Text Link Buying Good for Search Engines

Article Posted 2005 November 24, Thursday
by Gord Collins
Bay Street Search Engine Optimization
Toronto, Ontario | Canada

Commentators are suggesting that increasing Internet use is driving the surge of revenue to Internet advertising, and that Google's 100% revenue growth rates are driven by improved ad formats. I'm suggesting that something else might be a pivotal driver behind surging Google revenues.

Text link ads are enabling any advertiser to use Internet advertising. This has opened up a whole new market with huge new sources of revenue. So far, from being bad for search engines, paid text links are fueling every improvement in search engine performance.

Search Engines and Buying Text Links

Not long ago, search engines companies such as Google may have looked upon text link buying with a dim view. They might have thought that text link ads were a form of competition that took revenue away from programs like Google AdWords and skewed their prized organic search rankings.

Google has adjusted its new algorithm to permit links from quality advertising sites. They couldn't eliminate the paid link affect so they simply incorporated into their algorithm. In hindsight, we can see that text link ads have brought a lot of new money into the realm of Internet advertising, and shifted expenditures away from banners and graphic ad formats to text based advertising. Of course, text based advertising is Google's forte.

Figure 1 - Shifting Ad Expenditures

A report by Forrester Research shows (http://www.techweb.com/wire/ebiz/
162101194) a shift in consumer behavior and marketing executives plans.

The Forrester study, was based on an online survey of 99 of the nation's largest marketers. It revealed that 47 percent intended to spend more in online advertising at the expense of traditional channels. 84 percent of the survey respondents intend to increase their online budgets 25% over last year.

Again, according to Forrester, total online advertising and marketing spending is expected to grow 23% to reach $14.7 billion this year in the United States.

Search engine marketing was expected to lead the charge, with spending projected to increase by 33 percent this year to $5.7 billion. By 2010, search related marketing is expected to reach $11.6 billion, or 44 percent of all online spending.

Additionally, 64% of the respondents said blog advertising interested them along with RSS distribution. 78 percent of the respondents told Forrester they expected that search engine marketing to become more effective.

That means Google has actually benefited from the monetization of links. With more money spent on web site promotion, that money is filtering through to the more effective ad formats. Text links are an effective format not only because Google might consider them when ranking web pages for its organic search results, but also because they are a simple, fast communications system. They improve ad delivery, reach, and waste less time for consumers. And, they are accessible to advertisers. They are revolutionizing the advertising industry and making changes SEOs and SEO services buyers should recognize.

Modern Text Link Advertising

Traditionally, most web advertising was poorly targeted. Now, modern text link advertising is placed on topically relevant sites. Old banner based ads have gone from 1% click through rates to almost zero click through rates. People don't have time for these desperate graphic annoyances hawking things like animated icons, nor do they want to wait for the flash banner to download. Banners disrupt, yet text links fit in unobtrusively.

Text link buying has caught on tremendously in the last few years, and not so coincidentally, Google's AdWords revenue has also grown dramatically during that time. Certainly Google's influx of cash from the stock offering has affected that growth, but the change happened before they went public.

According to an article by ClickZ.com Google's revenues of $1 billion for the fourth quarter of 2004, were up 101 percent over the same period in 2003. Google reported (http://investor.google.com/releases/2005Q3.html) record revenues of $1.578 billion for the quarter ended September 30, 2005, up 96% compared to the third quarter of 2004. There's a lot of conjecture about which of the products and technology caused the increase, but no ad performance systems can account for 100% improvements. The fact is, new money is entering the arena and its finding its way into Google's advertising programs.

Websites Selling Text Links

Until major text link selling web sites arrived, there wasn't much of an opportunity to buy and sell text ads. With the arrival of these services however, buyers and sellers had an effective, efficient intermediary to gain a presence on good web sites. In the past, this opportunity wasn't there. Now that it is, small advertisers are able to get in on great advertising placements.

As small advertisers have gained access without going through large ad agencies and large web sites with high minimum spend requirements, a huge influx of revenue has appeared on the scene. Previously, these small budget expenditures went unrealized, meaning there was nowhere for them to be spent. With that money in hand, many small advertisers in turn spend on Google AdWords to generate further traffic for themselves. Of course, Google's programs are critically important core advertising programs, so it makes sense that money would gravitate to them.

So the Google AdWords phenomena, is part and parcel of a decentralization of ad spending away from advertising agencies and advertising sites to the millions of web sites online. With the increase in opportunity for cheap advertising, we see a huge growth in overall spending as shown in Figure 1 above. You can go direct to web site owners, or through intermediaries such as...

www.textlinkbrokers.com
www.text-link-ads.com
www.linkadage.com
www.linkworth.com

What is the End Value of Text Link Ads?

Well, they may boost your organic search engine rankings, but be forewarned that although Google may have accepted paid advertising into their organic algorithm, they do have systems for filtering out undue effects. Some of your paid links may not produce any organic ranking benefit at all, and you'll be left wondering which are producing and which are not.

Text links do produce direct visits from targeted buyers as well, so expect direct sales from incoming visitors.

Although text link advertising has the potential to skew search engine rankings, Google and other search engines do have the means to filter out strong negative effects. One thing for sure, Text link advertising isn't going away. Using text links skillfully and selectively is an important task for SEOs today.

Gord Collins is SEO Director at Bay Street SEO

Gord writes frequently in magazines, blogs, and forums on new trends in search engine optimization and search engine marketing. He provides SEO services to numerous major US companies and other SEO companies.

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Last modified: 2008-01-24T07:37:51-0800