“Algorithm, Shmalgorithm… how will Panda & Penguin impact my company?”

“If it ain’t broke, don’t fix it,” according to the old maxim.

So why does Google update its algorithm so frequently? The answer to this “why” provides the quickest insight into the “what” of recent algorithm updates.

Buying Your Way to the Top

For years, it’s been an arms race to buy your way into high SEO rankings, because the authority and traffic granted to websites appearing in the top few results of competitive searches are SO valuable, and for many years it wasn’t all that difficult to game the system.  In fact, there are so many vendors on eBay offering ‘backlinks’, social bookmarks, Google plusses and other SEO shortcuts that eBay briefly gave them their own category (examples). It’s not for lack of trying on Google’s part, but their bark has historically been much worse than their bite, and even the most egregious abuses are typically penalized with a PR headache and a slap on the wrist (see J.C. Penny’s temporary ranking penalty).  As we’ll see (below), the Panda update (begun in early 2011 and continuing in phases) has changed the game, by taking a much harder line on low-quality sites and short-cut SEO techniques. But first, a little background…

For Years, Google Needed the Webmasters, so They Tolerated the Pirates

Google distinguished themselves from other early search engines by separating and clearly distinguishing paid from ‘natural’ or ‘organic’ search results (something that China’s Baidu still doesn’t, btw).  Rather than trying to hierarchically catalog the web, as Yahoo and AltaVista did, Google created a system of ranking factors and filters to deliver search results without any human editor.  Google actually depended on Webmasters and SEOs to create links and directories to provide it with the ranking signals it needed to index the web without a human editor.

The Most Important Ranking Factor?  It’s Always Been Links

Links from other websites function like votes. Some websites’ votes are worth more than others (that’s what PageRank measures, named after Larry Page). And while Google is constantly experimenting with 200+ ranking factors, almost half are directly related to the number, quality and “natural-ness” of those links back to your website.

Are Links a Valid Measure of the Quality of a Website?

One of the problems with using links as the dominant ranking factor was that for many years, it was a very small slice of the population that created links, so reflected the preferences of a narrow subset of the population.  This changed dramatically with the development of blogging platforms whereby now everyone and their little sister has a website or blog (150 million+ at last count) and creates links which influence the algorithm (and which provide a vast & profitable network for Google’s Adwords and Display Network).  While those links validate the system of counting links as votes, an SEO can use the system to create hundreds or thousands of links and thereby ‘rig’ the voting.  Many technorati agree that Google created G+ largely to generate a new ranking factor that would draw from a wider pool of ‘voters’, once they realized that they couldn’t count on access to the raw feeds of Twitter and Facebook.  (Though Google has a soft spot for its own social signals, retweets of your URLs do provide a temporary ranking boost and often lead to permanent links for sustained benefit.)  Nonetheless, unless consumers get in the habit of +1-ing everything, Google will still depend on links to judge the authority of a website.

Panda Applies a Harsher Measuring Stick to the Sites Linking to Yours

Over the years, Google has been alternating threats and cajoling SEOs into playing by its (reasonable, we think) guidelines, including creating a Webmaster Tools to help Webmasters manage their relationship with Google.  This spring, Google began using the system to send ‘unnatural link warnings’ to hundreds of thousands of webmasters.  What’s happened is that Google is finally enforcing the many guidelines and standards that they’ve been demanding for years.  If a website falls afoul of the guidelines to the point that Google judges the site to be malicious or ‘webspam’, Google will flag it and won’t show the site in search results, but more importantly, any links originating from it will lose their ‘voting’ power.  All the cries of dropping in the search rankings are a result of having cheap, paid links devalued by Google.  If your site has suffered a rankings drop in recent months, it should be a wake-up call that you need a forward-looking strategy that incorporates link-worthy content, link-building strategies that won’t be wiped out overnight, and social integrations as well.