Lesson #335: The Death of Search Engine Optimization

I have been a digital marketer for over 20 years now, which seems like an eternity at this point!  Google has always been a staple of any good digital marketing strategy, especially for search engine optimization (SEO), to attract free organic traffic based on the quality of the content on your page.  But, when we recently started to see our SEO traffic start to decline, we asked our SEO consultant to investigate what was the root cause, and he said it was due to a recent Google Search page redesign, moving the free organic links further to the bottom of the search results page.  What was more troubling, was when I asked him how best to fix the situation, he said, “start spending more money advertising with Google, to get back up to the top of the page”, which was a very strange thing for an SEO expert to say, as he isn’t needed in that scenario.  This means SEO as a strategy for ecommerce driven companies is potentially dying, and paid search marketing has become your primary way to gain an audience through the search engines, at least through industry leading Google.  Allow me to further explain.

A Quick History of Google Search

Ever since Google hit the scene in 1998, Google has been a staple of any good digital marketing strategy.  Originally, it was simply having a good SEO plan, to help you go up the free organic rankings—onto the top of the first page of the search results.  The search results were very straight forward and uncluttered, and looked similar to this example below, with only organic free results appearing on the Google page based on the content of your page, and its relevancy to the keyword being searched (in this example, a search result for the word “technology”):

Then, Google launched Google Adwords (now called Google Ads) in 2000, which was your way to “buy” your way to the top of the search results with paid text ads.  Which meant, now you needed both a good SEO strategy for free organic traffic (for the links at the bottom of the first page), and a good keyword bidding strategy for paid traffic (for the links at the top of the first page), as seen in this example search result for the keyword “text”.  

Then, in 2002, Google launched Google Shopping, which gave ecommerce companies the opportunity to “feed” their product listings to Google, also on a pay-per-click model, adding a third dimension to their mix, but largely separated into its own “Shopping” tab on Google.  At the time, it didn’t really impact the traditional search results at all.  And, finally in 2004, Google launched Google Local, which allowed businesses with multiple retail locations the abilities to advertise and promote their various locations, in addition to the corporate parent company.  This change simply localized the advertising, to the location of the user (e.g., instead of seeing a national ad, they saw an ad for a nearby local business).  Again, it really didn’t materially impact the page design.  

Google Today

But, in the last several months, Google has materially changed its page design for Google Search.  And, previous “sacred ground” rules like “stay true to our organic search roots, and don’t clutter the page with a bunch of advertising” got completely flushed down the toilet.  As you can see in this example of a keyword search result for “restaurant furniture”.

Notice what has happened to the page design—today, there is not one free organic search result anywhere to be seen on the first page, above the fold (where the computer screen breaks the page).  Every single link on this page, is now a paid advertisement—the links in the upper left coming from Google Ads, the links in the lower left map coming from Google Local and the links in the right coming from the Google Shopping product feed.  Every single one a paid placement, which is great for Google maximizing their ad revenues.  But, if you want to see an organic search result that is truly based on the quality of the content of the landing page, you need to scroll down “below the fold”, and even then, they don’t start until the bottom of that second screen view after you page down.

The Death of Search Engine Optimization

So, what does this all mean for you commerce companies selling products or services . . . it means search engine optimization as a strategy is on “life support”.  Most Google users focus on the first page of results, mostly on the links that appear “above the fold”.  If there is no way now, to get your organic search result into that position, based on the current Google page design, then why focus on doing SEO at all?  All your focus needs to be on shelling out a lot of money to Google, to make sure your business is promoted in Google Ads, Google Local and Google Shopping placements on the page.  Which is exactly what Google wants, their cash register to ring with each click on their site!!

Now that paints a pretty extreme picture.  Yes, you can still be doing traditional SEO for organic rankings, especially for sites other than Google (e.g., Bing, Yahoo).  Yes, there are still a minority of Google users that will scroll down the first page, and an even smaller amount of users that will click beyond the first page, to page two or three.    But, the amount of SEO traffic you will receive from free organic SEO efforts has become materially less than you would have received prior to the Google page redesign, especially given its dominant market share position in the search industry.  That is the point here:  yes, SEO still can play a role, but a much less impactful one if you are in the ecommerce world.

Also, worth adding, Google is using its new page design on their largest trafficked search terms (e.g., “restaurant furniture”), there may still be SEO value by focusing on “long tail” search terms that Google uses a more traditional search result page design (e.g., like this one below, for “30 x 30 table top”).  

But, I think this is only a matter of time, before Google figures out how to take over advertising on every single one of their page results, including the “long tail” keywords.  Even in the above example, Google Shopping has five paid links at the top of the page, Google Ads has one paid link in the middle of the page, and there are only two free organic results at the bottom of the first page, “above the fold”.

Concluding Thoughts

So, as you are trying to figure out how best to spend your limited marketing dollars, the 20 year “staple” of optimizing your website for free organic traffic, has become a much less effective use of your time and efforts.  It just doesn’t bring the same “bang for the buck” that it used to, which means it is much harder to drive a ROI.  Whether or not this helps or hurts Google in the long term, will be determined in the future.  But, you can bet Google’s competitors, like Duck Duck Go, are going to try to win over internet searchers with their largely free organic search results (which you can see this below example for “restaurant furniture”), promoted as protecting your privacy from the evil Google advertising empire.  

Let’s see if Google’s attempt to fleece all of its advertisers for even more money, and further clutter up its user experience, will open up a door for one of their competitors to start growing share in the search industry.  But, until then, the grim reaper is sharpening his blade for the SEO industry.  R.I.P. my dear friend.

For future posts, please follow me on Twitter at: @georgedeeb.

The 7 Steps to Managing Your Advertising Agency

 

You've selected the right advertising agency for your company. Great! Now what? Managing an advertising agency is not as simple as hitting “autopilot,” crossing your fingers and hoping they get it right. You will need watchful eyes along the way, helping to keep your agency on the desired track. Here's how to make sure the agency is giving you what you need.

Read the rest of this post in Entrepreneur, which I guest authored this week.

For future posts, please follow me on Twitter at: @georgedeeb.

Lesson #334: Use Google Trends to Track Your Market Share and Success

 

I am sure many of you have used Google Trends in the past.  But, for those of you that are not aware of this terrific tool, now is the time to learn how valuable it can be for your business.  

What is Google Trends?

Google Trends is a tool that can tell you how searches for a specific keyword on Google have been trending over time, for whatever date range you are most interested.  As an example, here is the search traffic trend for the term "restaurant furniture" for the last year:

As an investor in Restaurant Furniture Plus, this data is very important to me, as a tool to know whether the industry is moving up or down, and how the industry is behaving year over year, which I then can compare to our own revenue results.  It also tells me whether or not we are gaining or losing market share, compared to our competitors, which I will detail below.  The way to read this chart is the highest point in the period is scored a 100, and then every other period is indexed against that peak.  So, a week showing a score of 25, would have 75% less traffic than the peak week.

What do we see is in this chart--there was a slump starting in March 2020, which is no surprise with the beginning of the COVID pandemic in the U.S.  Then, there was an unexpected spike in June 2020, which caught us in surprise.  Why was there a spike in the middle of a pandemic when most restaurants were closed?  In response to COVID, restaurants were racing to buy outdoor furniture to open patios which were allowed to operate.  And, then, the rest of the year, pretty much followed normal seasonal trends--this industry normally peaks in March-June, and then November-December are typically the slowest months of the year.  If you looked at this same chart in 2019, you would not have seen a dip in March, you would have seen steady acceleration in demand leading up to new summer restaurant openings and their need for furniture.

How to Use This Data For Your Business--A Couple Case Studies

As discussed, the above can show how the industry is trending, for you to compare your own revenue results.  But, if you dive a little bit deeper, it can tell you if you should be happy or sad with your own revenue results.  Let's talk through an example, using the above chart.  The month of April had an average score of 27 and the month of May had an average score of 48.  That was a 78% increase as the restaurant industry started to shake off the immediate paralysis coming out of COVID.

As I compare that to our Restaurant Furniture Plus data, our revenues in May were up 128% over April.  So, yes when I looked at our revenue data in isolation, without Google Trends data , I was obviously happy with the 128% growth.  But, when I layered in the fact the industry growth was only 78%, that means that Restaurant Furniture Plus was actually growing 29% faster than the industry was growing.  In other words, we were increasing our market share, taking volume away from our competitors, which obviously made us ecstatic.  It turned out that in a world post COVID, the internet dealers like us, where taking share away from the offline brick-and-mortar dealers, many of which were closed during this period.

This data is especially helpful in this following scenario.  I had a client that was really pleased with their 10% month-over-month revenue growth.  And, he thought everything was fine with his business, until we layered on the 20% industry growth from the Google Trends data!  It was a very sobering moment for my client, as his mood changed from "great, we are growing", to "oh crap, we are losing material market share" in the snap of a finger.

Some Additional Guidance

Remember, Google Trends is simply traffic data from Google.  Your website traffic growth, may or may not be in synch with Google trends.  Maybe you have a bottleneck there, with poor search engine optimization, and you are not getting your fair share of the overall internet searches (so, fix that!).  And, the above example assumes you have an immediate conversion of website traffic into sales in the same month.  That may be the case for low ticket consumer products.  But, that is most likely not the case for more expensive B2B products or services, that have a longer sales cycle, especially if they are converted offline.  So, instead of mapping Google Trends data to sales or transactions, map it to leads.  And, if you are going to map to sales, adjust the analysis for your sales cycle (e.g., April traffic growth with a three month sales cycle will drive July sales growth).

Closing Thoughts

Hopefully, you now have a new tool that can help you with instantaneous market research and trends on your industry.  Use this data to help you plan your month-by-month budgets, for any seasonality in your industry, and to compare how your business is trending versus the industry overall.  If you are losing market share, you may not realize it now, but you have a pretty big problem on your hands, that you will need to fix asap.  Good luck!

For future posts, please follow me on Twitter at: @georgedeeb.

Lesson #333: How COVID-19 Has Changed Staffing Decisions Forever

COVID-19 has impacted the business world in many ways.  Some industries thrived (e.g., healthcare) and other industries got clobbered (e.g., hospitality).  But, one thing that was consistent across most companies, is many of them were forced to have their employees work from their homes for the first time.  And, a very interesting thing happened . . . it worked!!  Both for the employers in hitting their goals and for the employees looking for more flexibility in their jobs.  But, this is just the beginning of what should become a long term trend towards continued teleworking and increased outsourcing and offshoring even when COVID-19 is behind us.  Allow me to explain.

Teleworking Success During COVID-19 Has Opened the Eyes of Employers 

In the wake of COVID-19, employers are dramatically rethinking their staffing decisions.  In the "old days", most companies would think with a "home office" mentality, looking for staff in their headquarters or regional office locations.  But, COVID-19 forced many companies to experiment with teleworking for the first time--allowing their staff to work from their homes.  And, once they learned it was pretty much "business as usual" in terms of getting work done and driving revenues, they quickly started thinking "do we even need staff to return to the office".  A long term teleworking model would require a lot less home office space.  And, for staff that does need an occasional office, it can be provided with a "hoteling" model where you can reserve a desk for the day (not have your own dedicated desk), helping to reduce your monthly rental expense.  Additionally, they are starting to see the benefit from being able to recruit talent from any location, opening up a much larger talent pool of candidates for them to choose from, far beyond the constraints or limitations of their home office location.

This Has Also Opened Employers' Consideration to Alternative Solutions Like Outsourcing

But, this is just the beginning.  According to my colleague Jeremy James, a Partner at the outsourcing firm Staff Street (who helped me research the topics of this post), now that employers' "beaks are wet" with this concept, they are now giving the idea of outsourced staffing models much higher consideration than they have in the past. Why?  Because it is a similar "out of the office" solution that can help them expand their bottom line with lower-cost talent sources (save as much as 55% according to the Bureau of Labor Statistics), they can handoff secondary roles in order to enhance their core business functions, and it can help them accelerate their recruiting needs with "on-demand" talent to keep up with their growth demands without having to internally recruit or train those same roles.  Companies are starting to rethink every aspect of their talent needs--with a bias towards hiring employees for your core competencies (e.g., hire accountants for accounting firms, hire engineers for automotive manufacturing), with the flexibility of letting those employees work from wherever they want (at home or the office), and outsourcing everything else.  According to the BLS, around 45% of all jobs in the U.S. can be done remotely.  Not good news for the corporate real estate market!

The World is Quickly Becoming an Employers' Oyster . . . Literally!!

With employer's becoming more amenable to teleworking and outsourcing, it really raises a bigger question of where the talent needs to be located.  In many cases, the best solution may not be in the United States.  Hiring offshore and nearshore talent can often be the most effective and budget-friendly solution for your needs.

Offshoring is when outsourcing companies find solutions, whether it’s recruitment or program development, outside of the country their client is incorporated in. Many think the decision to offshore is solely concerned with being able to save costs or expand their bottom line. But offshoring doesn’t just mean cheap labor. Educating the world over has improved in the last 20 years and the global labor force has only grown in talent as well as in the competition for that talent. By finding the right offshoring strategy, companies are able to tap into that global talent pool and benefit from the general advantages of outsourcing, such as making fixed capital more variable and your organization more flexible and nimble, as well as the diversity and expertise in skills and ideas of globally competent workforce. Jeremy has found that the best outsourcing talent pools are based in the Philippines, Mexico and Eastern Europe. The Philippines and Mexico primarily specialize in customer service and back office support, working during American hours of operation.  And, the firms in Eastern Europe are phenomenal with technical tasks such as web and app development.   All at a fraction of the price of U.S. based talent.

Nearshoring is similar to offshoring in that companies find their solutions in other countries. But while offshoring companies look to the labor force in places like India, the Philippines, and Ukraine, or other places across the world, nearshoring’s competitive advantage is working in countries that are in the similar time zones and geocultural zones as the countries the outsourcing companies are incorporated in. They navigate the common problems that arise from conflicting time zones or cultural differences, things that can compromise company cohesion and agility.  For example, there is a large and cost effective technology coding community in Costa Rica that perfectly aligns with the time zones in the United States, making it easier to do business and collaborate on calls during the same working hours.

There is literally an offshoring or nearshoring solution for most any talent need you have.  Each with a different: (i) industry expertise; (ii) role focus; (iii) talent location; and (iv) costing model.  So, do your homework to find the partner that has the best mix of the above to meet your needs.  

How To Decide The Best Path for You??

The first real step to choosing the right talent strategy for your operating or growth needs is to have a clear organizational map and a clear growth objective. A good grasp of organizational needs and strengths helps companies and businesses determine which functions can be done in-house and which can be outsourced. It also helps you find the right outsourcing company to work with based on competencies in strategies and staffing solutions, as it can be a really confusing and daunting process for finding that right outsourcing partner.  So, map out your talent pool of options, figure out your core competencies, figure out how remote/outsourced staff will impact the business or culture and set a recruiting or outsourcing plan from there.

Closing Thoughts

So, now that we are starting a new year.  This would be a good time to rethink everything you are doing from a staffing perspective and figure out which of the above strategies would work best for your companies long term.  If you embrace the above concepts, that our home office is no longer a requirement for employment, there are surely better efficiencies to be had in helping you hit your sales targets and talent goals, with a materially better cost structure.  Which leaves more money in your pockets to grow your companies with.  Thanks Jeremy for helping me with this post.  Feel free to reach out to Jeremy's team at 213-537-8804 with any questions from here.

For future posts, please follow me on Twitter at: @georgedeeb.

Red Rocket's Best Startups of 2020

Red Rocket gets introduced to hundreds of startups each year, in the normal course of doing business, or via our involvement with various startup groups or events.  We wanted to honor the best of these startups that we met in 2020, in Red Rocket's 9th Annual "Best Startups of the Year".  This list is not intended to be an all-encompassing best startups list, as there are many additional great startups that we are not personally exposed to each year.  And, this list is not intended to be only for businesses that launched in 2020, it is open to startups of any age, that they or their advisors had some personal interaction with us in the last 12 months.  The business simply needed to have a good idea, good team or good traction, that caught our attention.  Congrats to you all!!

THE BEST STARTUPS OF 2020 (in alphabetical order):


BioSurplus (CEO, Bill Vandeweghe) - B2B used lab equipment marketplace

Cartogram (CEO, Will Clausen) - B2B indoor mapping & wayfinding platform

Castango (CEO, Chekesha Van Putten) - B2B online platform for casting and booking models

Charlie Health (CEO, Justin Weiss) - B2C telehealth for personalized teen mental health

EcomWizz (CEO, Nikita Danilov) - B2B platform for researching trending products

Get Boat (CEO, Ilya Veller) - B2B yacht booking platform

Greenlight (CEO, Nadeem Mazen) - B2B platform and community for micro-influencers

Lonerider Brewery (CEO, Sumit Vohra) - B2C craft beer brewery

Media Capital Technologies (CEO, Christopher Woodrow) - B2C movie financing marketplace

OneCare (CEO, Tom Glaser) - B2C remote health data monitoring from smart watches

Phone Wagon (CEO, Ryan Shank) - B2B call tracking software

PopShop (CEO, Nathan Franco) - B2B marketplace for finding shared retail space

Sapphire (CEO, Walter Larkins) - B2B accounts receivable collections for hospitals

Torre (CEO, Alexander Torrenenegra) - B2B professional social network for finding remote work

And, don't forget to check out the 2012 winners, 2013 winners, 2014 winners, 2015 winners, 2016 winners, 2017 winners, 2018 winners and 2019 winners, many of whom continue to be doing great things.


Congratulations to you all!!  Keep up the good work.


For future posts, please follow us at: @RedRocketVC

Lesson #332: One Bad Employee Can Tarnish Your Entire Brand

 

In business, a company's reputation can often come down to the lowest common denominator, the actions of one specific individual, especially in small companies.  Look at the image on this post--do your eyes gravitate to all the beautiful green apples, or does it focus on that one rotten apple, that spoils an otherwise perfect picture.  It is often the same thing in business, where the bad actions of one, can overshadow the otherwise perfect actions of others.  Allow me to explain with this case study.

The Situation

At one of our clients' companies, they had a employee that had been with the company for many years.  She was largely a rock star for most of those years.  She had been the company's best selling salesperson, she gave her customers terrific customer service, and they loved her for it.  And, they kept coming back year after year, loyal to the company and that specific salesperson.

But, about a year ago, something started to change.  Her sales started to plummet.  Instead of being the highest-ranked salesperson, she dropped to the lowest-ranked salesperson.  And, her service levels also started to drop off, where many customer calls were going unanswered and tasks were no longer getting done.  When the company's owners investigated further with this employee, she admitted that she had been having health problems. where she could not focus on her work or organize herself.

The Initial Attempt to Resolve

Given the employee's long tenure of success with the company, the owners wanted to try and help her through these difficult times.  They helped consult the employee on where to find medical assistance, which she took them up on.  The doctors and therapists quickly diagnosed the condition as adult ADHD, prescribed medications and other treatments, and suggested things would be better and back to normal in a couple months.  So, the owner's of the business patiently waited for the employees' health and performance to return back to historical levels.

The Damage Done in the Interim

The resulting damage from this employee's poor work performance really started to pile up.  Firstly, the company was losing revenues from the unconverted leads that were sent her way.  Many of these leads vocalized their frustrations to the company, willing to give the business another chance with a different salesperson.  But, the vast majority did not, and decided to take their business elsewhere.  And, secondly, the operational mistakes really started to pile up, with customers having major problems with their orders.  This caused the company to have to offer refunds as a mea culpa, and really started to tarnish the company's brand and reputation, and negative customer reviews started to flood into the website.  And, that didn't even talk about the fellow employees that were witnessing this poor behavior, and wondering what was going on, and how the owners were going to resolve it.

The Second Attempt to Resolve

After many months of patience (and continued lost sales and service breaks), the employee's performance never improved back to historical levels.  The employee even suggested that the owners create some financial disincentives for undesired performance, which they did without any success or change in behavior.  The owners really had no choice, but to cut ties with the former "golden girl", as the parties came up with a mutually acceptable separation.  Which to the owners, was like saying goodbye to a loved family member, you were never going to see again.

The Key Takeaway Here

Cutting ties with employees you like personally and professionally, is very hard to do.  The owners kept hoping that old "rockstar" would walk back into the room, and that never happened despite a year of trying.  But, the damage done to the company's brand in the meantime was immense.  The company got a lot of egg in its face, had to make lots of apologies and refunds, and turned away dozens of prospective customers that would never be coming back to the company.  And, it doesn't matter if those customers had originally started with a different salesperson that would have served them brilliantly.  At this point, that one "bad apple" had spoiled the entire "bushel" from a brand perspective in how they perceived the entire company.  Which is unfortunate, as the company really does deliver incredible customer service, other than this isolated situation.

So, during times like this, sometimes you have no choice but to rip off the Band-Aid, regardless of how painful it may be.  If you can't quickly resolve the situation with your employee, you need to make changes quickly that will best serve your customers.  If you wait too long, you may never get those loyal customers and lost leads back.  Which at that point, that outcome would be a self-inflicted wound by the owners for not acting fast enough in correcting a known material issue inside the company.  Don't let that be you.

For future posts, please follow me on Twitter at: @georgedeeb.