Category Archives: Sunk cost fallacy

Why Is SEO The Biggest Scam On The Internet?

False Promises Made By SEO Agencies:

On an almost daily basis I receive emails from companies offering to “optimise” my site. This often includes a guarantee to get my site on the first page of Google (even though I have already achieved that), to send more visitors to my site, to fix broken links, provide site analytics and get more authoritative links to my site.

Image of email from SEO scam agency offering guaranteed top of Google

What the hell is an “optimised site”?

I’m sorry to tell you that anyone who claims to have “fully optimised” your site for SEO or any other purpose is a fraud and is probably charging you a lot of money for little, if any benefit. There is no such thing as a “fully optimised” site as it’s like repairing the roads, the job is never done.

For example if you want to improve your conversion rate listening to the advice of a so called “expert” will have limited impact and needs to be validated through A/B and multivariate testing. Every site is unique and so a best practice may work on one site but there is no guarantee that it will work on your site.

80% of SEO is pure hype:

 

Since 24th April 2012 when Google released their “Penguin” update most of what SEO agencies do has become irrelevant. Even more worrying though is that a lot of what some of these agencies do may actually harm your ranking and they certainly can’t guarantee to put you on the first page of Google.

 

The old tricks don’t work anymore:

Stuffing your site with keywords, content cloaking and blasting blog sites with links to your site don’t work and are more likely to get you penalised. Even keywords are much less important than before as there is evidence that Google now evaluates the content on the pages that link to your site to identify what searches you rank for rather than relying on the keywords that are on your page.

Search engine algorithms are much better than before at spotting attempts to play the system and conversely are more adept at identifying good quality and relevant content. There are still SEO best practices, but these are more about avoiding mistakes than using any tricks of the trade.

 

What drives SEO rankings?

Part of the problem with SEO and why so many SEO scams are circulating is that Google and the other search engines don’t publish exactly what gets you a high page ranking. However, from what the search engines do publish and research carried out by genuine SEO agencies it is clear that it is a combination of quality external links to your site, social indicators (likes, shares, tweets etc.) and good content. As Google can differentiate between legitimate links and the spam that many SEO agencies create it really comes down to good content. So maybe SEO should be re-named content marketing?

Most basic tools are free:

For many of the genuine aspects of SEO there are free tools available that you can easily access. I’ve previously written a post on how to use Google’s Search Console. This is a great free tool that will answer most of the questions you may have about the performance of your site including; crawl errors (e.g. page not found – 404s), external links to your content, average page rank, clicks,  impressions and structured data errors.

Google Analytics is also free and allows you to identify your most popular content and track page speed and conversion goals. If you have the time and resource there is no need to pay SEO agencies lots of money to identify where your problems exist.

 

Why don’t SEO agencies tell you this?

People have a made a lot of money out of SEO and continue to do so and so why would they admit they add little, if any, value? There may also be an illusion of skill for some SEO agencies that psychologist Daniel Kahneman sums it up nicely:

“Facts that challenge such basic assumptions – and thereby threaten people’s livelihood and self-esteem – are simply not absorbed.” Daniel Kahneman in Thinking, fast and slow

This is not only a waste of money it is quite dangerous for companies. By measuring metrics that don’t influence your bottom line (e.g. Likes and Shares), people can’t stop themselves optimising campaigns using such meaningless targets (see Cobra Effect).

A lot of investment has also been made into SEO and optimisation. Due to our tendency not to want to admit when we have made bad decisions (see Sunk Cost Fallacy), people often carry on with behaviour even when there is no evidence to support it.

12 SEO scams and how to spot them:

  1. Guaranteed Rankings:

It is not possible to guarantee a #1 ranking on Google as their algorithms are far too complex for any SEO agency to play the system and definitely deliver a sustainable first place on Google.

  1. They don’t detail how the will improve your organic traffic:

Many SEO “experts” claim they have “secret” SEO strategies and don’t detail what exactly they are going to do to improve your ranking or traffic levels.  Any legitimate agency should outline in detail tasks they will undertake and agree some targets to measure their level of success.

Image of how I more than doubled organic traffic using content marketing strategy

For example in October 2016 I implemented a new content marketing strategy and by the beginning of 2017 my organic traffic had more than doubled. I knew exactly what my plan was and also had the analytics in place to measure the impact of my new strategy. Anyone who can’t tell you what they plan to do is probably thinking of using black hat SEO techniques that will get you penalised or banned by the major search engines.

Here are a few of the SEO scams that try to leave back links on my site on a daily basis. They don’t even have the intelligence to hide their intent.

Image of comments on blog from SEO scam companies

 

  1. Offer free trial SEO services:

Genuine SEO work is time consuming and takes days, if not weeks, to deliver results. No genuine SEO company is going to offer this for free and if they also ask for access to your admin area or hosting account I would be very concerned about their motives.

Image of SEO audit
Image Source:

 

  1. They have a special relationship with Google or an employee at Google.

This is definitely a scam as Google can’t be seen to have a “special relationship” with any SEO agency and so this will be a simple lie.

  1. Offer to submit your site to hundreds of search engines.

In the UK Google, Bing, Yahoo and AOL account for over 95% of searches and so why waste time worrying about other niche search engines?

  1. Low priced SEO:

As I have already mentioned genuine SEO is time consuming and labour intensive and so anyone who offers to do it at a very low cost is either having you on or they won’t do a very good job for you. Concentrate on learning how to use Google Search Console and Google Analytics for free and you will save yourself a lot of money.

  1. We understand Google Algorithms and are algorithm experts:

Search engine algorithms are very complex, dynamic and are frequently updated and so it is virtually impossible to understand for certain how they will rank your site for a specific search query.

  1. We can submit your site to well-known directories:

Some SEO agencies offer to manually submit your site to various directories. This is another scam as this is the internet; the vast majority of people use Google not directories to find a service or a product they are looking for.

  1. We can submit new content to search engines:

Continuously submitting your site to Google is a complete waste of time as it won’t influence your ranking. If you have new content you can submit it to Google for instance using their free Search Console.

Image of Fetch as Google from Search Console

  1. We are partners with Google or work with someone at Google:

Google can’t be seen to partner with any SEO company and nor would any employee want to risk their jobs by illegally working with any such firms.

  1. SEO companies that want ownership of your content:

You should never give up ownership of your content to an SEO agency as you should retain ownership of anything you pay for.

  1. You pay for a monthly SEO package:

Monthly SEO packages can be a great money spinner for unscrupulous agencies. Before signing up ensure you have agreed a suitable number of hours per month that the agency will work on your site and get them to specify in detail the tasks they will undertake for you. Further, agree some targets for quality links and an increase in traffic to ensure you get value for money. Any agency that is not willing to comply with these requests is not worth dealing with.

Conclusion:

OK, so genuine SEO work can be valuable for a site. However, the key here is to agree objectives that have clear benefits  and set performance targets to ensure you get value for money. Avoid signing up with any agencies that use any of the above tactics as they are likely to be poor value for money and could actually damage your search engine rankings.

If you can, educate yourself about SEO practices to allow you to take greater control over organic traffic generation. Further, remember that what your visitors and Google want is great content and that should be your priority. Everything else, including SEO, should be secondary to the content. If you focus on quality content in the first place then SEO may largely take care of itself as good content will attract external links and social media mentions and shares.

Thank you for reading this post. If you found it useful please share using the social media icons below.

You can view my full Digital Marketing and Optimization Toolbox here.

To browse links to all my posts on one page please click here.

  • About the author:  Neal provides digital marketing optimisation consultancy services and has worked for  brands such as Deezer.comFoxybingo.com, Very.co.ukpartypoker.com and Bgo.com. He uses a variety of techniques, including web analytics, personas, customer journey analysis and customer feedback to improve a website’s conversion rate.
  • Neal has had articles published on website optimisation on Usabilla.com  and as an ex-research and insight manager on the GreenBook Blog research website.  If you wish to contact Neal please send an email to neal.cole@conversion-uplift.co.uk. You can follow Neal on Twitter @northresearch, see his LinkedIn profile or connect on Facebook.

Why Are People More Concerned About Potential Losses Than Winnings?

The Psychology of Loss:

  • As anyone who has bought stocks during a bull market will know, making a quick profit is great, but making a loss is difficult to stomach!  Behavioural scientists call this loss aversion. People are intrinsically afraid of losses. When compared against each other people hate losing more than they enjoy winning. Thus losses loom larger than gains even though the value in monetary terms may be identical.
Image of mri-head scan
Source: Freeimages.com
  • Research by Daniel Kahneman and Amos Tversky  into the psychological value of losses and gains indicated that people may have a loss aversion ratio of between 1.5 and 2.5. This means a loss that is identical in money terms to a gain may be valued up to 2.5 times more than the gain. This is an average as some people are more or less loss averse than others.

 

  • For example professional gamblers are more tolerant of losses. This seems to be because they are less emotionally involved in individual bets than the amateur gambler. The key for any risk taking behaviour appears to be to think like a professional trader or gambler. Don’t get emotional about a purchase or a bet. Think of it as purely a transaction.

Image of 888.com poker table

Implications of Loss Aversion

Loss aversion is one of the most important drivers of human decision making. This is because it inevitably leads to risk aversion and a number of predictable behaviours in certain situations:

Threat to lifestyle:

 

image of playing cards and chips in a casino

  • Where a loss could be ruinous or would threaten their lifestyle, people will normally dismiss the option completely. This is one reason why spread betting companies force customers to set automatic stop losses on most of their accounts. This protects customers from their bad bets by limiting potential losses. If there was no such stop loss in place most people would never consider this type of betting.

Winners and losers:

  • Where people are presented with a situation where both a gain and a loss is possible there is a tendency to make extreme risk averse choices. For instance a person is given the choice between a small but certain gain and a chance for a large gain that also has a low chance of a large loss. People have a tendency to focus on the potential for a large loss and often select the former, more certain option. This is why people are drawn to guaranteed returns and even a small probability of a large loss is enough to make people shy away from certain types of investments.

 Bad choices:

  • Where the choice is between a certain loss and a larger loss that is just a probability (i.e. there is a chance of no loss), diminishing sensitivity can result in  excessive risk taking. This helps explain why people will sometimes throw more money at a loss making venture in the hope that they can turn the business around. Gamblers are also prone to putting more money at risk after making substantial losses. Their mind set is focused on the potential for their next gamble to win the jackpot and wipe out their losses. People become so emotionally involved in trying to avoid a loss that they fail to see they are just making the situation worse.

Image of New York stock market

Power of ownership:

  • Where a person buys something with the intention of consuming or using it the minimum price that they are prepared to sell the item for is often higher than the maximum price they would be prepared to pay themselves. This is called the endowment effect. The ownership of goods appears to increase the perceived value of an item, particularly for goods that are not  frequently traded.
  • This is the result of our reluctance to give up an item that we already own. Such behaviour can be seen in the housing market where sellers often have to lower their initial asking price as buyers frequently are not prepared to pay the price sellers value their homes at. The endowment effect is most prominent for new goods, such as cars, where owners value their goods much closer to the original purchase price than potential buyers do.

Status quo bias:

  • Loss aversion is also powerful force in preventing change. People have a general preference towards the current state of affairs (e.g. their existing supplier) over changing to a better alternative. This is often attributed to a combination of loss aversion and the endowment effect. However, fear of regret in making a wrong decision can also play a part in inertia.
  • This is why it is important to understand the effect of loss aversion and emotional factors when researching how to encourage switching. Money back guarantees and free trials are often used by companies to reduce the perceived risk of loss and regret that stops people switching away from what they know. However, the fear of loss and feeling regret are such powerful emotions that these activities often fall on deaf ears. Loss aversion is probably the most effective loyalty program most companies have on their side.


“Loss aversion is a powerful conservative force that favors minimal changes from the status quo in the lives of both institutions and individuals.” Daniel Kahneman, Thinking, fast and slow.

How People React to Risk or Probabilities:

  • As I’ve mentioned, loss aversion and risk are intrinsically linked. Research into the psychological value (i.e the weight) that people give to different probabilities has identified two key biases that influence human decision making in the face of uncertainty.
  • The possibility effect results in highly unlikely (low probability) events being given more weight than they justify.  People naturally overestimate the probability that these events occur and so are more willing than they should be to respond to offers that tap into these perceptions.
  • This helps to explain the attractiveness of betting on unlikely outcomes (e.g. a horse with odds of 100 to 1) and insurance policies that cover uncommon events (e.g. extended warranties). If people assessed odds rationally they wouldn’t gamble on such unlikely events as they would over time be better off keeping their money in their pocket.
  • In market research this means that people tend to express more concern about low probability events such as crime or freak accidents than we might expect them to. This may also explain certain risk averse behaviours that give the impression that the chance of an event is higher than it is in reality.
  • The certainty effect leads to events that are almost certain being given less weight than their probability justifies. Due to loss aversion it is human nature to want to eliminate risk rather then reduce it. In horse racing this means people place fewer bets on the favourite than we would expect if they were totally rational. Instead the possibility effect encourages people to bet on rank outsiders when the odds don’t justify it.
  • In retail, rather than offering 4 for the price of 3, people respond better to 1 free with every 3 purchased. The latter is more compelling because the zero price has more certainty. For websites it also means that if visitors are slightly unsure about how genuine or secure a website is they will have a tendency to magnify the risk. This may lead to visitors abandoning a transaction. It also explains why we are so responsive to guarantees. A guarantee eliminates any uncertainty about the situation, whether it’s about an application being accepted or getting the advertised offer/rate. People are often unsure if they will qualify for offers so a guarantee removes this concern.
  • A study carried out by Kahneman and Tversky for their Prospect theory indicated that unlikely events (1% to 2% probability) are over weighted by a factor of 4. However, for an almost certain event the difference is even larger. In experiments a 2% chance of not winning was given a weighting of 13% (or an 87.1% chance of winning).

The Risk of Rare Events:

  • Where the odds of an event are very small (e.g. around 0.001% or less) people become almost completely indifferent to variations in levels of risk. Rather emotional factors and how a risk is framed are the key drivers of how people react to these levels of risk. This helps to explain why people are often too willing to bet on extreme events happening or why they buy multiple lottery tickets when there is a large jackpot.
“When the top prize is very large, ticket buyers appear indifferent to the fact that their chance of winning is minuscule.” Daniel Khaneman, Thinking, fast and slow
  • Research has also found evidence that rich and vivid descriptions of an outcome (e.g. fantasies about your lifestyle as a lottery winner) help to reduce the impact of probabilities. In particular people are more heavily influenced (in terms of weighting of probabilities) if an event is described by using frequencies (e.g. the number of people) than by using standard indicators  of probability or risk.
  • This is why gaming sites tend to promote the number of winners rather than the chance of winning. From a marketing perspective it suggests using rich media to bring events to life and avoid using abstract concepts of probability that people struggle to understand.

Conclusion:

So, loss aversion and related biases are a key driver of human decision making in many situations. It explains how uncertainty skews surveys that ask respondents direct questions about risk and uncertainty. If there is any uncertainty about an outcome people are likely to exaggerate the potential risk and respond accordingly. For this reason more value is likely to be gained from observing consumer behaviour and analysing the choices they make (e.g. through conjoint analysis or online experiments).

Thank you for reading my post and I hope it has generated some ideas for future research and experiments.

You can view my full Digital Marketing and Optimization Toolbox here.

To browse links to all my posts on one page please click here.

Further reading:

 

  • About the author:  Neal provides digital optimisation consultancy services and has worked for  brands such as Deezer.comFoxybingo.com, Very.co.uk and partypoker.com.  He identifies areas for improvement using a combination of approaches including web analytics, heuristic analysis, customer journey mapping, usability testing, and Voice of Customer feedback.
  • Neal has had articles published on website optimisation on Usabilla.com  and as an ex-research and insight manager on the GreenBook Blog research website.  If you wish to contact Neal please send an email to neal.cole@conversion-uplift.co.uk. You can follow Neal on Twitter @northresearch, see his LinkedIn profile or connect on Facebook.