It’s a weird thing that some of the smartest affiliate marketers are also the dirtiest.

1 – Ever heard of “PPV”? Aka pay-per-view? I wish I was talking about boxing matches on TV. No, the larger ROI-centric affiliates are tending to move into “PPV” or “CPV” traffic, which many of you might know under its non-euphemism name, pop-ups.

The funny thing to me is that the dirtier you’re willing to play, the dirtier others are willing to play back. I was watching a TV show I like, and the site hosting it sells PPV traffic. Here’s an indication on traffic quality: the new ad page opens when you click play the first time. Yeah, totally what the visitor intended.

Bottom line is that PPV is the talk of the town in ROI-driven affiliate circles, and that’s a sad thing.

2 – The blackhat SEOs are tending increasingly towards the hacking side of things. In an SEO-driven version of a common scam, interruption marketing is used to make you think your website has bugs and you need to buy the virus “anti-virus” these helpful ‘warning’ providers are offering.

I’m trying to find the right reference on Ben Edelman‘s site, but it’s not surfacing.

Coincidentally, what does show up the overlap in adware makers [which serve to generate popup "traffic"] and phony anti-virus scams. All of which dovetail with Zango‘s jolly products.

3 – Annoying people and slowing their computers with your crummy software, plus hacking their sites … don’t think it doesn’t get better! Indeed it does. Phishers are going for AdWords accounts. Probably for the credit card info, firstly (the fastest cash), but I’m sure the campaign data can’t be something they’re possibly ignoring.

4 – Facebook application providers drive useless incentivized traffic. A whole lot of scaffiliates were pissed when Dennis Yu outed them on TechCrunch, but I’ve yet to hear them complaining about Farmville sending junk traffic to advertisers who will lower their payouts accordingly.

That’s what happened with cookie stuffing and other crap at eBay, until they dug into the data, booted the thieves and switched to CPC pricing based on quality. The good affiliates got paid more and the riff raff got the door.

We really, really need consumer advocacy organizations and Attorneys General to sue more of the big-time jokers for the benefit of the industry. Just a shame they can’t sue certain goons in the Kremlin who profit from this. Or, more optimistically, there are market solutions, as per Alex Rampel of TrialPay.

p.s. While I’ve almost never answered her [mostly unsolicited] emails, this interview with Emma Kupiak makes Neverblue sound like a good network to run traffic with. Almost – they still run the scammy junk like the rest of them… But at least Emma makes a good case about them being helpful to affiliates who want to be scammy! …

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I got the question recently from a friend at a big corporation, in the context of buying reviews. Of course, Google does not make the law (yet), but there are laws restricting misleading marketing.

In Canada, the main law in this field would be the Competition Act, whose sections 52 and 74 (or is that 54 and 72?) deal with misleading advertising.

The law was revised in March 2009 to, amongst other things, raise fines for criminal prosecutions under the Act. Which is awesome!

Fines were at $50,000 to $100,000 penalties for individuals, and $100,000 to $200,000 for companies.

Today they’re at $750,000 to $1M for individuals, and $15M to $20M for companies. A considerably greater dissuasive force, imho .

You can find my more eloquent and detailed post on this, in French, at Blogue Marketing Interactif. (I guest-write for the Montreal Marketing Association.)

p.s. What does this tell you about flogs?

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One is at Search Engine Journal: http://www.searchenginejournal.com/seo-mythbusters-content/12810/

The other is at Blogue Marketing Interactif: http://www.bloguemarketinginteractif.com/flogue-collette-judy/ (in French)

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While reading Canada’s Trade-marks Act (IDK why it’s not spelled Trademarks, but anyways…), I found the following interesting nugget. Sounds similar to some domaining practices, and may have value for offline businesses:

Exception for disuse

11.18 (1) Notwithstanding sections 11.14 and 11.15 and paragraphs 12(1)(g) and (h), nothing in any of those provisions prevents the adoption, use or registration as a trade-mark or otherwise, in connection with a business, of a protected geographical indication identifying a wine or spirit if the indication has ceased to be protected by the laws applicable to the WTO Member for which the indication is protected, or has fallen into disuse in that Member.

Source

What would you guys do with this, if you were in the wine/spirits business?

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The scams described in the video below have a lot in common with the Google cash, Google Money and other similar scams prominently found all around the internet.

FYI to affiliates promoting these things in Canada: You’re asking for jail time. Read the Competition Act.

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Malware is the music industry’s saviour. I’ve just had an epiphany.

My laptop is in for repairs for the second time in three years. Both times I’ve had intensive malware presence on the computer – it took computer repair specialist Adam Blechman hours to get rid of all the viruses the first time, and this time he apparently almost had them infect his own computer! It cost me $300 to get things fixed the first time and I’m probably looking at a similar bill on this go-round.

While I can’t remember the circumstances of the first viruses getting on my computer, I’m 99% certain that peer-to-peer downloading caused the most recent flare-up. I wanted to watch episodes of Greek immediately, telling myself I would buy the season DVD later. Turns out those .rar files packed a [spiked] punch and I invited a bunch of viruses, trojans etc onto my computer.

You probably see where I’m going with this… By imposing friction and a measurable financial cost on people who use peer-to-peer downloading software, malware creators solve the music, movie and tv industry’s woes [at least, those due to peer-to-peer downloading].

One of three solutions seem possible:

• There should be a greater willingness to pay for the authentic version from a reliable store like iTunes.
• People who prefer to run the risk of getting viruses should be more likely to buy anti-virus software. These sales can be taxed and the taxes redistributed to the music biz, in the same way Canada has long had a tax on 8-inch tapes. Those taxes were imposed because people could record songs off the radio onto the tapes.
• Folks who download P2P but refuse to get anti-virus and other security software will see their computers slow down into oblivion. They will then need to buy new computers, which can be taxed.

The last solution sucks for people who are already paying for anti-viruses and/or authentic songs (since they’re already paying for real songs or taxes on anti-virus software). But they’ll still pay this tax less often than people who keep destroying their computers with malware.

I find it interesting that this situation is the culmination of a “tragedy of the commons” type of situation. The free public resource that is P2P networking got leaned on by so many people that it became an attractive target for malware writers, who seek to build botnets on tens of thousands of computers. Hopefully I’ll have a bit more on that in the near future.

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Are domain names the internet’s real estate? Can keyword research be considered intellectual property? I put these and other questions to Eric Goldman and Mark J Rosenberg, both of whom are speaking on SES San Jose’s legal panel. (Clarification: This is an interview, not coverage of an SES session.)


(Image: Jason Burrows)

Note: This post only offers information. It does not offer legal advice, counsel or opinion, and should not be relied upon for such. Speak to a lawyer who is a member of your local bar if you need counsel.

1) Are domains really an equivalent to real estate? I asked my real estate prof that and he highlighted a variety of reasons why they aren’t. Ex.: No rights-of-way, usufruct, and other such items.

Eric Goldman (EG): No, domain names are not virtual real estate, and I always chuckle when I see the domainers bloviate about this analogy. Personally, in almost all cases, I’d rather own the top spot on Google for a keyword than to own the keyword.com. I expand on this point more in this lengthy article: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=635803 [Requires some kind of subscription; password confirmation email not hitting my inbox so I'm not linking to them. Talk about SE friendlines... Abstract looks interesting though!]

Mark J. Rosenberg: He [your prof] is right. Domains are like any other personal property. No different than a baseball bat. They can be bought and sold without any special terms and conditions. If used incorrectly, they can cause damage.

2) Can SEOs be considered fiduciaries/trustees for their clients, at least with respect to the site? What criteria would militate in favour and what criteria would oppose such a characterization? Is implementing non-best practices a breach of trust that can constitute a cause of action?

EG: No, I think the analogy to fiduciaries or trustees is way too strong in most cases. In some cases, SEOs can be “agents” of their clients and have the power to bind their clients to legal commitments, but this is probably not the case with the standard SEO-client relationship.

EG: However, like any professional service provider, SEOs could face malpractice or related claims for botching their jobs. I’ve never seen an SEO malpractice claim but I suspect they will come in the future. Even then, the standard for malpractice will be loose (i.e., general incompetence will probably not be deemed malpractice; it will take a higher degree of incompetence to be actionable).

EG: In all cases, an SEO who does a lousy job will develop a poor reputation and suffer some economic consequence accordingly. Also, this issue becomes less important to the extent clients are paying performance bonuses or other compensation tied to results.

MJR: [Whether the SEO is a trustee or not] is most likely a contract specific issue. Unless specified in the contract and/or SEO given special responsibilities, the answer should be no.

MJR: Some of the criteria that would militate in favour are handling money, extensive control and/or operation of site including content. Those that would oppose such a characterization include an SEO acting as a consultant merely providing advice, and having limited or no control over site or its operation.

MJR: [As to breaching a trust by forgoing to implement best practices,] This is case specific. For example, in some situations, there may be a legitimate reason for not implementing a best practice. Otherwise, I would say that depending on the extent of the violation, there may be a claim for breach of contract.

3) Keyword research – can it be considered as intellectual property? If an affiliate manager gives yours away, or a search engine does… are they violating your rights?

EG: It’s possible for the insights derived from researching keywords to be protected under IP. Most likely it would qualify as a trade secret (if it qualifies as IP at all). In order to remain a trade secret, the SEO would have to require everyone who has access to those insights to agree in writing to protect their confidentiality. This can be tricky–especially with the search engines, who aren’t promising anything!

EG: Note, however, that depending on an SEO’s contract with its client, the contract may transfer ownership of the SEO’s work (including their keyword research) to the client. Clients are often as concerned about confidentiality as the SEO, so this can set up some conflict during the contract negotiations. SEOs really interested in protecting their work product, including their keyword research, need to retain an attorney to help them build the proper legal
protections into their contracts and operations.

MJR: It can be considered a trade secret if it is treated as such. If given away without permission, there is a definite violation, provided that it was a trade secret in the first place.

4) What is the standard of care SEOs need to employ in carrying out work for their clients ?

EG: As I mentioned, I don’t think the standard of care has been defined in the courts, and I expect it will take some time before it is. In all cases, the legally defined standard of care will be less rigorous than the marketplace expectations of SEOs’ ability to deliver results. Add value to your clients, and you will be richly rewarded. Chunk it, and your phone will stop ringing.

MJR: There is no special standard. It is to abide by contract terms to the best of their ability while governed by the usual implied covenants and standards under the UCC [Uniform Commercial Code, a US inter-state legal convention aiming to harmonize signatory].

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At the Domain Roundtable, Matt Cutts said that Google will cut down any sites that get sold back to zero ranking value. So after a site has built up SEO strength for a few years, the asset could be worthless on the search market because Google – which controls the overwhelming majority of North American and most Western search – makes the rules.

This is clearly unfair to webmasters. Not to mention that the Fortune 500 are again on a different playing field, because their purchases are just mergers and acquisitions, not “site purchases”…

Update: Apparently this treatment is reserved for sites that also change topics. The technique thus remains useful, but obviously the problem it resolves is narrowed to particular situations. Hat tip to Gustavo Cardial for pointing out the error.

Lady Justice, blindfolded with scales and sword by California Criminal Defense Lawyer Rob Miller.

In an effort to balance out the scales, I’m sharing a legal technique called “the trust.” My hope is that it will enable webmasters to buy sites and sell them without fear that their hard SEO work will go to naught.

Disclaimer: As I’m just a law student and not a lawyer, let alone an expert on trusts, please only take this as information, not legal advice, and please correct any errors you find.

What is a trust?

Trusts evolved through the [feudal] tax-evasion efforts of commoners and low-level knights in the Middle Ages. Before running off to rape and pillage in the Crusades, a person (“A”) would leave their property with a trusted friend (B) – who thus acquired legal title through an inter-vivos transfer – to the use of A’s family or kids.

(The reason this was tax-evasion was that higher up lords or the King would perceive taxes if property was transferred in a will. By transferring inter-vivos, you had no taxes to pay.)

Problems arose where the “trusted” friend tried to claim the property for his own use rather than be its custodian for A’s family. The courts of equity resolved them by holding that the “cestui que trust” (today known as the trustee) was bound to hold the property for the benefit of A’s family. A’s family thus had what is known as “beneficial title.”

The difference between beneficial title and legal title is that the former was created and enforced by the courts of equity (whose jurisdiction was more about morality) while the latter was enforced by the courts of common law. Today both courts are merged. But for reasons of history and lawyers having fun finding new uses for outdated legal mechanisms, the trust (the “use” ‘s modern cousin) is still around.

So the trust is by definition a devise of property to another party for the benefit of a third party. The devise, aka settlement, is made by the settlor (A). The person receiving the property is known as the trustee (B), and he holds legal title. B holds the property in trust for C, the third party designated by the settlor. C has the beneficial title and is thus known as the beneficiary. (A is left with nothing, though if a court finds that the trust “failed,” the property will usually return to him.)

Note: You can have trusts created by wills nowadays. It need not be an inter-vivos transfer. Which makes sense, since we no longer have the feudal tax system.

Why should webmasters who want to buy or sell websites care?

The reason I shared the history lesson was to make clear the distinction between legal and beneficial title. By taking advantage of that distinction, webmasters should be able to write contracts that transfer control of a site without getting it shot down by Google.

In essence, the contract simply states that the site’s seller is creating a trust in favour of the buyer, with the seller as trustee. The property in question would be specified as being the website.

The Result of Using a Trust?

The Whois record for the site’s domain will read that the property is still owned by the site’s seller, since he as trustee retains legal title. However, the beneficial ownership of the property passes to the purchaser. Thus Google has no way of knowing that the site was sold, afaik (if you know of other methods beyond whois, please say so in the comments.

Caveats On This Technique

You need to make sure that you draft the trust document very precisely. In particular, you need to show the three certainties:

• Certainty of intent [on the part of the settlor] to create a trust. If he meant it as a gift, lease, power of appointment etc. you might have trouble. Best to use the word “trust.” Obvious, but you’d be obvious how many people screw that up.
• Certainty of the subject-matter of the trust, i.e. the property. Is it just the domain? Hosting too? The backend? vBulletin licenses? Take an inventory of everything and specify it in the trust instrument (and in the contract specifying that you’re to have this trust created). Then make a clause that if you forgot anything, your intent was to include all things reasonably required for the site’s operation in the subject matter.
• Certainty of objects, i.e. the beneficiaries. Who exactly is getting the property? You? Your business partner? Your company? Note: If it’s your company, it had better be incorporated or else you get into really grey areas of the law. Good for your lawyer’s billings, not so good for you.

Penalty clauses for breach of the trust on the part of the trustee should be included and heavy, but not so harsh that a court would overturn them as unconscionable. This is tricky, and I know very little about these, so again, consult a real lawyer for advice.

If you’re buying a site without knowing the owner other than online, be aware that you run the risk of them “selling” the site a second time. As beneficial owner, you can sue the new purchaser to ‘trace’ your property and get it back, though you might have problems if they purchased it in good faith. Of course if it gets to this point, the site will have been sniped by Google and so you’re better off suing the trustee/seller for damages, since the rankings will be gone. This is probably the biggest problem I can see with the whole deal, since on paper (i.e. the Whois record for legal title), the seller still owns the property.

Finally, the last caveat is that if Google’s legal department gets jerky, they might argue that whois represents legal and beneficial title. It’s a weak argument, imho, but it’s there. And judges mostly don’t get the web (with some exceptions), so there you go… Rule #1 in law is avoid litigation.

Conclusions on Using Trusts to Beat Google’s Domain Demolitions

Whoa! Breaking Google’s rules can be legal and ethical? Shocking I know . More interestingly, I’m sure that jurists with more knowledge than me could find other areas of application for legal mechanisms in search (beyond trademarks). Incidentally, I think I’ve found an application for another legal fiction, and I’ll be blogging about it as the second part of this two-part “law and search marketing” series.

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I’d like to highlight that while I haven’t yet studied the civil law’s parallel mechanism, “la fiducie,” my understanding is that it should work the same way. After all, as you might have derived from the name, a “fiducie” is where property is held by a “fiduciaire” (French for fiduciary) for the benefit of another party. And trustees owe fiduciary obligations to beneficiaries, like website purchasers…

Update: As my presentation at SMX Advanced on the site buying panel was well received, and this is something I have an interest in, I now offer site buying services and consulting.

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Legal fictions can be used by greyhat SEOs to overcome Google’s nearsighted paradigms on buying websites and buying links. While Google is trying to pass off its guidelines as law – and is succeeding in convincing some people of that fact* – the facts are otherwise, and my two-post series on the topic will show that the law can actually enable people to skirt Google’s techniques and expose its faults.

For my first post, I will address how legal fictions in the common law solve the problem of having a website’s SEO strength reset upon purchase and transfer. (I’ve yet to grasp how the civil law handles this, though my understanding is that it has similar mechanisms.)

Everyone’s favourite competitive webmaster, John Andrews, recently liveblogged Matt Cutts’ presentation at Domain Roundtable . Matt explained that Google eliminates all or nearly all of a site’s value when it is sold.

Obviously this is not the case for corporate America (Myspace anyone?), which in any case has its own legal fictions defending it (News Corp bought Myspace Inc, and Myspace.com was just one asset…). But for your average independent/competitive webmaster, the situation is different. So hopefully this will be helpful to you search marketing folks without the benefit of Fortune 500 status to back you up.

Update: The post is live: Buying Sites? Use Trust To Avoid Google Domain Demolitions.

For my second post, I will show how another legal fiction enables the purchase of text link ads under the radar.

After my post on hiding/disguising text link ads as AdSense and other ad format, and Shady’s point on making paid links look like the result of linkbait , this tip is another tool in the link purchaser’s arsenal.

Google is broken: it gave up the original PageRank paradigm of valuing links based on the traffic they send in favour of some public relations notion of links as “votes” (next SEO that repeats that links are votes is getting their ass kicked by yours truly). Until Google fixes itself, buying links from craptastic sites with no visitors (the majority of link buys, imho) is going to keep working.

*”[B]lackhat tactics are [...] illegal ways to game the system to your advantage.” – Avinash Kaushik’s Web Analytics an Hour a Day, p. 206; otherwise an interesting and educational read and one which I’ll be reviewing here once I’ve finished reading it. Note also: I spoke to Avinash before publishing this and he wanted to highlight two points of context for the above statement:

• First, he recognized that it was a mistake and poor choice of words. His point was merely that it’s unwise as your site might get banned (which is a more accurate statement and one I agree with).
• Second, he highlighted that he wrote that prior to working for Google, and thus it wasn’t a statement that they had him put out there. (That said, I’m quite certain their public relations department was more than happy to see that statement put out there.)

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Net Neutrality has added another formidable opponent to its already large list, with the US Justice department issuing a filing with the Federal Communications Commission against Net Neutrality. This could potentially be big news for bloggers, Search Engine Optimization consultants and all those in the internet marketing industry.

Net Neutrality is the principle that all web sites be accessible to surfers for the same cost. The telecommunications industry is lobbying the US government to enact legislation allowing it to charge more for people to surf certain websites, or even certain forms of content.

There are two main reasons why Net Neutrality matters, and why this filing is bad news for the internet marketing industry. First of all, Net Neutrality means that a blogger with a critical opinion of some big telecom industry could easily see access to his website made prohibitively expensive. Or on a similar train of thought, if he outranks some telecom portal for a lucrative keyword, the telecom could make accessing his site more expensive than accessing its own portal.

In effect, it gives the telecom industry the right to affect the cost of doing business of anyone with a website.

In the offline world, this is the equivalent of letting your telecoms provider add a bunch of figures to the expenses column in your accountant’s books! In simple terms, this gives telecoms the right to censor web sites and web content they don’t care for in fact, if not in theory (theoretically you could always pay some exorbitant price if you reaaaally want to surf that site).

Second of all, if Net Neutrality is lost, then SEOs can find themselves and their analytics providers – I can hardly think of a more crucial element of the internet marketing industry – being priced out of the market by ISPs who also sell webdesign, ecommerce and internet marketing services.

I know that Bell has huge ads for its ecommerce offerings in the local yellow pages, and – big coincidence – they’re also a major ISP here in Montreal. The folks at NVI (whose writing at SEO Moz are fairly good – keep it up Guillaume!) might find their website suddenly on the “costly access” list.

Similarly, if/when they start offering analytics, you can expect Conversion Ruler (giving you guys a link because of Kent’s friendly email support) and company to find their own sites rather expensive to access. This could kill their businesses in a flash, since their business model is dependant upon people visiting their site.

ISPs and the telecom industry generally would be in a position of conflict of interest if they had control over their competition.

Thirdly, without even considering conflicts of interest and just considering the technological aspects of things, losing Net Neutrality could mean that people with bandwidth intensive sites are made more expensive. Photo bloggers and video bloggers beware! Adult industry – you’re in for it (but then, considering that you guys are the Net’s pioneers, my guess is you’ll find a hack around it that everyone else will catch up on 3 years later)! Soccer training site online? Better use text explanations for your drills!

Anybody doing business on the internet, and specifically the people in the internet marketing industry such as SEOs and analytics providers, need to fight for Net Neutrality. We all stand to lose a lot if we don’t.

Update: Other SEOs and marketing folk are discussing this issue. Jordan McCollum at Marketing Pilgrim is on it (funny… my girlfriend’s last name is McCollum too!) . Her write-up includes this killer quote, also discussing the likelihood that video users will be hit:

“Oh, wait. According to comScore, that would be 75% of US Internet users, or 132 million people (that would also be about 44% of the total US population). So three-quarters of Internet users should pay more to keep getting what they’ve been getting so that the other one-quarter can pay the same for the features that they’re not using?”

Touche!

Jeff Pulver ran a viral marketing campaign to support Net Neutrality, offering $1k for the best video ad. Kudos to you, Jeff; you deserve the link. Also check out Jeff’s great blog!

Ira Teinowitz of Adage has another worthwhile writeup, where he sums up why Net Neutrality is key:

“Favored providers could get faster access to consumers’ doorsteps and less favored ones could having difficulty competing.”

(Incidentally, you’d think that Ad Age would be doing better SEO… the URLs are keywordless, the title tag features Ad Age before the postname, a broken search function that won’t bring up the article when I type in net neutrality… go figure! At least they have smart writers penning quality content.)

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