vineri, 16 decembrie 2011

Advanced On-Page Optimization - Whiteboard Friday

Advanced On-Page Optimization - Whiteboard Friday


Advanced On-Page Optimization - Whiteboard Friday

Posted: 15 Dec 2011 12:51 PM PST

Posted by Kenny Martin

In this week's Whiteboard Friday, Rand goes into depth on how you can optimize your on-page content. Presented here are five advanced tactics that get you thinking beyond the basics of traditional page optimization and set you up to start creating content that's both relevant and unique.

How do the phrases on your page relate to one another? Does your page content make your visitors happy? By moving beyond simply making sure those title tags are optimized and scattering a few keywords around, we can produce intelligent content that's not only engaging but gets better rankings too.

As promised, here is a Quora thread that describes Google's use of Machine learning.



Video Transcription

Howdy, SEOmoz fans. Welcome to another edition of Whiteboard Friday. This week, we're talking about advanced on-page optimization. Specifically, I have five tactics for you that go beyond the traditional "I'm going to put my keyword in the title tag. I'm going to put my keyword in the URL", those kinds of things.

First one, starting out is this idea of semantic connectivity. We talked about this in the past. We did some research a couple of years ago, maybe 18 months ago on LDA, which is latent Dirichlet allocation, which, of course, is a form of topic modeling that we suspected Google might be using.

It's a way to imagine the connections between words in a particular language. I'll give you an example. Here is the word "cat", and the word "cat" is probably closely related to the word "feline". If you were a search engine and you saw a document with the word "cat" and the word "feline," you would think that document is more relevant to a query for the word "cat" than a document that has the word "cat" and the word "whiteboard," which maybe that would be very far away.

Here's cat and here's canine. Those are much more distant, but cat is relatively closer to tiger, but it's even a little closer to meow. So, you get this sense of, ah, the search engines have a graph of all the words in a language set, how they're connected to each other, what's relevant to what, phrases not just individual words but the two or three or four word phrases.

This kind of thing can be very helpful if you're looking at a document and you're saying to yourself, "Boy, I talked about cats, but I forgot to mention anything about what they eat or what family they're in or what they're related to. I didn't even use the word 'pets.' Maybe, I should be optimizing for those types of things." Employing those closely connected terms can help to boost the relevancy and help boost your rankings.

Second thing on the list, block level optimization. There is a great YOUmoz post about this that we promoted to the main blog recently talking about precisely this type of thing where search engines will essentially analyze individual portions of a page. They'll look at, oh, here's a sidebar and we've decided that's not really relevant because that's navigational links or here's the top nav. We're not going to analyze that for relevancy as much potentially. We're going to look at the header of the document, where the headline is, those first few sentences. We're going to look at the middle of the document, maybe in paragraph forms, the footer of the document, the end. Are all of those things talking about the topic? Are they all on the subject, or is this something that starts out talking about tigers, but it eventually gets into a discussion on genetically modified foods? If that's the case, maybe it's less relevant to tigers. It's just that the initial headline looked like it was relevant to tigers, and so therefore, we don't want to rank this document for the word, tigers. We might even want to be ranking it for something like genetically modified foods. It just happens to use that catchy title.

So, make sure that your document . . . do this kind of check for all of these sections, making sure that they're pertinent, that they're relevant to the content of the query, that they're serving the visitor's interests and needs. If you have that kind of off topic diatribe, and I'm not saying you can't go off topic in your writing a little bit and explore some storyline themes, particularly if you have a long expository piece or you're writing a narrative blog post. That's great. I'm just saying, for stuff that is hyper targeting a particular keyword, especially for a commercial intent or a navigational intent, this might not be ideal. You might want to make those more focused.

Number three, internal and external links. I'm not talking about the links pointing to the page. I'm talking about the links that actually exist on the page. You remember some folks from Google have actually in the past said that, yeah, we might have some things, some first order or second order effect things in our algorithm that rewards people who link out, meaning link to other websites.

Marshall Simmons from The New York Times was on a Whiteboard Friday a couple of years ago, and Marshall talked about how when The New York Times changed their policy to put more external links on the page off to other websites, they actually saw increases and boosts in rankings from the articles that did that, strongly confirming what Google had said about there being some sort of effect in the algorithm, maybe not directly but indirectly looking at, hey, is this person linking out or are they linking out to good places? If they are, we might want to reward them.

Another optimization tactic that's on the more advanced side is putting good external links referencing relevant, potentially useful content on your pages. Linking out to other people is a wonderful thing too, because it puts you into the ecosystem. What I mean by that is if you link to someone else, other people go and visit that page. They might be talking about it. They might thank you for the reference. Someone might see that on Twitter. They might look in their analytics and see that you've sent visitors over and come check out your page and then link to something you've done. That reciprocation is very, very powerful in the organic web, and it can be useful, not only for this direct relevancy boosting signal, but also from a links perspective, from a traffic perspective.

Number four on the list, the happiness of visitors to a page. I know what you're thinking. It's sort of like, wait a minute, that's not on-page optimization. That's more like conversion rate optimization. Yes, but it matters for rankings because Google is looking so much at usage and user data.

I'm going to ask Kenny, who's filming this video, going to wave, Kenny? That's a great wave. Did you all see that? He looked great. It's amazing. I'll ask Kenny to put in a link to a Quora thread where a Google engineer, somebody who worked at Google, actually talked about how they use machine learning on user and usage data signals in the potential ranking algorithm to help better stuff come up when the rankings may be ordered normally just by their classic on-page link stuff and these types of things.

That means that if I can make visitors happier, if I can boost the value of what they're getting out of the pages, I can potentially rank higher too, not just convert more of them but even improve in rankings.

We were talking about things like: Are these visitors completing actions? Are they spending more time on this site or page on average with a good experience than they are with others? What I mean by this is it's not just, "Oh, my time on site is low. I need to find ways to keep visitors on there a longer time." Maybe, you have something that's answering a very, very short query in a short amount of time, and that's making visitors happy. And, maybe, you have something that's answering that query but after a long period of time, visitors are actually unhappy and they're going back to Google and clicking, you know what, block all results from this site, I don't want to see it any more. Or they see you in the rankings in the future, and they're like, "Oh, I remember that domain. I do not want to go through that again. They had those annoying ads and the overlays, and they blocked me from going there."

Every time I see Forbes, I was like, "Man, does this article look interesting enough to me to have to go through that initial screen of the ad, because I know I'm going to get it every time, and it's going to take extra time to load?" On my phone when I'm browsing the Web, I'm always like, "I'm not going to click on that Forbes link. Maybe I'll check it later on my laptop or my desktop."

Those types of things are signals that the engines can look at. Are people coming back? Are they returning again and again? When they see this stuff, true they've got 25% market share with Chrome. They've got the Google tool bar. They have Google free Wi-Fi. They have relationships with ISPs. So, they can get this data right about where everyone goes, not just from search but all over the Web. They know what you're bookmarking. They know what you're returning to. They know your visit patterns. This kind of stuff is definitely going to make its way into the algorithm, I think, even more so than it does today.

Fifth and finally, some content uniqueness and formatting. So, you're all aware of duplicate content issues, thin content issues, and the Panda stuff that happened earlier this year that affected a lot of websites. What you may not know is that there are a bunch of tactics that you can apply in an advanced on-page optimization scenario that can help, so things like completely unique. When I say "completely unique," what I mean is not that you can't quote someone in here, but just that what you can't have is a mad lib style SEO where you've got XY blank Z blank ABC blank, and it's fill in the city name, fill in the proper name, fill in the name of the business, and that's the same across every page on your site, or that's taken from a manufacturer's description and that's put in there.

You need to have that uniqueness throughout, and Google is very good at shingling, which is sort of a method for pattern detection inside topics or inside content. Don't play with them. Just make sure that this is a highly unique piece. If you want to quote something, that's fine. If you want to use media or graphics from somewhere else, that's fine and reference those. I'm not talking about that, but I am talking about that sort of playing mad libs SEO is a dangerous game.

We've noticed that longer content, more content is literally quite well correlated with better rankings, particularly post Panda. What you saw is that sites. I'll give you an example. I look at a lot of rankings for restaurant sites, because I'm constantly doing searches for restaurants and types of food because I travel a ton. What I see is that Yelp and Urban Spoon do very, very well. City Search often does well, and then you'll see those independent, individual blogs. When they tend to rank well, when they're on page one is when they've written that long diatribe exploring all sorts of things on the menu with lots of pictures of the food, an experiential post versus a short snippet of a post. You'll find those on page three, page four, page five. They don't do as well. That longer in- depth content, more of the uniqueness, more value in the content, more than I can get out of it as a reader seems to be something that Google is picking up on. I don't know if that's pure length. I don't know if that's something necessarily they're looking at in the user and usage data, but it could be helpful if you're not ranking very well and you're thinking, boy, I have a lot of pages that are just short snippets. Maybe I'm going to try expanding some of them.

Using images in media, we've, of course, seen the correlation with alt attributes matching the keyword and images. That's not what I'm talking about necessarily, but using images on the page can create more of that in- depth experience and can create a better relationship between you and the visitor. Those things could be picked up and used in other places, and then they'll link back to you. There are all sorts of benefits.

User generated content, so getting comments and interaction down here at the bottom, that type of stuff often is an indication in search engines that, hey, people really care about this. It's also an addition to the amount of content, and it tends to be very unique and valuable and useful. It uses those words that people on the Web would be using about the topic, and that can again be helpful for your content optimization.

Then, finally, Google is clearly looking at things like reading level and correctness of grammar and spelling. There's now a filter inside Google. If you click on the advanced search in the little gear box on the top right- hand corner of your screen when you're logged into Google, you can see advanced search. When you click that, there's a reading level filter to say, "Only show me content that's 12th grade and above." Clearly, Google has that ability.

What I'm saying here is that your content formatting, the way you're putting things together, the length of the document, the in-depthness, and the correctness, these can all have an impact. Don't just be thinking about keyword stuffing and using a few keywords here and there and putting it in the title at the front. Be thinking a little bit more broadly about your on- page optimization. You might get more benefits than even doing some link building, sometimes.

All right, everyone. I hope you've enjoyed this edition of Whiteboard Friday, and we will see you again next week. Take care.

Video transcription by Speechpad.com


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How to Fix Crawl Errors in Google Webmaster Tools

Posted: 15 Dec 2011 03:53 AM PST

Posted by Joe Robison

Looking at 12,000 crawl errors staring back at you in Webmaster Tools can make your hopes of eradicating those errors seem like an insurmountable task that will never be accomplished. The key is to know which errors are the most crippling to your site, and which ones are simply informational and can be brushed aside so you can deal with the real meaty problems. The reason it’s important to religiously keep an eye on your errors is the impact they have on your users and Google’s crawler.

Having thousands of 404 errors, especially ones for URLs that are being indexed or linked to by other pages pose a potentially poor user experience for your users. If they are landing on multiple 404 pages in one session, their trust for your site decreases and of course leads to frustration and bounces.

Webmaster Tools Crawl Errors

You also don’t want to miss out on the link juice from other sites that are pointing to a dead URL on your site, if you can fix that crawl error and redirect it to a good URL you can capture that link to help your rankings.

Additionally, Google does have a set crawl budget allotted to your site, and if a lot of the robot’s time is spent crawling your error pages, it doesn’t have the time to get to your deeper more valuable pages that are actually working.

Crawl Errors with Arrows

Without further ado, here are the main categories that show up in the crawl errors report of Google Webmaster Tools:

HTTP

This section usually returns pages that have shown errors such as 403 pages, not the biggest problems in Webmaster Tools. For more documentation with a list of all the HTTP status codes, check out Google’s own help pages. Also check out SEO Gadget’s amazing Server Headers 101 infographic on SixRevisions.

In Sitemaps

Errors in sitemaps are often caused by old sitemaps that have since 404’d, or pages listed in the current sitemap that return a 404 error. Make sure that all the links in your sitemap are quality working links that you want Google to crawl.

One frustrating thing that Google does is it will continually crawl old sitemaps that you have since deleted to check that the sitemap and URLs are in fact dead. If you have an old sitemap that you have removed from Webmaster Tools, and you don’t want being crawled, make sure you let that sitemap 404 and that you are not redirecting the sitemap to your current sitemap.

Image of Old Sitemaps and URLs 404'ing

From Google employee Susan Moskwa:

The best way to stop Googlebot from crawling URLs that it has discovered in the past is to make those URLs (such as your old Sitemaps) 404. After seeing that a URL repeatedly 404s, we stop crawling it. And after we stop crawling a Sitemap, it should drop out of your "All Sitemaps" tab.”

Not Followed

Most of these errors are often caused by redirect errors. Make sure you minimize redirect chains, the redirect timer is set for a short period, and don’t use meta refreshes in the head of your pages.

Matt Cutts has a good Youtube video on redirect chains, start 2:45 in if you want to skip ahead.

Redirect Chains Kills Crawlers

Google crawler exhausted after a redirect chain.

What to watch for after implementing redirects:

  • When you redirect pages permanently, make sure they return the proper HTTP status code, 301 Moved Permanently.
  • Make sure you do not have any redirect loops, where the redirects point back to themselves.
  • Make sure the redirects point to valid pages and not 404 pages, or other error pages such as 503 (server error) or 403 (forbidden).
  • Make sure your redirects actually point to a page and are not empty.

Tools to use:

  • Check your redirects with a response header checker tool like URI Valet or the Check Server Headers Tool.
  • Screaming Frog is an excellent tool to check which pages on your site are showing a 301 redirect, and which ones are showing 404 errors or 500 errors. The free version caps out at 500 pages on the site, beyond this you would need to buy the full version.
  • The SiteOpSys Search Engine Indexing Checker is an excellent tool where you can put in a list of your URLs that you submitted as redirects. This tool will allow you to check your URLs in bulk to see which ones are indexing and which ones are not. If your original URLs that you had redirected are no longer indexing that means Google removed the old URL from its index after it saw the 301 redirect and you can remove that redirect line from your .htaccess file now.

Examine your site in the text only version by viewing the cached version of the site from the Google SERP listing of the site, then select the text-only version. Make sure you can see all your links and they are not being hidden by Javascript, Flash, cookies, session IDs, DHTML, or frames.

Always use absolute and not relative links, if content scrapers scrape your images or links, they can reference your relative links on their site and if improperly parsed you may see not followed errors show up in your Webmaster Tools, this has happened with one of our sites before and it’s almost impossible to find out where the source link that caused the error is coming from.

Not Found

Not found errors are by and large 404 errors on your site. 404 errors can occur a few ways:

  • You delete a page on your site and do not 301 redirect it
  • You change the name of a page on your site and don’t 301 redirect it
  • You have a typo in an internal link on you site, which links to a page that doesn’t exist
  • Someone else from another site links to you but has a typo in their link
  • You migrate a site to a new domain and the subfolders do not match up exactly

Best practice: if you are getting good links to a 404’d page, you should 301 redirect it to the page the link was supposed to go to, or if that page has been removed then to a similar or parent page. You do not have to 301 redirect all 404 pages. This can in fact slow down your site if you have way too many redirects. If you have an old page or a large set of pages that you want completely erased, it is ok to let these 404. It is actually the Google recommended way to let the Googlebot know which pages you do not want anymore.

Redirect 404 Errors

There is an excellent Webmaster Central Blog post on how Google views 404 pages and handles them in webmaster tools. Everyone should read it as it dispels the common “all 404s are bad and should be redirected” myth.

Rand also has a great post on whether 404’s are always bad for SEO also.

Restricted by robots.txt

These errors are more informational, since it shows that some of your URLs are being blocked by your robots.txt file so the first step is to check out your robots.txt file and ensure that you really do want to block those URLs being listed.

Sometimes there will be URLs listed in here that are not explicitly blocked by the robots.txt file. These should be looked at on an individual basis as some of them may have strange reasons for being in there. A good method to investigate is to run the questionable URLs through URI valet and see the response code for this. Also check your .htacess file to see if there is a rule that is redirecting the URL.

Soft 404s

If you have pages that have very thin content, or look like a landing page these may be categorized as a soft 404. This classification is not ideal, if you want a page to 404 you should make sure it returns a hard 404, and if your page is listed as a soft 404 and it is one of your main content pages, you need to fix that page to make sure it doesn’t get this error.

How Soft 404's come to be

If you are returning a 404 page and it is listed as a Soft 404, it means that the header HTTP response code does not return the 404 Page Not Found response code. Google recommends “that you always return a 404 (Not found) or a 410 (Gone) response code in response to a request for a non-existing page.“

We saw a bunch of these errors with one of our clients when we redirected a ton of broken URLs to a temporary landing page which only had an image and a few lines of text. Google saw this as a custom 404 page, even though it was just a landing page, and categorized all the redirecting URLs as Soft 404s.

Timed Out

If a page takes too long to load, the Googlebot will stop trying to call it after a while. Check your server logs for any issues and check the page load speed of your pages that are timing out.

Types of timed out errors:

  • DNS lookup timeout – the Googlebot request could not get to your domain’s server, check DNS settings. Sometimes this is on Google’s end if everything looks correct on your side. Pingdom has an EXCELLENT tool to check out the DNS health of your domain and it will show you any issues that pop up.
  • URL timeout – an error from one of your specific pages, not the whole domain.
  • Robots.txt timeout – If your robots.txt file exists but the server timed out when Google tried to crawl it, Google will postpone the crawl of your site until it can reach the robots.txt file to make sure it doesn’t crawl any URLs that were blocked by the robots.txt file. Note that if you do not have a robots.txt and Google gets a 404 from trying to access your robots.txt, it will continue on to crawl the site as it assumes that the file doesn’t exist.

Unreachable

Unreachable errors can occur from internal server errors or DNS issues. A page can also be labeled as Unreachable if the robots.txt file is blocking the crawler from visiting a page. Possible errors that fall under the unreachable heading are “No response”, “500 error”, and “DNS issue” errors.

Unreachable Errors Make Man Sad

There is a long list of possible reasons for unreachable errors, so rather than list it here, I’ll point you to Google’s own reference guide here. Rand also touched on the impact of server issues back in 2008.

Conclusion

Google Webmaster Tools is far from perfect. While we all appreciate Google’s transparency with showing us what they are seeing, there are still some things that need to be fixed. To start with, Google is the best search engine in the universe, yet you cannot search through your error reports to find that one URL from a month ago that was keeping you up at night. At least they could have supplemented this with good pagination, but nope you have to physically click through 20 pages of data to get to page 21. One workaround for this is to edit the page number by editing the end of the URL string that shows what part of the errors list you are looking at. You can download all of the data into an Excel document, which is the best solution, but Google should still upgrade Webmaster Tools to allow searching from within the application.

Also, the owner of the site should have the ability to delete ALL sitemaps on the domain they own, even if someone else uploaded it a year ago. Currently you can only delete the sitemap that you yourself uploaded through your Webmaster Tools account. If Jimmy from Agency X uploaded an image sitemap a year ago before you let them go, this will still show up in the All Sitemaps tab. The solution to get rid of it is to let the sitemap 404 and it will drop off eventually but it can be a thorn in your side to have to see it every day until it leaves.

Perhaps, as Bing starts to upgrade its own Webmaster Tools, we will begin to see some more competition between the two search engines in their product offerings. Then one day, just maybe, we will get complete transparency and complete control of our sites in the search engines.

Give me some feedback!

What success/obstacles have you ran into when troubleshooting Webmaster Tools errors?

Any recommendations for new users to this powerful but perplexing tool?


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Video: "A Final March Toward Home"

The White House Your Daily Snapshot for
Friday, Dec. 16, 2011
 

Video: "A Final March Toward Home"

With America's war in Iraq coming to an end, the President welcomed Iraqi Prime Minister Maliki to the White House and invited him to a wreath laying ceremony, then spoke to troops at Fort Bragg on ending the war responsibly and standing by those who fought for it. After nearly nine years of sacrifice, the tide of war is receding, and the troops are coming home.

Watch the Video:

In Case You Missed It

Here are some of the top stories from the White House blog:

White House Office Hours: Joining Forces with Brad Cooper
Today Brad Cooper, Executive Director of Joining Forces, answers your questions on Twitter about the Joining Forces initiative and how you can support our nation's veterans and their families.

Extending Unemployment Insurance Is Essential for Our Economy
A new report shows that extending unemployment insurance is important for continued economic recovery and helps millions of Americans make ends meet while looking for a job.

By the Numbers: $21,000
The average salary for in-home care workers is just $21,000.

Today's Schedule

All times are Eastern Standard Time (EST).

10:45 AM: The President receives the Presidential Daily Briefing

12:00 PM: Press Briefing by Press Secretary Jay Carney WhiteHouse.gov/live 

1:00 PM: The President meets with senior advisors

2:10 PM: The President deliver remarks at the 71st General Assembly of the Union for Reform Judaism WhiteHouse.gov/live

WhiteHouse.gov/live Indicates that the event will be live-streamed on WhiteHouse.gov/Live

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SEOptimise

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How you can get over 79 Twitter followers in under 23 minutes – and why not to bother!

Posted: 15 Dec 2011 08:23 AM PST

Let's get one thing straight first:  you will NOT be required to do the following in order to get free followers on Twitter using this method:

  1. Tweet interesting thoughts
  2. Post ground breaking news articles
  3. Be informative to your target market
  4. Interact with people
  5. Be selling a good/service to people in order to be followed

Over the past few years, as social media marketing has increased and become ever more popular, ludicrous businesses have popped up "selling" Twitter followers, with many brands also reporting the success of their social media campaigns simply from the number of increased followers.

Today's post will not only show you how to get free followers, but also help you understand that having 100 followers as opposed to 100,000 makes no difference; it's about quality not quantity (funnily enough, similar to SEO).

I will not be discussing the reasons as to why you would want more Twitter followers etc; a quick Google search will bring up a plethora of articles discussing it.

Learning Objectives

Before we begin I will outline a little structure to what this post will cover:

  1. Show you how to get free Twitter followers
  2. Prove to you that it is possible
  3. Help you understand why even if you/your brand gets, say 100,000 followers from doing this, it would be useless – especially from a business perspective.

How to get free followers? 

In order to start acquiring more Twitter followers you will need to log onto the following site: www.twiends.com and register yourself.

What is Twiends?  Good question. Twiends helps people to develop their social network profile on Twitter.  The whole concept works on creating seeds in order to incentivise people to "follow you".  So when you follow someone they give you a seed and vice versa; more information can be found about this here.

The whole concept is pretty straightforward – piggy-backing from one of the old tactics in Twitter that people used to use and still do, quoting "Team Follow Back/Follow Me, I Follow You." Using the Twiends method is far quicker and more effective.

The Proof

This morning, to accompany the blog post, I thought I would actually show you guys that this is possible and to test how many I could acquire in under 25 minutes. Shown below is my dummy account "Pre Twiends" – please take note of the followers, following, time and date in the corner (I have no idea why this Twitter UI has not been updated yet either).

Within 10 minutes of setting up my account and gathering and distributing the seeds, I had already acquired 36+ followers. Note that my following figure has gone up dramatically, but that's because of the way Twiends works, as shown below:

You will find that the featured users distribute the most seeds and the interesting Tweeps distribute fewer seeds, but sometimes you do get some who offer 8/9 seeds, so be on the lookout for those, as they do go quick!

Here is a top tip for you:  when you first log into Twiends, I would recommend that you go to your settings straight away and turn your seed distribution to "OFF", so you will not be giving your initial free seeds away, and use a few minutes to better acquaint yourself with the layout and how the programme works.

I used some of the time in between to follow some more people and to unfollow some people, and before I knew it, as you can see, I had 100+ followers in under 25 minutes and 79 new followers!

Why doing this is useless for you or your brand

Even though it's great to show that with this it is possible to get 100,000+ followers on Twitter, it is useless for two reasons – for a person and business.

Firstly it would be useless for you on Twitter to voice your opinions to a load of people that are just there for the vanity metric.

Secondly, for a business, if those numbers do not convert to sales/leads, that is useless too.

To put this into perspective, ask yourself a question:  as a person or brand on Twitter, would you rather have a 100,000 followers and 0.1% of those are genuine sales/replies, or would you rather have 10,000 followers and 70% of those followers lead to sales/replies?

© SEOptimise - Download our free business guide to blogging whitepaper and sign-up for the SEOptimise monthly newsletter. How you can get over 79 Twitter followers in under 23 minutes – and why not to bother!

Related posts:

  1. 30 Ways to Use Social Media for Business People
  2. Twitter Netiquette: 10 Reasons to Unfollow Someone
  3. How to clean up your act and your timeline on Twitter

Seth's Blog : On buying something for the first time

On buying something for the first time

There are only three kinds of sales:

  • Buying a refill, another unit of a service or product you've already purchased before
  • Switching to a new model/brand/style
  • Buying something for the first time

Here's an overlooked truth: until quite recently, buying something for the first time was a very rare and almost revolutionary act. In fact, more than a billion people on Earth don't do this as a matter of course. The standard is to only purchase the seeds, fuel or shelter that your parents, grandparents and great-grandparents did. That's the way it's always been.

Take a minute to think about what it means for someone in poverty (which until recently was almost everyone) to buy something for the first time. The combination of risk and initiative can be paralyzing. One of the little-known transitions of the industrial revolution was the notion that companies and individuals could set out to discover and buy stuff that they didn't know about until just recently.

You see a box or a store window or a product on the web and you start imagining how cool it would be to open the box, own the product, use it, engage with it and benefit from it. A product you've never purchased before. That's new behavior. Until a hundred years ago, that sort of imagining was rare indeed, just about anywhere in the world.

If you are trying to grow your coaching practice or b2b saas business or widget shop, understand that you are almost certainly pushing against a significant barrier: most people hesitate before buying something for the first time. If you're trying to develop trade in the underprivileged world, understand that teaching people to buy anything for the first time is a revolutionary concept.

Campbell's soup is almost never bought for the first time. It is a replacement purchase. No one switches to Campbell's either. They buy it because their mom did.

The first iPhone, on the other hand, was a first time product for just about everyone who bought it... most of the people on line that first day were buying their first smartphone. Worth noting that a few years later, many millions have made the switch--we don't make first-time purchases lightly.

And most of what gets sold to us each day at work or at home are switching products. "Ours is just like the one you already use, but cheaper/better/faster/cooler."

The potent mix of fear of loss, desire for gain and curiousity fuel the appeal of buying for the first time. But it's magic, it's not science, and it doesn't often happen on schedule.

Here's a six-minute video presentation I did on this for the Acumen Fund. Sorry about the video glitch near the beginning--part of the magic of being on stage is that I wasn't even aware of being projected upon...

 

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joi, 15 decembrie 2011

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis


Ceridian Fuel Index Shows Christmas Doesn't Come Early to the Trucking Industry

Posted: 15 Dec 2011 02:04 PM PST

Reported retail sales are not in alignment with truck fuel usage as reflected in the Ceridian Pulse of Commerce Index for November
The Ceridian-UCLA Pulse of Commerce Index® (PCI®), issued today by the UCLA Anderson School of Management and Ceridian Corporation rose 0.1 percent in November following a 1.1 percent increase in October.

Over the past three months, compared to the prior three months, the PCI declined at an annualized rate of 4.8 percent. On a year-over-year basis, the PCI grew 0.9 percent in November compared to the 1.3 percent year-over-year increase in October. "The continuing weakness in the PCI is out-of-sync with real retail sales. The year-over-year increase in real retail sales through October was 3.6 percent compared with an increase in the PCI of 1.3 percent. The disconnect between real retail sales and the PCI suggests that retailers have learned to better manage their inventory. Therefore, shoppers can anticipate fewer bargains in the month ahead, and relatively little stock left for the after-Christmas sales," said Ed Leamer, chief economist for the Ceridian-UCLA Pulse of Commerce Index and director of the UCLA Anderson Forecast.

"Given the weak PCI, the advance estimate of third quarter GDP growth of 2.5 percent was surprising, but the final estimate may be lower," said Leamer in last month's report. The inventory contribution to third quarter GDP was indeed revised downward to minus 1.55 percent, which accounted for most of the revision of GDP growth to 2.0 percent. With two months of data available, the PCI suggests fourth quarter GDP growth in range of 0.0 to 1.0 percent. Based on the latest PCI data, our forecast for November Industrial Production is a 0.06 percent increase when the government estimate is released on December 15.
Ceridian PCI vs. GDP



Chief PCI® economist, Ed Leamer, is disappointed that Christmas did not come early to the trucking industry, as evidenced in the November PCI numbers. November's data suggests that trucking activity is not keeping up with the strong retail sales seen in October and on Black Friday.

Here is an Interview with Ed Leamer on retail sales and GDP.

If inventories are lean there should be a rebound next quarter, assuming the rest of the Christmas season went well. I am not at all convinced that retailers are having an exceptional year. Tighter inventory management does not necessarily mean fewer discounts. Competition for customers is intense.

Note that the Ceridian index is in essential alignment with with energy usage as noted on December 9 in US Petroleum and Gasoline Usage Plunges Last 5 Weeks Compared to Prior Years

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List


China Skids Towards Hard Landing; Hot Money Outflows Increase; Risk of Devastating Trade Wars Increases

Posted: 15 Dec 2011 09:12 AM PST

The Chinese hard landing is on its way. Please consider China's epic hangover begins by Ambrose Evans-Pritchard.
China's credit bubble has finally popped. The property market is swinging wildly from boom to bust, the cautionary exhibit of a BRIC's dream that is at last coming down to earth with a thud.

"Investors are massively underestimating the risk of a hard-landing in China, and indeed other BRICS (Brazil, Russia, India, China)... a 'Bloody Ridiculous Investment Concept' in my view," said Albert Edwards at Societe Generale.

"The BRICs are falling like bricks and the crises are home-blown, caused by their own boom-bust credit cycles. Industrial production is already falling in India, and Brazil will soon follow."

"There is so much spare capacity that they will start dumping goods, risking a deflation shock for the rest of the world. It no surpise that China has just imposed tariffs on imports of GM cars. I think it is highly likely that China will devalue the yuan next year, risking a trade war," he said.

China's $3.2 trillion foreign reserves have been falling for three months despite the trade surplus. Hot money is flowing out of the country. "One-way capital inflow or one-way bets on a yuan rise have become history. Our foreign reserves are basically falling every day," said Li Yang, a former central bank rate-setter.

The reserve loss acts as a form of monetary tightening, exactly the opposite of the effect during the boom. The reserves cannot be tapped to prop up China's internal banking system. To do so would mean repatriating the money – now in US Treasuries and European bonds – pushing up the yuan at the worst moment.

"The reality is that China's economy today requires significantly more financing to achieve the same level of growth as in the past," said China analyst Charlene Chu.

Ms Chu warned that there had been a "massive build-up in leverage" and fears a "fundamental, structural erosion" in the banking system that differs from past downturns. "For the first time, a large number of Chinese banks are beginning to face cash pressures. The forthcoming wave of asset quality issues has the potential to become uglier than in previous episodes".

Investors had thought China was immune to a property crash because mortgage finance is just 19pc of GDP. Wealthy Chinese often buy two, three or more flats with cash to park money because they cannot invest overseas and bank deposit rates have been minus 3pc in real terms this year.

But with price to income levels reaching nosebleed levels of 18 in East coast cities, it is clear that apartments – often left empty – have themselves become a momentum trade.

Mark Williams from Capital Economics said the great hope was that China would use is credit spree after 2008 to buy time, switching from chronic over-investment to consumer-led growth. "It hasn't work out as planned. The next few weeks are likely to reveal how little progress has been made. China may ride out the storm over the next few months, but the dangers of over-capacity and bad debt will only intensify".

In truth, China faces an epic deleveraging hangover, like the rest of us.
Hot Money Outflows Increase

Bingo to Ambrose. And hedge funds have finally figured out this massive revaluation of the Yuan upward they expected is not going to happen, and the tail does not wag the dog. Thus the hot-money outflow.

China is prepared for that outflow with massive reserves, but the US is not prepared for the Yuan to stop or even slow appreciating. Devastating trade wars are likely.

They may have already started. Please see China to Impose Anti-Dumping Duties on GM; "Fair Trade" Idea is Self-Serving Scam; Proposal to Stop "Free Sunlight" Gains Support From Mitt Romney for details.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List


China to Impose Anti-Dumping Duties on GM; "Fair Trade" Idea is Self-Serving Scam; Proposal to Stop "Free Sunlight" Gains Support From Mitt Romney

Posted: 15 Dec 2011 12:09 AM PST

In response to inane tariffs on tires imposed by the US (and upheld by the WTO) China to Impose Anti-Dumping Duties on GM, U.S. Cars
China announced plans to impose anti-dumping duties on some vehicles imported from the U.S. after failing to block a U.S. tariff on Chinese tires.

Punitive duties will be as high as 12.9 percent for autos from General Motors Co. (GM) and 8.8 percent for Chrysler Group LLC, China's commerce ministry said today on its website. The U.S. units of Bayerische Motoren Werke AG (BMW) and Daimler AG (DAI) will face duties of 2 percent and 2.7 percent respectively, it said.

"The move shows that China is always capable of intervening politically in its markets," said Juergen Pieper, a Frankfurt-based analyst with Bankhaus Metzler. "The automobile industry is very dependent on China for growth, and there's doubts about the pace of future expansion."

The move to increase import levies comes three months after the World Trade Organization rejected China's appeal of a ruling backing U.S. duties on tire imports.

The WTO in September rejected China's appeal of a ruling by WTO judges last December that found tariffs on $1.8 billion of car and light-truck tires from China were legal. President Barack Obama imposed the duties of as much as 35 percent in September 2009 under a so-called safeguard provision designed to protect U.S. producers from a surge in imports.
Trade is Between Individuals, Not Nations

If someone wanted to give you tires for free would you take it? If you needed new tires, surely you would. Would there be anything wrong with it?

The answer is of course not. Chinese manufacturers should be able to sell tires at whatever price they want, including giving them away. If China "underprices" tires, it is to the advantage of US consumers who have more money to spend on other things, including cars, boats, and houses, perhaps made in the US, perhaps not, but definitely shipped within the us providing countless jobs along the way.

Trade is not between nations, trade is between individuals. Both parties have to agree the transaction is mutually beneficial or there is no trade.

Candlemakers' Petition

Tariffs on tires (or anything else) makes as much sense as placing a tariff on free sunlight because it impedes the rightful growth of candle-making jobs. However there was a proposal to do just that.

Please consider the Candlemakers' Petition
The Candlemakers' petition is a well-known satire of protectionism written and published in 1845 by the French economist Frédéric Bastiat as part of his Economic Sophisms. In the Candlemakers' petition, the candlemakers and industrialists from other parts of the lighting industry petition the Chamber of Deputies of the French July Monarchy (1830–1848) to protect their trade from the unfair competition of a foreign power: the Sun.

In their petition, the candlemakers cite several economic 'advantages' that might be had from blocking out the Sun, by increasing consumption of products: tallow, leading to the increased production of meat, wool, hides, etc.; vegetable oil, leading to the increased production of poppies, olives, and rapeseed; resinous trees, leading to more bees, hence crop pollination; whale oil, leading to a larger merchant navy that would boost France's prestige and standing.
Fair Trade is Self-Serving Protectionist Scam

Here is the Bastiat's Open letter to the French Parliament, originally published in 1845 on his candlemaking proposal.

If his satirical proposal sounds ludicrous, it is because it is ludicrous.

However, it is no more ludicrous than the World Trade organization deciding minimum prices for toilet paper, steel, or tires.

It is also no more ludicrous than the UK facing £20m garlic tax bill

The UK Government has received a European Commission ultimatum to hand over £20 million within two months or face legal action. The wrangle is over the fact that import tariffs on frozen garlic from outside the EU are lower than the rates for fresh garlic. And, according to the Commission, UK authorities carelessly levied the lower rate applicable to frozen garlic on imports of the fresh product from China, in breach of EU customs rules.

A Commission statement explained: "Between 2005 and 2006, the UK customs authorities allowed imports of fresh garlic from the People's Republic of China under wrong authorising documents. They have erroneously stated that the goods imported were frozen garlic for which significantly lower import duties apply.
Why put up with this? What on God's green earth does the UK get for these endless regulations other than higher prices and direct subsidies to French farmers?

Mitt Romney Hopes to Stop Free Sunlight

Meanwhile, back in the US,  Mitt Romney has stated he will declare China a currency manipulator and jack up tariffs (costing US consumers plenty). In essence Romney hopes to stop "free sunlight".

The result will be a collapse in trade and the global economy will suffer.

Proponents of "fair trade" want anything and everything but "fair trade". The very essence of "fair trade" is to block sunlight to protect the jobs of a favored group.

Once one comes to the proper conclusion that trade is between individuals, not nations, and that everyone should have the right to make trades they deem to be in their own best interest, the notion of "fair trade" can easily be seen as a self-serving protectionist scam.

Proper analysis shows that "free sunlight" and "cheap tires" are both good things.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List