Mish's Global Economic Trend Analysis

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• Greece Needs New Constitutional Provision Imposed by the Troika; Slight Problem, Constitutionally It Can't Do it
• Hillary Clinton's New Role as Secretary of Job Creation
• 9 Day Race to Ecstasy; Only Way Greece Can Win Is To Lose
• Mardi Gras Political Floats in Germany an Absolute Riot
• Deal "Really" Finalized? Will Greece Survive the Ides of March? Disastrous Piecemeal Breakup of Eurozone Likely in the Cards

Greece Needs New Constitutional Provision Imposed by the Troika; Slight Problem, Constitutionally It Can't Do it Posted: 21 Feb 2012 10:09 PM PST The sad saga of unending, even impossible demands by the Troika on Greece continues. For example, please consider this set of paragraphs listed in a Eurogroup Statement of conditions placed on Greece. The Eurogroup also welcomes Greece's intention to put in place a mechanism that allows better tracing and monitoring of the official borrowing and internally-generated funds destined to service Greece's debt by, under monitoring of the troika, paying an amount corresponding to the coming quarter's debt service directly to a segregated account of Greece's paying agent. Finally, the Eurogroup in this context welcomes the intention of the Greek authorities to introduce over the next two months in the Greek legal framework a provision ensuring that priority is granted to debt servicing payments. This provision will be introduced in the Greek constitution as soon as possible. .... We reiterate our commitment to provide adequate support to Greece during the life of the programme and beyond until it has regained market access, provided that Greece fully complies with the requirements and objectives of the adjustment programme. Lovely, isn't it? The Troika now wants Greece to pass constitutional amendments to meet its demands to bail out Greece French and German bondholders, the IMF, and the ECB. How likely is that? The answer is "not very" given it cannot be done constitutionally until 2013 at the earliest according to Keep Talking Greece. Please consider Greece Needs New Parliament to Pass Constitutional Provision Imposed by the Troika Conditions for Constitutional Amendment According to Greek constitution, an amendment of the constitution can take place after two consecutive legislation terms and not before five years have past from the latest amendment. As the Greek parliament passed an amendment in May 27, 2008, a new amendment before 2013 is hardly achievable. Procedures 50 MPs have to propose the need for a Constitutional Amendment. The amendment proposal has to be approved at two parliament votings, which will take place in one month form each other. The approval needs 'enhanced majority' i.e. 3/5 of the MPs or 180 MPs have to vote in favor, although some provisions can pass with the 'absolute majority' of 151 votes in the parliament fo 300. With the parliament voting, the provisions to be amended will be determined. The proposal for a constitutional amendments can be voted by the current parliament, but a new parliament that will come into force after elections is needed to pass the amendment. The new parliament can pass the amendment during its first session after the elections. An enhanced majority of 3/5 is needed for the amendment to pass, that is: 180 votes in favor. No new amendment is allowed before five years have passed after the latest one. The current Parliament could pass the amendment proposal within 1 to 1.5 month as Papademos coalition government partners have an enhanced majority of at least 184 votes (PASOK 130 seats, ND 64 seats). Should the elections take place towards end of April or beginning of May, the new parliament will have to wait for almost a year to pass the Eurogroup imposed provision. However as the Greek voters are angry at the two big parties that ruled the country for almost four decades, who can say in advance what will the political balances in the new parliament? Only Way to Win is to Lose Technically, 2013 is "as soon as possible" but I highly doubt that is what the Troika meant. As I said in 9 Day Race to Ecstasy; Only Way Greece Can Win Is To Lose: Hold your horses on that "finalized" deal. There are still numerous austerity measures to implement, details to wrap up, ribbons to cut, and bows to tie. ... Things have deteriorated so badly, the deal is in no one's best interest. Germany clearly understands that simple fact and has put up roadblock after roadblock hoping to find the right set of conditions that Greece would not accept or fail to meet if they did accept them. At this point, no statements by Greek politicians or the Troika are credible. Rather, I suggest statements are made by everyone to prevent further capital flight. If Greece was working on a plan to return to the Drachma they could not say so. Likewise, if Germany was attempting to force Greece to return to the Drachma, Germany too would have to deny it. And Chancellor Merkel has, as noted in Merkel's Official Denial "I will have no part in forcing Greece out of the euro"; Schäuble Starts Salami Tactics on German Participation, Calls for Vote The perpetual placement of roadblocks suggests that Greece will not survive the Ides of March. If by some miracle Greece does make the March 20 payment, I still stick with Disastrous Piecemeal Breakup of Eurozone Likely in the Cards because nothing has been solved. The deal is in no one's best interest and cannot last. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

Hillary Clinton's New Role as Secretary of Job Creation Posted: 21 Feb 2012 07:25 PM PST The Fiscal Times suggests Hillary Clinton is Now Secretary of Job Creation. The State Department may become the nation's human resources department by adding job creation to its already bulging portfolio. Secretary of State Hillary Clinton invited U.S. companies to call on Foggy Bottom experts for guidance on increasing their exports, safeguarding intellectual property abroad, and increasing foreign direct investment in the U.S. as part of a new administration effort to promote domestic jobs. Speaking on Tuesday before more than 200 major U.S. executives operating in more than 120 countries, Clinton laid out the State Department's plans through a concept Clinton coined "Jobs Diplomacy." Under this approach, U.S. diplomats will take a more active role in looking out for U.S. business interests abroad, making a stronger effort to share their knowledge of foreign markets with U.S. multinationals. Although it's unclear what the exact structure of the State Department-private sector relationship will be, the concept could potentially be a boon to the U.S. economy, said Ted Alden, a senior fellow at the Council on Foreign Relations. "You've got in the embassies abroad what really amounts to market intelligence—people on the ground who are familiar with the business environments in the countries in which they are working and companies are looking to break into," he said. Farcical Idea The suggestion that Hillary Clinton is going to be a boon to jobs creation in the US is farcical. The only way government can create jobs is for government to get the hell out of the way. That means less government not more of it. Indeed, the idea of an actual "Secretary of Job Creation" position is so ridiculous that Obama is likely to embrace it, wasting still more money we do not have on foolish ideas that should easily be discarded. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

9 Day Race to Ecstasy; Only Way Greece Can Win Is To Lose Posted: 21 Feb 2012 04:10 PM PST Hold your horses on that "finalized" deal. There are still numerous austerity measures to implement, details to wrap up, ribbons to cut, and bows to tie. Thus, the Greek Race to Unlock Bail-Out is on. The Greek government is racing to complete a lengthy checklist of reforms demanded by international lenders before the end of February to unlock a €130bn bail-out agreed in the early hours of Tuesday morning after months of high-stakes bargaining. The latest demands include dozens of "prior actions" that Greece must deliver as a condition of the rescue – from sacking underperforming tax collectors to passing legislation to liberalise the country's closed professions, tightening rules against bribery and readying at least two large state-controlled companies for sale by June. Andrew Balls, head of European portfolio management at Pimco, one of the world's largest bond investors, said: "It is all an exercise in make-believe. Does anybody really believe any of the Greek debt sustainability numbers?" In addition to the sheer volume of legislation the Greek government needs to pass, it will also be working against a backdrop of social unrest that has brought thousands of demonstrators on to the streets of Athens. Leftwing politicians, who have risen in the polls, have already vowed to challenge the deal ahead of expected April elections. In what could set a precedent for future European Union rescues, the new deal gives the lenders extraordinary powers to monitor Greece's policies and ringfence its revenues to ensure that foreign creditors are paid first. Only Way Greece Can Win Is To Lose The irony to this mad dash to hell is the only way Greece can win is to lose. To understand why please read Why Greece Must Exit the Eurozone, How it Will Happen (and Why Portugal and Spain Will Follow); Does the Euro Act Like a Gold Standard? For an alternative angle with the same conclusion please consider Greek Bailout Or Deliverance? by Peter Tchir. The Greek government has been a complete failure. They are represented in these negotiations [by someone] who owes his job to the people he is negotiating with. His job was not to represent the Greek people, but to force a deal down their throats. No work was done on alternatives to the bailout (until recently). He didn't explore what options Greece had other than the bailout. All he did was create fear that without a bailout Greece would fall into total chaos and used that to get his job done – passing austerity measures imposed on the people by the Troika. The situation in Greece seems awful. The economy is collapsing. The human toll is growing, yet the puppet didn't spend time looking for alternatives, looking for paths that might be good for Greece, but instead tried to promote irrational fear and get his job done. Any attempt by Greeks to explore alternatives has been shut down. Remember when the last Greek leader had the silly idea of a referendum? Samaras mentioned that the April elections could change things, which led to some demands that the elections be changed, but ended (so far) with him just groveling for forgiveness. And that is a trend that is growing. This is no longer any attempt by one nation to help another, this is now about creating a pecking order. Too many things have been said that cannot be unsaid that hurt the dignity of the Greeks. If they had a leadership that had worked on alternatives to the bailout, maybe the PSI talks would already be over. Instead, there is a real risk they accept a deal and allow their dignity and sovereignty to be stripped away, all for a deal that probably isn't in their best interests. The deal is in the best interest of the Troika – not Greece. Deal In No One's Best Interest The last line in the snip above is "The deal is in the best interest of the Troika – not Greece." Actually, that's not quite right. Although that statement was true at one point, it no longer is. Things have deteriorated so badly, the deal is in no one's best interest. Germany clearly understands that simple fact and has put up roadblock after roadblock hoping to find the right set of conditions that Greece would not accept or fail to meet if they did accept them. At this point, no statements by Greek politicians or the Troika are credible. Rather, I suggest statements are made by everyone to prevent further capital flight. If Greece was working on a plan to return to the Drachma they could not say so. Likewise, if Germany was attempting to force Greece to return to the Drachma, Germany too would have to deny it. And Chancellor Merkel has, as noted in Merkel's Official Denial "I will have no part in forcing Greece out of the euro"; Schäuble Starts Salami Tactics on German Participation, Calls for Vote Humiliating Greece Germany originally asked Greece to Cede Sovereignty to Eurozone "Budget Commissioner". When France objected, the German proposal was watered down to "I will Give You Money If You Give It Right Back" a Mathematical Scam to Prevent CDS Triggers When Greece reluctantly agreed to that demand, the German Finance minister Wolfgang Schaeuble then asked Greece to suspend elections. The Greek president responded with an Attack on German Minister's "Insults" "I cannot accept Mr Schaeuble insulting my country," said Papoulias, an 82-year-old veteran of Greece's resistance struggle against the Nazi occupation of World War Two. "Who is Mr Schaeuble to insult Greece? Who are the Dutch? Who are the Finnish?" he said in a speech at the Defense Ministry. His comments marked a highly unusual foray into international controversy for Papoulias, who normally steers clear of daily political debate. Resentment of the tough German stand on Greece's failure to meet targets set by the EU and IMF in return for financial aid has become widespread in recent months. Protesters burned a German flag last week and newspapers have run computer-generated pictures of Chancellor Angela Merkel in a Nazi uniform. New Roadblocks at Every Turn Imagine the outcry if someone proposed Germany to suspend elections or to dump Merkel in the first place for a puppet appointed chancellor. Regardless, every time Greece agrees to anything, new demands are put in place. Thus, in spite of an announced deal, Greece still has a basket of items to complete and Germany is doing everything it can so that Greece will fail. The perpetual placement of roadblocks suggests that Greece will not survive the Ides of March. If by some miracle Greece does make the March 20 payment, I still stick with Disastrous Piecemeal Breakup of Eurozone Likely in the Cards because nothing has been solved. To answer the question posed by Andrew Balls, head of European portfolio management at Pimco, who said: "It is all an exercise in make-believe. Does anybody really believe any of the Greek debt sustainability numbers?" The answer is: No, not even the Troika, and especially not Germany. The deal then is in no one's best interest and cannot last. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

Mardi Gras Political Floats in Germany an Absolute Riot Posted: 21 Feb 2012 10:48 AM PST Der Spiegel has an interesting and frequently humorous look at politics in a 22 slide-show presentation on Mardi Gras. German carnival culminated on Rose Monday with huge parades in the cities of Cologne, Düsseldorf and Mainz. Hundreds of thousands lined the streets to catch sweets and watch the marching bands and satirical floats, one of which illustrated the close relationship between Angela Merkel and Nicolas Sarkozy. German carnival started in earnest last Thursday, Old Wives' Day, when women went around storming town halls and committing symbolic mass castration by cutting off the ties of all the men they come across in their rampage. The festival reached its height on Rose Monday with the big processions. But the partying will continue on Tuesday. Parades and fancy dress balls have been going on in scores of towns and villages across the predominantly Catholic Rhineland and south-west of the country, which have come to a virtual standstill for the best part of a week. Sadly, it will all end on Ash Wednesday, the start of Lent, the Christian fasting season before Easter, when order and discipline will be restored on German streets for another year. Carnival Images The carnival processions in Cologne, Düsseldorf and Mainz are famous for their satirical floats as Germany's Catholic regions celebrate the country's version of Mardi Gras. This one in Düsseldorf purports to illustrate the close political relationship between French President Nicolas Sarkozy and Chancellor Angela Merkel. Ballerina Angela Merkel shielding Europe from the euro crisis with her ample tutu. The term "Rettungsschirm" on her tutu is the German expression for "bailout package". Christian Wulff, who resigned as president on Friday following months of criticism for accepting discounts and taking free vacations with the rich and famous, gets a serious pasting. This one in Düsseldorf portrays him as a fallen, plucked eagle. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

Deal "Really" Finalized? Will Greece Survive the Ides of March? Disastrous Piecemeal Breakup of Eurozone Likely in the Cards Posted: 21 Feb 2012 09:16 AM PST As a point of curiosity, the Greek 1-Year Bond Yield touched 682% today, now down to a mere 666%. Bloomberg quotes the open as 566%, if correct, the one year yield soared 116 percentage points from the open to the high. Deal "Really" Finalized? Open Europe says Many questions around the second Greek bailout remain unanswered We finally have an agreement on the second Greek bailout…in principle. It only took eight months. If you're of the belief that a disorderly Greek default would have triggered Armageddon, the deal that was agreed (as ever 'agreed' is used loosely) by Euro finance ministers in the early hours of this morning is broadly good news. Below we outline a few key issues (not exhaustive by any means, there are many more) and give our take on how they could play out. Greater losses for private sector bondholders: Reports suggest the Greek government was sent back to the negotiating table with bondholders at least four times during last night's meeting. Nominal write downs for bond holders now top 53.5% (or around 74% net present value). The leaked Greek debt sustainability analysis (DSA) assumes a participation rate of 95%. Open Europe take: 95%, really? We weren't convinced the previous threshold of 90% with a lower write down would be reached and that was while potential ECB participation was still on the table. Although this target may have been agreed with the lead negotiators for the private sector, it is far from a cohesive group, diminishing the value of the agreement. It will be interesting to see how bondholders respond to the plan but we think that hold outs could well be more than 5%. Greek 'prior actions': The deal includes a list of requirements which Greece must meet in the next week to get final approval for the bailout. These include: passing a supplementary budget with €3.3bn in cuts this year, cuts to minimum wage, increase labour market flexibility and reforms opening up numerous professions to greater competition. Open Europe take: The now infamous €325m in cuts still needs to be specified. The huge adjustments to labour markets and protected professions mark a cultural shift in Greece – pushing these through will not be painless and could result in further riots. Fundamental tensions in objectives of the programme: The DSA notes that the prospect achieving a return to competitiveness while also reducing debt is very small – the massive austerity could induce a further recession. Open Europe take: As we have noted all along the assumption that Greece can impose massive levels of austerity and then return to growth in the next two years is a big leap and almost inherently contradictory. We'd also note that the cuts in expenditure in Greece are larger than have been attempted anywhere in recent memory (successful or failed). Likely to be substantial slippages in the austerity programme while the growth programme remains almost non-existent, essentially closing the book on Greek debt sustainability. Further favourable treatment for the ECB: ECB and national central banks avoid taking losses on their holdings of Greek bonds but promise to redistribute 'profits' from these holdings so that they can be used in Greece. Open Europe take: See our previous post for a full discussion of this issue. Markets still don't seem too worried by suddenly being subordinated by central banks in Europe – they should be. This raises questions of the basic premise that all bonds are treated the same, based on who issued them not who holds them. As we've noted before, the whole concept of 'profits' is misleading, while any distribution would happen anyway – this is not a commitment from central banks but a further fiscal commitment by the eurozone (should really be included in total bailout funding). Greece may not be able to return to the market even after three years: The DSA points out that any new debt issue will essentially be junior to existing debt, hampering the chances of Greece issuing new debt in 2014/2015. Open Europe take: This point isn't too clear but given that the eurozone, IMF and ECB will own such a larger percentage of Greek debt in 2014 any new private sector debt will be massively subordinated and at risk of taking losses if anything goes wrong with the Greek programme. Additionally after the restructuring the remaining private sector debt will be governed under English law and will have the EFSF sweetener – further subordinating any new debt issued to the market. Why would anyone want to purchase Greek debt in this situation (especially given the other concerns above)? EFSF funding requirements: The EFSF will have to raise €70.5bn ahead of the bond swap – €30bn in sweeteners for the private sector, €5.5bn to pay off interest and €35bn to provide Greek banks with assets to use to gain liquidity from the ECB. Open Europe take: We've already questioned whether raising these funds so quickly can be done and whether the approval from national parliaments will be forthcoming. Even if it is the €35bn is said to fall outside of the €130bn meaning it is expected to be returned swiftly – given the uncertainty over how long banks will need these assets (as long as Greece as declared as in selective default by the rating agencies) this may be a generous assumption. There is also no talk of the money to recapitalise banks. This is a risky strategy given that Greek banks' main source of capital (government bonds) will have just been wiped out significantly. The needs were previously specified at €23bn, although reports now suggest they could top €50bn. It's not clear where this money will come from or when it will be raised. The bond restructuring will be like dancing through a minefield for Greek banks. We're still trawling through the responses, analysis and documents to come out of the meeting – meaning there are likely to be plenty more questions and uncertainties to come. The one thing that is clear is that even if this bailout is 'successful', it will set Greece up for a decade of painful austerity and low growth leading to social unrest, while the eurozone will have to provide on-going transfers to help it keep its head above water. Sorry to be killjoys but as Dutch Finance Minister Jan Kees de Jager put it, the deal isn't "something to cheer about". Open Europe Offers excellent analysis of the issues. On the ECB Swap: Decoding the ECB bond swap On a Continually Insolvent Greece: Take III: Don't bore me with the details The Improbable Greece Plan Felix Salmon chimes in with The Improbable Greece Plan. Greece is now officially a ward of the international community. It has no real independence when it comes to fiscal policy any more, and if everything goes according to plan, it's not going to have any independence for many, many years to come. The problem, of course, is that all the observers and "segregated accounts" in the world can't turn Greece's economy around when it's burdened with an overvalued currency and has no ability to implement any kind of stimulus. Quite the opposite: in order to get this deal done, Greece had to find yet another €325 million in "structural expenditure reductions", and promise a huge amount of front-loaded austerity to boot. The effect of all this fiscal tightening? Magic growth! A huge amount of heavy lifting, in terms of making the numbers work, is done by the debt sustainability analysis, and specifically the assumptions it makes. Greece is five years into a gruesome recession with the worst effects of austerity yet to hit. But somehow the Eurozone expects that Greece will bounce back to zero real GDP growth in 2013, and positive real GDP growth from 2014 onwards. Here's the chart: Note that the downside, here, still looks astonishingly optimistic: where's all this economic growth meant to be coming from, in a country suffering from massive wage deflation? And under this pretty upbeat downside scenario, Greece gets nowhere near the required 120% debt-to-GDP level by 2020: instead, it only gets to 159%. And to make things worse for the Eurozone, the report explicitly says that under the terms of this deal, "any new debt will be junior to all existing debt" — in other words, there's no way at all that Greece is going to be able to borrow on the private markets for the foreseeable future, so long as this plan is in place. As in all bankruptcies, the person providing new money gets to call the shots. And it's pretty clear that the Troika is going to have to continue providing new money long through 2020 and beyond. Under the optimistic scenario, Greece's financing need doesn't drop below 7% of GDP through 2020. Under the more pessimistic scenario, it's 8.8%. And here's the kicker: all of that money is being lent to Greece at very low interest rates of just 210bp over the risk-free rate. Much higher, and Greece's debt dynamics get even worse. But of course even with well-below-market interest rates, Greece is still never going to pay that money back. The cost of this plan is €130 billion right now, and €170 billion over three years, through the end of 2014; it just continues going up from there, with no end in sight. Remember that total Greek GDP, right now, is only about €220 billion and falling. Oh, and in case you forgot, this whole plan is also contingent on a bunch of things which are outside the Troika's control, including a successful bond exchange. The terms of the deal, for Greek bondholders, are tough: there's a nominal haircut of 53.5%, which means that you get 46.5 cents of new debt for every dollar of existing bonds that you hold. The new debt will be a mixture of EFSF obligations and new Greek bonds; the new Greek debt will pay just 3% interest through 2020, and 3.75% until maturity in 2042. Incorrect Conclusion Salmon has this nailed except for his conclusion. Europe's politicians know this, of course. But at the very least they're buying time: this deal might well delay catastrophic capital flight from Greece, and give the Europeans more time to work out how to shore up Portugal if and when that happens. Will they make good use of the time that they're buying? I hope so. Because once the Greek domino falls, it's going to take a huge amount of money, statesmanship, and luck to prevent further dominoes from toppling. Simply a Prelude for Return to the Drachma? By now, and at long last European politicians  do realize Greece is hopeless, so on that score Salmon is correct. However, I still think there is a very good chance this deal was done only to protect the ECB as a prelude to pulling the plug on Greece funding sometime between now and March 20 when the next bond payment is due. If I am correct, at some point between now and then, most likely a Friday or Saturday, Greece will declare a bank holiday. Please see Germany Draws Up Plans for Greece to Leave Euro; Athens Rehearses the Nightmare of Default; Merkel's Denial Rings Hollow for further discussion. The sooner Greece exits the euro, the more likely Greece will be able to prevent still more capital flight. The smart money has already left. We are only discussing the dumb money now, and the best way to convince the masses that all is well is to reach a deal. Yes this borders on the conspiratorial side, but the ducks are lined up and squawking loudly. Further delays serve absolutely no purpose and will only encourage more capital flight, especially if there is more protests and panic in the streets. If so, Salmon is incorrect on preventing capital flight. Then again, perhaps I am overly optimistic that the EU finally does the right thing with Greece. Regardless, Salmon is overly optimistic for sure, because there is virtually no chance to shore up Portugal, Spain, or Ireland. The dominoes will topple, the only question is "how disorderly?" Disastrous Piecemeal Breakup of Eurozone Likely in the Cards The best solution would be for Germany to exit the Eurozone  first, but that is not going to happen. The next best option would be for a simultaneous bank holiday involving all Greece, Portugal. Spain, and Ireland at the same time as noted in Why Greece Must Exit the Eurozone, How it Will Happen (and Why Portugal and Spain Will Follow); Does the Euro Act Like a Gold Standard? That too is highly unlikely. Thus the odds of a protracted, one-by-one, and very costly breakup of the eurozone is the most likely outcome whether or not Greece survives the Ides of March. For further discussion including an analysis of why it would be best for Germany to exit the Eurozone, please see Eurozone Breakup Logistics (Never Believe Anything Until It's Officially Denied). Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

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The New SEO Process (Quit Being Kanye)

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The New SEO Process (Quit Being Kanye) Posted: 20 Feb 2012 12:46 PM PST Posted by iPullRank The responsibilities of SEO practitioners have changed to include far more of the digital ecosystem, yet for so many, much of the SEO process remains the same. Currently there are several segments of SEO strategy seen as optional that are actually absolutely imperative to the success of an SEO campaign, as well as to the synergy of other initiatives within the marketing mix. In other words, SEO must adopt and adapt in order to be taken seriously and command the type of influence required to drive change. As it stands, SEO looks to disrupt the symphony (or cacophony) that is a brand’s marketing mix. Let’s discuss a new process that allows SEO to improve the effectiveness of all digital marketing channels – not just inbound. Disclaimer: Kanye West is awesome, but you understand how he is perfect to illustrate these points. Problems with the Old Process I’ve heard SEO called a lot of ugly things in the past few years. My favorite one lately was delivered to me by the wonderful Brittan Bright after someone passionately declared to her that SEO is the “Calculus of Marketing.” I love it simply because it fits. Just like Calculus, if you’re not looking at the aggregate value of what you’re working on you may do a lot of work for a result that doesn’t seem big in the grand scheme. Just like Calculus, SEO is quite specific and esoteric to those that haven’t studied it. Just like Calculus, you can be completely successful without it altogether. And finally SEO and Calculus both set a barrier of entry that excludes more than it includes. With all that said, here is the typical SEO process as it has been defined over the years. Although we often treat it like one, SEO has never been an initiative that existed within a vacuum. It has always required changes be made across a complete digital ecosystem in which there are numerous stakeholders. However, this existing process always asked for change without justification with regard to the purpose of goals of these touchpoints. For example, if my recommendation is to change a title tag there has been no justification as to how that affects the CTR of a page shared on Facebook. Perhaps the social media team has discovered that the target audience clicks through less when a page title doesn’t feature a brand name. That’s a hypothetical situation but let’s go into a little more detail as to why SEO will not continue to work this way. No Regard for Market Research Just as the diagram above suggests, most SEOs jump right into keywords, analytics and competitive analysis of those keywords. Wrong move; search is about fulfilling needs. Before looking at a single keyword there needs to be a deep understanding of business objectives and the market. Standard kickoff questions often look like this: What analytics package do you use? Are there any other domains or sites that you own? What SEO efforts have been done in the past? List your top 3 competitors. Do you have social media accounts? What keywords are you looking to rank for? The biggest problem with this is we often take these inputs at face value. That is to say, very often the brands that the client believes they are competing with offline are not the sites they are competing with for keyword coverage in the SERPs. Also the keywords a client may think they should rank for are not the keywords that are going to help them meet their actual goals. To simplify it, many SEO teams send clients kickoff questions to get a sense of the keywords they should target and then hop right into the keyword tool. Pages are optimized. Keywords are allocated to pages. Links are built. Content is pushed into social. Performance is measured to identify subsequent opportunities. Obviously it oftentimes goes far more in-depth for many, but this is basically the widely accepted process. One of my biggest issues as a consumer of Search that understands SEO is if the results I click appear to be overly optimized I become quite leery of the content. This is simply because in my experience many copywriters (SEO or otherwise) often don’t know what they are talking about. Recalling dusty memories of early in my own SEO career when I wrote copy, in most cases I was just a human article spinner. I definitely read a few wiki articles and the top results for a given keyword and just reworded what other people said. I shared all that to say: Becoming an expert in the niche that you are optimizing for is an extremely underrated step in the SEO process. For this reason, if I were to hire an agency, I would prefer one with extensive prior experience or specialty in my vertical.  All my in-house SEOs – make some noise! Little Regard for the Audience Truthfully, the real differentiation between clients happens in a latter set of questions. Unfortunately, the following doesn’t get asked enough in the standard SEO kick-off: What is the purpose of your site? What are you trying to get users to do once they arrive? Who is your target audience? These are typically questions that Conversion Rate Optimization teams focus on rather than SEO teams. For shame SEOs, for shame! We all want traffic and we all want to rank #1 for juicy head terms, but these things are not goals. By themselves these are not KPIs that make clients successful. Simply put, if you rank highly for keywords but aren’t fulfilling the needs of people searching for them, you just put a ton of effort into exactly the wrong thing. It’s not about the keywords; it’s about the people searching for them. Consider this offline example of Target using data on customers to identify when they’ve become pregnant to learn when to ramp up efforts to turn mothers-to-be into long-term big spenders at the wholesale department store. You can do this far more effectively with Search if you’re mindful of your audience and their needs. This measurement of intent plus interests plus demographics plus network is the Holy Grail of Marketing. With that in mind it becomes quite clear what Google’s ulterior motives are with Plus and the consolidation of privacy policies. Recently, I had a short conversation with AJ Kohn via Twitter about personas and how client research can prove useless. I agree somewhat because clients that have done audience research beforehand may have only looked at offline factors. To that point, it is important that we validate or disprove those insights with our own research rather than taking what the client says at face value. Our goal is to optimize, not paint by numbers. SEO Disrupts Most Digital Strategies As much as I hate to say it, the reality of SEO is that it disrupts much of digital planning even when it’s included from the onset. Most other digital capabilities start from the target audience before they do anything. User Experience has user stories, personas and user flows. Strategy teams build personas and need states by examining demographics and psychographics in efforts to really try and understand what does and will influence and fulfill the target audience.  Whichever of these teams develops these audience insights then feeds them to other teams so that efforts are glued together by the target consumer. Paid channels such as Facebook Ads, Display Advertising and Paid Search benefit from this significantly in their ability to target demographically. Media teams examine the available audience by vendor and allocate dollars based on where the delivery will be most effective. Traditionally, Organic Search ignores this step entirely and declares “HEY! I’M HERE NOW WE’RE DOING THIS MY WAY!” This is partially why SEO gets shunned by brands when they are determining where to distribute their efforts within the marketing mix. SEO is certainly effective, but it has always been a maverick that didn’t want to play by the rules. There is little meritocracy because if channels were chosen only by ROI – Display Advertising would have died 10 years ago. Evidently, they are not chosen this way so for SEO to get buy-in it needs to be team player. Many Link Building Initiatives Exist in a Vacuum Regardless of the hundreds of strategies, tactics and tools that are being born for link building daily, every successful link building campaign boils down to making news and/or making friends. As SEOs, we try to strong arm how and where brands will do this. Making news and building relationships are functions of many different groups and initiatives within a business from top to bottom. How is it that we as SEOs believe our best initiatives can exist outside of the things the brand itself contributes to?  Brands launch PR campaigns, social media efforts, events, so on and a variety of other social strategies to facilitate the awareness of the news they create. How is link building any different? The fact of the matter is, it isn’t. Therefore it should be attacked from, and included with, the same standpoint as the rest of a brand’s social strategies for both scale and effectiveness. Simply put, link building is better when the entire muscle of a brand is leveraged. To do effective SEO now, at the very least, you have to be a digital strategist, social media marketer, a content strategist, conversion rate optimizer, and a PR specialist. I’m skipping anything coding related because although I believe you should be able to build a website you don’t necessarily have to. SEOs are already inherently each of these things, however in most businesses these are all different capabilities that sit in different groups, or offices or cities. Who are we to upset an entire digital ecosystem and undermine so many people? Well I work with some awesome digital strategists, content strategists, creatives, etc. and while they tend to have impressive grasps of web trends, audiences and their specific capabilities they typically don’t know how to leverage cross-channel campaigns as specifically as SEOs or Inbound Marketers.  It is now the role of Inbound Marketers to drive strategies that looks far more like this (sorry guys, Kanye had to go – busy schedule):   I wish very much that I could be there for your “aha!” moment right now as no doubt you recognize many of these steps and can guess where other tasks will fall. Now let’s break it down completely – forgive me for anything that is obvious. Opportunity Discovery – Opportunity Discovery is a cyclical process of understanding brand opportunity with regard to business goals, target audience, industry specifications and past performance. It’s cyclical in that insights from one step often refine insights from another step in the process.   Business Objectives – Everything must be done within the context of the goals of the brand. This requires a deep understanding of where the brand has been and where it’s going. In many cases businesses large and small may not understand how to translate their goals and therefore it is the job of the Inbound Marketer to do so.   Market Research – The reason why SEO gets such a bad rap for polluting the web is that so many people simply do not build content that is worthwhile or has utility for the market. At this point, the entire team must take a deep dive into the industry and be able to have more than cursory conversations on the subject matter. For those that believe this to be a largely arduous task I suggest specializing in verticals of interest.   Audience Research –The Facebook Ads tool is the Adwords Keyword Tool of personas. The Doubleclick Ad Planner is also good for understanding the demographics of existing sites. If available, Facebook Insights gives demographic data on the existing users visiting the site as well. The output of this is a set of user segments and stories or – personas.   Analytics Mining – As always, you should mine existing analytics data to understand who is visiting. Take deep dives into keyword performance, especially in concert with any internal Search data, to identify opportunities. All in all, this is no different than normal unless the client has already been tracking their audience at which point you can see if who they are trying to attract is actually coming or not.   Social Listening – Using a core set of keywords, collect data on the conversation around those keywords. Keep track of patterns and identify user segments, demographics and need states of the people partaking in that social conversation. You’ll also want to keep track of how these users are using the keywords as this will allow you to eliminate ambiguity in keyword decisions and help to create messaging that resonates with the audience during the customer decision journey.   Quantitative Analysis – Services such as ComScore, Quantcast, Forrester Research, etc. track a multitude of data points on users in various verticals by demographic. Leveraging these reports gives you deeper insight into what types of users visit your competitors and exist within the market.   Keyword Research – Keyword Research must be completed with regard to the audience not just a determination of whether the keyword is viable from a search volume standpoint, but whether the keyword intent matches the business goals. Keywords should then be correlated with target personas and need states to help drive the build of content that is optimized for people first and search engines second.    Site Audit – Under the New SEO Process the Site Audit becomes decidedly more comprehensive, as it covers UX issues that would normally fall into a CRO Audit. Specifically, the audit talks about things impeding the conversions due to incongruence with the target audience in addition to the standard SEO technical issues that it covers.   Asset Inventory – A standard practice SEOs are already doing wherein there is an understanding of what a brand controls and is willing to leverage to the benefit of the campaign.   Content Audit – What content inside our outside of the site can be leveraged?   Brand Relationships – What other companies, businesses, groups and events are the brand involved with?   Offline Assets – What tools, venues, prizes, etc. are at the brands disposal?   Competitive Analysis – As always, competitive analysis is a collection of high-level audits of competitors across the vertical. The difference is that since site audits are completed with regard to the audience, the competitive analysis must also include a determination of how other brands are capturing that audience.   Measurement Planning –A standard practice amongst analytics teams the Measurement Plan is the Statement of Intent and determination of Key Performance Indicators with regard to the business goals and audience. Avinash Kaushik covers measurement planning in his Digital Marketing and Measurement Model post. (Hat tip: @scotttdodge)   Content Strategy & Development – Content Strategy and Development are big picture initiatives with a variety of stakeholders, so it often carries with it the most pushback. Creative teams just want to take big swings for big ideas and brand managers just want to advertise. To be effective we have to show how our content ideas will connect with the brand’s target audience and make sure content is designed to our specification.   Content Ideation –With all this social data we have collected and correlated to keywords we can now come with ideas for content with portions of the target audience built-in. Do so.   Wireframes – are an early deliverable in the design phase of a website wherein we can annotate considerations for SEO and CRO to ensure that Creative teams design with both in mind. Be very involved in this phase.   Content Build – Once all your points are baked in, it’s time to let the Creatives do what they do. If they come back with creative is not congruent with what is agreed upon in an earlier phase, then you now have data to back up your position with the client.   Technical Development –Technical SEO is the price of admission and cannot be ignored, so this where we make sure that the structure of the house is sound.   Technical Build –At this point, we’ve done all we can do now we just wait to see what the tech teams come back with. We’ve specified everything in wireframes and hopefully have had some say in the build of the CMS, but the tech team is going to do what they know. We’re just going to have to wait to see what they come back with unless they are open to our input during the actual build.    Implementation Audit – We’ll always have to double-check the work of a technical team and this is the spreadsheet in which we do it. An implementation audit briefly recounts the issues outlined in the site audit and wireframes and says whether or not they were successfully implemented. This is the easiest way to show that the bottlenecks are not so much with the SEO team but the tech team – as they oftentimes are.   Social Strategy – Typically link building is an initiative that exists by itself, in the new SEO process link building is an initiative that must be completed as part of a broader scope. While it is clear that low quality tactics like blog commenting continue to work, even those are far more effective coupled with a social push across PR and social media. Leveraged strategically, you are launching a piece of content with a cross-channel marketing push and therefore the link velocity will appear more natural to search engines and the return on the social strategy is likely to be higher. While link building has always been about casting the widest net, social strategy is about casting the rightest net the widest. I just made up a word. Kanye approves.   Link Strategy – Link building for most businesses, particularly small businesses, is not an “if you build it, they will come” situation. Therefore it is not enough to just launch content and hope for the best, we must continue to supplement content launches with smaller complementary content launches, outreach and manual submission link building. This is where this strategy is defined with its own measurement plan. Yes, I’m saying we should report both our prospects and the links we close. If you’re proud of your work that shouldn’t be a problem. Link Building is just like a PR campaign in that there is no guarantee of placements and should be explained as such.   PR – News is better than advertising, so a key part of social strategy is doing things that make news. Users spend a large part of their day reading, sharing and linking to news so make it a large part of the social strategy to make sure that content is newsworthy and get it to the news outlets that your audience frequents.    Contests – Contests are an excellent way to get a one-to-many return on incentives. Rather than performing outreach and directly offering them a free sample or (gasp) money request that they enter a contest wherein their entry is a blog post about the brand’s topic that contains a link. Also add a layer of gameplay to the contest by determining the winner through the number of times their post is shared in social media. Unbounce had a similar blogging contest in 2011 but link building wasn’t the goal of the campaign so they had all the posts on their own site.   Events – Throwing a party, conference or trade show is another one-to-many return for link building. Simply host an event and invite influencers in the brand’s audience where the stipulation for attendance is that people must blog about it and link back to you.   Social Media – is a two way street. Not only is it a place for discovery but also a place for conversation. Use that conversation to find the influencers in the space with regard to the target audience and business goals. Build social media profiles to be authoritative and engaging to easily get your content shared and also convert sharers into linkers. Regardless of where Google is headed, the social graph will never completely replace the link graph.   Social Implementation – is the phase when you let it all rip for the best synergy.   Measurement – is not just about whether or not we hit the goals. It’s the insights into why that makes measurement the most valuable step in Online Marketing. Measuring with regard to the audience helps with understanding the why even further than speaking in concrete abstracts such as bounce rate of a keyword. After all the ability to tangibly measure is why digital marketing is far more effective than traditional.   Reporting – is tailored specifically to the goals of the client. There’s no one-size-fit-all report. For example, a client business goal may be to get user segment A to watch a video and therefore, the primary metrics reported should be the Time On Site and persona type versus traffic and keyword. Rankings are only important with regard to how they’ve affected traffic. Everything should be focused on who (persona A) and why (because the message is unclear) rather than what (“blue widgets for sale ranked #5”).    Link Reporting – Under the umbrella of social strategy there is a lot to be said about what has been done to increase visibility. Aggregate rankings should be reported with regard to link building efforts to show the direct correlation between the two. Furthermore, link prospects and closes should also be reported with close rates to show clients what is being done on their behalf. This is obviously a subject of contention within the community, but if the links you build are so suspect that you are afraid to show them to the people you’re building them for – you need a different approach.   Optimization – I had an art teacher once that always used to say “No work of art is ever finished, we just give up.” The art and science of SEO is never complete and there is always an opportunity to do more.   Conversion Rate Optimization – While CRO is far more baked into this strategy it still likely to take its own seat at the table. That is to say that while SEOs may also be CROs they may be too close to the project to properly optimize. This is much the same way that the mixing engineer of a song is not supposed to also be the mastering engineer. At this point, a separate CRO Team should run A/B Tests, Usability Tests and so on and report back.   Continued SEO – Do it all over again! A Better Web Not to go all “land of milk and honey” on you guys, but the consumer is the biggest winner here. Naturally businesses benefit immensely as well, but the more we optimize with people in mind the more likely their needs will be fulfilled and consequently, the more likely we are to get those people to convert. Including people throughout the process and making the core goal to encourage them to do something ultimately makes the web a better place because everything we create will have a distinct purpose for the user and never solely for search engines. This is not to say we are circumventing the technical tenets of SEO as they are the price of admission. Brand Buy-In SEO has always been an industry that explains itself using empirical data. Starting from the audience, a place that businesses can understand, it is far easier to get buy-in for SEO initiatives. So when we make recommendations and explain the impact of our efforts on a target audience that has been determined as a focus of all initiatives, it’s easier to obtain brand buy-in than when we’re just talking about keywords and traffic. Compare the following statement: “We want to build links targeting websites with a PageRank of 3 or higher. We’ll reach out to a variety of prospects and target anchor text for keyword opportunities identified by our extensive keyword research in order to gain rankings for your brand.” with: “We’d like to launch a contest targeting Influential Moms with over 5000 followers on Twitter. To enter they’d write blog posts that link back to our properties in order to drive traffic for our target Listener Moms that are using Search to buy more healthy cereal.” Both ideas would potentially accomplish the same goals however the former will require far more explanation for the client and ultimately more effort on the part of the SEO team. Whereas the latter explains a link building campaign in terms of the brand’s target audience and business goals then further lays out a campaign wherein the brand commits cross-channel resources that the SEO team can leverage. Understanding the business objectives and the audience make it easier to develop and deliver strategies that client can easily get behind. Scalability Getting on the same page with the other capabilities allows SEO efforts to be scaled considerably for brands large and small. This is how we regularly achieve those otherwise rare instances of synergy between capabilities when the PR team is facilitating Link Building, the Content Strategy teams and Creative teams are creating link bait and SEO is both driving and supplementing those efforts. That is the perfect storm where we spend far more time chiseling our perfect sculptures rather than polishing poop and our efforts have far more impact with less effort.  Cross-Channel Optimization Learnings and wins in SEO can influence other channels. Imagine we discover through social listening, keyword research and/or measurement are a large number of the client’s target audience is looking for “red kanye west t-shirts” but the client only sells every color but red. We now have a tight business case as to why that client should start manufacturing the t-shirt in red. Conversely, what if we find out that people love the shirt but bounce from the landing page because they hate the user experience of the site? There is any number of scenarios that when explained purely from the context of search brands are far less likely to make a move. However when you explain these insights through the context of personas and market research you have a tighter case that can affect change across all channels and capabilities. [not provided]…so what? Google has positioned itself to take away all of our organic keyword referral data and let’s be honest they ultimately will take it all. Plus, and the consolidation of privacy policies to allow cross-product data access, is Google’s way of positioning itself to attain the Holy Grail of Marketing. However, measuring through our audience essentially allows us a new way to determine the effectiveness of a campaign. We know the keywords we are targeting for a given page and we can see rankings and analytics of a given landing page by channel to determine whether or not Search is driving traffic. The true measure of success was never the rankings, nor the traffic but how well the page a given page converted for our visitors. If we track conversions based on audience that is the only metric that is truly worth optimizing against. The holistic performance of a channel is what brands are concerned with, not necessarily the performance of a given keyword. The following are a list of posts, pages, tools and presentations to help get a deeper understanding of personas and need states and how to apply them to various Inbound Marketing efforts. Personas 10 Steps to Personas [INFOGRAPHIC] Develop Personas Personas: Setting the Stage for Building Usable Information Sites Using Personas to Boost Online Marketing and SEO [SLIDESHARE] Understanding Your Audience Using Social Media [MOZINAR] Need States AIDA: Attention-Interest-Design-Action Landing Pages and the Decision Making Process McKinsey Customer Decision Journey [VIDEO] Customers Go On a Journey, Escaping the Funnel Useful Social Tools SocialMention Amplicate Topsy Trendistic MentionMapp Twtrland FollowerWonk Listorious KnowEm.com Radian6 - PAID Lithium - PAID Quantitative Analysis Providers (PAID) ComScore QuantCast Compete Hitwise Forrester Research During the #seochat I did on the SEO Process there were some questions of whether this applies to small businesses or not, citing that small businesses only care about the #1 spot and they “just want rank.” Yes, understanding what makes an audience tick applies to all businesses. Again, the ability to quantify the interests and intent of your audience and track a brand’s ability to persuade is the advantage of digital marketing of any kind. As I said on Twitter, #1 is not a goal, but a means to an end. #1 gets users to the door; it doesn’t keep them in the house. Finally, the new SEO process is a call for us to speak the language of other capabilities and deliver strategies that can plug and play with what brands truly understand. The new SEO process is not about chasing the algorithm; it’s about fulfilling the needs of the people the algorithm serves. It’s about creating and discovering the content that resonates with the people that a business is trying to reach and then also covering the technical bases required to get results. It’s about understanding the connections between keywords in the mind of your target audience in order to optimize for them effectively. And most importantly, it’s about having SEO become the driver of the marketing mix rather than the outcast. No doubt SEO will remain the esoteric “Calculus of Marketing” but it’s time to prove that we can actually do the math so to speak. So fellow marketers—what’s it gonna be? Keep it classy or keep it Kanye?  Sign up for The Moz Top 10, a semimonthly mailer updating you on the top ten hottest pieces of SEO news, tips, and rad links uncovered by the Moz team. Think of it as your exclusive digest of stuff you don't have time to hunt down but want to read!

Lessons Learned by an Over-Optimizer Posted: 20 Feb 2012 02:27 AM PST Posted by shirtsthatgo This post was originally in YouMoz, and was promoted to the main blog because it provides great value and interest to our community. The author's views are entirely his or her own and may not reflect the views of SEOmoz, Inc. I own and run ShirtsThatGo, which is a small ecommerce site running on the Volusion platform. I started the company about three years ago and have been learning everything myself. I have taken a particular interest in the marketing piece, especially search engine optimization. I have made all the usual mistakes and I am sure I have many more lessons to come. I am a pure white hat and have done the SEO effort the hard way by slowly gaining links and trying to do everything by the book. I ran into a rather perplexing problem about one year ago and it took me over a year to resolve it. My home page www.shirtsthatgo.com and the ice cream truck product page disappeared from the SERPs. The pages looked fine in the index but they would not rank for anything including the title tags. I read some of the great SEOmoz posts about what to do when a page will not rank for its title tag and tried to follow the steps. I had inbound sidebar links (non-paid) taken down for fear that I was seen as buying links. Yes, I went through a phase of chasing Google PR so I begged everyone to give me sidebar links! Sound familiar to anyone? Next I reached out to some of you and begged for help to this issue. I was getting desperate to solve the problem and did not know how to solve it. I even asked folks on the Google Webmaster Forum and my forum posts would show up in the SERPs and not my missing page! As it turns out I just needed to learn to listen. I was getting some great guidance from Dean Peckenpaugh, who is an SEO and e-commerce specialist and one of the main contributors at the Volusion customer internal forum. Most forums tend to have one or two contributors who really know their stuff that everyone listens to. At the Volusion forum Dean is one of those guys. So Dean was pushing me away from over optimizing and telling me to think like a computer but to write my pages for people. I got so caught up in optimizing that the site content was (well it still is) written more for the bots than my prospective clients. My other product pages ranked so well that I was afraid to change anything. When I started to actually listen to what Dean was saying I took another look. Upon closer inspection the Ice Cream Truck page had maybe five more instances of the keyword than all the other product pages. I took a chance and backed way off the keyword count. I figured nothing would happen at all and that my needle in a haystack problem would still be there. On the next crawl the page was in position one on page one for the target keyword. Could it be this simple? I was blown away! I had badly overstuffed my site and my problem was so easy to fix!!! For any given page there is clearly a keyword limit and the algorithm will simply flag the offending page and refuse to serve it up. Stay above the limit and the page is banished. Drop below the limit and it will rank! My expectation is that this is going to differ somewhat from page to page but the rule will hold. Just this week I deployed some new product pages. I tend to put them online a few days in advance with a teaser product photo so that the page is already ranking by the time I have the product ready for the site. I ran into the problem again with our tank t-shirt page. I had inadvertently stuffed it a bit too full of the target keyword. On large pages a quick way to check this is to view source and use the find feature. This will paint all the instances and as you scroll through it will be apparent if a term is appearing too frequently. Note this screen shot does not show all the other instances that are below the fold. As my pages are ranking great I do not want to make any drastic moves. That said I know my pages are still way over-optimized. Over time I will pull back on the keywords in the body and see if I can rely on the title tag, a couple of headings, and maybe one instance of the keyword in the body. Once I find a happy medium I will update all the pages. As I see it Google knows what the page is about by the title and the H1. Everything else that is not written purely for humans is stuffing plain and simple. Here is a sample of our police car sell page and as you can see the target keyword is in there a lot. This page is ranking on page one for “kids police car t-shirts” and was just deployed a few days ago. Once the ice cream truck page was ranking it was time to deal with the home page. At the time the home page was relatively skinny but I had content with anchor links pointing to almost all of the product pages. The home page was not even ranking for its title tag, so definitely something was way wrong. In this case though I did not see a keyword stuffing issue so I decided to think like a computer on this one and looked at the structure of the page for anything that might be confusing. I noticed first that the page did not have an H1 or H2 which is how Volusion pages come out of the box. I read about how the importance of these tags is diminishing but they do add structure which is important. Also the page had content that was more about the various product pages. I had the idea that I was passing PR from my home page to all my product pages and thus helping them rank. It was not working! As a computer I might be confused by the home page so I made the following change to add a very clear structure to the page and overall site: Here are the changes that I made: Added structure by putting an H1 and H2 that had exact match to the title tag main keyword. Removed all content about product pages and the links to the product pages. Added new content that was built up around the target keyword and the general topic of my site. Added a link to the home page from the bottom of every product page with anchor text matching the <title> and <h1>< h2 >of the home page. Within a few days the page started to rank for the title tag! After a few weeks the site was sitting around position 70 or so for the target keyword “kids t-shirts”. About a month later the page jumped to around page 20 or so in the SERPs for “kids t-shirts”. Position 20 seems about right given the other players in the space and the authority we have built up. I find it interesting the way the site sat in a lower position for many weeks then as if something came unblocked it popped up in the SERPs. This may illustrate some kind of a holding place Google uses for pages recently emerging from being flagged prior to giving them full ranking. Here are the key takeaways from this experience that I wanted to share with you all: Consider keyword count if a page is indexed but not ranking for its title tag. Look closely at the structure of your site and ask yourself is it clear what the site is about. The idea of home page being general and product pages being specific makes a lot of sense. Be careful not to send mixed signals about what pages are about when building internal links. I welcome all and any feedback. Any feedback about my site as well would be very much appreciated! Thanks, Nick Morgan ShirtsThatGo Sign up for The Moz Top 10, a semimonthly mailer updating you on the top ten hottest pieces of SEO news, tips, and rad links uncovered by the Moz team. Think of it as your exclusive digest of stuff you don't have time to hunt down but want to read!

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