Weather.com and HuffPo's SEO

Still curious about how the Huffington Post was able to transform itself from a virtually non-existent publication in 2005 to a 20 million+ unique visitor juggernaut with a $315M valuation? Aside from its fierce and loyal following, much of HuffPo's success comes from a savvy and aggressive manipulation of Google's search engine algorithms. In fact, HuffPo has a 75% higher share of its traffic coming from search engines compared to competitors in the news category, and in this business search traffic means page views and advertising dollars.

A lot of HuffPo's tactics are fairly well known, such as writing content exclusively designed for search engines and based on trending topics like the Super Bowl. Do a search for "what time is the super bowl" and you're more than likely to see HuffPo's "What Time Does The Superbowl Start?" article, an unlikely candidate for the Pulitzer Prize.

Less well known are the aggressive link buying tactics employed by the Huffington Post, a practice nearly identical to the J.C. Penney link buying scandal earlier this year, but of the white shoe variety. Rather than buying links from hundreds of blogs like J.C. Penney did, which HuffPo can generate organically, HuffPo targets large authority sites for its link building. A flagrant example is Weather.com's "Partners" section found across their site, where HuffPo has a direct follow link with targeted anchor text of "Latest News." In the screenshot below you can see that WebMD and GoDaddy are also taking advantage of this opportunity--a clear violation of Google's Webmaster Guidelines because they are intended to manipulate rankings. These manipulations are working, evidenced by the first page ranking for all these sites for the keywords they are targeting.
If you have more examples of HuffPo's search engine optimization, I'm compiling a list, so please leave a comment below.

Search and Direct Navigation Strategy

Most people think search marketing is only about paid advertisements (PPC) and organic listings (SEO) in search engines like Google. While search engines generate tens of billions of referrals across the web each month, there is still a huge amount of traffic that comes from direct navigation or browser type-ins. Direct navigation is largely ignored by search marketers, but some experts estimate that it makes us roughly 30% of all web traffic. In many cases, these users are indeed searching for something--they just don't use a search engine because they assume they will find it more quickly by typing a domain name or generic word into the browser's address bar. Companies that can capture customers that use direct navigation as their searching method can acquire huge amounts of qualified traffic at low cost.

Generic head terms face stiff competition in the Google auction so the advantage of owning a generic domain like Money.com or Clothes.com becomes obvious. These domain names can be acquired in after-market auctions like Moniker or Sedo.

The Direct Navigation Strategy of Big Advertisers

Many companies employ a simple transfer that takes the searcher from the generic type-in URL to their main website. Here are some examples of companies that employ a 301 redirect as the technical solution to this strategy:

• Books.com --> Barnes & Noble
• Gift.com --> JC Penney
• Tennisshoes.com --> K-Swiss
• Money.com --> CNN Money
• Clothes.com --> Zappos

Other employ a more subtle domaining strategy and drive direct navigators to either an informational site or a generic-inspired branded site:

• Baby.com --> Johnson & Johnson's Baby Center
• Asthma.com --> GlaxoSmithKline's informational site about asthma
• Toys.com --> ToysRUs' brand portfolio (purchased for $5.1 million in 2009)
• Fly.com --> Travelzoo-owned website for booking flights

Second Tier Search Engines: More Traffic

Nielsen recently released their MegaView Search data for the U.S. Out of the 10.2 billion search queries performed in January, 9.4 billion of of these were on Google, Yahoo, or Microsoft properties. The big three (mostly Google) get a tremendous amount of attention for the market share they command. This attracts thousands of advertisers in each vertical, making those auctions highly competitive and pushes up acquisition costs for advertisers. For affiliates and resellers, high CPCs squeeze them out of engines like Google.

Fortunately for some advertisers, there were 708 million queries performed on second tier search engines in January 2009 alone. In many cases, these alternative search engines offer much more attractive CPCs, sometimes as low as 1/20th of what an advertiser might pay on Google. Generally speaking, second tier engines are companies like Lycos, Excite, Info.com, MetaCrawler, DogPile, and InfoSpace. These provide limited total search volume, but can be extremely high ROI conversions simply because of the low CPCs. The biggest provider of search traffic other than Google, Yahoo, and Bing is probably Ask.com (IAC InterActive) which serves ads across general engines like Infospace and MySearch and also verticals like Indeed and CNET.

Companies like 7Search and AdBrite also syndicate text ads across an even longer tail of search engines to take advantage of the opportunity. During the first quarter of 2010, 7Search served advertisements against over 2.3 billion unique search queries. Because of the low cost-per-click, which according to 7Search, averages at 11 cents, these can be some of the highest ROI conversions in PPC. Beware that conversion rates may vary on second tier pay per click networks, and in some cases less information about network placements will be provided. Update 3/9: I'm running a few offers on 7Search in the personal finance space and have seen CPCs for head terms come in at 1/50th what I see in Yahoo.

Top 10 Search Providers for January 2010, Ranked by Searches (U.S.)

	All Search	10,272,099	100.0%
1	Google Search	6,805,424	66.3%
2	Yahoo! Search	1,488,476	14.5%
3	MSN/Windows Live/Bing Search	1,116,546	10.9%
4	AOL Search	251,762	2.5%
5	Ask.com Search	194,161	1.9%
6	My Web Search	112,356	1.1%
7	Comcast Search	59,608	0.6%
8	Yellow Pages Search	35,101	0.3%
9	NexTag Search	34,736	0.3%
10	BizRate Search	20,123	0.2%
Source: The Nielsen Company

15th Ave. Coffee and Tea: What's a Brand Worth?

Last month Starbucks opened a new store. For a company that opens almost two stores a day, this usually doesn’t make the news. The location that Starbucks opened last July, however, wasn’t just another store, it was a coffee house called 15th Ave. Coffee and Tea. The new coffee house offers coffee tasting sessions each morning, serves beer and wine, and prides itself on its involvement in the local community. The interior décor features a swarthy mercantile theme and is constructed of almost entirely recycled materials.

What is Starbucks doing? Are they giving up their brand to pursue the indie market? Are they finally capitulating to the Starbucks-haters? What does this mean for the value we place on brands and their power to sell products? Isn’t brand supposed to be a differentiator?

Starbucks boldly states in its annual report, “The Company’s objective is to establish Starbucks as one of the most recognized and respected brands in the world." They’re on their way to accomplishing this goal as the two-tailed mermaid is one of the planet’s most recognizable icons. Why is the company giving up its brand to grow its business? Starbucks has successfully leveraged its branding power into adjacent markets like ice cream, coffee hardware, and music and film publishing. Much of the value in Starbucks emanates from the strong and recognizable brand the company has created. Logical revenue growth opportunities lie in cross selling additional products and services to their massive base of foot traffic and expanding into adjacent spaces where the brand can be made relevant. The 15th Ave. store makes you wonder what management is thinking, because rest assured, they won’t make a dent in the indie coffee market.

Starbucks 15th Ave. store is part of a larger identity crisis and turn-around story that encompasses the dilution of the Starbucks experience, slowing top line growth at what Wall Street wanted to call a “growth company,” and founder Howard Schultz’s retaking of the CEO helm. During the 2000s, Starbucks’ comparable store sales peaked at over 11% in 2004, a stunning growth rate fueled by seemingly insatiable consumer demand, higher drink prices, and successful cross-sell efforts in the food category. These tactics proved to be lucrative but came at a cost: the repulsive smell of melted cheese from grilled paninis permeating the entire store. Comparable store sales growth, a good measure of retail health, has since dropped to a meager 4% in 2007 and to a negative 5% in 2008. In short, Starbucks went from being a high-end specialty coffee shop in the late 1990s to being a direct competitor of McDonald’s.

So why 15th Ave. Coffee and Tea? How does this replenish the Starbucks experience and ultimately grow sales? The re-branded store is a desperate experiment aimed to demonstrate that the company hasn’t lost its innovative core. According to management, the 15th Ave. store is part of a “global redesign strategy” aimed at reviving the coffee heritage, focusing on local communities, and practicing sustainable business. Management explains that “by introducing fresh design ideas that celebrate local materials and incorporate reused and recycled elements, we’re bringing a new layer of creativity and design innovation to our business.”

These qualities, specifically the local and sustainable rhetoric, have been a part of the Starbucks message for years. The design qualities aren’t new either—many of the company’s stores conform nicely to local architecture and micro-cultures. In short, Starbucks is wasting their time creating off-brand coffee shops. The design innovation and management attention that these stores are getting could be put to better use by reinvigorating the flagship Starbucks stores. Masquerading as an independent coffee shop is deceptive and unproductive—instead the company should act on their commitments to sustainability, non-market trade practices, and great employee relations. Following through with these commitments will silence many of the company’s detractors and provide scalable value for the brand that has lasting impact.

The Great Moderation: Technology and Monetary Policy

Below is a paper I wrote on the moderation in business cycle volatility experienced from the 1990s through the mid-2000s. I explore the impact of the information technology revolution and innovation in monetary policy on the behavior of prices and output. Viewed through the current lens of the 2007 recession, one potential variable that I would like to investigate is the buildup of moral hazard in the financial system. Let me know what you think or if you have comments.
Changing Business Cycle Dynamics V2.1