Countless others, including Google, have also used today to come out and publicly oppose the legislation. Thousands of Twitter users have also joined the movement, voluntarily “blacking out” their own profiles for the day.

But whilst most of the hype surrounding SOPA and PIPA has been confined to the US, the ramifications of the bills extend much further. For those who don’t know, the SOPA and PIPA legislation is designed to protect Intellectual Property rights on the web (a good thing), however the legislation extends so far that many are labelling it an infringement of freedom of speech and give a select few the power to control what is and isn’t allowed on the net. Gizmodo gives a good (and slightly scary) synopsis here for those interested.

The question for Australia, and most other countries outside the US, is what does this mean for us?

If you think we’ll be unaffected, think again. For a start, any Australian business with a website that has US visitors, US customers, US hosting, relies on US-based adserving platforms (such as AdWords) or has a connection with any other US-based website (like search engines) will fall under the Act’s powers.

One of the major problems with the legislation, as Gizmodo pointed out, is that the potential for abuse is rife. One complaint (made by the right people) about your site to the appropriate authorities has the potential for your site to be instantly blocked by US internet service providers (ISPs), search engines, social networks and more. Basically, you would disappear from the web (or the US version) overnight.

Now you might be thinking “I’m not hosting pirated movies on my website, so i’ll be fine…” which in theory should be the case. Much opposition to the bill however, has focused on the fact that the interpretation of it is so broad that the smallest indiscretion can cause major backlash. For instance, if you have a forum or blog and a user posts a link to a site considered by the US to be promoting IP theft, your site could disappear. Linking to a Youtube video with copyrighted content could incur the same fate.

If you’re hosting in the US, this may not just be blocking the site of US traffic, but deleting it all together.

And then of course there’s the fact that if the US enact SOPA to protect its copyright holders, other countries around the world will follow suit, blocking content that it deems inappropriate too. What different countries deem “inappropriate” will vary greatly, making doing International business a nightmare.

At this stage there’s a long way to go, but if you’re an Australian business who relies on International (in particular US) traffic for sales, you need to watch the developments very closely.

As a starting point, every business should be reviewing how much of their sales is tied to US customers, and how much they rely on US sites to direct traffic their way (think Google, Facebook, Twitter, etc)…

In an unsurprising move, Google has this week launched its own social networking platform in direct competition to Facebook, called Google+.

The signs had been there for a while that Google was planning a move into social. The launch of +1 earlier this year was obviously a precursor to something bigger.

But now that it has been released, there’s two big questions:

1. Why has Google gone head to head with Facebook?
2. Will Google win?

Why has Google Gone Social?

Let’s start with the first question. The reason is simple, they want to make their search results better (and tap into the ad revenues that come with it).

Google has realised for quite a while that social recommendations play an important role in determining what content is best on the web.

With Facebook and Microsoft having previously signed a deal to incorporate Facebook ‘likes’ into search rankings in exchange for Bing powered search functionality on Facebook, Google was left out in the cold when it came to ‘social search.’

Google is very aware that social recommendations, likes, tweets, etc, are just the newest form of ‘link juice’ that search algorithms have been based on for the last fifteen years. But with Facebook closing ranks and giving access to Bing/Yahoo, Google was in real danger of missing out on social ranking factors.

Their solution was to launch +1 (Google’s version of a ‘like’).

However, this only gave them part of the picture. Without knowing anything about the person doing the +1′ing, Google was in the dark as to whether the user was a real social influencer or a ‘Nigel no friends.’ In other words, they didn’t know whether any given +1 was a really valuable recommendation, or one worth next to nothing.

Hence, along comes Google+. By creating their own ‘Facebook’, Google can now see actual information about the person doing the +1′ing. Things like how many connections they have, how influential they are, how often they “hang out” with other influential people, etc. In other words, they are now able to weight +1′s so that a really influential person may be be worth +1, but others may only be worth +0.01.

Relating this back to search results, if all the really influential people (or “cool kids”) are +1′ing certain sites and pages, then those pages are likely to appear higher in the search rankings.

Obviously this has major implications for SEO, but that’s an article for another day!

So will Google win?

I’m going to go out on a limb and say “yes.”

But… not overnight. Google has made a product that takes the best parts of Facebook (connecting with friends, sharing photos and links, etc) but has seemingly managed to overcome the areas that Facebook has continued to struggle with.

In areas like the grouping of friends (called ‘circles’ in Google+), default privacy settings, “hanging out” (by location) and mobile use, Google has a clear upper hand.

The privacy and grouping of friends will probably be the biggest reason users will switch, and every time Facebook has a privacy saga (which is quite often), Google+ will be there to recruit the deserters. There’s also rumours that Google is working on a Facebook import tool, so you can bring your entire Facebook life across (photos, posts, videos, etc) in one go. If that’s true, it’s brilliant.

They also couldn’t have launched it at a better time, with Facebook usage in the United States falling for the first time in Facebook’s history.

What’s more, Google have followed the tried and tested ‘by invite only’ launch that worked so effectively for Gmail.

So, my big call for the day is this:

By 1st July, 2016 (exactly five years from today), Google+ will have more users than Facebook, and by a considerable amount.

Some of you may be calling that statement ridiculous given Facebook’s size and massive head start. But consider what happened when Google took on Microsoft’s Hotmail with Gmail using a very similar strategy.

Also consider MySpace, which only this week was sold off by News Corp for a paltry $35 million (a whopping $550 million lower than what they paid for it) and less than 4% of it’s all time high valuation of close to $1 billion. (As a side note, this massive loss is attributed to the same person who says he “knows users will pay for online news content”, but again an article for another day).

So whilst I do feel that Google+ will ultimately become more successful than Facebook, today marks just the ‘beginning of the end’ for Facebook.

Facebook will continue to be popular, and the companies that have invested into building Facebook fan bases will still see great returns on their investment for a number of years, and probably even after Google surpasses it. What this case shows, however, is that you need to be prepared for when the next social platform or web trend comes along.

The really smart companies are already making a move with Google+ to see how they can reach those ‘early adopters’ and get the jump on their competitors.

But rather than summarise the last decade of innovations, in this article I gaze into the crystal ball to see what search could be like in the next decade.

A challenger to Google?

Quite probably. I doubt that anyone will be able to catch Google’s monopoly-like market share, but there are a few contenders that will surely give them a shake.

The most obvious choice is the Bing/Yahoo combination (or Binghoo!). With pooled resources and a greater focus on delivering features comparable to AdWords, marketers and consumers alike may see the benefit of switching.

But realistically the development cycles at both Microsoft and Yahoo are too slow to keep up. Google’s massive innovation budgets and focus on NPD (new product development) keeps them ahead of the game.

The real challenger is actually Facebook. The way they have infiltrated the web with ‘Like’ functionality paves the way for a search engine to be based not on links (like Google’s PageRank), but on likes, creating a social-powered search engine.

Of course, this is conditional upon Facebook maintaining its own popularity for the next decade (which I have some doubts about – but that’s an article for another day).

The big caveat to Google maintaining its supremacy is the top three; Larry Page, Sergey Brin and Eric Schmidt. Whilever those three remain Google is unlikely to lose top spot. The danger for Google is a shift in approach that alienates users (like charging for search or other services that have traditionally always been free) and that won’t happen while those guys are still there.

TV

Television is the next big medium for search. Google have already started to dabble in it with Google TV and broadcast rights on YouTube. Yahoo and Microsoft have been teaming up with networks for years (think Yahoo!7 and Ninemsn in Australia).

However, the big stumbling block for Google TV at the moment is the opposition of the major networks and media buyers.

AdWords already lets you buy TV ads on major commercial networks in the US, and Google TV aims to allow free-to-air shows to stream via the net. The big problem the networks will have in trying to oppose Google TV long term is that the push for Google TV is likely to come from the advertisers themselves (and their million-dollar budgets).

By allowing anyone to buy TV ads through AdWords (eliminating traditional media buyers) and streaming shows to a wider audience, advertisers have the potential to reach more people for less money.

Furthermore, with real-time Analytics being fed back into the system about individuals viewing patterns, there’s nothing stopping advertisers micro-targeting certain demographics. From a viewer’s perspective, it means that you could be seeing different ads each ad break than the guy in the house next door!

There’s obviously many issues to overcome, and failing an agreement with the major networks, don’t be surprised if Google do an Oprah Winfrey and establish their own TV network. Remember, they’ve already got broadcast rights through YouTube.

The Search Algorithm

Most search algorithms have gone through many changes in the last decade, but there has always been one constant; the number and quality of links. I don’t foresee this changing within the next decade either.

Over time, we may start to see social connections play a bigger role, but these are still a form of link.

New Search Products?

Undoubtedly. What products, you ask? Well, that’s a tougher question.

As society becomes more and more mobile, expect a greater focus on location and geographic based search products. Also expect a greater focus on augmented reality products, particularly in the areas of retail, real estate and maps.

As a general rule, expect to see a Google powered search bar everywhere, from your TV to your fridge, the world is going to become very searchable place.

Update: Two days after posting this, Google announced the launch of Google Wallet, a mobile payments platform (partnering with MasterCard and Citibank) that they’re calling a merge between “mobile” and “local.” Looks like a good start to the decade.

For those who haven’t heard, the New York Times (which is starting to get a reputation for these types of exposés), ran a story outlining how JCPenney had been allegedly engaging in dodgy SEO practices (you can read the full article here) in an attempt to artificially influence Google’s ranking algorithm.

Whilst not illegal, these dodgy SEO practices do go against Google’s policies, and as a result, Google responded by manually penalising JCPenney’s site, causing them to drop from high on the first page for most of their key search terms to somewhere on page six and below.

What JCPenney, or more accurately their SEO firm (who was subsequently dumped by the company), were doing was engaging in extensive paid link schemes on completely unrelated sites. Basically, what they were doing was paying thousands of dodgy or unrelated websites (like a nuclear engineering site and a Bulgarian property site) to link to them, thus artificially increasing their popularity in the eyes of Google.

Now most, if not all SEO firms engage in some form of link-building for their clients. However, this is perfectly fine providing you only get links on related sites or those with high authority themselves. In other words, a genuine reason for one site to link to another. Extensive (and/or paid) link building from what is often referred to in SEO circles as “bad neighbourhoods” is likely to result in Google issuing some harsh penalties for hanging out with the wrong crowd.

The issue for all businesses who are undertaking SEO services is to make sure their SEO firm is not engaging in dodgy or black hat techniques.

What will be interesting to see over the coming months is how long Google impose this ‘manual penalty’ before allowing their algorithm to re-rank JCPenney back where they belong (probably somewhere low on page one or onto page two).

Google have always claimed that their algorithm is very intelligent when it comes to detecting when a site is engaging in dodgy practices, and most ‘penalties’ are handed down algorithmically without the need for manual intervention. So what happened with JCPenney? Why were they able to get away with it for so long before someone noticed?

Cynics have suggested it’s due to the massive AdWords budget JCPenney spend with Google each year, but I don’t believe so. Google have always kept the paid and organic side of their business very separate and there’s also plenty of brands with far bigger budgets than JCPenney that would probably get the preferential treatment (if they were doing it, which I don’t believe they are).

In my opinion, the reason why they were able to get away with it without drawing attention from Google’s algorithm is due to the weighting in Google’s search algorithm regarding the strength of the brand. It’s been rumoured for a while that one of the factors Google uses in assessing a site is how much of a “brand” it is.

This may sound like a hard thing to gauge, but when you have the resources of Google, it’s actually not. For instance, by checking the ‘About Us’ and ‘Contact Us’ pages of a website (and verifying against Google Maps listings, Yellow Pages, other directories, etc), Google’s able to get a picture of how many offices a company has, where they’re located and generally how big a business is.

They’re also able to use social signals like Facebook fans, Twitter followers, LinkedIn connections, Youtube views to assess the size of a company.

Even other factors, like a company’s Wikipedia page or how many searches occur each month for a ‘brand name’ help Google to assess how big a brand is.

JCPenney would have ticked all these boxes, meaning Google would have had leeway in its algorithm for some dodgy links (either because of others pretending to be affiliated with the brand for their own personal gain or even sabotage by competitors).

The second point is probably the most valid because Google have always said it won’t penalise you for something your competitors could do to you. (Eg: Theoretically, it could have been one of JCPenney’s competitors that planted all those links to deliberately sabotage them).

Now normally, companies engaging in dodgy linking themselves leave a trail. This might be in the form of a link wheel where one of the dodgy linking domains is actually registered to the original company, requests left up on forums for paid links or even ‘honeypot traps’ set by Google where they pose as webmasters of dodgy sites trying to see who approaches them. In any case, if someone involved in dodgy linking has forgot to ‘dot an I’ or ‘cross a T’ somewhere along the way, you can bet Google will find it.

What this suggests is that either the firm engaged in the dodgy linking was covering their tracks perfectly or the few blemishes they did have were being offset by the ‘value of the brand.’ Either way, Google’s algorithm didn’t have enough evidence to punish them.

However, when the story broke and JCPenney fired their SEO firm, it gave Google enough evidence to suggest they had been doing it deliberately and imposed a manual penalty on them.

What this case highlights more than anything is that the world of link-building, whilst necessary to get solid rankings, has a very black underbelly and all businesses need to be careful about which SEO firm they choose to deal with, as picking the ‘wrong’ one can have disastrous consequences online.

For those who haven’t heard, Yahoo and Microsoft agreed last year to a deal whereby Microsoft’s Bing search engine algorithm would power the organic results in Yahoo; and Yahoo’s Search Marketing software would supply paid listings in Bing.

What this means is that, in theory at least, the results in Bing and Yahoo will be identical.

However, I suspect that this won’t be the case in reality.

For one, paid search advertisers may choose not to advertise on one or the other, or have different sets of keywords in different engines, meaning the paid listings will vary.

Why would they do this? Mainly because the demographic makeup of users on the two search engines vary, and so advertisers who know that their target market is more aligned with Bing’s userbase will only advertise there.

However, this difference in demographic usage is also the reason why the two search engines probably won’t spit out the same organic search results.

The deal between Yahoo and Microsoft will see Bing’s search algorithm used on both engines. However, search engine algorithms are made up of thousands of individual factors and one of these is the actual search and click patterns of its users.

Eg: If, for a given keyword, a search engine discovers that the listing at number 3 is proving more popular (i.e. getting clicked on more) than those higher up, it will adjust its search results to reflect this.

Given that different demographics will have different interests and tastes, it holds to reason that the website that attracts them the most in a given list may not be the same one.

Based on that, results in either Bing or Yahoo may start to vary (because of the underlying algorithm) if users of one of those engines are preferring certain sites.

What this means is that you may still see very different sets of results in Bing and Yahoo (and the disparity will probably grow larger over time).

It was claimed that these reviews were generating a massive boost to his online search engine rankings, as many of these sites featuring negative reviews were providing a link back to his site.

As the number of links pointing to a site does impact on a its search engine ranking, the owner of the business felt that by aggrivating dissatisfied customers, he could stir up more publicity (and more links) for his site. Since many of his customers were simply typing in things like “designer glasses” and purchasing without checking the reputation of the company they were buying from, one unhappy customer was turning into 100 new ones for the business.

So do unhappy customers actually boost search engine rankings? When it comes to Google, is all publicity good publicity?

On the face of it, the idea seems plausible. Hundreds of negative reviews all linking back to the site they were ripped off from, providing the owner with a bevy of new links to his site on a daily basis.

One thing is for sure though, the article drew the attention of Google itself, who have (kind of) admitted there was a slight flaw in their logic (you can read Google’s official release here). They have since rolled out a change to their search results, designed to take into account “bad” customer experiences as part of their algorithm.

The official release from Google made some interesting points though. As they mentioned, they can’t just go penalising sites that have negative publicity (otherwise you’d never be able to find a politician’s website), and most review sites (like TripAdvisor and RippedOffReport) use “nofollow” tags to stop the links carrying any SEO impact.

What Google has actually changed remains a tight-lipped secret, however it does raise an interesting issue. If “bad” reviews are now having more of an impact on a site’s rankings, it does open the door for “black hat” SEO sabotage whereby a dodgy competitor can post hundreds of fake reviews on your business around the web attempting to get Google’s new algorithm to pick it up and punish you in the search results.

This seems like a dangerous position for Google to put itself in, which is why I doubt it’s that simple.

Long ago, Google put in place ways to stop shady companies deliberately putting links to their competitor’s pages from other dodgy sites by simply not counting them, rather than actually penalising. This meant that even if your competitors went out and sent 10,000 dodgy links your way, it wouldn’t negatively affect your rankings. You might get a temporary boost, but when Google realised they were dodgy links you would simply return to where you were (unless Google can find evidence that it was you who did the linking).

I suspect that a similar approach is probably going to be taken here, whereby negative reviews and posts don’t affect your SEO rankings at all, reducing the likelihood of these situations from happening again.

However, this issue is not finished with yet. As Google’s official statement says, they are “reasonably confident” that being bad to your customers will be bad for your Google rankings.

In my original article I pointed out that maximising the ROI of your campaigns does not necessarily maximise the actual profit of your campaigns.

In this article, I’ll continue to explore this but with a practical example.

Let’s take the following scenario:

An advertiser is running a campaign selling goods in their online store. The average profit margin of their products is 40%. By doing much testing, the advertiser has found that their ROI is maximised at $15 when their monthly budget is at $2,250. For every $250 they increase or decrease their budget away from this amount, ROI drops by 5%.

Based on this scenario, we get the following situation:

As we can see from the graph above, ROI is maximised at $15 when the budget is $2,250 per month. When we vary the budget, the ROI drops.

An advertiser without an understanding of the relationship between ROI and profit would incorrectly leave their budgets at $2,250 per month.

We can see from the graph that total revenue is actually maximised when the budget is $5,000 per month, but this is failing to take into account the 40% profit margin and the actual click spend itself.

When we allow for these factors, we can see that the optimal monthly budget is $3,750, resulting in a profit of around $13,000 per month.

So how does this relate to AdWords campaigns in the real world?

The example above is a simplified (and fairly symmetric) version of what happens when you decide to increase the size of your campaigns.

When more ads, keywords and click spend is added to a campaign, it’s normal for ROI to drop.

However, what this example aims to show is that even though ROI might drop when you expand your campaigns, actual profit is likely to be higher.

Essentially, Google Instant is the next leap forward in terms of predictive searching, as results are displayed to the user before they’ve finished typing their key phrase. For those who haven’t seen what Google Instant does, there’s a demo available here (http://www.google.com/webhp?sclient=psy).

What this means for the world of search engine optimisation (SEO) has divided experts.

However, the prevailing opinion is that Google Instant has made SEO even more critical to your business.

In the past, a user would head to Google with a search term in mind, let’s say “neon lighting brisbane”

In the time it takes the user to type this search phrase in, they’ve seen 15 different sets of results flash before their eyes. And this doesn’t count any mistakes that require backspaces!

So whereas before you might have been content to just optimise for the keyword phrase “neon lighting brisbane”, you now need to make sure you’re showing for all possible (relevant) variations that show up during the typing of this phrase.

What remains to be seen however, is whether or not users will actually be tempted by, and click on the “instant” results or whether they will just become an annoying distraction.

By being able to control the maximum cost-per-click for every keyword, this puts advertisers in a position where they are able to monitor the profitability of every keyword they are targeting.

Search engine ads are one of the most trackable marketing activities available, and if you’re running some sort of eCommerce environment then you have the potential to track the exact return on investment (ROI) each keyword is bringing.

However, this degree of reporting can lead to misinterpretation of what is a “good” keyword and what is a poor keyword.

At the basic level, a decent Analytics setup will allow you to determine that for every $1 you put into AdWords, you are getting $X back. Clever operators will have this set up for each individual keyword.

However, relying just on ROI can be a big mistake. Let’s take the following example.

Keyword #1 – “widgets brisbane”

• ROI = $4.50
• Monthly Spend = $300

Keyword #2 – “widgets sydney”

• ROI = $2.80
• Monthly Spend = $700

From the above example, we can see that “widgets brisbane” is a better performing keyword. Therefore, if you only had $1000 in total monthly budget, you would spend all of it on Brisbane (presuming of course there’s enough traffic to use that much). However, if your budgets are flexible and you can spend more if you want, then would you turn off the Sydney keyword?

The answer is no. ROI is just one factor you need to consider. The other is profit. The Brisbane keyword makes $1,050 profit per month (300 x 4.50 – 300) while the Sydney keyword makes $1,260 profit (700 x 2.8 – 700).

Turning off the Sydney keyword would make your business worse off. Obviously you should also consider the profit-margin on the actual widget itself when calculating these figures.

Now most people when faced with the above scenario, would obviously choose to leave both keywords turned on, but for some reason when this scenario is expanded to hundreds of keywords, rational profit-maximising thinking tends to go out the window.

Let’s say an AdWords’ advertiser is spending $1000 per month across hundreds of keywords, and is getting about $5000 back (a $5 ROI). Based on this good performance, the advertiser decides to increase their budget to $2000 per month, which in turn lifts the revenue to about $9000 (a $4.50 ROI).

Looking purely at the ROI figures would lead an advertiser to incorrectly assume the increase in budget has not worked, and they might drop it back. However, looking at the profit figure clearly shows monthly profit rising from $4000 to $7000.

One of the questions we are commonly asked is “why does my ROI drop when I increase my budget?”

The reason behind this is actually tied to the economic principle of the low-hanging-fruit. The low-hanging-fruit principle basically explains that in business, there are some sales that are easier to get than others, like the low hanging fruit on a fruit tree is easier to reach.

In an AdWords context, a low-hanging-fruit keyword would be something like “buy online widgets now.” If a user types this into Google, it’s likely that they already have their credit card out of their wallet and are ready to purchase. These longer, more specific keywords are also often cheaper to bid on than generic terms.

By contrast, a user searching “widgets” is not a low-hanging-fruit. This term is highly generic and it’s going to take a good salesperson (in this case a website) to convince this person that now is the right time to buy.

Essentially, this is why ROI drops when you increase your budget. The AdWords’ algorithm has a built in “low-hanging-fruit” factor that shows higher performing keywords more often, meaning when you increase your budget, you’re starting to reach for the fruit higher up on the tree.

The lesson here is that the way to assess how your AdWords’ campaigns are performing is to find the point (budget amount) where total profit is maximised, not where ROI is maximised. This simple mistake could be costing your business thousands in lost sales.

This statement may have some scratching their heads, but the similarities between a business’ website and their employees makes it more than achievable.

Let’s firstly look at initial costs. Most websites cost between $5,000-$30,000 to build, which, depending on your industry, is also around the amount it can cost to recruit and train new staff.

But once you’ve recruited a new staff member, the job’s not done. In order for that employee to become a valued team player you need to invest in training, resources and time, as well as pay them a yearly salary.

This goes for your website as well. Once it’s built, you need to invest in continually improving its effectiveness. This often includes both search engine optimisation (SEO) and search engine marketing (SEM) on an ongoing basis as the website’s salary, and ongoing usability improvements as their training.

Like an employee, websites also work best when there’s an ongoing buy-in from managers, spending time actually trying to improve the work that they’re doing, rather than being left alone to twiddle their thumbs and cost the business money.