm, SearchDex, failed to disclose the risk of getting blackballed by Google to JC Penney, then that was unethical. It's also not unheard of - I mentioned cowboys for a reason. Digital marketing is a land grab right now, and the industry is young enough that snake-oil salesmen abound.)

I agree that black hat usually results in a crappy user experience, but I think that it's Google's job to keep improving the search results as the web evolves and expands, and the job of company websites to make the websites as good as possible. At the end of the day, black or white hat SEO doesn't matter if you've got a 99.9% bounce rate and no one stays on your site long enough to actually make you some money. (Bounce rate was famously described by Avinash Kaushik as "I came, I puked, I left.")

I think Google is incredibly disingenuous when they, on the one hand, get businesses to do their work for them by publishing SEO guidelines, and on the other hand maintain that their pure and noble mission is the happiness of the user, and the piles of money generated in Mountain View are just a side artifact of Larry Page's and Sergei Brin's laudable desire to organize the world's information. They might have been motivated soley by altruism at the start, but the tentacles of Google have spread much farther than that over the past decade. Google runs an office in Washington DC devoted soley to lobbying. At the very least, making money is a twin passion to organizing information at Google.

The Times article suggests that Google allowed this black hat stuff to go on for fear of disturbing the relationship with JC Penney's paid search advertising, worth $25 million a month. Not incidentally, that is a big goddamn budget. I would guess that my employer is in the top 500 largest PPC (paid search) advertisers in the US, but that's a lot of clams even to me. Worth it, too - did you ever think about how much cheaper it is to ship shit out of a warehouse than maintain brick-and-mortar stores staffed with humans who can only process one transaction at a time? The profit margins on online transactions are so much better than offline because the overhead is way lower.

All of which explains why JC Penney was eager to get all the traffic they could, particularly over the holidays. A risky strategy, sure, and I do wonder if the top brass even knew that their SEO firm was doing this - retail is a pretty old-fashioned industry, and SEO is complicated and new.

My guess is that Google has known about the JC Penney site for a while and was trying to solve the problem algorithmically when the Times story broke. I do believe Matt Cutts (for once) when he says that Google's spam team didn't let it go because they were worried about disturbing the business relationship with the paid search side of the house.

First, Google makes no money directly off of organic traffic - but JC Penney spends $25 million a month on paid search ads. Therefore, Google actually has a direct interest in reducing JC Penney's organic traffic because it will force them to rely more heavily on Google. Secondly, Google can stand to lose 25 million in revenue per month a lot more easily that JC Penney can find an alternate source for all the high-quality, high-intent traffic that Google currently gives them. Thirdly, it's as embarrassing as shit for Google. I also think that there's a genuinely strong corporate culture at Google which would be a considerable obstacle to surmount in order to proceed with some kind of back room blind-eye deal. Like I said, twin passions.

What is truly amazing about this situation, and others like it, is that we don’t look at why Google is placing such disproportionate weight on links, particularly in this case, when so many of the links are of poor quality.

I think Evan LaPointe has put his finger on the heart of the matter here, who has the best response I've seen so far to the whole JC Penney kerfuffle. He puts forth the revolutionary idea that instead of concentrating all that energy on marketing, companies refocus and invest in improving their product (an e-commerce website). I really don't understand why most B2C businesses fail to realize this - they're going to make a lot more money over the long term if they can establish an ongoing relationship with a customer. In retail, it's always cheaper to extend the lifetime value of the customer by re-marketing to the existing customer base than it is to acquire new customers. Hello, anyone remember mail-order catalogues? Great business model. E-commerce is exactly the same. I don't care if your product is coffins, something that no one will ever need more than one of - it's worth cultivating an ongoing relationship with your (surviving) customers, for word of mouth sales alone.

So: I don't buy that Google knowingly ignored JC Penney's black hat tactics, and I think it's possible that JC Penney did not, in fact, know what was going on. (Not very likely - but possible.)

What I'm curious about is what prompted this article in the Times. David Segal is doing some excellent journalistic work in the search space, I just wonder what brought his attention to JC Penney and DecorMyEyes in the first place. It wasn't Microsoft, who were still showing JC Penney's results for days after the article was published (and who just got busted copying Google's search results.) I could see competitors like Blekko or Mahalo tipping off the reporter though, couldn't you? I would, if I thought of it. What a great strategy in the battle for hearts and minds: expose your opponent's legitimate weaknesses. It's not any wilder than what goes down on Capital Hill. It seems like a good space for a reporter to make a name in, too - there's a lot of money sloshing around in search these days.

You want conspiracy theories, here are mine. Google is doing its best to keep its results just good enough not to lose users, but to make the organic results useless enough to force uses to take a second look at the paid search ads. Jill Whalen proposes this and I think she's got a good point.

In the same way that Google gets businesses to do much of the heavy lifting on helping the algorithms to return relevant results, while not giving away enough for anyone to copy their secret sauce, Google is responding to increasing ad blindness on the part of users by reducing relevancy in the natural results at the same time as it mucks about with the look of paid search ads to make them appeal more to the user.

If you're not in paid search, you might not have taken special note of this, but Google is now extending ad titles so that they are longer, with a click-to-call phone number embedded in the ad, as we've been seeing for a while in organic local results. They've also introduced site links into the ads, just like we see in organic results.
It's a delicate balance, and I admit that I take a small-minded satisfaction in pointing out the contradictions between some of Google's stated policies versus the policies that are self-evidently in place. They talk a lot about relevance, but for Google, what's relevant is what's likeliest to make the most money for Google.

Google is usually pretty long-term in their thinking - it's one of the reasons that makes them such a great company. (I know I just spent the whole post slagging them off, but I do admire them tremendously in many ways. What can I say - I come to bury Caesar not to praise him.) So I think they're genuine when they say that they want to get rid of content farms, even though content farms make them a crapload of money. I hope the next algorithm update drops soon, because I think the Google organic results have gone a little too far in the direction of "intentionally crappy".

Plenty of tinfoil to go around. Don't be shy.