Aug 2

Google’s Penguin Algorithm is a Huge Success

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    What? Didn’t you know? You didn’t get the memo? You aren’t one of those complaining about poor rankings or lost traffic are you? Because we have undisputed proof that Penguin has been massively successful. That’s right. It’s responsible for a 42% increase in revenue. Didn’t you see that on your site as well?

    Oh wait, I guess I should clarify things a bit. It has been a huge success indeed (if you work for Google). Yeah, we now have hard core evidence backing up everything we’ve been telling you for months – that Google doesn’t care about search results, they only care about AdWords revenue. Don’t believe me?

    Well, that’s ok, you can read it yourself because it’s not a matter of speculation but hard fact. It actually slipped by us and I just recently found this article from a couple of weeks ago when Google announced their earnings report.

    July 20th, 2012 – Last night, Google announced some pretty good earnings, beating expectations, making more money than ever with really nice profits.

    In short, revenues up about 35% from previous second quarter in 2011. Why, maybe due to a 42% increase in paid clicks over the second quarter of 2011.

    Webmasters and SEOs at WebmasterWorld say paid clicks are up because organic search results are poorer and Google is showing more ads in place of organic results. They point fingers at the Penguin update.

    So how does that make you feel? For me personally, well, it just solidifies everything I already knew. Google is relying on the fact that most people are conditioned to use it and think that online search equals Google. In fact, I would actually take that one step further and say that there is a significant portion of the population that equates the Internet with Google. They are absolutely relying on the fact that people will not even go to other search engines because they’ve got you trained that they are the best. Hogwash.

    If you are still under the false impression that Google cares about YOU or that they care about YOUR SITE or even that they care about search quality, well, I’m sorry to be so blunt but it’s time to “wake up”. In the past when revenue was down, Google would adjust the Adwords “broad match” algorithm so that unsuspecting advertisers wouldn’t realize that all of the sudden their campaigns weren’t doing so well.

    By changing the algorithm and making it more broad, they essentially reduced conversions, increased the clicks they would get and generally decreased the overall effectiveness of the ads. But one thing they didn’t do was hurt their revenue. No, not that. In fact, they boosted their revenue – at their advertiser’s expense.

    Google played this game for quite awhile and eventually those in the know stopped using the broad match keyword matching in Adwords altogether focusing on very tightly coupled exact match campaigns instead. Tools were created that generated thousands of single keyword AdWords campaigns in order to learn which keywords were converting and avoid the ambiguity of broad match campaigns.

    Why am I talking about AdWords?

    Simple. If you’re talking about Google then you are talking about AdWords – one way or the other. That is what drives their revenue. That is what drives their business decisions. That is what drives their algorithm changes. That is what had driven Penguin and Panda too – don’t be naïve.

    Follow me through this logic for a minute. Google allows you to “buy” top rankings – all you have to do is pay top dollar and you can rank #1 in Google every day of the week. In fact, they’ll even highlight your results in yellow to make them stand out. All you have to do is pony up more money than your competitors.

    Now, who can do that? The big companies and, trust me, they do. And guess what? They have the money to spend. In fact, they are Google’s ideal client. Now, let’s put this into perspective a bit. Way back in 2010 – sounds like ages ago when I say it that way doesn’t it? But honestly, when it comes to Internet years, that’s like 17 years ago. Internet years are kind of like “dog years” – about 7 years to the human year.

    Well, here’s some AdWords stats from way back in 2010 (and for just one month I might add):

    adAge obtained an “internal Google document” that disclosed the first half of 2010 AdWords advertising spend of Google’s customers. As you can imagine, the numbers are pretty revealing.

    It showed that $574 million was spent, where 1,356 advertisers spent between $10,000 and $100,000. It also showed that AT&T was Google’s largest AdWords customer in June 2010.

    Their top 10 clients spent over 44 million on AdWords. You’ve heard of the 80/20 rule, right? Well in this case it’s far more exaggerated than 80/20. Out of 1,356 advertisers and $574 mill total ad spend, the top 10 accounted for 7.7% of their income. Just to put that in perspective those 10 only represent 0.7% of their customer base. So less than 1% of their advertiser base was generating nearly 10% of their revenue.

    What that means is that it is in their best interest to continue to skew the results (hint: the algorithm) to favor big sites and big spenders. It’s only pure speculation, but my guess is that the top 10 in 2012 would probably account for more like 9% or 10% of their revenue. In other words, I expect that those percentages are even more lopsided. But again, that is just my speculation based on other trends that I see.

    Remember, this was “way back” in 2010. Also please note that that was only for the first single month of June. So I really want you to stop and think about that for a minute. In just 30 days they pulled in $574 million and $44 million of that came from just 10 advertisers and those numbers are over 2 years old now. By the way, those numbers come from leaked internal Google documents, so they are by Google’s own internal accounting.

    Google generated $28 billion in ad revenue from AdWords in 2010. In 2011 that number when to nearly $38 billion. Do you see a trend here?

    So it’s time to step back and really reassess your efforts and your priorities. There is a very concerted effort on Google’s part to force more and more traffic to their paid advertisers and recycling it amongst their own network of sites. For example, have you noticed how many YouTube videos are on page one lately? I did some searches and found as many as seven YouTube videos at positions #1 thru #7 for some keyword phrases.

    Google slaps you silly if you engage in any form of traffic arbitrage and yet they are the single worst offenders on the Net in recycling their own traffic and forcing you to jump through their hoops. Now they’re even scraping content from other sites and using it inline in their product displays within the SERPS to hijack even more clicks.

    And, if you are not truly convinced yet, then you have to check out this article on SeoBook.com.

    Mobile Ad CTR

    Wordstream recently put out an infographic where they suggested that 64.6% of search result clicks on highly commercial keywords are clicks on AdWords ads. Shortly before Google’s quarterly announcement RKG put out their digital marketing report. In it they highlight how search ad CTR differs by device.

    Please take a minute and check out the images / screenshots on that article showing what is actually displayed on the displays of phones, ipads and other tablet devices searching in Google. In many cases the entire screen is filled with AdWords ads. And in the cases that it’s not, there is maybe one other search result displayed. So the competition for mobile SEO has been reduced from a competition to get into the top 10 to simply – be number one or go home.

    Where is the future of Google SEO headed?

    Well, I don’t think you have to be a rocket scientist to realize that Google is going to continue to be the 800 pound gorilla and will continue to throw its weight around to keep as much of the search traffic within their own network of sites as well as push as much traffic to their own advertising network as possible. Can anything really change this trend?

    Yes, absolutely. You can change it. But to do so you have to simply stop using Google altogether as well as all of its tools, other web properties (gmail, youtube, google docs and the 100’s of other wildly successful sites). Yeah, I know, that’s a pretty tough sell – even for me and I’m hardly a Google fan club member. The problem is – like a virus –they have completely infiltrated the Net at such a high level that I’m afraid this trend will get much worse before anything ever changes.

    I do believe it will change. Maybe that’s just optimism on my part, maybe it’s wishful thinking – but I do believe it will change. The question is how long will it take for everyone to wake up to all of the crap they’re pulling and make the sacrifice of moving to other alternatives in all of the respected channels. But here’s the thing, it’s really not a sacrifice, we’ve just become lazy. Many of the alternatives to Google and Google related offerings are actually far better. But they have brainwashed the average consumer into the mentality that bigger is better. Yeah, whatever.

    Anyone else feel like we’re back to pre-tivo days?

    So, while I’m on a rant here, let’s talk about youtube for a minute. Have you tried to watch a video lately? It’s as bad as trying to watch TV before there was Tivo. Google is craming ads down our youtube video consuming throats like the champ at the hot dog eating contest is devouring Oscar-Meyer’s one after the other.

    It’s getting so ridiculous that it is totally ruining the entire Internet experience. TV advertising fell off due to Tivo and other DVR technologies and pushed all of those 100’s of millions of ads into the Internet and now they’re taking over like a virus.

    My prediction for the next coming years is this. Right now membership sites thrive by providing quality content. In the near future I predict that more and more sites will begin to transition to a membership model that is advertisement free. I believe that people will get so fed up with all of the advertising being force fed to them that they would rather pay small membership fees just to avoid being bombarded by the ads. Pay attention, because I really don’t think I’m that far off track on this one.

    So, what do you do about it? Google dominates everything…

    Well, see this is where I think so many people miss the boat. While Google does truly dominate search traffic, when it comes to traffic as a whole, they are just a fraction of the Internet traffic out there. Until you’ve invested in paid traffic via media buys, banner ads, PPV, PPC (on other sites, not Google) you probably won’t believe me. But I can assure you, you can get more clicks in a matter of minutes with paid traffic then you can get all week long via Google organic traffic.

    Not only that, but it is just as targeted and easier for you control. After all, with Google, you have no control at all – the Penguin should have drilled that point home by now. Paid traffic, on the other hand, is entirely controllable and the sources for it are only increasing.

    Getting a paid traffic funnel in place for your site that grows your list and at least breaks even on the front end should be your single biggest goal in terms of traffic strategies right now. If you already have a working paid traffic funnel, then look to improve it and supplement it with other parallel niche or sub-niche funnels as well to broaden your reach. The time is now.

    Stay tuned for a follow up post with more about what you should be doing now to redefine your SEO campaigns.

    What are your thoughts? Let me know with comments below.

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      About Troy

      Troy Broussard is an avvid writer, co-founder and regular contributor to sites such as TopMarketingStrategies.com and TroyBroussard.com. Troy also enjoys creating information products and is a regular speaker at many Internet marketing events. Follow Troy at Google+
      Posted in SEO | Tagged | Comments are closed

      23 Responses to Google’s Penguin Algorithm is a Huge Success

      1. Steve K. August 3, 2012 at 1:16 am #

        Ugh! I think we all knew at heart that Google just didn’t have our best interests in mind. This really nails it home, though. Paid traffic sounds like the right way to go. Even if you have a good site you are probably missing out, right?

        I guess I do not know the answer, but I am thinking even if a site has done well it can do BETTER with paid traffic? Please let me know because I am done relying on Google exclusively (thanks to your advice on this site in previous articles) and ready to diversify. I don’t want to say my niche, but right now I am doing pretty well in terms of sales, but ready to take it up a notch – any suggestions, gentlemen?

        • Troy August 3, 2012 at 7:20 am #

          Hi Steve,

          Thanks for the comments. Well, I was a bit on a terror in that post, paid traffic is not the only answer, there are many answers, but the real question you have to ask yourself is “what else can I be doing BESIDES Google to bring traffic to the site?”. That being said, however, we do love paid traffic because of the control you have over it. Like anything, though, it takes some time to nail down. The key with paid traffic is to have a very high converting optin/giveaway page to put people on your list and then to have an immediate upwell offer that is low cost and high converting. We’ve seen offers as low as $1 or as high as $97 – it just depends on the niche. But generally an under $10 offer converts best. The goal here is to (a) build your list and (b) use the low cost offer to pay for the costs of acquisition of the traffic. Then over time you monetize the traffic further via your list marketing. That’s it in a nutshell…

          Thanks again for stopping by!

      2. Scottie Reinhauser August 3, 2012 at 1:21 am #

        Hey Troy I dont know if you know this or not, but where you are talking about paid membership sites to avoid advertising – guess what? Hulu Plus – that is their paid subscriber membership – STILL has ads that run during the shows! Its super annoying and this is coming from a guy who understands marketing and the need to get the word out. The thing is if I charge people to watch something I dont then make them watch ads on top of it. Insult to injury.

        I guess cable tv already does that tho huh? LOL

        What a crock!

        • Troy August 3, 2012 at 7:22 am #

          Yeah, exactly. We had free TV, then huge advertisements on TV and then Tivo came along. YouTube is now following suit for sure and others will continue to follow. At some point we’ll reach the “tipping point” and I believe paid access for advertisement free enjoyment will become more and more popular. I could be way off base here, but that’s just my gut feel.

      3. Authority buzz August 3, 2012 at 9:41 am #

        What an annoying ride it’s been these last 6 months. Ugh. I mean, I understand Google wanting to increase profits, but do they have to be so greedy and aggressive? One silver lining though…all this drama has forced me to focus on quality link building, good content and social media…so even if Google doesn’t appreciate my hard work, maybe Bing/Yahoo will.

        • Mike August 3, 2012 at 5:55 pm #

          One one hand, as a marketer I get very pissed at Google for the things they do that effects so many. On the other hand, as a business man I have to respect their motives. I mean as a business man, isn’t your goal ultimately to make as much revenue as you can for your business and ultimately your share holders. I guess the part that pisses everyone off, is the fact they are sneaky about it. They claim they make all these changes for the better of their users. But in reality it is all done for bottom line. Maybe they would be better off coming out and just saying its our engine, and we are making whatever changes we see effect to help our shareholders.

        • Troy August 3, 2012 at 6:07 pm #

          It’s not the greed and aggression that ticks me off, it’s the obvious deception and outright campaigns of deceit. Going after profits and being aggressive is fine with me. But they put Cutts out there touting how all they want to do is improve the search results and all of that jazz – it’s just deceitful. Then these messages that encourage you to “rat out” every link you’ve ever obtained when they allowed this to occur for years is also BS.

          Good job adjusting your strategy and we hope it pays off for you!

      4. Andrew Murray August 3, 2012 at 10:32 am #

        Awesome insights.

        1 interesting point not covered by your blog post.

        In the last couple years google has banned Adwords accounts promoting affiliate links and home business ads. While that may account for a relatively small portion of adwords revenue, the “make money” market is one that always has money to spend and deep funnels.

        Not to mention competition – so it would be easy money.

        So on the one hand, Google dropped revenue for user experience (by banning make money stuff)

        And on the other hand, now they are trying to drop user experience to generate more revenue.

        Wat are your thoughts on this market, Troy?

        • Mike August 3, 2012 at 6:00 pm #

          Andrew, I am not so sure they dropped revenue by ousting all the affiliate marketers. If anything they were cleaning house to make room for their larger corporate clients to take all the spots they wanted. Basically they kicked out everyone they perceived as troublesome and transient. Because IM’ers inherently are very good at maximizing their ad spend and squeezing out as many clicks for the money they spend. Whereas the large corporate clients have a much larger budget and wont tweak the campaigns as much to lower the CPC. At least that was my thoughts on that.

          • Troy August 3, 2012 at 6:11 pm #

            Yeah I tend to agree with Mike on this. That being said, there are other issues I have with AdWords. If you’re not a professional there is NO WAY that you can succeed with AdWords. If you don’t have all of the “inside tricks” you’ll never be successful with it and they have NO DESIRE to help you. As a new Adwords user I suggest you try. Others have only to find all of their ads disapproved without and absolutely no help offered and even had their accounts suspended or frozen when the issue was just simply that the person “didn’t know”. They have the system so completely complex now that only true pros can make a go at it and that’s just the way they want it.

            What I can’t stand is the double-faced approach. I would have much more respect for them if they simply said that AdWords was limited to those spending $10k or more a day. Fine. At least that’s honest.

          • Joe September 3, 2012 at 11:28 am #

            I do work for large spenders on AdWords and i can tell you they want to lower their CPC but they are just too stupid and too lazy to do it since they have so much money to waste. There are many times that we have to spend so much money in so little time just to for the sake of spending and Google loves that about us.

      5. seand11 August 3, 2012 at 11:45 am #

        I think paid ad free TV was an option before Tivo, but now you can record and skip the ads so it is becoming less likely, I would imagine ad revenues are going to drop off a cliff for TV soon.

        Sponsorship of shows may make a comeback in a big way, along with more subtle ads like product placement (Sorry for the slow typing just enjoying a nice cold Coke) the advertiser needs to know you are seeing the message or they will not pay.

        Another interesting move may be total on demand TV, you can watch what you want when you want, this would be a pay per view or subscription (no ads) model.

        It is an extremely exciting time to be involved in marketing.

        • Mike August 3, 2012 at 6:04 pm #

          On demand TV exists today to some extent. I am a big Amazon user, I store my all my music on Amazon via their Amazon Cloud Player. I also use Amazon Instant Video for all my movies, and just watch movies from them. The same can be said with iTunes, Netflix etc. But when you look at all those, they offer seasons of TV shows, and you can watch them when you want. And I know you can watch tons of stuff online that I haven’t even gotten into yet. But I believe on demand TV is already here at some capacity, and will probably continue to grow. Instead of new show coming out at a specific time. It will simply be added to a list of shows available to watch, would be very col to have that.

        • Troy August 3, 2012 at 6:18 pm #

          Yeah, good point on sponsored shows – that does have a chance of coming back. Dunno. I would love to see on demand TV and in essence we are starting to move towards that model now. I mean many just skip live TV altogether and instead watch their favorite series via Netflix when it’s released. In fact, I prefer that. I hate watching a series episode and have some lame cliff hanger for the next week only to be out of town traveling or something.

          And yes, it is an exciting time in marketing.

          What I would truly LOVE TO SEE is something that I’ve been talking about since 2002 when I was Director of Technology for Britannica – micro transactions. Essentially it’s the ability to have super small payment options – like fractions of a cent. So in essence someone could “use” your blog on a pay per view model but it would be so cheap that they wouldn’t even really care. Let’s say it was 1/10 of a cent per page view or something like that. It’s never caught on because of the cost per transactional infrastructure that we have wherein credit card companies charge a minimum of 30 cents per transaction or whatever. But if they ever solve this issue and revise a billing medium for it, it could be very interesting indeed. Sort of like how your cell phone works now wherein you pay for minutes consumed.

      6. Bill Roberts August 3, 2012 at 4:41 pm #

        Hi Mike,your right as always.I have quit using Google for search,I tried Bing and get good results.My sites aren’t doing anything right now.I am going to keep on with affiliate marketing though.I think if a site has great content,google cant do much to them.

        • Mike August 3, 2012 at 6:07 pm #

          Hey Bill, actually this post was written by Troy, but I am usually right though, you are correct – lol. Just kidding.

          But great content alone is not enough. You can have the greatest content in the world, but if nobody sees it, it means nothing. Marketing is the key. Many a mediocre product has beat out a great product because it was marketed better. Just ask Bill Gates!

          But yes, I agree about transitioning to BING. Lets all start making it an exercise to say Bing it instead of Google it every single day.

          Repeat After Me…… BING IT!

          • Troy August 3, 2012 at 6:21 pm #

            LMAO – “I am usually right”… See Bill, this is why our partnership works so well – we have half the world in between us for comments just like this! LOL

            Great content is part of it for sure, but you really have to find a way to “go where your customers are”. If they’re a social bunch, bring them in via social channels. If they’re an “offline crowd” do some seminars, speaking or conferences, etc…

            One thing you’ll find is that “momentum” is a powerful force. Once you start making some forward progress with it, push hard in every direction you can to get over that “tipping point”. Once you do you won’t have to worry so much about traffic as your customer base will help spread the word, but it takes some sincere effort to hit that tipping point for sure.

          • Troy August 3, 2012 at 6:22 pm #

            LMAO – don’t even get me started on Bill Gates! He already bought off the Justice Department and now apparently he bought off the Grim Reaper too because he took Steve Jobs from us and left us Gates!

            LOL

      7. Mike August 3, 2012 at 6:24 pm #

        Pinky and the Brain remind me of Matt Cutts and Eric Schmidt – Just saying……….

        Brain is Always trying To Take Over The World!

      8. Seung August 3, 2012 at 7:52 pm #

        When will Google be seen as a utility company? I think it is. How are they truly different from a power or water provider? In today’s world access to most of the services they provide is critical to businesses and also to many private citizens (search, Gmail, etc) so are they not obligated to act differently than a company whose role is not so integral to society’s function?

        I don’t view Google as acting much better than other “rogue” companies who use their power to negatively impact many many lives to their own profitable advantage. I am not saying anything of politics here – I am saying that when anyone or anything can deal such great damage and benefits from doing so – it seems there should be some sort of obligation to those relying on said service. Like cell phone providers have to provide 911 and so forth. Am I making sense?

        Thank you.

      9. Mike August 3, 2012 at 7:58 pm #

        I dont see them that way. We all need to run our business as if Google doesn’t exist, they are just one of the mediums. Such as Bing, FB, etc etc. I mean if my cell phone isn’t working, I can call a competitor and get a new one, but not instantly. If I Google isn’t working, i can instantly use Bing. I am not tied to them, nor am I paying them any money for use of their website. To me, if Google.com ceased to exist as of this minute – what would it mean to me? Nobody in the world would be able to search for my sites in Google, so everybody in the world would use something else – and hey – our sites still rank great on other engines – lol.

      10. Seung August 3, 2012 at 8:27 pm #

        You make a fair and candid point Mike. I am probably going off of what Mark Zuckerberg has said regarding Facebook – I saw a video wherein someone posited that if Facebook became the “be all end all” social media platform then it would essentially become a utility and thus more regulation. Though more regulation is rarely the answer in a free market!

        Good point on Bing too. Hard to remember they exist sometimes :)

        Thank you.

      11. Troy August 3, 2012 at 8:46 pm #

        Yeah this is a tough one. In some ways I agree with you Seung in terms of their responsibility for fair play given their monopoly in the market. But, as Mike points out, they’re not charging anything for their service (well, not directly) so that kind of puts it into a different category. But I do get your point Seung and in many ways I agree with you, not necessarily from a legislation standpoint but certainly from an ethical one.