miercuri, 13 noiembrie 2013

Top 20 Local Search Ranking Factors: An Illustrated Guide

Top 20 Local Search Ranking Factors: An Illustrated Guide


Top 20 Local Search Ranking Factors: An Illustrated Guide

Posted: 12 Nov 2013 03:18 PM PST

Posted by MiriamEllis

First published in 2008 by David Mihm, the Local Search Ranking Factors survey of Local SEOs around the globe has become a high point in the year in local search. If you eagerly await this yearly report and comb through it for new insight, then the information in this guide may not come as news to you. I wrote this guide for marketers who are new to the field of local SEO and for local business owners who are flying solo in their efforts to market their companies on the web.

Local Search Ranking Factors 2013 identified 83 foundational ranking factors. This guide takes the top 20 most important factors and offers a succinct, illustrated example of each.

By reading this guide, you will understand both the lingo and the concept of each local search ranking factor. Use this information and you will be on the road to promoting local businesses on the web from a firm and educated foundation. Sound good? Start reading!



1. Proper category associations

Proper category associations are important enough to be ranked #1 in the survey. During the process of creating your Google+ Local page, you will be choosing categories at two distinct points.

When you enter your initial details, you will be selecting a primary category for the business. This is the most important category you will choose.



Then, once inside the dashboard, you will be allowed to select up to nine other categories for your business.



All categories must be chosen from Google's pre-set category taxonomy. Earlier versions of Google's dashboard allowed the business owner to custom create categories, but this feature is being phased out.

The concept here is simple. If you wish to appear in the local results for a search like "dentists in denver", your business must be categorized as a dentist. If it is categorized as a certified public accountant, you have no hope of appearing for your important search terms.

To help you determine which categories are available to describe your business, you can use Mike Blumenthal's free Google Places for Business category tool. Type in keywords that you feel best describe what your business is and the tool will show you which categories are available. Your choice of categories will often be obvious. A dentist will want to choose "dentist" as his primary category. But, he may wish to perform keyword research and combine that with use of the above tool to discover additional important categories such as "dental clinic" or "cosmetic dentist".

You will be building listings for your business in a variety of other local business directories and indexes. These platforms will not necessarily offer categories that are identical to those in Google's system. You must take time to discover the most relevant categories on each platform as you build each listing.

2. Physical address in city of search

Your business is most likely to appear in Google's pack of local results for searches that either:

  1. Contain the name of the city in which it is physically located, or
  2. Stem from devices based in that city
If you are a chiropractor in San Francisco, you are most likely to appear in the local pack of results for a search like "san francisco chiropractor", or if someone searches for "chiropractor" from a computer or cell phone based in San Francisco.

This search for "chirporactors san francisco" illustrates this phenomenon, in that all of the results Google is returning in its local pack are for practitioners physically located in that city:

In the above screenshot, you will note that there are no chiropractors in neighboring cities included in these results. It's safe to say that Google has a very definite bias towards physical location in the city of search. This is a simple concept, but it represents a major stumbling block for two distinct business models.

A) Service area businesses (SABs) with employees who might travel to a city like San Francisco to do plumbing, management consulting, or dog walking, but who are physically based in another city or town. In other words, the SAB does not have a physical address in San Francisco.

B) Brick-and-mortar businesses located just outside the borders of a major city like San Francisco, Dallas, or Denver. An example of this might be a locally-heralded acupuncturist who is located in Mill Valley, California, but who has numerous clients who are happy to travel a few miles outside of San Francisco to visit him.

In both cases, the business owner understandably wants these major city audiences to know his services are available, but because of Google's bias toward physical location, these businesses are unlikely to ever appear in the local pack of results. As things presently stand with Google, the best hope for these types of business owners is to begin developing city landing pages that showcase their professional association with these other cities, whether this involves windows they wash on the skyscrapers of Dallas or lectures they give at a Denver hospital. The goal here is to gain additional visibility in the organic results for these other geographic terms.

There are some exceptions that may overcome Google's bias. If you search for a niche business model in or around a major city, or search for any business model in a rural location, you may see listings in the local pack of results that stem from several cities. For example, if there is only one gas station serving a large radius in a rural area, it may pop up as a local result for any of the towns in that region. This scenario, however, tends to be the exception rather than the rule.

In sum, it is generally wise for local business owners to set the goal of earning local pack rankings for searches related to their city of location, and organic rankings for any other geographic terms they feel are important.

3. Consistency of structured citations

A citation is any web-based mention of your company's partial or complete name, address, and phone number (NAP). A "structured citation" refers to a listing of your business in an online local business directory such as YP.com, HotFrog, or Best of the Web.

Inconsistent citations might involve:

  • A difference in the business name (i.e. Smile Dentistry vs. Smile Dental Clinic)
  • A wrong street address, a typo in street address numbers, or a missing suite number
  • A wrong or different phone number, a toll free or call tracking number
  • A different or wrong website URL

Citation inconsistencies may arise from simple carelessness during the citation-building process and these mistakes may then be duplicated across the local search ecosystem. Inconsistencies also commonly arise if a business has moved at any time in the past decade or so. Apart from causing confusion for humans, these discrepancies hinder Google's ability to trust the data they have gathered from around the web about a given business. A lack of trust on Google's part can spell ranking difficulties for the business.

Here is an illustration of a randomly-chosen dental practice in Sacramento, California which recently moved. The new location of the practice is on Riverside Blvd., but a search in Google reveals that many structured citations for the business still list its old location on Freeport Blvd. As can be seen in the Google+ Local area of the results, the business currently has two listings that reflect this inconsistency, meaning that their authority is being split up instead of consolidated into one correct listing.

If you have to move locations, it's a given that you'll need to put in some hours editing your old citations so that they reflect your new address. You'll see this being referred to as "citation cleanup." However, many businesses that haven't moved will discover that they have inconsistent NAP data out there on the web, too.

An easy way to begin searching for this is to simply type your business name into Google's main search engine and see what comes up. Go through the results by hand and make sure that each part of your NAP is identical across all listings of your business. Edit where necessary.

4. Quality/authority of structured citations

It's just good horse sense that having your business listed on high-quality websites is going to help you more than being listed on sites of low quality. As a rule of thumb, businesses should initially concentrate on getting listed on a handful of really authoritative local business indexes and directories. Use the tool at GetListed.org to be sure that you have a listing in the dozen or so basic, authoritative directories highlighted there.

Once you have all your ducks in a row with these basic citations, you want to continue down the citation building path to further enhance your company's visibility and authority. Perform searches for category terms, service terms, and geographic terms to see what comes up in the search engine results. The websites that come up may be places you would like to list your business, if possible.

There is no standard process for judging the quality of a citation source. Metrics you might consider could include domain authority, domain age, link profile quality, and even simpler quality signals such as whether the website looks fresh or neglected. Darren Shaw of Whitespark has written a good blog post entitled "How to Identify Quality Citation Sources". If you are in a competitive market, you may need to build numerous citations to compete and may find that using a paid tool like Whitespark's Local Citation Finder makes your work both easier and more effective.

5. HTML NAP matching place page NAP

Google will be looking at the website page you've linked to from your Google Places/Google+ Local page to cross reference the name, address and phone number of your business. If all elements match, as shown in this screenshot, you're good to go:

However, if there is a discrepancy in the NAP you have on your +Local page and the NAP on the website page your +Local page links to, then Google will become "confused" about the data they have about your business. Small discrepancies like Ste. vs Suite or Hwy. vs Highway do not matter. Reference Point 3 in this guide for a list of discrepancies that do matter. Your task is to ensure that your NAP is cohesive in both places.

There is a specific scenario in which Google may not be able to cross reference the complete NAP in the +Local Page dashboard with the NAP published on a website. This relates to home-based businesses which, for reasons of privacy, do not publish their street address on their website. It is speculated that this decision may put the business at some disadvantage, given what an authoritative source the website is, but to date, I am unaware of any in-depth studies that have been conducted surrounding this interesting topic.

One might guess that if there are five home-based seamstresses in a town and only one of them publishes her home address on her website, she might have an edge over the other four, because Google is able to confirm that the Google+ Local page dashboard address matches the one found on the website. This is a subject that is deserved of further study!

6. Quantity of structured citations

Again, a structured citation is a listing of your business name, address, and phone number (NAP) on an online local business directory. While the quality of these structured citations counts most, quantity is definitely important, too.

Each unique local business owner will find he needs to build a different number of citations in order to be competitive. Typically, the more competitive your market is, the more citations you will need to build.

A simple way to find new structured citations for your business is to type your business category terms into Google's main search engine to see what comes up. For example, a Boston-based search for "doctors" highlights these two directories where it may be smart for any doctor to get listed.

For a more sophisticated approach, you might use a tool like Whitespark's Local Citation Finder (Moz members get a 20% discount!) which will not only help you find new citations to build, but will also keep track of the numeric quantity of citations you have earned:

For businesses in less competitive markets, an initial session of citation building followed up by a very modest, occasional effort to build new citations may be all that's needed to become dominant in the search engine results. If you're in a tough market, however, ongoing citation building will likely need to be an integral part of your local search marketing strategy.

7. Domain authority of website

At present, the overall strength of a local business' website plays a major role in how it ranks both locally and organically. Simply stated, "Domain Authority" is a metric used to predict how well a website may perform in search results compared to other websites. Moz offers a Domain Authority toolbar called the MozBar that makes it easy to see the DA of any website in the search engine results. See the bottom of this screenshot, below:

There are many factors that make up the domain authority of a website. Some of these include the age of a website and the number and quality of links pointing to it. For a great explanation of DA, read this blog post by Matt Peters.

In general, every local business will want to publish the strongest possible website. This means having a user-friendly, optimized site with excellent content that earns links and social mentions over time. You will always be working to build your domain authority, and the higher it is, the better your chances of ranking well for your most important terms.

8. Individually owner-verified local Plus page

Creating your Google+ Local page for your local business is your first step to being included in Google's index. Your second step is to verify your ownership of the listing. These days, this typically involves receiving a postcard/letter from Google containing a pin number which you must enter in order to complete verification.

Avoid letting anyone else act as a go-between for your company, putting your Google+ Local page into some master Google account of their own. It's fine to have a Local SEO help you with the steps of verification, but this should be done with your own Google account and not the account of any third party. You need to be in direct control of your Google+ Local page, and while you will find unverified listings managing to rank in some local packs, it is always wiser for any local business owner to take the time to verify his or her listing. It's easy to do!

9. City, state in Places landing page title

Your Google+ Local page should link to a page on your website. This page on your site will have an element in its code called a "Title Tag." This is typically located in the <head> section of the code and the words contained in it send a very important signal to both search engine bots and human users regarding the topic of the page in question. The title tag of a page typically displays in the upper left hand corner of your browser window:

In the above screenshot, you can see that the title tag of the page contains both the city and state name. Local Search Ranking Factors 2013 cites the inclusion of these geographic terms as being especially important on the landing page to which your Google+ Local page links. For many local businesses, the landing page will simply be the homepage of the website. However, for multi-location or multi-practitioner business models, specific landing pages may have been developed on the website to reflect this diversity, and the Google+ Local pages created for these locations or practitioners will often link to these landing pages instead of the homepage.

By including your city and state names in your landing page title tag, you will be letting both search engine bots and human visitors know that your business is local to a specific geographic locale.

10. Proximity of address to centroid

Traditionally, the centroid in Local Search has been defined as the city center identified by Google in its Maps product. You can go to maps.google.com, type in a city and state and get a result that looks like this, with Google putting a red pin on the presumed city centroid:

However, expert Local SEO Mike Blumenthal has recently pointed out that the centroid can change position relative to different industries and may often have nothing to do with the the designated center of a city. In other words, Google can decide that the center of business for auto dealers is different than the center of business for chiropractors. This is a somewhat complex topic and I recommend you read Linda Buquet's forum thread, Google+ Local Centroid - Not City Center! to see illustrations of this concept of the shifting center of business.

Proximity of address to centroid is one of those factors over which your business will have little control. Some businesses located outside this centroid/center of business radius may discover that they are at a disadvantage in comparison to competitors who are within the radius. Short of moving to a new location, (not a realistic suggestion) your proximity to Google's designated center of business for your industry isn't something you can change.

11. Quality/authority of inbound links to domain

Because organic signals play a big part in local rankings, earning high quality links from authoritative sources will help your business to improve its visibility in the search engine results. A tool like the Open Site Explorer can help you to begin understanding both the number and quality of links currently pointing to your website:

For a local business, high quality, authoritative links may come from a variety of places, including local and national newspapers, local business indexes, high profile bloggers and professional industry associations.

These days, strategies surrounding the acquisition of links have evolved from link building (the process of actively seeking web pages on which links can be placed) to link earning (the process of generating links without having to build or request them due to some outstanding aspect of the website).

Local businesses can both build links, as in the case of having their domain linked to from their local business listings, and earn links via forms of marketing like content development and social sharing. The more authoritative the sources that link to your website, the better your chances of gaining visibility for your important search terms.

12. Quantity of native Google Places reviews (w/text)

This is a simple one! It is currently felt that the number of reviews your business earns on its Google+ Local page influences rank more than reviews you might earn on other review platforms. You can easily see how many reviews you have by clicking either on the "reviews" link on your Google+ Local link in the main search engine results, or by visiting your + Local page directly. You'll see something that looks like this:

No local business needs to earn a ton of Google-based reviews at once. In fact, if you earn reviews at too great a velocity, you may find that some of them get filtered out. Rather, best practices for this revolve around slowly acquiring positive reviews from happy customers, one by one, over time. You want to earn more reviews than your direct competitors have, but you don't need 10 times as many reviews to see the benefits. In fact, if you've got many more reviews that your competitors, it may look suspicious to Google and human users.

Google allows you to ask for reviews, but not to offer money or incentives in exchange for explicitly-required positive reviews. Reviews must come directly from your customers' Google accounts. Never hire a third party marketer to pose as a customer and post fake reviews or post reviews on behalf of real customers. Create an internal process in your company for requesting reviews either at the time of service or shortly thereafter. Remember, a slow, steady acquisition of reviews is the goal here, so that you are gradually building a great online reputation, over time.

You will note that this ranking factor relates to the quantity of Google Places reviews rather than the quality or rating of them. At this point in the evolution of Local Search, sheer numbers seem to matter most.

13. Product/service keyword in business title

The business title of your business is its legal name or DBA. It is believed that having the name of a core product or service in your business name may give you some advantage over competitors who lack this. Here's an example of some auto body shops in Boston with the full or partial keyword phase "auto body" in their business names:

If your business name currently doesn't contain a product or service term, don't take a wrong turn by simply adding keywords to the business title field on your Google+ Local page or other citations. This is not allowed!

Ostensibly, you could take the legal steps to change your business name so that it includes a keyword phrase, but be advised that if you do, you will be signing up for a mountain of work editing all web-based references to your old name, in addition to offline re-branding in your signage and marketing. Often, it is simply more realistic to concentrate on other promotional efforts. However, if you are starting a new business, it will be good to take note of this bias on Google's part and consider including your core product/service term in the naming of your company.

14. Quantity of citations from locally relevant domains

Having your business NAP (name, address, phone number) mentioned on a website that relates specifically to your geographic community acts as a locally-relevant citation. This type of citation reinforces Google's trust in your relevance to your locale. Here's an example of a locally-relevant citation for an accounting firm, listed on the Livermore, California Chamber of Commerce website:

Apart from Chamber of Commerce websites, other locally-relevant domains on which you might earn citations could include local news sites, local professional association sites and local blogs that publish content about businesses or happenings in your community.

Remember, a citation does not necessarily have to link to your website, but that's always nice, too!

15. Proximity of physical location to the point of search (searcher-business distance)

For many searches, it is no longer necessary to include a geographic term in your search in order to be shown local results. If Google feels that your search term has a local intent, they will automatically detect your physical location and show you local results. For example, a user located in Laramie, Wyoming can simply search for "wood stoves" in order to be shown a local pack of results containing businesses near him.

This phenomenon of proximity demonstrates Google's bias towards businesses with a physical location within a specific geographic area. If your business is physically near to the searcher, your chances are good of showing up in the local results, but if it's too far away, it is unlikely to be included in the results.

For Google Maps app users looking for local businesses on their cell phones, this concept of proximity is especially sensitive. If you run a local auto body shop on the north side of your city, your chances are good that you will be shown to searches who are driving around that part of town, but if you are on the south side, there is a chance you won't appear as a result for that specific searcher at that time. He'd need to drive or walk closer to you to see you as a result.

Obviously, local business owners have no control over where a particular searcher is physically located at the time he performs a search, but it's important to understand that the closer a searcher is to you, the better your chances of being shown as a result for his search.

16. Quantity of citations from industry-relevant domains

Just as it can be helpful to earn to have your name, address and phone number listed on locally-relevant websites, being included on industry-relevant sites can improve your authority and rankings, too.

An industry-relevant website can be defined as one that is widely recognized to be authoritative within a particularly category of industry, be that automobiles, hospitality or health care. GetListed.org partnered with Whitespark.ca to create a great data set highlighting The Best U.S. Citation Sources By Category. Here's an example of the data you'll find on this page:

Definitely check that resource out if you are looking for citation sources that are relevant to your industry. You can also perform manual searches for your industry category and create a list of the authoritative websites that come up most frequently for your terms. Once you have created this list, you can visit each of the sites to see if they allow local businesses to be listed in a directory-type feature, or if there are other opportunities for earning a citation, such as guest blogging.

17. Local area code on local Plus page

Using your local area code phone number as your primary phone number on your Google+ Local page is considered a best practice. The area code of the phone number should match the area code/codes traditionally associated with your city of location. This may seem obvious, but the local search engine results reveal that some businesses take a wrong turn here and publish a toll free number, instead. Alternatively, they might publish a cell phone number or call tracking number with a different area code.

Here is a screenshot of a business which has done this correctly, publishing a 505 area code phone number consistent with the city of Santa Fe, New Mexico:

Google allows you to enter a secondary number (such as a toll free number) when creating your listing. This is especially important for businesses like hotels who receive calls from all over the world and want their guests to be able to make a charge-free phone call to book a room. Just be sure that, when you create your listing, you are putting the local area code number in the primary number field.

18. City, state in most/all website title tags

As referenced in point #9 of this guide, the title tag is an extremely important element of any website page. Local Search Ranking Factors 2013 posits that inclusion of your city/state name in most or all of your title tags can have a positive impact on how your local business ranks. Here's a screenshot from Open Site Explorer showing how these geo terms have been included in many of the title tags for a carpet cleaning company in Livermore, California:

While it isn't necessary to include your city/state in every single title tag of your website, it makes sense to include it on major pages such as the home page, contact page, service description pages and bio pages. You want to send the clearest possible signals to search engine bots and human users that you are a local business and the title tag really helps transmit that message.

19. Quantity of third-party traditional reviews

In point #12 of this guide, we discussed the importance of earning customer reviews on your Google+ Local page. Beyond this, there are many third-party platforms on which it can be useful to get reviews. In ranking your local business, Google takes into account the quantity of reviews you have earned around the web. Take a look at how the famed New Orleans restaurant, Antoine's, is the recipient of reviews on a variety of sites:

How do we know that Google takes this third party data into account? For one thing, they link out to third party review sites right on the Google+ Local page:

In the above screenshot, you can immediately see that Google is aware that reviews exist for Antoine's Restaurant at UrbanSpoon, TripAdvisor and Switchboard. Consider this a hint!

When trying to decide where it would be best for your local business to win reviews, it can help to look at the +Local pages of your direct competitors to see which third party platforms, if any, are being highlighted, as in the above screenshot.

You should also research which review sites appear to be most active in your locale. For example, in California, Yelp is an incredibly active website, but it may be less so in other parts of the country. Your state or city may even have locally-relevant review sites that your community is using. The idea is to get your business profiled anywhere that your potential customers might leave a review so that you are building a broad, web-based portfolio of positive reviews over time.

20. Page authority of Places landing page URL

Similar to the concept of Domain Authority of a whole website described in point #7 of this guide, this ranking factor relates to the authority of the specific website page linked to from your Google+Local page. For many companies, this will simply be the homepage of the website, but for businesses with multiple locations or practitioners, other pages on the website may have been designated as the landing pages. You can get a sense of your landing page's Page Authority using www.opensiteexplorer.org.

Open Site Explorer uses Page Authority to predict a specific page's ability to rank well, based on an algorithmic combination of link metrics, MozRank, MozTrust and other factors. For a detailed explanation of this concept, read What Is Page Authority. Because of the influence organic factors have on local rankings, the higher your landing page's Page Authority, the better your chances of becoming dominant in the local search results.

Whew, you made it!

Now you're off to a good start! You understand the top twenty most important local search ranking factors. Your next task is to move on to the rest of the eighty-three foundational factors, and from there to the competitive difference maker factors and then the negative factors. I consider the study of Local Search Ranking Factors to be essential and exciting homework for every Local SEO and local business owner on the planet. Taking the time to understand the concepts represented by each factor can spell success for any local business you own or market.

The smartest Local SEOs I know are the ones who study hardest. I'm here to help you in the Moz Q&A Forum if you hit a stumbling block. In the meantime, let me wish you good luck in the learning process!


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The 2013 #MozCon Video Bundle is Live!

Posted: 12 Nov 2013 05:27 AM PST

Posted by EricaMcGillivray

The 2013 MozCon Video Bundle is finally here. Yes, finally! We apologize for the delay, but hope you're still excited. MozCon 2013 attendees: You should've gotten an email with your special code for your video access, which was included with your ticket price (if you didn't, let us know at community@moz.com).

MozCon 2013 was spectacular! This year, we moved our conference to its new home at the Washington State Convention Center, and we were able to host 1,200 people, including Moz staff and other people helping out. This year saw a monumental 35 speakers! That's a lot of inbound marketing knowledge.

Dharmesh Shah at MozCon 2013

What MozCon goers said about MozCon's content

Let's get down to business. Why should you purchase the MozCon videos? We always try to give you plenty of takeaways to inspire and kick off your next brilliant marketing move. Here's what MozCon 2013 attendees said about our speakers' content:

Did you find the MozCon presentations to be advanced enough for you? 73.2% said Yes.

What percentage of the presentations did you find interesting? 55.8% said 80% or more and 36.9% said 50% or more.

All the details on the video bundle

Our videos show both the presenter and their deck, and we include a download of the slide deck so you can flip through it at your leisure. Or just click on those important links. You can stream or download them directly to enjoy on your desktop, laptop, iPad, tablet, Surface, Android phone, iPhone, Windows phone, and those rare Andromeda 4000s, which only work on Mars.

Our dream is that you keep pausing every single talk in order to send emails and IMs filled with new ideas to your team or clients. There are 37 videosâ€"35 speakers + a q&a session + a special Rand Fishkin introductionâ€"to level-up your skills.

For $299 Moz Analytics subscribers ($399 non-subscribers) get instant access to:

  • 37 videos (over 19 hours) from MozCon 2013
  • Stream or download the videos to your computer, iPhone, or Android device
  • Downloadable slide decks of presentations

Buy the 2013 MozCon Video Bundle

Non-subscribers, sign up for a free 30-day Moz Analytics trial and save.

A full-length talk for free!

Last year, we gave away Wil Reynolds' talk, and this year, we're continuing in the tradition of giving you a taste of one of the best MozCon talks. The New Yorker's Kyle Rush talks about the conversion-rate optimization he did as part of the one of the most famous internet campaigns to-date, Obama for America.

Buy the 2013 MozCon Video Bundle

If that doesn't convince you that these MozCon videos are all that jazz, here's a really cute kitten hanging with adorable ducks. Or if you're dance-party excited, we have a super early-bird deal on MozCon 2014 tickets.


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!

Seth's Blog : Evoking online trust

 

Evoking online trust

Interactions rarely happen with people we don't trust.

How is it that someone sees your website or your social media presence or your email and decides to interact? The decision to interact happens before someone actually listens to what you have to say. Here’s a way to think about the factors that kick in before the browser even hears what you have to offer them today:

  • Word of mouth
  • Direct interaction
  • Graphics
  • Tone of voice
  • Offer
  • Size of leap
  • Fear
  • Social ranking/metric
  • Tribal affiliation
  • Perception of transparency
  • Longevity
  • Mass acceptance


Word of mouth: The most effective, by far. If I’ve heard good things about you from people I know, the entire relationship changes. You get the benefit of the doubt.

Direct interaction: Have you previously touched me or interacted me in some way beyond the passive? The way I feel about that ping will alter our interaction. If this is the first time you're reaching out, you can bet a piece of spam is read differently than something that comes via mutual introduction.

Graphics: What do you look like? What does it remind me of? With so few clues online, we read an enormous amount into every pixel, every typeface...

Tone of voice: A variation of graphics, it has to do with your copy, with your video, with the urgency of your offer. Urgency rarely leads to trust.

Scarcity: Is there a perception that early birds gain? This also hooks in with metrics, like the progress your Kickstarter has made so far, or the number of social links you display.

Offer: What’s in it for me to listen to what you have to say? Do I gain more if I listen with a sympathetic ear?

Size of leap: What are you asking me to do? It’s significantly easier to earn the trust that is required to with follow you on social media than it is to get me to give you my credit card. When you hook your new idea to an old idea I already trust, you benefit.

Fear: This is related to the leap. Big leaps are scarier, requiring more trust, and thus more skepticism.

Social ranking/metric: Results on the first page of Google are more trusted. People with a lot of Twitter followers as well, which is one reason both metrics are aggressively coveted and sometimes gamed.

Tribal affiliation: Are you one of us?

Perception of transparency: When I can see the metrics, or understand your intention, or when the message carries with it the hooks to those ideas, I’m more inclined to trust you. (This is a cultural, not a universal, bias).

Longevity: How long have you been showing up?

Mass acceptance: When I sort of hear of you from my friends, when I recognize you from a hashtag or the logo on a shirt or from a TV show, you come out ahead. TV celebrities walk in to the room with a lot of trust.

You will be judged, best to plan on being judged in the best possible light.

       

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marți, 12 noiembrie 2013

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis


Small Business Optimism Sinks On "Precipitous Decline in Hiring Plans"; Is Lack of Credit an Issue?

Posted: 12 Nov 2013 03:58 PM PST

The National Federation of Independent Business (NFIB) reports Small Businesses Optimism Takes a Tumble largely due to a precipitous decline in hiring plans.
Fall arrived literally this month, as small business optimism dropped from 93.9 to 91.6, largely due to a precipitous decline in hiring plans and expectations for future small-business conditions. Of the ten Index components, seven turned negative, falling a total of 27 percentage points. The stalemate in early October over funding the government as well as the failed "launch" of the Obamacare website left 68% of owners feeling that the current period is a bad time to expand; 37% of those owners identified the political climate in Washington as the culprit—a record high level.

NFIB chief economist Bill Dunkelberg: "Small employers are not fooled by headlines announcing record high stock market indices; everyday they live the economic realities of overregulation, increased taxes, weak sales and a government without any direction or plan for the future. The average value of the Index since the recovery started is 91—8 points below the thirty-five year average through 2007 and well below readings typically experienced in a recovery. The new budget deadline of January 15, 2014 is approaching quickly and Congress continues to wrangle over the disastrous healthcare law and little else. We shouldn't expect skies to turn blue anytime soon."
Is Lack of Credit an Issue?

The short answer, as I have commented numerous times before, is "no".



Credit Markets
Six percent of the owners reported that all their credit needs were not met, unchanged from September. Twenty-eight percent reported all credit needs met, and 53% explicitly said they did not want a loan. Only 2% reported that financing was their top business problem. Twenty-eight percent of all owners reported borrowing on a regular basis, down 2 points and a record low.  A net 6% reported loans "harder to get" compared to their last attempt (asked of regular borrowers only), up 1 point from September. The net percent of owners expecting credit conditions to ease in the coming months was a seasonally adjusted negative 8 percent, 1 point worse than September. A surprising result in an economy with the most aggressive monetary policy in history.
Commentary by Chief Economist Bill Dunkelberg
Typical of the reporting by the "mainstream media" on the economy, CNN (Your Money, Nov 2) asserted that stingy credit was dragging down the small business sector; no mention of the impact of Washington antics.  Banks are once again being blamed for the slow recovery, not the Administration's policies (or lack thereof). However, only 2% of NFIB members cite credit and interest rates as their top business problem, and a record 66% expressed no interest in a loan, obviously due to their dismal view of the future of the economy. It's not a problem of credit supply; it's a lack of credit demand due primarily to poor economic prospects.  Consumer sentiment is sympathetic to that notion as optimism posted declines in October, signaling that customers are less optimistic as well.

The healthcare law is revealing itself to be everything opponents feared. But what else could be expected when a few hundred people (in one party) decide to restructure 15% of the economy. Nobody read the bill, nobody understood the whole thing, the big picture. Now, as it dissembles, a panicked Administration is throwing even more tax dollars at the project in an effort to stem the hemorrhaging. No surprise in Washington, apparently firms that supported the Obama campaign were awarded contracts for most of the work.  Kind of like giving Ms. Pelosi's husband the exclusive right to dispose of our unneeded post office real estate - what a deal.
For numerous charts and other analysis, please see the 23-page NFIB November Report.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Venezuela’s Hyperinflation Anatomy; Army Storms Caracas Electronics Stores; Total Economic Collapse Underway; Could This Happen in US?

Posted: 12 Nov 2013 10:17 AM PST

A total economic collapse in Venezuela is now underway. In a futile battle against high prices, President Nicolás Maduro ordered the military to enforce an order that the Daka electronics chain reduce its prices to October levels. The store did not comply and the result was chaos.

Bloomberg reports Army Storms Caracas Electronics Stores, Shoppers Follow
The government-ordered military occupation of a Venezuelan electronics chain has brought out a reserve force in its wake: a line of shoppers that stretched for three blocks from a store in eastern Caracas today.

"You have to take advantage of the government regulations because it was too expensive to buy before," said Maryorie Cacique, 33, as she stood in the line with her three children in hopes of getting a 90 percent discount on an air conditioner in the army-occupied Daka store.

Black Market

"There are no economic reasons for the shortages and price increases we are seeing," Maduro said late yesterday in a national address in which he read the Koran, Bible and Torah. "This is not because of a lack of dollars. It's political."

Chief price regulator Eduardo Saman said Nov. 9 on state television that it's illegal for stores to raise prices on existing inventory. The government has set prices for everything from medical services to flour.
Venezuela Sinks Deeper Into Hyperinflation

The Financial Times reports Venezuela Sinks Deeper Into Hyperinflation
Prices rose 5.1 per cent in October, the second highest monthly increase in over three years, according to the the Central Bank of Venezuela (BCV).

The price jump brings accumulated inflation for the first 10 months of 2013 to 54.3 per cent – well into hyperinflation territory, which analysts at Goldman Sachs define as seasonally adjusted annualised rates of more than 40 per cent.

At the root of Venezuela's economic woes is a tangled web of price and currency controls which, together with problems in the oil industry that supplies 96 per cent of export revenues, have generated a shortage of foreign currency, on which the import-dependent economy relies.
Path to Hyperinflation

1. In May of 2009 Chávez Seized Assets of Oil Contractors after which Chavez stated "our people will never again be anyone's slave".

2. In June of 2010 Venezuela Nationalize U.S. Firm's Oil Rigs. "A former soldier inspired by Cuba's Fidel Castro, Chavez has made energy nationalization the linchpin in his 'revolution'. He has also taken over assets in telecommunications, power, steel and banking."

In May of 2012, USA Today reported Venezuela's PDVSA oil company is bloated, 'falling apart'.
Beatriz Rodriguez sits in a long line under a sweltering sun, waiting for state oil company Petróleos de Venezuela to deliver cylinders of natural gas she uses to cook her family's meals.

"I complained, and they told me I should use firewood," Rodriguez, a mother of three, fumes. "Firewood, they told me. And we're supposedly an oil power."

Venezuelan President Hugo Chávez points to the state takeover of his country's oil industry as one of his revolution's great successes. He boasts that his renegotiation of oil agreements made by his predecessors has improved oil production and allowed Venezuelans to guide the direction of its major export.

Reliance on oil revenue has led to the abandonment of other economic sectors. Much tillable farmland remains idle amid attempts by Chávez to increase food output, and Venezuela continues to import two-thirds of its food. Chávez uses oil revenue to subsidize the cost of the imported food, but shortages of basic goods are not unusual.

Chávez has also used the oil wealth to underwrite artificially low domestic gasoline prices of 11 cents a gallon, which is among the cheapest in the world.

PDVSA's payroll has more than doubled to 115,000 employees since Chávez took office in 1999, and debt has risen 10-fold since 2006 to $34 billion.

Those increases have seemingly accomplished little: Venezuela's oil production has dropped more than 25% since 1998 to its current 2.4 million barrels a day, according to OPEC.
3. As with all government takeovers, output plunges and costs soar.

4. In March 2013, Venezuela devalued the Venezuelan bolivar by 46.5% and created a new currency exchange control regime

5. On November 5, 2013 Venezuela tightens control of foreign exchange
President Nicolas Maduro is tightening control of Venezuela's foreign exchange system and intensifying the pursuit of currency speculators that the government accuses of waging an "economic war" against his rule.

As mounting shortages and galloping inflation undermine Maduro's leadership, the president took to the airwaves Wednesday to announce a slew of measures he said are designed to protect Venezuelans from "parasitic bourgeoisie" speculators.

"Get your papers in order, get your shop in order," Maduro said in a rambling three-hour speech, during which he also attacked popular eBay-like retailer MercadoLibre.com for setting prices artificially high. "If you're looting the people it doesn't matter what your name is, the law will find you."

Maduro's speech was widely anticipated after Venezuela's currency plunged to a record low 58 bolivars per dollar on the black market this week — nine times the official rate of 6.3 per dollar. The president said Tuesday that he and his advisers worked past midnight to prepare the economic package.

6. Army seizes goods, imports dry up, merchandise unavailable at any price. Currency collapses additional 90% on black market.

Total Economic Collapse Underway

The army can raid stores precisely once, after which imported goods will not be available at any price.

Oil export revenues have plunged, while costs soared following the nationalization of the  oil industry. Amusingly, Chavez billed the takeover as his greatest success.

For now, meat and produce availability will depend on whatever the government can confiscate from local growers. However, agricultural products will not last long because fertilizer and feed will vanish at government set prices.

A total economic collapse is at hand.

Hyperinflation a Political Event

Please note that hyperinflation is a political event, not a monetary one. In the case of Venezuela, a series of incredibly stupid political errors is behind the collapse of the currency.

Political error is the root cause of every hyperinflation.

For an historical country-by-country analysis of hyperinflation events please see Reader Questions On Hyperinflation; Would Printing $50 Trillion Tomorrow Do Anything?.

For further discussion of hyperinflation theory vs. practice, including an analysis of absurd calls for US hyperinflation, please see Hyperinflation Nonsense in Multiple Places.

US Hyperinflation calls have been, and remain nonsensical.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Moody's Warns of Scranton Bankruptcy; Fitch Downgrades Chicago Citing Pension Problems; Liberal Fantasyland

Posted: 12 Nov 2013 12:20 AM PST

It is truly pathetic watching politicians flop like fish out of water trying to prevent something that was clearly inevitable long ago.

Please consider Moody's warns of bankruptcy in Scranton as city faces $20 million budget gap.
Moody's warned investors that Scranton could be facing the threat of default or bankruptcy thanks to a $20 million budget gap for the fiscal year that begins Jan. 1. Scranton has more than $195 million in outstanding debt, according to Moody's.

A similar crisis hit the city in July 2012, which lead to Mayor Chris Doherty cutting all city workers' pay to minimum wage for several weeks, a move that made national headlines.

"A second liquidity crisis could have more severe effects, including additional defaults," Moody's warned.

To generate revenue necessary to address its debt, Scranton has considered taxing commuters and alcoholic drinks, though neither has been approved by the city council. The Pennsylvania Economy League, which is overseeing Scranton's Act 47 recovery plan, warned last month the city would have to raise taxes to avoid a default at the beginning of the 2014 fiscal year.

Scranton also faces more than $100 million in unfunded pension debt, on top of the $195 million in other debt owed.

Adding to Scranton's financial woes is the need to borrow another $28 million to pay a court-mandated settlement with the city's police and firefighter unions.
Tax Hike is Pure Idiocy

The numbers say everything that needs to be said. It is absolutely impossible for Scranton to dig out of this hole, I do not care how much taxes are raised.

All tax hikes can do is harm more working class citizens for the benefit of undeserving public union workers.

Liberal Fantasyland

Whatever judge awarded the police and fire workers $28 million is an idiot or a genius, depending on his or her intent.

If the intent of the ruling was to make it clear to everyone on the planet that the only solution for Scranton was bankruptcy, then the judge succeeded.

If as I suspect, the judge actually thought police and fire fighters would receive $28 million, then the judge is living in liberal fantasyland.

Fitch Downgrades Chicago Citing Pension Problems

Yahoo!Finance reports Fitch downgrades Chicago bond ratings
Fitch dropped the rating from AA- to A- on $8 billion in general obligation bonds, backed by property taxes.

It also dropped the rating on $497 million in sales tax bonds — paid for by both the city's local sales tax and its share of the state sales tax. And the rating was downgraded on $200 million in commercial paper notes, financed by a general obligation pledge from any available city fund.

Friday's downgrade stems from "the lack of meaningful solutions" to the city's pension situation. City and fire pension programs have no more than 30 percent of the money needed to cover obligations.
Scranton is several steps deeper in the hole than Chicago, but the problems are quite similar. Neither city can possibly pay pension promises.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com