February 22, 2015 by Jim Theo
WWW: The Latest Democracy To Fall Victim To The Rich And Powerful
If I asked you what it takes to get a popular web site onto the internet, what would you say? If you’re like most people, you’d probably say something about creating a site, then sprinkling relevant keywords strategically throughout (a.k.a. “Search Engine Optimization” (SEO)), and then, as people discover the site, and your audience & traffic builds, your site will move up to the top of the search page rankings making you a popular web site.
Sadly, you’re living in the past. That’s the old World Wide Web. You know – the one that built its reputation on the Protestant work ethic of pulling yourself up by your bootstraps – if you work hard and make content that people want & like, then that’s all it takes to rise to the top. Search engines are built to display the most relevant results to your search, right? Wrong – this is 2015, and over the past 5-10 years the landscape (as with all things technological) has shifted. The problem is word hasn’t gotten out to the general public about this, and so I’m here to burst your bubble and clue you in to the new reality of business/life on the web. The WWW has moved away from being a democracy, and has morphed into something more akin to our political system, where success is more related to who you know and what you can pay for, than what you have to offer.
The Web is no longer like an old library card catalog, where, with some poking around, someone looking for your topic was as likely to find your site as the older “authoritative” site on the topic down the shelf from yours. The reason is simple: there’s now effectively only one search engine: Google. Ten+ years ago there were many search engines, and while some were more popular than others, there was still real competition for searchers, and ALL sites were relatively new, so they were all starting the race for eyeballs at a similar starting point. Now, all these years later, what you have is many sites that have been around for 10+ years, who came up in a digital landscape of easy search rankings and even playing fields, leading to fast audience/traffic building, and many others which are just coming online. If everyone uses the same search engine, that means we’re completely reliant on the results that one company provides. And now that company just happens to make the vast majority of its money from paid advertising. This creates a perfect storm of searchers who want relevant results – which often ARE those old/big companies who dominate their markets – and a search engine company with a financial incentive to charge new sites for good search results placement (and keep them from getting listed “organically” (i.e., without paying for it)).
What this results in is a snuffing out of a lot of small sites & businesses.
If you’re starting a small e-commerce business (i.e., a store that only exists online), you have no physical presence, which means nobody can find you “by mistake,” as they could in a retail location – people MUST be told that you exist. The only way to tell the public that you exist is by appearing in search results. Your friends on social media and their friends will only take you so far for so long. “Appearing in search results” is another way to say, “get listed on Google’s first few pages,” since virtually nobody uses other search engines anymore, and about that same number of people will venture past the second or third page of Google results.
The only way to organically appear in search results on Google is to have a number of links to your site from other sites. The more well-known & popular those other sites are, the better for your page ranking. But, since you’re a new site with no way to get links from sites who have never heard of you, the only way left to get noticed is to advertise.
Unfortunately, advertising is prohibitively expensive if you’re selling something with relatively small profit margins, and/or if you’re competing in a space already occupied by large corporations. Consider a modest example of someone selling their own line of affordable t-shirts. As I write this, Google’s current suggested bid for a click to your site via an ad appearing on their front page from a search for the phrase “tee shirts cheap” is $1.85. There are two things to note here: The word “bid” – that means it’s an auction. You’re competing with everyone else who wants an ad when that term is searched for, and right now the going rate for this “cheap t-shirt” market is $1.85. Of course, you can’t actually participate in the auction in real-time like a typical auction – all you can do is tell Google the maximum amount you’re willing to spend for a click to your site and hope that you’ve outbid your competition (and trust Google to be honest).
The other big thing to note is the cost. For someone trying to sell cheap t-shirts, they can expect to spend in the neighborhood of $1.85 per click. (It can easily get well over $10 if you’re in a market already occupied by a few aggressive multinational corporations.) This wouldn’t be a problem if every click resulted in a purchase. However, as most people who have done this will tell you, a reasonable expectation is to get maybe 1%-2% of your visitors converting into customers. That means that one or two of every 100 clicks becomes a customer. So let’s be optimistic and assume that 2 out of 100, or 1 out of 50 clicks results in a sale. How much did those 50 clicks cost you? 50 x 1.85 = $92.50. So, it cost you over $92 to get that customer. Now, remember what we’re selling? What was that search term again? Ah yes… it was cheap t-shirts. I don’t know where you buy your t-shirts, but I’ve never considered a shirt being sold for over $92 profit to be a cheap t-shirt. (Lest you think I’m somehow overstating the cost, consider that even if it was 1/10 that cost per customer it would barely be worth it for this business.) Therefore, advertising on Google will cost you FAR more money than you could hope to make back in profit.
So, nobody can find your business via organic searches because you’re not authoritative enough to get tons of links from other sites, and you can’t buy your way onto search results without losing large amounts of money on every customer, so what’s left? Social media? Not so fast – Facebook runs a very similar bid system for its ads, and the costs/maths work out similarly.
Ok, so you may be thinking that you can get tons of visibility/links on sites by posting comments as your company. Surely having a link to your company on threads at sites like Reddit, Facebook, Twitter, etc., or in blog comments and such would help with backlinks, right? Nope – the vast majority of sites code their pages with what’s called a “nofollow” tag, which tells search engines to stay away and not catalog what they contain. (To keep people from abusing their forums by spamming them with links to their sites instead of meaningful posts.)
But wait – you can always guest blog, right? Maybe if you get a few prominent guest blog posts on some prominent sites you can salvage this and still get SOMEONE to see you. Nope Google is one step ahead of you, and often penalizes you for trying this.
So what’s left? Is there any way to get decent levels of traffic to your new e-commerce site? Sadly, not really. Like our political system, viability on the internet has been reduced to a popularity contest where those who are the most connected and wealthy have the best chance of success. The rest are left aspiring to copy the examples set by the successful & powerful in a simpler time, while being left to wonder why they’re not able to make even a modest living with it. Sure you could make it work if you had a huge budget and/or a huge profit margin on each item you sell, but for today’s average small business start-up it’s another utopian democratic dream dead. Such is the danger of an ecosystem reliant upon a single unrestrained gatekeeper in a capitalist society. I hope you like big name brands, because you’ll be seeing a lot of them. Mom & Pop are dead.
Full disclosure: the start-up I work for (NoneStuff.com) is among the many new e-commerce sites facing this problem, and my efforts getting it some traction (after struggling with the same issues at previous companies in recent years) is the main inspiration for this rant, so this is more than just an academic discussion for me. So many people have expressed surprise at the new search engine landscape, and so many people can’t understand how this targeted form of advertising isn’t the answer to all businesses’ prayers, that I needed to write this post for them. If you’re hearing about this all for the first time, then I hope this clears things up a bit for you. I only wish I had some good answers/solutions to offer. If you do, feel free to offer them in the comments below!