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Buying Online Businesses Based on Evaluation

l3vi — 2009-11-19T10:57:02+01:00

Posted by l3vi

Business evaluation can be tricky process. There are hundreds of factors that you have to take into account before you unload your cash on some pour soul who only wants to make as much money as they can from the sale of their venture.

One of my banking buddies once said: "If you really knew the business, you probably would not be buying it". He could not be any closer to the truth. The fact is, if you knew everything the current owner knows, you probably would never spend a penny on buying the business, because you would know the underlying truth about all the problems you’re going to inherit as you try to breath new life into the venture.

While you might not know everything about the business, you can learn a lot by using a few of the tips I’m going to share with you. Most buyers on sites like Flippa like to ask for traffic stats, some type of screen caps on earnings, and then ask any off-the-wall question that makes them feel better. Then they dump their money into an escrow and call it a day, only to figure out months later that their investment is not panning out.

This illustrates my 1st rule: Ventures that are publicly listed for sale are not in good shape, are failing, or are out-right scams. But this does not mean they are all bad investments. This only means you should think a little more about your evaluation before you post up that bid.

Most of these ventures are failing because they have no real growth, the owner’s personal expenses are eating up the earnings, because of bad marketing, bad design, they have a bad idea, or the industry has shifted in some way that has left that company – or all companies in that industry – in a bad position. There are millions of things that could create a bad investment, however most of the time it is one of the above. Luckily, with the Internet, you can research most of these factors within a day or two, as well as give the seller some hard questions that will test the skills of people who are trying to hide the truth about their business.

Here is my 2nd rule: I never buy ventures that are failing because the venture is heading towards zero in earnings. If they are doing bad why buy them on the way down? Just wait until they have crashed and burned, then go and buy what is left from the owner at that time. There is no point in paying to lose money, when you can get the venture at rock bottom after they go belly-up. Besides, the company has only one direction to go in after that.

My 3rd rule: Grill them hard. Who cares if they say it could, or should, become something bigger. Could, should, and would is worth nothing. It is an excuse made for suckers who accept it as their answer to buy. Only care about what is happing now, not what could happen in the future.

When looking at any venture you want to get all the data you can. If the company was started 12 months ago then get all 12 months of financials, broken down by income source and expenses month-by-month. Never accept lumped expenses, estimations, or yearly sums in a case like this. If the company is 5 years old, ask them for their tax filing and yearly financials summed up by year. Then ask for the current year on a month-by-month basis. If applicable, get the balance sheet for those years as well. In this format, unless they are planning to out-right defraud you, it is hard to hide the truth.

My 4th rule: Most sellers are delusional on their evaluations and will try to force the hand of the buyer to pay too much for the venture. Never fall for it! Flipp’s stats show that 35% of their listings are successful at selling, while acquisition statistics within the United States show that only 2% of businesses are successful at being sold. Why listings never get sold is because the sellers have their heads in the clouds when it comes to evaluation, and refuse to see that their company is really bad off, or is nowhere worth what they think it is.

In the brick and mortar world of business most businesses evaluate at 0.5-10 times their yearly earnings, depending on their stance. If the business is shrinking, don’t expect much more than 1 times. To reach 10 times yearly, they normally have to have a yearly growth rate of 20% plus per year, proven over a couple years span. As most of us know, in the world of Flippa, websites are priced at 1-30 times their monthly earning, with most deals being closed at around 8-12 times their monthly earnings.

Just the other day I talked to a guy that had a website with revenues of around $2,500 a month, and a net earnings of about $980. Can you guess what the company evaluated at? After I asked some very basic questions, and requested access to his Google Account and financials, I made a pre-offer of around 10 times his earnings, he snapped back at me that is was worth no less than 26 times his earnings.

His company was less than one year old, it has already seen its explosive marketing, and was on a level point. Where it would go from there was anyone’s guess. I liked the site and was willing to pay 10 times the earnings simply because the owner’s design looked like something from the early 1990’s. He was over-paying hosting by 3 fold, and was missing 2-3 other revenue options that could make the site a million-dollar venture, if it all worked out. So, instead of offering 6-8 times his earnings, I felt I could hit a home run at 10 times and everyone would be happy.

Because he was so stuck on getting 26 times his earnings the site never sold to me, but someone else took the bate and offered 20 times earnings. Now they have to hope the site will double, if not triple, within the next year to adsorb all of that risk and capital they just invested. Unless it’s a home run, they will most likely lose the money they invested and then some.

Another business friend put it this way: "Businesses are VERY high risk, so when you invest in such small businesses you want to get 89% of your investment back within the first year". What he is saying is this: as the business continues down a time line it is going to get even more risky for you to get your money back. So, when you pay 2 or 3 times the yearly earnings, or more, you’re upping your risk, as you must make the company profitable over a longer life cycle to get your investment returned. If you can fit the risk into the rate of return and growth, you can at least return some of your capital and move onto another investment, having learned your lesson, instead of writing down years of capital with just one investment.

This brings us to my 5th and final rule. This rule you never bend or break. Never. Get a business attorney to write the contract for you. I don’t care if the deal is $5k, $100k, or 9 million. Most sellers and buyers never get an attorney to write up the agreement. They go on word of mouth, or some shoddy agreement that one of them wrote or copied off of some website. Everyone that I have ever acquired or sold a domain or website to got an acquisition contract from me. If they refuse to write up an agreement they are shady and you are better off getting the hell out of that deal. Contracts clear up any questions anyone may have, and take care of people who are trying to trick you into buying a bad business.

When it comes to legal stuff, you want to insure that the company has no pending lawsuits and that, if it does, you’re not on the hook for those lawsuits after you buy the venture. You also don’t want to buy something and then learn that the domain or content is trademarked or has copyright owned by someone else and have to pull it down, losing your value or, even worse, getting sued. Additionally, you want to lock the seller from being in that type of business venture for 3-5 years, and make sure that they will not solicit your customers for anything else. You also want to insure that they are going to provide transitional support. This way they don’t get the money and leave you high and dry trying to figure how to run the business.

Lastly, the contract should include something that will bind them to what they said about the business. This helps shake off the people who falsified their financials or traffic, or plan to remove links or other items from the business that would make the company collapse. Always start off with an NDA (Non Disclosure Agreement), move to a LOI (Letter Of Intent), then move to the contract. If you follow these steps, and apply them to your best, you will find that your deals go better. You get what you paid for, and by following these steps you will know more ahead of time – before you get in too deep and lose a lot of money quickly.

Each week I look at over 30 ventures to buy, and each week I turn them all down. Every 2.33 years I find one business that has the amount of growth I want, and I buy it like a mad man.

I have heard people tell me they can not tell me who the hosting company is, so I looked it up with ARIN and learned that the hosting company was not able to give us the server the site was on, or sell us a new server to put it on at the price the owner was paying, thus making the business dead on arrival once the cash was moved into the sellers hands.

Another seller, after I had forced his hand to give me the numbers the way I wanted, looked over everything, and made him tell me all but one of the income sources, told me he would not tell me the name of a client. I walked away, as I thought it was not a good deal. He had preached for weeks about how it was a sure-hit business and would make 19 times more per month within next 12 months. After I walked away, he blasted me with an email saying I was just going to build the business myself, since I had all the information about his business. Then he added that, since I did not have that one client’s name, if I attempted to create the same business it would never make a profit. With that one statement he acknowledged what I had concluded: without that one client, whom he may not be able to find anywhere else, he would be in the red. And if that client split, found the same services cheaper someplace else, or anything else happened, the business would be dead.

Remember: unless they are trying to defraud you all the way, they cannot hide the truth when you ask for hard numbers and solid contracts.

This article is only intended for entertainment value and should not be used for legal or investment advice. Please seek help from a qualified business professional before taking any actions related to topics presented in this article.

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Get Annual Local Demand from Google AdWords Keyword Tool

identity — 2009-11-17T21:56:15+01:00

Posted by identity

I realized it has been some time since posting on SEOmoz. I just released a new tool, the Google Keyword Tool Annualizer, over on the Netconcepts website and announced it on the Natural Search Blog. But I also wanted to explore and demonstrate it in even more detail, which I feel lends itself very well to the SEOmoz community.

Whether you are a site owner, a SEO dabbler, have your own practice, or work for an SEO firm, chances are pretty good that you've turned to Google's AdWords Keyword Tool to aid in your keyword research. It's quick and easy, and even though the data is limited to just Google, that's probably a major portion of the audience you are targeting...oh, and it's free.

What really puts this tool at or near the top on most people's list is the insight into search demand that includes the most recent month (for "local" demand), a monthly average (for "global" demand), and if you elect to show some additional columns, it reveals the highest demand month and even monthly comparison demonstrated with a bar chart. Of course, it also leaves some holes unfilled and dots unconnected. Many use the most recent month of local demand as their ordering factor on phrases, while others simply use the global number and assume that approximates to their needs, which in many cases may be good enough.

But what if we could further refine the local demand numbers to get an annual view of the demand, beyond trying to compare the monthly bar charts? That's exactly what the Google Keyword Tool Annualizer does. Based on the most recent local month, it extrapolates the annual demand for the past 12 months. Note that this is calculated based on the monthly relations (so you need to include the monthly Search Volume Trends data in your export, which is hidden by default) to the most recent month's demand. In other words, the annual number isn't just multiplying the last month's data by 12.

You can read more about it and see an example via the link above. The best way to understand though is to just download it (it's free) and play with it.

What I want to do here though is provide a bit more detail on an example and also show a comparison against a couple of the most popular keyword research tools, namely Keyword Discovery and Wordtracker. People often have their preferences between these two. I've used both and like both. Like all keyword research tools, they have their pros, cons and quirks, as does Google's. The most important thing we advise clients about when using any of these tools is to look at the demand relation between terms, rather than the actual numbers. It's less about what X and Y is, and more about X being 3 times Y. While you can try to use these numbers to approximate actual traffic potential, that's much more advanced and beyond this post.

For this test, I stuck just to Keyword Discovery and Wordtracker's publicly accessible free versions. In some cases, that required multiple searches (plural versus singular, possessives with and without an apostrophe) to match up against the AdWords export which was made from just two searches; "womens shoes" and "womens boots." Their free tools pull from their regular databases, but only return 100 results. So to be fair to them, some of these challenges and the number of results matching up to the Google results would probably be different via the full versions. As for the searches, I simply chose to focus on womens shoes and boots because we work with a lot of online footwear retailers and I knew there would be some interesting seasonality issues that would come into play with this demo. The number of keywords in this demo is only 214 which is a very small list, especially for these types of sites. So some of the examples you'll see would be even more heightened by a much bigger data set.

I've modified the actual spreadsheet tool for this demo to include the Keyword Discovery and Wordtracker data as well as added comparative order columns for demand: Annualized Local (our base), regular Google Local, Google Global, Keyword Discovery and Wordtracker demand. This shows you how the order, from greatest search demand to least, would compare across the board for these 214 terms. Note that not all of the terms showed up in the Keyword Discovery and Wordtracker data based on querying the free tools.

On this smaller sample set, the Annualized Local order lines up pretty closely with the Global, though there is a good bit of shifting as we get further away from the head terms. But comparing against the other tools or even the Annualized order against the regular Local order, we start to see a lot more differences.

The graphic below is just a sampling of the first 50 terms, based on the Annualized ordering:

An example that might first catch your eye is for [women's suede boots], which is ranked 14 based on the Annualized order, but falls all the way down to 85 on the regular Local order. What you would see by reviewing the monthly break out columns (not displayed above but available in the demo spreadsheet) is that this term, based on November and December data from last year, will ramp up tremendously over the next 2 months. So much so that its overall importance positions it up within the top 15 for annual searches. In other words, nearly all of the demand for this term comes over this two month period, which you may have missed based just on the Local demand numbers. Fortunately, the Global ordering might have still brought it to your attention at number 5.

It didn't even show up on our Wordtracker list (none of the apostrophe versions did). But even the Keyword Discovery data might have placed this term below our radar at the 56th position.

Another example, seen in the image below, comes at this from the other direction. Based on Google's Global order, [womens shoes size 5], is ranked 14, though comes in at 69 on the regular Local order, and falls way down to 105 based on our Annualized order. Keyword Discovery has it sitting at 59 and it didn't make Wordtracker's list. Some might look at this term and decide not to try to specifically target it due to its longer tail focus or the challenge of trying to specifically target it. But I'm sure there are some who would look at the higher position on the Global ordering and would focus on this term, and possibly forego other terms that might make more sense.

So there are a couple examples. The only real way to take a look at all this is through actually digging through the demo spreadsheet and playing with the Google Keyword Tool Annualizer with some of your own data. I'll be the last person to say that Google's data is perfect or even the best. Keyword research still requires your own eye and judgment be applied. My hope though is that the Google Keyword Tool Annualizer helps bring an additional layer of detail and hopefully accuracy to the analysis you apply to your keyword research.

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What Deep Purple Can Teach You About SEO

Tim Hatton — 2009-11-17T10:35:20+01:00

Posted by Tim Hatton

70s hard rock. SEO. Whilst the connection you might be able to think of is that your web developer is wearing an "original" Rainbow tour t-shirt (despite having been about 4 when the band last performed live), there is much* that grizzled middle-aged men playing Smoke on the Water can tell us about SEO...

1. They're an authority group

Deep Purple have links through most of the great hard rock acts of the 70s - sharing members with Rainbow, Dio, Ozzy Osbourne, Whitesnake. This is not a group on the peripherary of things - they are one of the authority groups.

Being an authority group means that a link from them has extra cachet (a high 'Rock Rank' or something like that...) Supporting Deep Purple were a band called The Crave. Nope - me neither, but a link from Deep Purple to them now says that they're probably a band we in the audience should like - more so than any number of links from "Rock Band Directory UK" can.

See: Domain Trust and Authority

2. Great content

With a set list including Highway Star, Strange Kind of Woman, Wring that Neck, Hush and - naturally - Smoke on the Water this is definitely premium content. Fresh content? Some of the classic tracks don't get performed live very often, and whilst the last thing you want your favourite 70s rock group to say is "here's some of our new stuff", they do put a new spin on some tracks - and there's always the keyboard and guitar solos. With back catalogue of 18 studio albums, Deep Purple have an enviable store of great content to dip into.

See: Generating Unique Content

3. Technical build

Deep Purple have had 14 members over the years, and this is line up #8 (according to the ever informative www.deep-purple.net). The core of this line up is pretty much your classic Deep Purple ca. 1969 - 73 (Paice, Glover, Gillan) plus Don Airey who was in Rainbow and replaced Jon Lord on keyboards and Steve Morse on guitar who replaced Ritchie Blackmore in 1994. So the 'technical build' of this group is excellent.

See: The Web Developers SEO Cheat Sheet

4. Give your audience what they want

Looking around, I suspect that if a bomb had gone off in the Hammersmith Apollo you'd wipe out good percentage of senior accountants, IT directors and civil engineers in the South East. This isn't an audience looking for the latest new sound of swingin' London. We don't mind a bit of new stuff, but what we've been searching for and want are the classics. So they serve them up to us. Although Don Airey didn't do the Terrahawks theme tune...

See: 10 Steps to Advanced Keyword Research

And if you don't agree with any of this, then the final thing that Deep Purple have taught me about SEO is that if you write a blog post with the title "What Deep Purple can teach you about SEO" then people will read it.

On a more serious note, applying SEO techniques and principles to real world examples does allow you a different perspective on the tools, tricks and tips we use and immerse ourselves in every day (Learn Link Building from a Will Ferrell Movie?). It allows you to think of good analogies when trying to explain often abstract and difficult concepts (Explaining Google's Algorithm...) to clients who don't really understand what it is you're going to be doing for their money. Or trying to explain to your mum what you do for a living.

\m/

*I may be stretching the definition of the word 'much'

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Offline Marketing: 11 Ways to Boost Your Site's Exposure Without Busting Your Piggy Bank

Nick.Santillo — 2009-11-15T13:44:46+01:00

Posted by Nick.Santillo

So, I have been reading SEOmoz for quite sometime now and I thought I would break up all of the online topics with a little swig of offline marketing. For those of you who own your own web business or maybe you're in charge of the overall advertising strategy for someone else's, here are a few realistic, proven ways you can drive new customers to your website and/or business.

1. Sign Spinners

Within the last 3 years, sign spinning seems to have taken off across the United States. The trend started in southern California, quickly moved to Florida and sprouted into a national guerilla marketing tactic from those locations. Major corporations have been known to participate.

Why has sign spinning become popular?

The messages can be dynamic and more interactive than a static advertisement. The human component is also a huge factor that gets people to pay more attention to the message being spun. In fact, the main company who started the trend puts their spinners through intense bootcamp to learn 100's of moves that are more likely to get noticed than without. More people are likely to engage their minds with a message that is moving and breathing as opposed to a sign that has been their for 3 months, is weather worn and being tuned out by a much higher percentage of passersby.

Cost: Depending on whether you outsource to a firm or not. If so, it can cost up to $70 per hour for the most skilled sign spinner.

2. Posting Road Signs

What? Road Signs? C'mon, I mean, like garage sale signs or political campaign road signs with stakes and everything? Yup, those are them. If you're looking to put your companies name out there and get some fresh local leads, this tactic has been known to work.

The aforementioned photo is evidence that an online matchmaking service has done this up and down the eastern seaboard. (nearly identical signs have been found here locally in Boynton Beach, FL - some 1140 miles from Haddon Heights, New Jersey)

Cost: $$

3. Guest Expert on Local Radio Show

Take a look at the show listings for all local radio stations and narrow the list down to possible fits for your business. Contact the radio stations and pitch yourself/company as a local expert in that field, possibly with a hook as well. If you have an event coming up, use that in your hook to get them to bite. The show will be able to call upon you in a segment surrounding your industry and you can plug your business/website during that segment.

Cost: Free

4. Guest Speaker at Conferences

There are a ton of conferences happening in nearly every industry from real estate to construction and you can become a panelist at these events. Most conferences are put on by associations or organizations whose sole responsibility is to successfully hold these events. The conference is really a convergence between experts and everyone else, including people looking to hire. The conference organizers select speakers to be on the panel by taking pitches from business owners and other successful people in the industry. Develop your pitch by researching past events and the specific topics that we're talked about and pitch new ideas that compliment the past with facts and evidence to back it up. If you can find references from people already speaking at or having attended those events, you're golden. If you're selected to speak, you'll be given the opportunity to share your expertise and trust with hundreds and expose your business to them as well.

Cost: Free

5. Distributing Flyers

Distributing flyers in mall, movies, gym and shopping center parking lots has been known to work for some niche businesses but its got to be a good fit from the get-go. Note: you've generally got to be more aggressive with this tactic and be able to take being hollered at by rent-a-cops patrolling the area. If you don't want to distribute the flyers first hand, try calling local restaurants that deliver food and asking them if they had any contacts of people who they think would would be willing to distribute flyers. Once you've got a few people rounded up and willing to work, monitor their progress to make sure your ads are landing correctly and getting ample viewership.

Cost: $/$$

6. Local Television Advertisements

Advertising locally may not be as expensive as you might think but you should be selective. Typically, products sell better than services on television. You've got to do a good job with production so you don't degrade the quality of your brand and good production, if outsourced, can come with a hefty price tag. Nonetheless, this tactic is an obvious way to get qualified offline traffic to your website with the potential to convert as customers. Call all cable/satellite companies that serve your market and test your local market if your budget permits. If you're profitable locally, expand to similar markets nationwide.

Cost: $$$

7. Local Chamber of Commerce

Your local chamber of commerce is a great way to become connected locally and network with other business owners who may have a need for what your business does. Often times, they will hold monthly or even weekly breakfasts/networking sessions and they are usually nominal in cost to attend. Similarly with speaking at conferences, they will pull in local distinguished professionals to speak at the events and share information about what they do. Again, a great place to plug your business/website if appropriate.

8. Business Magazines

For those of you who are located in larger markets, advertising in business magazines is generally more cost effective than you think. Don't buy a full, half or even quarter-sized ad, stick with a good old 10-30 word ad that will give you enough space for your web address and a call to action. Just enough information to spark interest- enough interest to convert them to a visitor and possibly a customer.

Cost: $/$$

9. Mobile Advertising: Cars, Clothing, Traveling Billboards

If you have a commute to your office, why not advertise on your vehicle? There are obviously a few different ways to accomplish this and some more costly than the next.

Car Magnets: Placing a car magnet on your vehicle on your way to and from work may be just what you need to drum up some local business. Magnets are inexpensive and they are easily removed.

Car Wraps: Likewise with Sign Spinning, car wrapping has become very popular recently and the results can be great but the cost is generally more expensive and although the wrap is temporary, you can't remove it until you're ready to dispose of it- this means no matter where you go, even to church, you'll be advertising your business.

Clothing: Getting clothes printed with your logo and domain name on them is a great and inexpensive way to advertise. Wear your business name proudly and others will take note and eventually become customers.

Mobile Billboards: If there is an event happening in an area where you know your target demographic will be, why not bring the billboard to them?

Mobile Billboards are much more cost effective than a static billboard and will give you the targeting that you're used to.

Video: http://www.youtube.com/watch?v=_GlnqzdCmAU

Cost: $ - $$$$

10. Workshops

A great way to meet very warm prospects is to hold local workshops that rely on you educating a group of people looking to learn more about what your business has to offer. This does two things for you off the bat, it establishes you and your business as the authority on the subject at hand and brings an interested party on your radar and into your rolodex. Continue to expose yourself and business to people at your workshops and the goodwill will come back around as referrals and new customers.

Advertise your workshops by taking out a local classified, starting a meetup at meetup.com, or posting an ad on craigslist.org

Cost: Free/$

11. Media Kit/Press Releases

As always, you should have a press kit available. Reporters are always looking for stories with a great hook so be sure to write a convincing press release about your business or a special event that your business will be putting on.

Must haves in your businesses press kit:

-Backgrounder with historical company/founder information, Facts about the company, Executive Biographies, Past noteworthy press, Photos of Key Executives, Media contact info, Collateral advertising material such as postcards, flyer, newspaper ad, demo or product sample.

Cost: Free/$$

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Beware of Google AdWords - Keyword Tracking Proven to be Misleading

William E — 2009-11-10T09:34:12+01:00

Posted by William E

I've always been a fan of Google Adwords. I was excited when they updated the AdWords interface this year with a plethora of new features and vastly improved the user experience. You can imagine my surprise and dismay when I found out that the tracking right in the Google AdWords account interface is completely misleading.

Here is the problem: The Google interface says we received 1,000 clicks on the keyword phrase "red widgets". But upon closer analysis, we found that Google conveniently aggregates many, many keywords under that single keyword phrase when it reports out on clicks, impressions and cost. To see if this is happening to your paid search campaign, try this:

Login into your account and view a ad group that contains several keywords.
Click on the checkbox that appears before one of the more popular terms
Then select "see search terms..." and choose "selected" from the drop down.

The impact of this is tremendous to anyone trying to optimize campaigns. We thought "red widgets" was the term that was being clicked by the user -- but in reality there were dozens or more terms that actually accounted for most of those clicks. According to Google's note within the interface, "Your ads appeared when people searched on the terms below. These search terms were matched to your ads based on the keywords in your ad groups." Their note goes on to state that "use this reporting feature to see every user search query that triggered your ad. Whether your ad is triggered depends on the search term a web user submits when searching on a site within the Google Network and your keyword match settings. You can add search terms from the list to your ad group keyword list, or add the terms as negative keywords to ensure your ad stops triggering for the keyword."

What is most alarming about this whole thing is that I was concurrently running other campaigns and ad groups that contained some of the same exact terms that Google decided to match to "red widgets". I can get over the fact that the Google reporting is screwy (well, not really), but to top it all off, I checked some of my other campaigns that contained these Google-matched terms. I found the max CPCs I had entered for those same terms in my other campaigns was well below the max CPC of "red widgets". The net was that I was paying twice as much for these keywords (since it was attributing the clicks to the term "red widgets").

I can understand if this was happening because the other campaigns had reached their daily max budget - but they hadn't. So what’s next? I assumed that I could turn off this feature via the "Settings" tab in the campaign interface. There is an advanced feature called "automatic matching" that I apparently had opted into. But even after making this change, I was still seeing more than a dozen terms when I expanded that one keyword phrase. I then figured that I could control this by changing the match type from "broad" to "exact". But even that didn't work. Finally I resorted to adding negative keywords to the ad group too. While that seemed to help, I'm still seeing additional terms tied to my keyword phrase.

Google should make this expended matching into an opt-in feature. The fact that Google is doing this broad-matching is unacceptable in my eyes. Here’s the kicker - even the conversion tracking data that we are seeing in our Web Analytics tool is skewed by this. Here's what I mean:

When a user searches Google.com for "yellow widgets", and they click on our ad, we expect that Google would pass into our web analytics that there was a search on "yellow widgets". Surprisingly, that's not the case if Google decided that “yellow widgets” is related to “red widgets”. So instead you'll see a click registered in Google and in your web analytics tool for "red widgets." Even more annoying is that our custom conversion tracking is giving credit to “red widgets” for driving sales that should rightly be attributed to “yellow widgets”.

My recommendation is two-fold:

(1) Be hyper aware of how you configure your campaigns and ad groups; be sure to use broad matching carefully; disable automatic matching at the campaign level

(2) Don’t believe everything you see in Google AdWords in terms of clicks, impressions and cost at the keyword level. Be sure to check at the keyword level to see if there are other terms that are being lumped under the umbrella of another term.

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Dear Generation X: Social Media From The Eyes of Your Successors

trycm — 2009-11-09T13:14:12+01:00

Posted by trycm

Dear Generation X:

I think we need to have a talk. As a member of Generation Y who has, like many of my generational cohorts, recently advanced into the world of business (especially the business side of Social Media), I’ve noticed a few things about you all. Firstly, that you’re more social network savvy than we might have given you credit for; but secondly, that you’ve forgotten that despite the fact that you’re ahead of us in age, that we totally had a hold on Social Media first.

You’ve taken these huge networks and made them quality, productive tools for advertising, corporate networking, and conducting business. That’s impressive. What we used to use for expressing our emotions through tortured song lyrics, you’ve made a legitimate business. And it’s brilliant.

However. . .

A few recent articles have brought to my attention the idea of “surprise” when it comes to the fact that people ages 18-29 use status updates more than any other age group. Really? That could surprise anyone? I know that Twitter is growing for business right now, but we started updating statuses, or AIM away messages, at around age twelve. It’s been a part of growing up for us. It defined or demolished our social lives IRL (that’s “in real life,” fyi) from middle to high school. Going into adolescence, we’ve always had the need to know where and what our friends are doing at any given time.

This eventually translated and graduated into Facebook statuses, which don’t forget, was only available to us college students for a while. And honestly, though we’re glad to welcome everyone into our Facebook networks now (including businesses, moms, and even you, grandparents), we really appreciated our own private niche online while it lasted. Oh well. Now that we’ve moved into the corporate world, we totally recognize the possibilities here.

This shouldn’t come as a surprise, though. Just think, back when you Generation Xers were between the ages of 18-29, you were the leaders in your own media. You had ICQ and Friendster, witnessed the birth of Google, and brought about SEO as it exists today. You witnessed some of the coolest technological advances so far, and while you were out busting into the corporate world making a difference, we were still stuck in desks looking for ways to procrastinate from our Biology homework via the internet. And we found them.

Continuing on - one more “surprise” surprised me: college students still use e-mail. Has it been so long since you’ve been there? Have you forgotten the joy of listservs? You could e-mail everyone in your organization, dorm, or even the entire graduating class of 200_ (I don’t feel inclined to reveal how young I actually am at the moment) directly in an instant if you wanted to. It’s unfortunate that you’ve never known the ease at which you can look like you’re doing something legitimate in class by being on e-mail but actually just reading your Facebook updates without logging into Facebook.

Just remember Gen X: before Social Networking was all about business, it was also just a lot of fun – a natural part of how we communicate in Gen Y.

We’re Social Media/Social Networking natives.

Welcome to our world.

Love,

Generation Y

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Google Analytics Alternatives - Measuring Beyond "Last Click Wins"

John Santangelo — 2009-11-04T21:07:20+01:00

Posted by John Santangelo

Web analytics and attribution management have received more attention this year as companies look to measure results with greater accuracy. However, I have yet to come across a list of vendors that offer robust analytics platforms that measure beyond the “last click wins” reporting method. Based on my research these firms offer analytics reporting beyond the last-click wins attribution method, and some offer much more beyond that.

The Background - What is “Last Click Wins?"

Google Analytics (GA) utilizes the “last click wins” method of attribution. It’s simply a measurement model giving “credit” to the last keyword and/or referrer to your site before a conversion occurs.

Here’s a quick example: Visitor A searches Google researching a product and discovers your site because of your content and organic SEO efforts, but the visitor doesn’t buy. Later that day, Visitor A researches prices and clicks an Adwords ad, doesn’t buy, but remembers the site. Next day, Visitor A remembers your site/company name, searches it, finds Product X, and buys.

So, what does GA tell you? In a nutshell: The conversion tracking you set up tells you that Visitor A came from Google, searched for your company name, and bought Product X. Your brand name got the credit for the sale. Nowhere does your Adwords ad get credit, or your organic SEO efforts for the initial search and site discovery. I know, I know, GA can tell you a lot more information than just that, but you’re still missing the first few steps in the conversion process.

Why Measure “Beyond” the Last Click?

In addition to getting the real picture behind the branded keyword conversions and getting your SEO efforts the credit, you may have other missing or misleading data! You may be spending time, money, and effort on organic and paid search efforts that don’t show any conversions in GA. Should you keep up those efforts or cut them? If you said cut them, hold on.

That general keyphrase or vanity keyword doesn’t convert, you say. Banner ads, laughable! But what if they were the first introduction of your brand and site to the customer? Is it still the right decision to pull funding from Keyword A even though it can be proven to lead to visits that convert later on?

What Are my Options?

With Google Analytics, by default, you get thelast-click wins view. You can however, override that setting but then your data still isn’t complete. You cannot get the first-click and last-click data at the same time in the same profile. It’s all or nothing.

As a sidenote, you for those advertising heavily on Google’s content network, it’s worth checking out GA’s view-through conversion tracking.

Should I Drop Google Analytics?

For a basic analytics system, Google Analytics is hard to beat. I’m not going to say that it fails for SEO, but you really shouldn’t be relying solely on it, or any javascript-based data capture analytic system anyway. Google Analytics sure has its benefits. After all, it’s free, it can be tweaked to view actual rankings, you can integrate it with your CRM, and with the additional features added recently it’s more robust than ever. But again, you may be missing some important data, especially on sites with long purchase paths such as those selling services rather than physical goods.

GA Alternatives that Measure Beyond the Last Click

The idea of multi-point attribution is gaining steam, and more and more vendors are entering the fray. A lot of them are designed to better measure PPC spend, but can be extremely useful even if you don’t do any PPC at all. Keep in mind that it’s not my intention to recommend any of these solutions, just to have them listed in one place so you can get your research and evaluations kick started. Some may be better suited to compliment existing analytics packages, while others could potentially replace entire systems beyond web analytics packages. Some are even so robust that they include their own data warehouse systems and CRMs.

The Big Guys

CoreMetrics is a big player in the web analytics game, and they offer a flexible attribution platform that can report on data beyond the last click.
Omniture’s online Marketing Suite is “powered by data that provides actionable, real-time intelligence and insight concerning customer interactions and marketing initiatives across multiple touch points.”
One of most robust attribution systems is ClearSaleing. Voted “Technology Platform Search Marketers Can’t Live Without” for its attribution-based advertising portfolio management platform at SES San Jose, they’re at the forefront of the attribution management game and have tight PPC integration, robust reporting, and even a built-in CRM and data warehouse functionality.

The Up-and-Comers

Who else has been providing a look beyond the last click for a number of years? None other than Yahoo! Web Analytics. The Assists metric can “measure the total number of times that display ads or search keywords contribute to the conversion of another ad or keyword”. Less robust than the rest on this list, still a good (Free!) product and hopefully one that Yahoo! doesn’t end up selling off.
The UK’s DC Storm offers Storm Analytics part of their StormIQ product suite. It supports advanced campaign tracking & web analytics and looks tightly integrated with their PPC optimizing and reporting system.
Visual IQ’s IQ Envoy “moves beyond simple attribution by tracking all digital exposures (not just clicks) for an individual across the digital landscape."
Atlas Advanced Analytics lets you choose last click attribution or beyond. Be warned through, their site so fluent in corporate-speak my head nearly exploded. Worth a look though.
X+1 laughs in the face of having a search friendly name, but their tagline is “make every interaction count.” So, that might mean something… but I can’t really tell from their site. If you like exploring every single option before making a decision, dig into this one a bit too.

Did I miss any? What have been your experiences?

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Case Study: How Building a Site for Users Improved our Rankings

csaliba — 2009-10-28T15:19:38+01:00

Posted by csaliba

I've been in the piano industry for five years and am just over a quarter century old. Some of you may or may not know that the piano industry is mostly very "veteran piano employees". Let's just say I am a VERY young representative in the retail piano business. About 15 months ago I was trying to think of ways that I can make a big impact in the piano business. When researching the websites of other piano companies, dealers, and piano communities a light went off in my head. This is in this is how I make my impact in the industry. I realized how stale, similar and unentertaining these piano websites were. Soooo...

I looked at my company websites and decided - I am going to make this a website that consumers will enjoy but, most importantly the will want to visit our store and select a new piano. I had no experience in webdesign, seo, link building and all the other never-ending factors that come along with building a website. The only thing I knew was Facebook and Myspace (Thank You College). So I started by researching, researching, joining SEOmoz, researching, and doing more research. Then I realized one brain can only take in so much research and the research is good but, it useless if you didn't have a site to experiment with.

Before we go further here's some background.... I am the VP of Sales & Marketing for Steinway Hall - Dallas/ Fort Worth/ Plano the exclusive Steinway & Sons piano dealer in North Texas. Our site was static and every 6 months a new page might be added, no conversion forms, looked like just another website. Most unsatisfyingly we were no where to be found in the SERPs. We averaged about 10-20 visits a day.

So, I decided to put together a game plan and go get my feet wet. These are the 5 areas I thought I should target first (1 being the most important) - In parentheses is the result.

1. Design - (Steinway & Sons allowed me to be the "guinea pig" for their Beta Dealer Template"

2. Domain - (steinwaydfw.com)

3. Tools - (Joomla)

4. Pictures - (Used the same from old site)

5. Content -( Lets just say, oops - this in now #!)

Side Note: (no pun intended) I thought the way our site looked was the most important aspect possible.

After about three months we launched our new website to the world. Was this pre-mature? Yes but, I don't regret it. Because it was from this point on I started learning more about creating a user friendly site. After the first three months we did see some improvement. We got a lot of compliments on the "design" of the site and a slight up-tick in daily traffic and started to show up in the first 5 pages in SERPs. That's it, nothing more. I thought what is going on the site looks great whats the problem? So it was back to the research... I thought. But then I realized, the site that we had just launched looked good to us but, we're not the users, or in the market to buy pianos. So we took it to the streets, well not really to the streetsm we went to our past customer base.

Every time I had the opportunity to ask a customer who had just purchased a piano, used our piano services, was local pianist, piano teacher or piano enthusiast I would point blank ask them "What is most important to you when looking to buy a piano? Here are the most common answers I received with. (1 being the most common)

1. Product Information (What is the best piano for me?, NOT what is the best piano?)

2. Socialability (Who do collaborate with, what music organizations, teacher, students?)

3. Site Organization (Where is everything)

4. Customer Testimonials or Stories (How did others feel about their experience with you company?)

5. Company History (Why should I purchase a piano from your company? What's your story?)

After compiling this information I thought to myself: Well, I guess cool design and a lot of great pictures was only important to me.

So what do I do? Hire an website company? No, no one knows my company and my products like I do. And I love challenges. What I decided to do next I think every new website owner should do: Meet the need of the users and over achieve at doing so. This is what I did and how I went about meeting the top five answers above.

1. Product Information - Detail the each product. By not just a picture but with content, history of the product, who usually purchases this piano, and videos.

2. Socialability - Communication at all avenues: Twitter, Facebook, Friendfeed, Blog and anything that you can handle easily. I got overwhelmed by having to many social profiles for our business and wasn't able to dedicate the proper amount of time to each. Quality over Quantity.(Remember earlier I mentioned that the piano industry has a lot of "seasoned experience", you should have seen their face when I said Twitter & Blog.

3. Site organization: I re-catagorized the information so someone who has zero knowledge about the piano could find what they are looking for. Make it SIMPLE!!! (More on this below)

4. Customer Testimonials - I asked had each employee ask their clients for a testimonial. This worked ok, but there is no enjoyment for the customer. Therefore, I set up a section on our blog for customers to submit "Their Steinway Stories" This has just started but, we are planning a big marketing campaign on this. You never know, the author of the "most popular" story may we a trip to tour the Steinway & Sons factory in New York. Stay tuned...

5. Company History - I need to spend more time on this but, we do have a company page about who we are and what we do. Ohh and yes, that is me on the home page, I am the one on the right. We are a family owned company. I am amazed at how clients that see me in the store say "hey that's you on your website." Some people say putting your face on your business website is tacky but, I think there are many who believe that this shows you have nothing to hide and show a sense of pride.

Conclusion: Content is only king if it entertains and gives the user what they are looking for. By dedicating myself to the meet the need of the users our site ranks anywhere form 1-5 in the SERPs for keywords, Average 100-120 unique visits a day, and average 35-50 web inquiries a month = 2 to 4 piano sales a month were the first contact was via our website.

Don't worry I'm almost done. But I want to share three most important things I've learned so far.

1. Think of the users on your website as guests. When you have a guest over to your house you want them to be comfortable. To insure they are comfortable you put everything they might need during their stay in the wide open so they don't get frusterated while SEARCHING for what they want. Could you imagine if every hotel put towels in a differnt place and you had to search for them. You would either leave (page exit) or never return. Organization = User Friendliness.

2. Make your site seem like the customer is already in the store. I found great success by doing trying to accomplish this. When you go to our site, www.steinwaydfw.com, notice that the main categories are in order, from left to right, of the customer buying or shopping experience. In parentheses is a typical in-store retail sales process.

About us - Who is this piano dealer who wants me to buy a piano from them (Greeting & Introduction)
Instruments - About the pianos we represent (Presentation of products)
Institutional Sales- Programs offered to schools, churches, and piano teachers. (Who is the piano for?)
Advantages - Advantages we offer to help the customer make the right decision for their family. (Decision making tools)
Service - Services & Maintenance guidelines we offer for their new piano (After-sales service)
News & Events - Now that they own a piano what concerts, events, headlines is Steinway making (Continuing the relationship.)

3. Successful People Never Stop!!!!!

Thank you for allowing me to share my experience and any comments and/or suggestions you leave will be greatly valued.

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Google Universal Results in Brazil

Fábio Ricotta — 2009-10-22T11:11:32+01:00

Posted by Fábio Ricotta

In May 2007 Google announced the universal results in Google Search with the philosophy of integrating all departments Images, Blogs, News, Products, Maps, Books and videos directly to the traditional results page.

About a year later, Google has enabled this feature to Google results in Brazil. Thus, we could see an usability and integration increase of Google products, providing an increasingly rich content to users' searches. Faced with this growing integration of Google products in Universal Results and thinking about the increase of local results, our company decided to create a test to analyze the current state of Universal Search in Brazil, making several queries on Google Brazil, and thus obtaining information on the amount appearances of each Google Product.

Data Set

This research used 2021 terms, where each one was submitted to Google search 4 times between the period 01 October to 13 October, amounting to a total of 8084 queries. In this 2021 terms group, we had the following scenario:

For each queries we investigate if the result had shown the following Google Products:

BlogsSearch
Images
Maps
News
Videos

Thus, we obtained the following results:

Blog Search

During the four executions we could notice a slight results variation, where the fourth execution, we obtained the least amount of results with BlogsSearch, 183. Already in the first run we got the largest, reaching 245 queries with BlogsSearch.

The overall average of four executions shows that 10.1% results have BlogsSearch and 89.9% do not.

Images

In images scenario we noted that the results show a good amount of related images. In the first execution we got the least image amount results, 963. In the last batch execution, we noticed the greatest image results amount, 1001.

The general average of four executions shows that 48.7% results have images and 51.3% do not.

Maps

Regarding the maps, the scenario is much more stable. In the first three executions we obtained 63 results containing maps and only the last execution we receive results containing 62 maps.

The general average of four executions shows that 3.1% of the results and 96.9% do not. Something curious about this map analysis was that almost all the results containing maps have a city or location tied to any term. This shows that slowly the local searches are being integrated into the universal results.

News

Like images, the news is much more frequent in Google results. According to the data, the third execution had the least results amount with news, 777. In the first batch execution, we noticed the largest results amount with news, 880.

The general average of four executions shows that 40.8% results have news and 59.2% do not.

Videos

In one better scenario than blogs or maps results, videos will appear in a reasonable queries amount. In our executions, we had in last run, the least results amount with videos, 547. In the first batch execution, we noticed the largest results number with videos, 562.

The general average of four executions shows that 27.4% results have and 72.6% do not.

Universal Results Intersection

As we know, a Google Result Page not only shows one of Universal Search Items, but mostly is shown a combination of these items. Below we show a table with the main combinations found in the results pages.

Conclusions

This research drew an X-ray of how Universal Results are displayed in Google Brazil, where we summarize the following scenarios:

10.1% of search queries showed BlogsSearch
48.7% of search queries showed Images
3.1% of search queries showed Maps
40.8% of search queries showed News
27.4% of search queries showed videos

From this research, we want create some variations modifying the terms and time period trying to figure out if it changes how Google Universal results are displayed.

Before ending this article I would like to thank all from our programming team that made this research possible. (Celso Fernandes, Rodrigo Tomonari, Rodrigo Sales, Hiroshi Eduardo and Felipe Rosa)

I hope you enjoyed this research and see you!

Ps.: I would like to know if you are interested in a US Research, so please, comment below asking for and we will do this research.

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