In truth it is only Google who can afford to buy Groupon at the valuations being bandied about. It has the infrastructure, Internet clout (local advertisers) and profits (only adwords makes money for Google). Google has a history of paying lots of money for big ideas and although they can't monetize them immediately that doesn't matter as they have so much cash swilling around it's just important that Facebook don't 'buy the competition' So - is Groupon worth $6Bn? Certainly not in the short term, maybe in the long term with the right amount of Google Support, ensuring that it becomes the 'standard'. After all, there have been discount schemes around for a long time, why does Groupon work better? The key is in the repackaging of an old idea. Voucher schemes from businesses such as vouchercodes.com have been successful but don't command such wild valuation. They aren't very 'clean' sites, the consumer has to work hard to get the info. Groupon 'googelises' this voucher industry, making it simpler for consumers to understand what's on offer. It's Genius in it's simplicity. Could Groupon shareholders make any more profit by not selling to Google now? Almost 100% not. Google are buying at a premium and valuation you would expect when it was a lot larger, which of course is difficult to achieve without Google, but easier with. The gain for everyone is that Groupon has introduced a different form of advertising to adwords and adsense. That's good news for retailers but it's no wonder Google are buying the third largest advertising medium after the two it already owns. Keep up with news on Groupon at http://tiny.cc/fb3en
Tuesday 30 November 2010
Friday 26 November 2010
SEO - an Insider's View
Let's just take one thing for granted. Google is the most powerful company on the planet right now. ALL it's income comes from PPC Paid Advertising. There is no way at all that they will develop a system that will deplete their income potential model. Now - over to SEO:
I've recently had two meetings, one with an SEO agency and one with an SEO Expert. The interesting thing about both meetings was the fact that in order to get anywhere in SEO you need to commit serious money investing in it and won't see a return for at least the first 18 months. Perhaps for the first 3 years you will have spent more money on it than was in the budget (seems that marketing online budgets are very flexible when it comes to PPC). Google admit to changing the algorithm regularly and so this is just an ongoing battle. You can really only ever afford to do SEO if you have a fast growing business. If you have a mature family business that is not intent on large growth then outside SEO expertise will just be a drain on finances (you are better off doing it in house over time).
The Agency Pitch
We work on the basis of being able to replace PPC and so in the long run you will spend less money advertising for new business. We have many mysterious and technical ways of achieving this.
The Consultant Pitch
I'm about risk management. Bypassing years of historical trading and internet presence to fool Google into thinking that I have a much better reputation than my new site would otherwise indicate. The nub of the issue is really link building, and tons of them. The technical stuff is just a given these days' Content and link building are the only ways you can perform better in search and both costs lots of money and link building is quite dubious in some instances so my role is to manage the risk of building SEO for a new client.
Conclusion
There are no guarantees to SEO. You should of course SEO optimise and write great content and link build, but do this over the long term with an inhouse team. Write a budget for it (named investment in the future), but don't throw all your other marketing activities (online PPc and offline) out of the bath. SEO is a long term investment. We are in a recession, spend at your peril (unless you happen to be a company that is immune to the recession) and concentrate on spending money to get immediate sales.
Foot Note: The consultant commented how difficult it is to make any money out of running an agency. Too many high cost people and too high an expectation from clients. In fact, if they did their job properly for the clients then they would not make any money. So, here's news to those companies hoping to outsource the magic. You can't unless you have very deep pockets. Get learning.
Is this the start of UK Auditors getting caught?
The top bods in the top four UK Accountancy Practices appeared in front of the Lord's this week to answer questions about the role that Auditors had to play in the reporting on banks financial stability.....
Accountancy Age, November 23, 2010: Debate focused on the use of “going concern” guidance, issued by auditors if they believe a company will survive the next year. Auditors said they did not change their going concern guidance because they were told the government would bail out the banks.
“Going concern [means] that a business can pay its debts as they fall due. You meant something thing quite different, you meant that the government would dip into its pockets and give the company money and then it can pay it debts and you gave an unqualified report on that basis,” Lipsey said.
Lord Lawson said there was a “threat to solvency” for UK banks which was not reflected in the auditors’ reports.
“I find that absolutely astonishing, absolutely astonishing. It seems to me that you are saying that you noticed they were on very thin ice but you were completely relaxed about it because you knew there would be support, in other words, the taxpayer would support them,” he said.
I am astonished as well that they appear to be so relaxed about the whole thing. The ONLY reason that auditors exist is to ensure that the directors of a business have behaved responsibly, in line with the wishes and good will of shareholders and that the accounts reflect a true and fair result. Why Auditing firms have not gone down I have no idea. We may all want to chase the devil bankers who have been paid so many bonus' but they will argue that they earned those bonus' good and proper in accordance with the rules that the banks set. The role of the Auditors is surely to then check that this is right?
In fact the bankers were paid massive bonus', based on short term profits from long term debt ridden liabilities that the tax payer has had to pick up. The Auditors missed this - I mean MISSED THIS. How can that be? What on earth are they auditing or is it just that they spend too long ensuring that the numbers have been transactionally added up, without standing back and wondering what the number mean.
As for 'Going Concern' - it's ludicrous. The whole financial sector, including responsibilities of audit firms needs a massive overhaul. Stop paying the big bonus' and get them all back to work properly.
Tuesday 23 November 2010
SEO Experts - What's the Craic?
SEO agencies and experts continue their quest for search engine domination. It continues to be a conundrum to me how and why Google would want them to succeed when their business model relies solely on PPC income.
There has also been much debate over social media and exactly how companies should or should not invest in social media platforms such as Twitter, LinkediN and Facebook. The debate rages on but one thing is for sure, it's always difficult outsmarting an organisation such as Google that employs such talented and intelligent people. 
Check out this latest screen grab. All these results fell above the 'fold' in the page (I was using an iPad) and what is interesting here is the dominance of News feeds, Twitter streams in real time and of course PPC. Where are the natural search results? All below the fold and if you look at the heat map I published on an earlier blog you will see that of course it is the top of the page that the most activity. Any comments SEO guys?
Wednesday 17 November 2010
Technology - something the non geeks should watch
At the very mention of the word 'technology' a lot of the office will just glaze over. This is especially damaging when the top management team do the same. Life has got tougher and the 'magic' or should I say 'bull****' taken out of every day decisions. Modern day 'Mad Men' are the tech guys. Business' hand over large sums of money and hope for the best and that the geeks will sort it, without input. What successful businessman have you ever encountered in the past who has taken a passive role in understanding the lifeline of his business.
Here is a great conference speech from a real grown up. The boss of CISCO (yes - a aren't they network providers?) talks some real life issues and how they can help solve them.
Tuesday 16 November 2010
PPC vs SEO - the debate rages (because it costs so much!!)
The heat map above shows the clicked search area of a typical google results page. What does it tell us?
The SEO Marketer
80 - 85% of all clicks on google come from natural listings. These cost nothing and your site gets 8 x the traffic than from paid search (PPC)
The PPC Marketer
The ability to carefully develop a PPC strategy that delivers profitable leads, within margin, with the ability to turn campaigns on and off due to seasonality is very strong. many business models rely entirely on PPC. Google has lots of research aimed at PPC because it is their only way of making money and projects like youtube cost about $500m per annum to run so they need the money! You can get up and running very quickly and compete with the big boys and it doesn't take all year.
The Business Marketer
The heat map above shows that in fact in line with what you expect, and from your own research (how you google!), that PPc and SEO are both important. The key element is being in position 1 - 5 either via SEO or PPC. After that you really get a small share of the traffic. The bottom place on page 1 equates to about 3% of clicks. This therefore gives you probably less volume than the first three paid search positions. However getting to page 1 at the bottom on high traffic key words could have cost you a lot of money.
The online marketing industry, in its infancy and although 'technical' in many ways, there is a lot of common sense that should be employed. Traditional businesses, such as travel businesses, who are morphing into online businesses just want there to be a magic answer. They are currently spending oodles of cash, throwing whatever it takes to the agency that can say - 'I can get you free relevant traffic!'. The point with all this is that everyone is forgetting the cost, and the make up of the marketing spend. The advice costs such enormous amounts that companies are currently signing up 1/3rd of their marketing budget to SEO agencies who have absolutely no industry knowledge, nor guarantee anything other than trying to get certain search terms onto the first page.
The Point
My point is really that the changing landscape online has just made the whole game a lot harder. Ill informed bosses are throwing money at agencies hoping they will deliver without understanding the sales funnel, their product, their budget or their alternatives. SEO is an important and vital part of the strategy and long term will yield great results.
However - let's not forget that:
1. Consumers tend to research using natural listings and buy using all the listings. Let's face it, if you want something and it stares you in the face at the top of the search results why click anywhere else?
2. Google continually make organic listings difficult by changing their algorythm. This is perportedly to make listings more relevant. However, it would just be strange if they hadn't worked in the - ' if everyone succeeds at natural search we don't have a business as our income drops off paid search'
3. The SEO guys would have it that paid search is'evil' - 'I never click on paid adverts' they will say and that's what customers think. Since when did we see adverts in magazines as evil? This just doesn't stack and the PPC guys will argue that 1. some customers don't know it is a paid advert and 2. paid adverts usually indicate a professional well managed business that can afford a campaign.
4. The only way to really tell is to measure results for SEO vs PPC and conversions on these. My guess is that the data is complicated to distinguish (and most companies just rely on their agencies to tell them the truth!! ha ha). If SEO was always the winner why else would brands appear at the top of SEO and paid search for a product - if it wasn't for the fact that both work, both cost money and no one really knows what the answer is! Look at the image here for DVD results and spot the double appearance in PPC and SEO
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