BACK TO BASICS: Bruce's 2012 Predictions Scored: How Accurate Was He?

by Virginia Nussey, January 16, 2013

Estimated reading time: 7 minutes Highlights: Bruce foresaw the continuation of trends in the SEO industry, and most came at least partly to pass. The business community's investment in mutlifaceted Internet marketing increased. The increased presence of local results in SERPs challenged national brands and drove local SEO demand.

It's one thing to make a prediction. It's another thing to be held accountable for your claim. There might be far fewer fortune tellers in the world if they were confronted by the accuracy of their soothsaying later down the line.

Bruce is a veteran SEO who has witnessed the rise of Google, seen the value of search algorithm ranking factors ebb and flow, watched the results page morph and grow, observed the many faces of spam, and assisted countless companies to develop websites that attract visitors and establish loyal communities. Bruce has been at the forefront of the online marketing industry since 1996; it's hard to be involved with something for that long and not see patterns.

Bruce uses the events of the past, the technology of the future and the motivations of those in power today to forecast the year ahead. Established in 2007, his predictions are a tradition of providing insight into our industry. However, this year we decided to see just how accurate he was. And so we tapped some experts and our community of readers to weigh in on whether or not these predictions came to light in 2012.

To analyze his 2012 predictions, we organized them into categories:

Investment in services, channels and education (jump here) Social media marketing and social channels (jump here) Personalization and localization of search (jump here) Internet marketing industry growth (jump here)

Twelve of Bruce's predictions for 2012 were scored on a point scale. Bruce can get up to 2 points for every prediction. A prediction that came to full fruition gets 2 points. A prediction that fell flat gets 0 points.

To assess whether or not predictions came to be in 2012, I enlisted help from:

• Tim Ash, CEO of SiteTuners and chair of Conversion Conference
• Motoko Hunt, president and search marketing strategist at AJPR
• Kendra Jaros, VP of marketing at Third Door Media
• Joe Kerschbaum, VP at Clix Marketing and author of Pay-Per-Click Search Engine Marketing: An Hour a Day
• Mike Ramsey, owner of Nifty Marketing and The Voice
• Internet marketers invited through the blog and our social networks to participate in a survey

Industry Investment

The Prediction: Budgets will be larger than expected, although not crazy, and spending will be rapid. I expect that spending will ramp quickly early in 2012, then flatten during the middle of the year, then grow in the fourth quarter for a yearly growth of 13.73194 percent. Top firms will be busy and by mid-year many will stop accepting clients. There will be significant early excitement as online leads grow significantly.

The Score: 1 point

Our survey respondents gave Bruce a mixed review on this prediction.

• I saw budgets for online marketing that were larger than expected in 2012, as well as rapid spending in this area: 25% said yes
• My online marketing firm was so busy we stopped accepting clients by mid-2012: 12.5% said yes
• I saw online leads grow significantly in 2012: 25% said yes

And one survey respondent said s/he saw business double in 2012 and stay consistently steady all year. Overall, Bruce gets a point for predicting budget growth, but no points for the details regarding ramping up, flattening and cutting off clients.

The Prediction: Conferences see massive popularity as companies fight to learn the Internet marketing optimization disciplines. As the IMO disciplines become more competitive, training will become a significant factor in businesses wanting a slice of the online pie. Training demand grows rapidly, and the best online and classroom courses will be exceptionally popular. Training classes at conferences will fill early and will often be the justification for the conference.

The Score: 1 point

I asked Kendra Jaros, VP of Marketing at Third Door Media, parent company of the SMX conference series, if she could speak to this prediction.

Kendra says, "I would definitely agree with Bruce's prediction – all of our US based shows saw growth in attendance this past year – both conferences "proper" and workshops."

However, she was unable to confirm if training workshop registration filled early and could not speak to workshops being the justification for the conference, so Bruce gets 1 point.

The Prediction: As labor costs in Asia skyrocket, the massive use of offshore labor will no longer be seen as cheap. Increasing prices will have a consequence to businesses naively desiring "cheap" SEO services. It does not help that the dollar and euro are weaker currencies throughout 2012, although this lower dollar value causes businesses in Asia and India to find U.S. and European-quality services within their economic reach. As a result of increasing labor costs and currency fluctuations, the cost of online traffic increases. Several vendors will create their own captive overseas workforces (some through acquisition) to contain costs during 2012, but customers can still expect that the entry point for professional services will climb.

The Score: 2 points

To grade this prediction I spoke to Motoko Hunt, whose company AJPR provides Japanese SEO and SEM services to companies around the world.

Virginia Nussey: Can it be said that labor costs rose in Asia over the last year? Motoko Hunt: Yes, but new companies who offer the services at cheaper cost are coming out. It gives the variety of options in service models and cost structures for the clients. VN: Did the quality of SEO and Internet marketing services rise in Asia in 2012? MH: Yes, and it's not correct to say that the cheaper services in Asia means lower quality than US and Europe. The interesting trend is that more US and European agencies are contracting out the services to less expensive agencies in Asia and Eastern-Europe. It means that the brands are paying more for the same services to US and Western-European agencies. VN: How would you interpret the prediction that labor costs and currency fluctuations caused an increase in the cost of online traffic? MH: The labor cost will continue to rise, and the currency fluctuates. While the cost is important part of the decision making, the brands should evaluate the quality of the services better during the contract process. The performance should be evaluated more by the conversion rather than to based only on the overall traffic. VN: Was there any trend of U.S. businesses starting up workforces in Asia? MH: They already are, through the outsourcing, the partnership, and acquisition of local agencies.

Bruce was pretty accurate on all counts on this one so 2 points.

The Prediction: Conversion and analytics emerge as the only items common to all company 2012 budgets regardless of what generates traffic (social, local, SEO, PPC … whatever). Traffic without conversion is a waste, and integration of conversion methodologies into projects is mandatory.

The Score: 1 point

Tim Ash CEO of SiteTuners, chair of Conversion Conference, was the go-to conversion expert to grade Bruce:

"Bruce is right — to an extent," says Tim. "Conversion Rate Optimization and web analytics are both growing. There are more in-house people with conversion as their primary responsibility. Attendance at our Conversion Conference event in San Francisco grew by 25% last year, and we expect to shatter that record in 2013. Unfortunately, the focus is still on driving more traffic (since that is where ad budgets are being spent), and CRO activity has not reached the level that I would like to see in organizations."

Since conversion optimization is still an undervalued facet of online marketing, Bruce takes 1 out of 2 points on this one.

The Prediction: As the quality of content continues to climb in importance, the easy money attitude will evaporate. You can no longer just build it and they will come, and one-person at-home lead generating businesses will often be unable to compete with larger content publishers. And larger publishers that simply regurgitate derivatives of other peoples content are also going to increasingly find rankings penalized. The focused expert sites rooted and recognized by peers for quality content will rise and succeed. Sites must really earn that traffic, and SEO tools and methodology become necessary for success much more than ever before. For businesses needing online traffic but unable to master the skills needed to achieve top rankings, SEO experts will be in very high demand.

The Score: 1 point

Survey respondents said they recognized some of this prediction coming to pass, so Bruce gets partial credit here.

• I saw the "easy money" attitude towards online marketing evaporate in 2012: 25% said yes
• I believe the one-person at-home marketing consultant and content creator could not compete with the larger marketing businesses and publishers in 2012: 37.5% said yes
• Sites had to really earn traffic in 2012, and SEO tools and methodology became more important than ever for success: 56.3% said yes

The Prediction: By the end of 2012 Internet Marketing practitioners will adapt to being expert at multiple disciplines, or they will need to resolve themselves to buying traffic for their clients.

The Score: 2 points

We again turned to the survey to score Bruce's prediction.

• The aftermath of Google's Penguin Update is an example of how the industry has shifted toward a holistic, multidisciplinary approach to Internet marketing: 88.2% said yes

In light of Google's crackdown on manipulative SEO tactics, the search marketing industry looked to a robust and multi-faceted strategy to optimization and online promotion. This is an insight that gets 2 points.

Social Media

The Prediction: Google+ will collect data that assists Google search in providing unique and exceptionally targeted results. Personalization of search results (ads, organic and local) is essentially accomplished.

The Score: 0 points

Joe Kerschbaum, VP at PPC specialty firm Clix Marketing and author of Pay-Per-Click Search Engine Marketing: An Hour a Day, gave Bruce a failing grade on this prediction.

"I’m not sure if personalization through Google+ had a huge impact in 2012. Google+ is still having a difficult time gaining traction with the general population. Therefore the effects of personalization haven’t been widely felt by paid search. If there has been any effect of personalization so far, it has been minimal and would be difficult to directly attribute. However, 2013 might be the year that Google+ gains more popularity, and perhaps it will have great impact on search."

The Prediction: Social media remains a major bright, shiny object. It drives traffic and influences decisions. This segment will develop ad, organic and reputation/service specialties by mid-year and most companies have "official" social media programs in one or more of these areas. Social media will be seen as a key influencer for the research stage of the buying funnel, driving traffic to conversion processes. Without social media, brands will weaken and sales will be lost.

The Score: 1 point

The survey respondents didn't really think much of this prediction.

• I saw social media as a key influencer for the research stage of the conversion funnel in 2012: 33% said yes
• Companies not investing in social media in 2012 saw brand and sales weakened as a result: 28% said yes

One respondent wrote: "Social media has become only as important as the original voice created on your website. Social media separate from the theme and focus of your site falls flat."

While social media platforms matured in 2012, especially in regards to advertising capabilities, it looks like the Internet marketing industry hesitated to give social media as much credit as a force for influence and investment as Bruce forecasted.

Localization and Personalization

The Prediction: The cost of AdWords ads doubles, but the ROI resulting from personalization targeting justifies it. Personalization makes it work. Google releases a new version of AdWords management tools combining demographic targeting to compete with that found in Facebook.

The Score: 1 point

For predictions on search advertising we again turned to Joe Kerschbaum.

Virginia Nussey: Was there an increase in cost of AdWords ads over the last year? Did ROI of search ads rise, and if so, is it being attributed to improved targeting via personalization? Joe Kerschbaum: We haven’t seen a significant increase in AdWords cost over the year. I just completed an analysis of a handful of accounts. A few accounts saw a slight increase in CPC during 2012 and a few remained relatively steady. I didn’t notice any accounts with a remarkable decrease in cost. For this analysis, I was looking at average position and the bids required to maintain these positions. Was there a major update to AdWords management tools? Did AdWords do anything to compete with Facebook advertising in 2012? Yes, there were a some very interesting updates for AdWords in 2013. Google released new options such as Search Companion, Remarketing Lists for Search Advertisers, and they re-vamped Google Shopping with a serious focus on Product Listing Ads (PLAs)

While the cost of AdWords stayed about the same this year, there's a point in there for the new AdWords management options and features.

The Prediction: Local results are shown for a majority of queries, generally resulting in only three organic results getting the vast majority of search traffic. As a result, SEO becomes more difficult for national non-local businesses. Many untrained people abandon organic SEO as costs climb and results are evasive.

The Score: 2 points

I asked Mike Ramsey, owner of local search marketing firm Nifty Marketing, to score this prediction.

Virginia Nussey: Did you experience or come across anything that suggests that local results were shown for a majority of queries last year? Or more last year than the year before? Mike Ramsey: Ed Parsons from Google this year stated that 1 in 3 queries typed into a standard Google search bar are about places. Data from 2010 said around 1 in 5 so the trend is quickly moving to over 50% of queries being recognized as having local intent. Google has always tried to show the most relevant information and update their algorithm to show such so we are starting to see more local results on search queries that don't have local modifiers and also we had the Venice update, which localizes organic listings that aren't tied to a places account. Localization was a HUGE factor in 2012 and I think we will continue to see this trend in 2013. Did you hear about or speak to any national non-local businesses that were challenged by local businesses in search competition? Often, I can't mention names but we have taken many phone calls from businesses wondering how to compete with localized search results due to the Venice update. Did you see the number of businesses that enlisted professional help for local SEO grew in 2012 because of rising costs and competition? A Borrell Associates study that just came out mentioned that Local online ad spending is expected to grow from $18.7 billion in 2012 to $24.5 billion in 2013, an increase of 31% from last year. Most of the conferences I have spoken at over the past few years were largely small businesses and agencies wanting to learn about local. This year, I noticed that the audiences seemed to transition to much bigger brands wanted to develop a multi-location focus."

Yes, yes and yes for 2 points.

Expanding and Contracting of an Industry

The Prediction: Google, with its Google+ intrusion into search, will lose market share to Bing. People will dislike the complexity of a hybrid social and search system. The systems will not be understood by a fifth grader. We see the beginnings of "Occupy Google" as protesters become vocal.

The Score: 0 points

Survey says not so much.

Only one-third of respondents reported a dislike for the complexity of a hybrid social-search system and the presence of Google+ in search. Likewise, a third of respondents said there was a vocal protest against Google+ last year. Nearly 45% of survey respondents said they didn't recognize anything in this prediction happening in the events of 2012.

The Prediction: Internet marketing optimization (IMO, the umbrella for SEO, PPC, analytics, social, conversion and information architecture) is finally recognized as the new online marketing battleground. Specialists such as SEOs are forced to learn about all other disciplines as projects require participants to know more about more about the other IMO disciplines.

The Score: 2 points

Nearly 78% of survey respondents said they expanded their online marketing practice from one discipline to many.

Write-in responses included:

• "I agree that making all strategic parts, search, social, mobile, local and reputation are critical aspects that must be integrated or apathy will quickly result. Failure follows apathy."
• "I've always used a holistic marketing approach. It's changed every year, as each year has brought additional or different channels. So this was just a continuation."
• "Something like this may have started; but the Panda and Penguin updates made Links the key battleground for online marketing."

The Final Score: 14/24 - 58% accuracy.

The end of the year is not the end for many of these predictions. When it comes to trends, there's no hard deadline and Bruce expects that many of the predictions may see more action in the months to come.