SEO Value Building Vs SEO Arbitrage... Penguin 2.0 Insights

Right out of the gate I wanted to share the Matt Cutts video (Matt is the head of web spam at Google). This is his formal address to the website and internet marketing community on where they are headed with combating search results that are manipulated by things that don’t provide real value to users.

There is plenty of technical talk about the potential issues of this update, but I am going to focus on what this update should mean to your businesses online marketing strategy. Some of the best and brightest pros in our industry are already making changes. Search Engine Journal cut off a well known link building abuse…..The author box. (If your not SEO savvy, links are what Google’s new update tackles)

What does it means for your businesses strategy?

It depends on your business. Honestly, it really does. There are some smaller companies that do well using doorway and throwaway websites and others that invest millions into a single domain. The strategy you should be using really depends on your what strategy suits you best. In this article I will be breaking down several options for you that will make it easier to choose the road the best suits you.

Arbitrage Vs. Value Building

In the good old days of Google, us SEO’s were free to use links to play online god and rank website at will without reprisal from the search engines. They did a lot of barking about quality, but quality efforts cost time, money, or both, and you could get a site ranked well if you knew what you were doing by skipping the quality part and arbitraging with cheap links that added no value to the end user.

Link building isn’t dead as a tactic, but is had most certainly changed a lot since last Penguin was rolled out in the spring of 2012. Your decision really needs to come down to which group you want to play in. Lets get to the pro’s and con’s of them both so you can make an educated decision of what fits your taste. Here is the break down.

SEO Arbitraging – we define arbitraging as the practice of using tactic that provide no real value to end users or potential customers to manipulate a website into ranking higher in the search results. What does that mean? Here are some actions we consider arbitraging:

  • Getting links from websites that a user will never use or click on (most likely will never see) because you know that links will make your website rank higher.
  • Buy social bookmarks, tweets, google+’s and other social signals just for the numbers that aren’t relevant to your business and don’t care about what you do.
  • Writing poor content that doesn’t add any value to the user who is reading it.
  • In general, just about anything that has the #1 focus of increasing search rankings

Are Their Benefits To SEO Arbitraging?

Yes! Otherwise nobody would be doing it…(don’t go buying links yet, there is more to the story). Arbitraging is typically much cheaper than value building (at least in the short term). With Arbitraging, you can hire a savvy SEO expert, tell him to get you some rankings and go back to running your business. You don’t really have to be involved.

The Problem With Arbitraging Is...

Google is now putting some bite into it’s bark in an effort to end arbitraging. Its bad for their searchers experience when a brand new company can open a website and outrank an established business with years of credibility. Google’s longterm approach to ending the problem is to reduce the potential return on arbitraging until people realize it is no longer profitable to do. It’s a great strategy. Of course there will always be some people that figure out how to continue to cheat the system, but are you the kind of company that wants to play that game? At the moment  if you get caught arbitraging by Google using low quality and manipulative link building tactics that results can be an algorithmic or manual penalty that causes you to all but disappear from the search results. Couple that with the fact that you have to hold your breath every time there is an update, and it may not seem as appealing.

Who Is Arbitraging Right For?

We aren’t Google, so we don’t think of Arbitraging as good or bad. We think of it as an aggressive, but short term strategy that some companies choose to follow in their path to more visibility and more customers. It isn’t illegal. It’s just a violation of Google’s Quality Guidelines. If you are going to attempt to arbitrage it is usually better suited for small or nimble companies that wouldn’t find it expensive to simply start a new site. Large corporations or business that do a lot of business online would find it devastating to have to move to a new domain and start over again. Especially if you have a lot of brand value in the domain you are currently on. In general, the more you already have to lose, the less you should be think about arbitraging tactics. As Google takes the wind out of the sales of arbitrage SEO, it becomes a more short sided effort with no long term gain. (If you want traffic on your website today, just use Pay Per Click advertising)
If you want to dabble in this arena, consider a darkhorse strategy. A darkhorse strategy is a term that we coined to explain testing a more aggressive arbitrage strategy on a new website other than their brands well established domain. For example, your companies website is and you sell “taco widgets”. If was manual filtered from Google’s search results it would be a devastating blow. Your customers couldn’t find you. If you had a second website called  thats only purpose was to generate organic search traffic, and it got manual filtered because you were aggressive with an arbitraged based lower cost strategy, it wouldn’t be the end of the world.

Does That Mean You Think Every Company Should Do That?

Absolutely not. This article is not about telling you to arbitrage or value build. I will leave that for another discussion. This is about drawing some clear lines so you can easily choose a path forward in your organic search efforts. We do have clients that use the darkhorse strategy and above all else, we like it because it satisfies their need to push the envelope without risking the long term devastation of their brands website.

Lets Get To SEO Value Building

SEO Value Building – We define it as focusing on things that will not only lead to links in the future, but new relationships with customers, channel partners, press, and other potential stakeholders of your business. Activities that are part of SEO Value Building include many of the same activities that build value for a business offline. They are:
  • Showing expertise to both your potential audience and the peers in your marketplace
  • Doing things that naturally catch the attention of your audience
  • Showing up at tradeshows and making real world connections and somehow showing those new ties on your website
  • Developing content that is new or unique in your industry
  • Answering the questions that your audience and peers have (even if they have been answered elsewhere by someone else)
  • Taking your realworld relationships and bringing them online by having guest experts right on your blog
  • Engaging your customers to be a voice for you
  • Getting testimonials in as many places as you can
  • Participating in places online where your peers are and where your audience is
  • Speaking at conferences
  • Doing something news worthy like an industry report
The list is a lot longer than that but it can be summed up in one statement. Commit to creating something valuable or interesting to your customers and peers and then put a budget together to use as many channels as you can to promote awareness of the value you created. The more value you created, the less you will have to spend getting awareness because it will happen naturally.

What Are The Benefits Of SEO Value Building?

Your website will probably go up instead of down when Google updates their algorithms and your competitors are caught with their pants down on short term arbitraging strategies. It may not be this update, but eventually it will happen. The links that  get built through process tend to stick around, and only get stronger as time goes by. You will also find that the activities you do create more than just links, they create real awareness for your business with your target audience. That awareness leads to revenue for your company that wouldn’t have happened otherwise. It will lead to new strategic partnership opportunities, better client relationships, more educated new customers, the aura of expertise which allows you to charge higher prices, and tons of great brand impressions. This all sounds amazing!

What Are The Disadvantages Of SEO Value Building?

Its difficult, time consuming, tends to be a lot more expensive than arbitraging (at least in the short term), and takes time to see results. It’s the reason why most companies don’t do it. If you are using an agency, it requires lots of communication with them to make it happen. It’s not an autopilot process.  Often times clients get frustrated when they receive a report that shows they only generated a few quality links for the price that they could have bought hundreds of thousands of low quality links. The trouble is, that clients rarely calculate in all the additional value created from the value building process that doesn’t result in search engine rankings. The story also looks a lot different 12 months later where in most markets 50 or so unique domains linking to your website legitimately is enough to put you at the top of the mountain. Thats only about 4 real links a month, and the end result is authority that isn’t going anywhere anytime soon.

So Whats The Verdict? Is It SEO Arbitrage Or SEO Value Building?

We try to get clients to invest in value building. Google has made it very clear where they are going, and they squeezing the return on investment out of short term solutions. If you wan’t your business to thrive in the organic search results you are going to have to invest either time or money in value building for the long-term. We will leave the technical aspects of that process and the Penguin update for another article. This blog post was meant to help business owners or marketing managers understand the difference between doing SEO authority building by focusing on SEO specifically, or amping up the natural process of value building to get most online authority out of every business action and relationship.
If you need help determining where to draw the line in the sand and which side is right for you, contact us for a consultation.



<a href="">David Wolf</a> is the founder of InBusiness, Inc. He is also an avid entrepreneur. David is an avid reader, and an expert at SEO, PPC, and inbound marketing strategies.