SEO Is to Marketing as Day Trading Is to Finance

By Dave Wieneke | in Search engines | 2 Mar 2011 | 6 Comments

Is SEO Greed Good?
There’s been naive shock in the media that brands like JC Penney, Overstock and Fortune have dared to take steps to game Google search for higher results. And faux shock by the firms themselves to learn that their teams have been using tactics to inflate their rank with Google.

Last year I asked, Is it time to sunset the very idea of an SEO agency? Why? Not because SEO is bad, evil, or ineffective. Quite the opposite. What the firms I just listed have done is rational, legal, and beneficial to their businesses.  Google has every right to fix its algorithm, or exclude results its finds suspect, but wrapping this in moral terms of “black and white hat” is nonsensical.

Stripped down to economic terms, Google has made a market to connect searchers and content publishers. However, obvious imperfections to Google’s system remain, and these have kept SEO firms in business for a decade. Firms like Penney and Overstock are monetizing what an economist might call inefficiencies.

The SEO Arms Race in Competitive Markets
When one company in a contested area starts manufacturing “optimizing” success markers for Google, it causes a marketing arms race as competitors must either must give up valuable search traffic or join in a spending contest. As a result, firms then waste resources trying to beat each other in these ultimately worthless measures. And by “waste,” I mean once they are used they are entirely useless.  What are the fake links Penney invested in worth now? And how about the value of the crappy content written for SEO from the linking sites?

My objection to the SEO sub-industry is fundamental. Marketing seeks to build persistent market advantages. SEO in heavily contested spaces has become nothing more than a short-term arbitrage based on taking often valueless actions that Google overvalues.

Competitive SEO no longer adds persistent advantage and value to firms. It only exists because Google’s slow search innovation has allowed this sub-industry of SEO tricksters to blossom. Given that Google exploits the system it created for its own profit, the company shouldn’t then blame those who are trying to do the same.

This year will see a change in how search engine rankings are decided as Google relies more on social proof. This will — hopefully ? make it harder to generate rankings through mechanized efforts as real people will rank what they find helpful. Real people are even less likely to be impressed by link farm sites than Google’s bots.

2011 is shaping up to be the year that Google rediscovered search as an innovation priority. Its business depends on it.