In my conversation with Rand Fishkin, we talked about the 30,000-foot view of marketing and advertising. Google and Facebook are the duopolies, that’s true. But small businesses don’t have to lose. With marketing flywheels, influence marketing, and audience insight you can get ahead. Why? Venture Capital takes advantage of our tax system which makes advertising expensive. How do you compete? The short answer is you compete on things that don’t scale. 

Small Business in the Vast Ocean of Advertisement

With so much of the public being trained by social media and search algorithms, you tend to get a sense that the algorithm is training us. Of course, I think we should be the ones training the algorithm so that takes more time and intent. 

“All three of these companies have a goal, which is relatively infuriating and directly-opposed to a small business owner’s goal.” Rand Fishkin

It feels tempting to throw money (easy money that requires almost no work) at ads. But at the same time, how does that help your small business tread water in the vast ocean of advertising dollars? If your market is swamped, you likely won’t have the capital available for that boost. With that said, Warren Laine-Naida and I talked a bit about $1/day advertising. Sure $1/day search ads can help, but if you’re selling jeans, as Rand brings up, your ad will probably not show up in the SERPs. Why? Two reasons: the advertising space is highly competitive and the tax structure rewards high growth rate and not profitability —  something Rand has written about for quite some time.

This is why building brand awareness, name recognition, and relationships in an organic way should come before advertisements in your online marketing process. In “The Only Online Marketing Book You Need for Your Small Business,” Warren Laine-Naida and I say you should prioritize your website, then understand customer intent, then social, then ads. Of course, email marketing follows and the cycle repeats itself. The point? Small businesses need to spend time building relationships — online and off.

“When you build brand equity elsewhere, Google and Facebook become better channels.”

Chicken and the Egg with Online Ads

When it comes to remarketing or retargeting, you want to ensure you’ve built up some brand awareness, first. As I mentioned in the video, people may see your ad, but if they don’t know who you are, they won’t click. Why? Because they don’t know who you are. This is the chicken and the egg with online ads. Fortunately for us, chickens lay a lot of eggs. You can, with the right team in place, work on both at the same time.

“So essentially, I mean, this is one of the other reasons that I so urge businesses to invest in building brand awareness before they go out and spend money on ads, because essentially the efficacy of those ads. Right? The likelihood that someone will click the likelihood that once they click, they actually convert goes up way higher. If they have heard of you, if they know you like you trust you. And so this is why retargeting and remarketing ads tend to be so valuable.” Rand Fishkin 

Organic Marketing for Small Business

I’ve been preaching organic as a partner to paid for years, and that is precisely what Jason Knill and I did when Thought House did the marketing for GiveWP.com (2015-2017). Find out what works on social media (organic) then pulse ads (paid) at those types of campaigns. And lately it seems like the people I talk to are throwing their money at Google and Facebook Ads — until they realize maybe it doesn’t work. 

Rand, later in the video, reminds us that the essentials of marketing and the questions we need to answer are the same in 1955 as they are today. He lists:

• Who is my audience? 
• What do they pay attention to? 
• Where do they engage? 
• What messages resonate with them? 
• Go tell those messages that resonate in those places, to those people. 

“That’s a complex form of marketing this, this sort of attention and influence, but is the opportunity bigger? Absolutely. I mean, is the cost of customer acquisition way smaller? Yes! So much smaller.” Rand Fishkin

How Can You Measure Organic Efforts?

But can you measure influence (no “r”) marketing? Sometimes measuring organic efforts is a bit more difficult than it is with paid media. That’s okay. This is where you adopt the Coca-Cola strategies. Try buying in certain spots. See which locations work. Track the website visits after a podcast appearance. What is the overall lift for the next two weeks after an event or a speaking opportunity? That’s how you can see what worked.

Even better is lead scoring. Don’t forget to ask your prospects, if you can, how they found you. We didn’t cover this topic this time, but I’ve covered it before. 

Essentially the cost of a low customer acquisition cost (CAC) is the loss of perfect attribution. So, don’t lose the forest for the trees.

Small Businesses and the Marketing Flywheel

When the marketing tactics that support your business goals become easier over time, you’re essentially using a marketing flywheel, as Rand describes. As you get subscribers on your email list and they follow your social accounts and they purchase and then you give them opportunities to upgrade, your friction goes down. It cycles. It grows. It gets easier.

It’s slow growth, but the growth you need for the long term.

“Look business and marketers understand this core concept that essentially when you invest for the long term, it starts slow.” Rand Fishkin

As a way to help small-to-medium businesses and marketing agencies with audience insights, Rand and his partner Casey started SparkToro. It is a great tool for persona research and audience insights. You get ten free searches a month with the free account. I’m even thinking of getting the starter plan for my agency. (Wait. Finish reading this before you head there, okay?)

Venture Capital and Tax Incentives

A lot of why growth rate becomes more important than profitability has to do with Venture Capital and the tax rates for Capital Gains. It may feel like you should replicate the efforts of larger enterprises that you admire. However, you don’t know why they’re spending their money. Marketing is an expense, after all, and if, in the long run, they can eventually make a profit, they’ll design their business to be unprofitable for years. 

What does this have to do with taxation? Well, when you’re a partner in a business (LLC investors) and the business is profitable, you’re taxed at a certain rate. Venture capitalists want the IPO gains. And the rest is basically something that a CPA or financial planner needs to explain. 

“I think for a lot of Americans to see the reason that my business, my small business has so much trouble competing against these other businesses because they get to play an unprofitable customer acquisition.” Rand Fishkin

Don’t forget this. You’re not them. You’re you. You don’t want an unprofitable business. Likely, you can’t afford to even play that game. What does that mean for your small businesses marketing? Basically, let the VC-backed businesses play their game. Do your own thing in a way that they can’t. Don’t compete with Amazon. Compete with yourself. Put energy into your community.

“So my advice generally is don’t try to compete with them on their terms.” Rand Fishkin

Be creative. Start a podcast. Build relationships. Speak at events. Sponsor your local youth sports. Do something that makes you stand out in your community. Brand recognition goes a long way — especially when your small business eventually boosts posts or engages in $1/day search ads on Google. 

Video — Too Big To Quit? A Chat with Rand Fishkin about GoogleFace.

About This Series — Conversations With Bridget 

Wouldn’t it be nice to overhear conversations with founders, CEOs, and business people?

In this series, Bridget Willard talks with these folks to allow small business owners to gain insight.

Marketing tactics will always be wrong if our strategy is off. 

.

Are you subscribed? 

Time Stamps for the Conversation with Rand Fishkin

00:03:54 Algorithms are like dogs; they do what you train them to do.

00:06:12 80% of Online Advertising is Spent with GoogleFace (The Duopoly)

00:09:00 People pay attention to social accounts that aren’t monetized. 

00:11:37 Learnings from Coca-Cola and Brand Lift

00:13:58 The Marketing Flywheel

00:17:50 What percentage do you spend on marketing?

00:19:50 “So my advice generally is don’t try to compete with them on their terms.” Rand Fishkin

00:22:26 Venture-backed companies don’t care about profit until their IPO.

00:27:18 Chicken / Egg Problem with Advertising an Unknown Brand

00:30:14 Influence Marketing – Who is your audience?

00:33:36 Q: How would you promote a one-time event without any paid traffic and without bugging the crap out of the speakers? 

00:36:25 Rand sees potential with TikTok

00:37:13 Bridget talks about Google indexing tweets.

00:38:08 Wistia on your site first; then YouTube after a couple of weeks.

00:40:34 Q: How do small businesses prepare for the future?

00:43:12 Q: What value is there to take venture capital and lose control for the mom and pop business?

00:45:59 “But the incentives of [venture capital] and that model are not, they’re not at the core a match for my values. I like small businesses.” Rand Fishkin

Conversations with Bridget — The Rand Fishkin Episode Full Transcript

Bridget Willard:

Hey, everybody. Welcome to the show. This is Bridget Willard with Rand Fishkin. Rand, for those who don’t know you, how would you like to introduce yourself?

Rand Fishkin:

Oh gosh. Uh, let’s see. I am a huge fan of pasta and cocktails and I really like traveling and I love people and I miss people and, um, I’m so excited that I’m vaccinated and I get to hug people again.

Bridget Willard:

Yes!

Rand Fishkin:

So yeah, that’s how I’d like to be introduced. But usually when I do a professional events, people say, “oh, he was the co-founder and CEO of Moz for many years. And he left that company and he wrote this book, ‘Lost and Founder.’ And, uh, he started a new company called SparkToro, which just launched last year. And, uh, he does lots of speaking and, uh, videos and events, uh, and helps people do better marketing.”

Bridget Willard:

So professional,

Rand Fishkin:

Personal stuff, personal stuff. I am, I am married to the, uh, infamous in many circles, author Geraldine de Reuter, who is a, uh, a humorist and feminist writer who with, with, uh, with a James Beard Award — as of last year. And, um, yeah. And is working on working on a new book. So I’m here at work.

Bridget Willard:

That’s so awesome. I did catch one of those interviews that you did together. And I was like, “oh my God relationship goals.” That’s so cute.

Rand Fishkin:

Was it the one where she gave me an introduction?

Rand Fishkin:

Yeah,

Bridget Willard:

That was, that was really funny.

Rand Fishkin:

Oh man.

Bridget Willard:

Got a good sense of humor. Got a good sense of humor. You’ve got to keep those ones. I mean, I have two questions before we start talking about GoogleFace. But number one, what is your favorite pasta and number two, did you intentionally order those books in rainbow order behind you?

Rand Fishkin:

Of course I did. I wanted them to match. So Geraldine Geraldine is not only a talented humerus, she painted these Adventure Time characters for me as a gift, like several birthdays in a row.

New Speaker:

I got all the core characters from Adventure Time I’m and, and, um, I wanted my bookshelf to match. And so that’s, uh, that’s, that’s how that got organized. She’s actually quite infuriated because, as an author, she likes being able to look by, uh, author last name or by book title, but no, um, she’s like, I, let me recommend a book to you. Let me see if I can remember what color it is.

Bridget Willard:

That’s real life, man. I mean, I like it arranged that way, but also I’m sure the Dewey decimal system worked for a long time for reasons.

Rand Fishkin:

That’s the struggle is real favorite pasta. Favorite pasta is

Bridget Willard:

Not the sauce, the actual, the pasta sauce.

Rand Fishkin:

Um,

Bridget Willard:

that’s another debated thing.

Rand Fishkin:

So I let’s see, I probably in the fresh pastas, um, I really love, uh, what are the little pockets called.

Bridget Willard:

tortellini

Rand Fishkin:

Um, yeah, but they’re the tortellini have the fold and then this is, this is like the pocket where you twist at the top. I can’t remember the name of those, but those are amazing, but it’s something close to that. Um, and then yeah, for sauce, I don’t know. It might be pesto. But you know, whatever, it’s, it’s probably whatever Google’s, uh, discover feed is showing me. I don’t know. They, their algorithm knows better than I do.

Bridget Willard:

Well, I will tell you what I always tell my small business clients, “algorithms are like dogs and they do what you train them to do.” So if you don’t see my stuff on Twitter, then you need to start interacting with it. If you haven’t heard from so-and-so in a while, Facebook then go to their profile. ‘Cause it’s rewards them for you to stay on their side as long as possible by serving you the same thing that you interact with.

Rand Fishkin:

This is absolutely true. And then there’s all sorts of fascinating byproducts of those algorithms that optimize for engagement, um, on both the advertising and the organic side and with with lots of consequences for marketers like us, but

Bridget Willard:

Also like you can kind of trick it. So when I moved to Texas, I bought all new furniture because I only came here with whatever fit in my Civic. And so what I did was I made my public wishlist on Amazon. I would put in furniture and then leave it. And then go to Facebook and Instagram and scroll until they showed me the carousel of better things. I put them on.

Rand Fishkin:

That’s pretty savvy. Bridget, I think, I think maybe you’re the one training the algorithm. Yeah.

Bridget Willard:

Yeah. Well, why not? It’s just data. Why are we so afraid of it?

Rand Fishkin:

There’s a lot of people who are being trained by the algorithm and then there’s people who are doing the trick. Yeah.

Bridget Willard:

So do you want to be a king or a king maker? I want to be a king maker, which is why I train small business clients. Right? So, um, I really, really, really want to talk about like this need or, or since the small businesses and medium, well, everybody basically, but small business to me, small and medium-sized businesses really have to advertise on Facebook and Google, as you call them the duopoly. But like, to me, it feels, it feels like between payola and extortion. And I really don’t understand how to totally communicate to them, uh, as well as you do, like, can we like kind of break that down a little?

Rand Fishkin:

Yeah. So, Um, I think it’s approximately 80% of online advertising spend is, is split between Google and Facebook. And then there’s another 10%, uh, that’s Amazon. And that is also growing and at Amazon, um, of course it’s pretty exclusively e-commerce, but still a tremendous amount of activity happening there. And, and all three of these companies have a goal, which is relatively infuriating and directly-opposed to a small business owner’s goal.

New Speaker:

So Bridget, if you and I start up, I don’t know a new fashion company and we’re making denim and we’re selling jeans to people, right. You know, if we, if our cost of goods is, I don’t know, $50 to make a pair of jeans and we’re selling them for a hundred bucks, Google and Facebook and Amazon want to have us pay $49 and 99 cents to acquire a new customer for our pair of jeans.

Bridget Willard:

That’s insane.

Rand Fishkin:

I mean That, but that’s their goal right there. Our goal is essentially take all the margin out of every business that they possibly can to the maximum amount that they possibly can over time. And so the way to do that is to get as many advertisers as you possibly can competing for every impression, every eyeball, so that, uh, all, all of that competition optimizes toward the maximum margin that’s reachable.

Rand Fishkin:

And so you, you get this world where Google and Facebook’s incentive is to drive up ad prices by getting all of these people in there and then drive everyone, uh, who might be a customer to see, you know, um, their ads exclusively as much as possible. And so when you search for jeans, Google wants the top four or five, six, seven results to be, you know, all advertisements for jeans from various competing companies who are all paying, you know, the maximum amount per click. Uh, and then Facebook’s goal is to basically identify people who might be buyers of jeans on Facebook and Instagram and WhatsApp and et cetera, and then show, uh, ads right, make that display, social display inventory available. Same thing in the Google display network. Same thing on Amazon’s, uh, e-commerce network.

New Speaker:

And then this, this makes for a very tough situation, right? If they can dominate both the attention of most consumers and the advertising side, they can make it really difficult for business owners to do anything else.

Rand Fishkin:

But I have to say the frustrating part about this as well, Google and Facebook dominate marketers’ thinking a as marketers thinking they are not the only places to do this.

Bridget Willard:

Well, Yeah.

Rand Fishkin:

I mean, we don’t, we, human beings do not exclusively pay attention to those two platforms. It is not the only things we do online or off. And so, you know, people go to events, they attend webinars, they listen to podcasts, they visit websites, they consume news. They, uh, form communities, they go to subreddits, they pay attention to social accounts that that are not monetized. Right. And that, in my opinion, that’s where most of the more authentic, more organic marketing takes place. It’s also where a ton of the opportunity is.

Rand Fishkin:

But that opportunity is not just throw dollars, get dollars back. And so you have to do real work to figure out, okay, what podcasts are my audience listened to? Could I be a guest on there? Can I offer them something of value? Uh, could I pitch to sponsor them? Okay. Maybe not the podcast, but the host of that podcast runs a website. Oh. And they blog about this. Huh? That blog audience is pretty big. I wonder if I could somehow get,

Rand Fishkin:

It’s more complicated, right? That’s a complex form of marketing this, this sort of attention and influence, but is the opportunity bigger? Absolutely. I mean, is the cost of customer acquisition way smaller? Yes! So much smaller.

Bridget Willard:

I mean, the thing is that somebody, and when I say “somebody” I mean CocaCola is still paying, paying Clear Channel for billboards. And they’ve been around for 200 years and they don’t, they’re never going to get attribution for that. I used to explain it to that, to my clients this way.

Bridget Willard:

When I had a day job, I would have to make a U-turn. And at that U-turn, I would see a Clear Channel billboard, literally for any Coca-Cola product. And I’m an avid Diet Coke drinker. I’m always going to drink Diet Coke. You don’t need to pay for my loyalty anymore. And as I made that, U-turn, there was a 7-11. Now, if I connected the fact that subconsciously, I was like, yeah, thirsty. I have time to go to hit 7-11 before I show up for work. Even if I thought that even if I was aware that I thought that, and even if I walked up to the person and said, I bought this because I saw the ad on 17th street in Tustin, in Santa Ana, that employee is no way to report it to that owner who has no way to report it to the 7-11 franchise who has no way to report it to, to, to,

Rand Fishkin:

But, I, but I’m sure, I’m sure you’re aware. Right? So the, the Coca-Cola corporation has, it has a pretty sophisticated system for essentially they’ll do, you know, large-scale, whatever media buys, right? So a television or outdoor radio campaign, um, in a geography and then they won’t do it in another geography and they’ll compare, right? So they’ll say, oh, this is demographically and population-wise similar to this other region. We will compare the, you know, we’ll compare and contrast by testing the two. How much, what, what brand lift did we get in market one? What brand lift did we get after six months we did we see sales, you know, stay to stay flat in that region. Did they go up by how much? Okay. That’s the value of brand advertising across these, uh, large-scale channels approximately in these regions. Is it perfect? Can we measure the attribution flawlessly? No. Are we still going to invest in it?

Rand Fishkin:

Absolutely.

Bridget Willard:

Right.

Bridget Willard:

And then, and then Coca-Cola has very sophisticated ways of measuring the compound interest effects. So what happens if, for example, they do it for four years, you know, invest a certain amount of advertising with a certain amount of impressions for four years in a row and then take a year off.

Bridget Willard:

Right.

Rand Fishkin:

What sort of loss do they see? How does that change over five or 10 years? So that, that ability to measure is absolutely incredible. And one of the, one of the few ways that a small business owners, medium sized business owners can do the same thing is by looking at — on their own websites, right? Assuming that you’re a digital marketer and selling mostly online, you can look at branded search traffic, direct traffic type in traffic. You know, you go to Google analytics and you look at your, you know, oh my lift, right?

Rand Fishkin:

So I do this, I do this all the time for SparkToro. I’ll, I’ll go to, uh, our analytics channel and Casey, my co-founder likes to actually mark, oh, Rand was on this podcast this day. And then we look at the lift and we’re like more podcasts. Rand, get yourself on more podcasts because look at that lift. It works every single time, right? Based on the number of people who listened when the episode goes live, you can see the next few days, the number of searches for SparkToro, just the brand name goes up. This is not impossible to measure. It’s just not perfect attribution,

Bridget Willard:

Right. It’s not, I have a coupon. I saw, I saw this tweet and you’re giving me a free thing. And now you know that I saw your tweet and therefore I’m getting this thing. It’s, it’s all of those things all combined over time. And that’s why I love your, um, marketing flywheel example. Of course, that link is in the comments and everything like that. Go read it. Like that’s really important. Like, cause when I heard that, I was like, this is a great way to explain this, that your efforts over time will, you know, have things, but everybody wants now, you know, like Ronnie Chang Prime now. Break into my house now. Just anticipate what I want. Just put it away in my cupboard.

Rand Fishkin:

I love it. Yeah. Yeah. Well, so I think this is the, this is the challenge, right? We, I think, especially look business and marketers understand this core concept, uh, that essentially when you invest for the long term, it starts slow. Right? When I start a, whatever it is, any kind of episodic content, a video series, a podcast, a blog, a news, an email newsletter, a sub stack, a I’m going to start investing in a social media channel presence, you name it, right? All of those things start out slow. You have very little traction that at the beginning, and then it builds and compounds over time. Over time, you. There’s one of two ways it works, right? The flywheel works either when each time I complete the cycle. So each time I send out my email newsletter, each time I, you know, run, do a YouTube video, whatever it is, I have to invest less effort for the same output.

Rand Fishkin:

That’s way number one. And way number two is I invest the same amount of work. It takes me the same amount of work to do the email newsletter every week or the blog post or the YouTube, whatever it is. But I get more out each time. Right? So w you know, Bridget, my, my first few blog posts, I mean, my first few dozen blog posts that Moz did, I have 10 readers? Not even. But you know, over time it got to be, oh, and now there’s a dozen people. Hey, like, I think like 25 people read that last one. And 25 turned into a hundred and then year three, my God, there’s a thousand people who read it. And then [do-do-do-do] right. The, it starts, it starts growing and growing. And, you know, before I knew it, right, Moz is a $30 million a year business. And, you know, tens of thousands of people are reading the blog every day. So it, it can compound over time. So long as you are getting better and better at it. And your audience is, uh, compounding by, by reaching more and more people.

Rand Fishkin:

And these algorithms, these algorithms that, um, YouTube and Facebook and Twitter and Instagram and LinkedIn and Reddit, and, uh, Google search and Google discover and Google news, all of the platforms have algorithms that optimize for engagement.

Bridget Willard:

Right?

New Speaker:

And if you are the one creating the engaging thing, they want to show you more.

Bridget Willard:

Right. So I love this I’m so like, I’m high. Excited, like Noom was asking me, “what gives you joy?” Like this kind of intellectual conversation is like huge to me. So I want to ask you this. I always go back to the practical. So small business, they have a tire shop down here. What percentage of their gross profit gross profit. Okay. This is what small businesses .I was in accounting. I’m like, I hate return on investment it’s not even accurate.

Bridget Willard:

But, uh, what percentage of their gross profit of their revenue should they set aside for marketing all marketing? And what percentage of that do you think should be paid?

Rand Fishkin:

Okay. So the answer is always going to be, it depends, but it has to, right? You can’t, I, anyone who gives you a number there is, is lying. Because look for, you know, for some owners of that shop it’s, oh, man, my kids are about to go to college. I need to be taking home more, the profits from this business. And, uh, and setting that aside for the kid’s college fund or, you know, whatever, I don’t know. My parents are sick; I need to help them with their health care costs, et cetera, et cetera.

Rand Fishkin:

So I have a lot of empathy for the fact that with small and medium business owners, you, you can’t just do what, for example, a venture backed business does. So when I, when I was at Moz, you know, we raised venture capital. That meant I never took home a dime in profits. Moz was kicking off, you know, whatever, $5 million a year in profits. Uh, the last few years, I, I mean, I’m not, I didn’t, I didn’t get any of that money. Right? Like. The owners don’t get any of that money.

Bridget Willard:

No, the, yeah, the investors get it.

Rand Fishkin:

Well, the, the investors don’t get it either. Nobody gets it. It’s supposed to go back into the business to try and grow the company faster. Right. Growth rate is the goal because complicated blah, blah, blah tax, basically it’s, it’s the tax rate that investors want to pay as capital gains. And so they want to see growth, not profit.

Bridget Willard:

Right.

New Speaker:

So you get these complicated systems and this is also a frustration for the tire shop, the local tire shop, that’s competing against a private equity backed or a venture backed business in the same space who can afford to, and how’s the incentives of spending every dollar. They can to get growth.

Bridget Willard:

Right. And that’s the franchisee, right. Like franchise, right?

Rand Fishkin:

Yeah. So my advice generally is don’t try to compete with them on their terms. Don’t, don’t, don’t say dollars is the way we’re going to beat, you know, this private equity back this venture back this, this large, you know, franchise or chain don’t play their game. Their game is throw dollars at Google and Facebook and Amazon, if you’re an e-commerce. Right? And try and get out as much as you can.

Rand Fishkin:

And I think the way that small business owners can win is by being more creative, being willing to do things that the chains and the, and the equity backed folks and venture-backed folks are not willing to do. And that is essentially things that don’t scale. Yeah. One thing that absolutely does not scale is personal relationships. And I got I. As a business owner. My favorite thing to do is build personal, like Bridget, you and I are friends now. Right?

Bridget Willard:

Like, I mean, I’m the person who’s always been listening to you for four years. So I, I feel super comfortable talking well.

New Speaker:

And So right. But that, that sort of personal relationship technically is non-scalable. If I, you know, if SparkToro were venture backed, it’d be one of those.

Rand Fishkin:

Like when Moz was, too, my incentives were not okay. I need to build, I want to build friendships and relationships with all the people in the marketing world. That was very helpful for the business. But I mean, the people, you know, the, the folks who, uh, eventually won that market, SEMRush, which is, you know, a good SEO tool too, but, you know, based out of, uh, out of, out of St. Petersburg in Russia and they, they didn’t, their founders didn’t build relationships with lots of people in the marketing universe. Like, no. They invested in high opportunity growth that they raised a ton of money, but, but close to the end, right. They were bootstrapped for a long time and then raised a bunch of money and then went public this year. And that IPO is actually doing quite well.

Rand Fishkin:

Small business don’t play that game, right. You go relationship build, you go build episodic content. You go build a presence on social media or an email newsletter or a content marketing flywheel. And then you invest over and over again. And hopefully it’s getting easier and easier for you, or it’s, it’s the same amount of difficulty, but you’re getting more and more out of it each time you do it. And those types of investments, they can pay real dividends over a long period of time. And you’re not competing with people who are throwing, you know, every dollar of margin or more at, you know, uh, Facebook and Google and Amazon ads.

Rand Fishkin:

This is really tough because they’ll do it unprofitably. I remember competing against HubSpot and HubSpot had, uh, was doing sort of more SEO stuff, you know, and, and, and Dharmesh and Brian are friends of mine, but they, you know, they raised a ton of money. I can’t, I can’t remember what it was a hundred plus million dollars, right. Over the, over the course of their business. And so, yeah, they were happy to lose millions of dollars a quarter, putting money into their marketing funnel and sales funnel. Right. And then knowing that lifetime-value wise, eventually, whatever, five years, 10 years out, they would have a profitable business. I think, I think HubSpot is now profitable, but they, you know, they never turned a profit until they went public.

Bridget Willard:

But it’s not advantageous to turn a profit because you’re paying, uh, if you’re in California, uh, you’re paying for 50% as corporation between California and the federal government. So I used to do the accounting at the place I worked at. Basically we ran very much like a nonprofit.

Rand Fishkin:

And so this it’s, it’s funny because the right, this is essentially, you have a bunch of wealthy people in corporations, in the sixties and seventies who lobbied the federal government to get the capital gains tax rate to be very low, right. 15%. And like the ordinary income rate has to. Um, and so you get these very weird incentives where essentially what investors want is I want to put money into a company, have it never turned a profit seller IPO for a ton of money. And then I get my, my gains are all taxed at the capital gains tax rate rather than, and so then you just got a super weird economic system and it’s, it’s very tough. I think for a lot of Americans to see, oh, the, the, the reason that my business, my small business has so much trouble competing against these other businesses because they get to play an unprofitable customer acquisition. Yeah.

Bridget Willard:

They’re incentivized. Yeah.

Rand Fishkin:

And like marketers, you know, it’s, it’s always frustrating for me that marketers don’t connect up. Do you know why your competitors can outspend you on Google ads?

Bridget Willard:

No one understand the tax system. I understand accounting. Yeah.

Rand Fishkin:

It’s I don’t care if you’re Democrat or Republican, talk to your representative and tell them to make the tax code fricking the same for everybody so that we all have a level playing field so that the competition is fair instead of benefiting, you know, like most things in the U S the rich.

New Speaker:

Steve

Bridget Willard:

Blogs has been advocated for the 15% ever since I knew who it was, what his name was. I don’t even know if he’s still alive. I just know Steve Forbes 15%.

New Speaker:

I don’t care if the tax rate is 50%, I freaking love public services. I want museums and sidewalks and public transportation. All that stuff is fine. I don’t care what the tax rate is. I just want it to be even right. I don’t want this world where a venture capital-backed business has a massive advantage over everybody else. I don’t want a world where a few companies, Google and Facebook and Amazon, um, especially in, in tech and advertising dominate the whole entire sector. But we don’t have to play their game. I, SparkToro has never spent a dime. I’ve never spent it on any Facebook or Google or those kinds of ads. Right. All of the stuff that I do is essentially I call it influence marketing but no “r.”

Bridget Willard:

That I noticed you’re no R

Rand Fishkin:

No R because yeah. I mean, Bridget, what do you think of when you hear influence influencer marketing?

Bridget Willard:

Oh my God. Think of blondes wearing clothes. Somebody paid them to. And I go on out. I go outfit of the day on his ground. Like, I’m a consumer. I bought this outfit from Old Navy. So suck it. Like, I don’t believe for somebody to give me something. I can,

Rand Fishkin:

You have a lovely necklace on.

Bridget Willard:

Thank you I bought it on Amazon. I know. I know, but like, see, there’s a lot of small businesses within Amazon, if that’s true. And I kinda like, I know getting kind of close to our 30 minute part, but I really want to, I, so something I advocate my small businesses to do okay. Is to do this, to build this library, to build this over time. This is why I came out with a WordPress plugin. It’s called Launch with Words where it’s blogging, prompts. It installs right on your right on your size, that JSON file and you fill it all out.

Bridget Willard:

And then you have a blog post because, you know, everybody knows Google wants this [snaps fingers]. It doesn’t matter what this is [snaps fingers]. It just needs to be consistent. And everybody does know how to like, they freak out about that.

Bridget Willard:

And then my client base of WordPress products and services where it’s open source. And there’s no like autumn, there’s no, um, like collaborative ad fund that we’ve, we’ve, we’ve come together. And, you know. It’s just, everybody’s competing against each other, even for those keywords. Whereas Wix and Squarespace don’t have to compete with themselves and open source. We kind of shoot ourselves in the foot. And my friends who have WordPress plugins, um, you know, they’re wasting money on Google, Facebook ads. My friend, Adrian spent $3,000 on Facebook ads. Nobody even knew what Groundhogg was.

Bridget Willard:

So I, I know intuitively like maybe people should know who you are before they started seeing ads. Cause if they see ads, they don’t know who you are, they don’t care because they don’t know who you are. So can you kind of like address the chicken and the egg situation with that?

Rand Fishkin:

Yeah, so essentially, I mean, this is one of the other reasons that I so urge businesses to invest in building brand awareness, uh, before, before they go out and spend money on ads, because essentially the efficacy of those ads, right? The likelihood that someone will click the likelihood that once they click, they actually convert goes up way higher. If they have heard of you, if they know you like you trust you. And so this is why retargeting and remarketing ads tend to be so valuable. And this is why a lot of, you know, Instagram and Facebook and Amazon and Google’s ads are that way.

Rand Fishkin:

But, the, the, the killer challenge is how do I get people to be aware of me without spending money on just ads? And, and my answer to that question is just a simple process. Right? It’s the classic marketing process. Like if we were doing it in 1985 or 1955 or 2025, it’s all the same, which is: who is my audience? What do they pay attention to? Where do they engage? What messages resonate with them? Go tell those messages that resonate in those places, to those people,

Bridget Willard:

Human behavior. What?

Rand Fishkin:

But I think the, I think the real challenge business are often good at two out of three of those. They’re often really good at who’s my customer. I know who my customer is. I know who my audience is. Right. Cause they talk to them every day. And number two, that they’re good at is they’re good at, uh, uh, telling those, those messages that resonate, right. They know sort of, Hey, I know when I tell people about this part of my business or product or story, it hits with them. They come to me like, that’s, that’s who I get and why I get them.

Bridget Willard:

Yeah. Because they’re not divorced from the pain points.

Rand Fishkin:

Right. But it’s really hard for them to say, where does my audience hang out? What do they listen to? What do they pay attention to. Where can I go reach them? Which is why you get the weird things like influencer marketing. Let me go pay the dude with the six pack abs and the big pecs to like pose on a beach with my product. Like yeah. Paying half-naked people to prose with your product that is not influenced to me. I think, you know, I think the real way to reach influence is to say, okay, describe your audience, go survey them, interview them, or use, you know, there’s there’s tools online now. Um, I’ve heard of the SparkToro thing it’s supposed to be good. I don’t know. Um,

Bridget Willard:

We should take a moment to say you get 10 free searches a month right now. Okay. 10 a month. Not just 10 in general. Don’t make the mistake that I do. I learned the hard way you don’t have to.

Rand Fishkin:

I’m so sorry that we didn’t tell you that you got.

Bridget Willard:

No, that’s On me. I take responsibility, man. I’m like, oh my God. I like, look in doing all these, but seriously people SparkToro.com.

Rand Fishkin:

Right? So the idea is then you find where your audience engages and now you can go say, oh, okay, these podcasts, these YouTube channels, these social accounts across these, you know, 10 different social networks, these, uh, websites, these press sources, these industry newsletters, these whatever emails, these individual people, those are the ones that my audience pays attention to. Now, how do I get in front of them? Well, the, the, the answers are up to you. That list is broad and that can be a challenge, but it’s also a huge opportunity. Something that works. You can do it again and again.

Bridget Willard:

Yeah. And I mean, I don’t want it just to be an infomercial, but I’m a marketer. I can’t not say like, would you rather pay $50 a month for SparkToro that gets some searches? Or would you rather waste money on a Facebook ads brand the other day? ‘Cause I have insomnia. I’m looking, I’m looking at Facebook at 3:00 AM, 3:00 AM. That’s when all their ads are served for San Antonio.

Rand Fishkin:

That’s when all the ad accounts refresh for the next day. Yeah. Yeah. And you’re saying,

Bridget Willard:

That’s what it’s being, that’s what it’s being delivered for local businesses in San Antonio, Texas, to me, it’s San Antonio .3:00 AM. That’s what they’re paying for. I feel like SparkToro would be a step in the right direction to see who, who you really should be reaching out to.

Rand Fishkin:

Yeah. Yeah. And you know, what I, what I tend to tell small business owners is for most of them the right way to do it is to have your marketing person or your, your agency, you know, potentially use [inaudible]. But I think for, um, for a lot of them, it’s, it’s just thinking about that process, get getting it right. That the strategy of the processes, who’s my audience. What are the messages that resonate? Where do they pay attention? Go tell those messages in those places, to those people. If you start doing that, um, then you get to build brand awareness and then your ads work a lot better.

Bridget Willard:

Yes.

Rand Fishkin:

So it’s, it’s this, you know, it’s a little chicken and egg, but one definitely comes first. I like, I really liked this question by the way. Okay.

Bridget Willard:

So Jan Koch is my friend at Germany. He runs an online summit. His question is how would you promote a one-time event without any paid traffic and without bugging the shit out of the speakers?

Rand Fishkin:

Yeah. Good, great question. So, um, in general, I think, uh, events are about especially, um, um, one-time events, right? It’s about exactly who that audience is and that the thing that’s performed best that I’ve seen from event organizers absolutely is email. Like no doubt about it. It is, it is email. And so if, rather than bugging the crap out of the speakers, I would say, “I only want one thing from you, Speakers, will you send to your email list, uh, mention that you’re going to be doing this event and here’s some promotional stuff.” I would also, uh, the thing that I found that really resonates with, uh, getting people onboard is a little mini video clips like video grams. If you can get like a, uh, I’ve done this for a few events now, right where they’ll ask me to fill in a short little 10 to 32nd promo of hi, I’m Ryan Fishkin.

Rand Fishkin:

I’ll be speaking at digital summit next month. And talking about the Google Facebook duopoly and how you can break free from advertising, vice grip on your dollars. And then that they take that clip and they’ll put it on their social channels organically. Right. But because it has a human face and a play button and like, um, you know, they, they add the, um, the text transcript below so it doesn’t, you don’t have to have the volume on. They put that on Instagram, they put it on LinkedIn. They put it on Twitter, on Facebook natively because all those platforms love native video content.

Rand Fishkin:

So, so then you start to get some play there. Oftentimes you don’t even have to bug the speaker. They’ll automatically whatever retweet you posted to LinkedIn. But the email list is, is the absolute key. If you can build up that flywheel through whatever content marketing or through, uh, appearing on other people’s shows or whatever it is, you build that email list. That’s where you get, you know, what a MailChimp say. I think email open rate, hasn’t fallen for the last like 15 years it’s been around hovered around 21, 22% average Facebook’s average engagement rate for page content, Organic content is 0.09%. It’s fallen by 95% in the last, you know, five years. Like it’s nothing

Bridget Willard:

I know. And the sad thing is people don’t realize that every platform has a totally different culture. Facebook is post-and-go it’s oh, look, I’m taking a selfie of Me and Rand. Click. I put it on there. Now I’ve put my phone down and doing something else.

Rand Fishkin:

Well, and, um, yeah, so I, I actually, I see a lot of value in the, I think there’s going to be, uh, some potential with TicTok in the future. They’ve actually made that platform a little bit more desktop friendly than like Instagram, for example. And I, I can see in my head like, okay, I think, I think TikTok’s got some innovation here. They still, for whatever reason, TicTok cannot get into Google. Like they’re just terrible at search. Um, which, which is super dumb ’cause I think there’s a lot of people searching for those videos, but they are. Yeah. Um, but I think there’s there’s opportunity there. And then, you know, in B2B, LinkedIn and Twitter are really strong. Um, just depends. Yeah. It depends on your community.

Bridget Willard:

I know, but that’s why I specialize there. And also I love to tell everybody, the individual tweets are indexed by Google and if you go searching, you will see a carousel. So like you got to keep that like on, I tell people this, they go what? And I’m like, yeah, just start Googling stuff, go seek, go, Google me. You’re going to see my website, my old Twitter handle a new Twitter handle, LinkedIn. Twitter is above LinkedIn in that.

Rand Fishkin:

Well, so Google has a relationship with, uh, Twitter’s API, right? They, they direct connected in there. And so for many, many things where there’s heavy, Twitter activity, Twitter content appears above everything else. And in its own special place, it almost gets treated like YouTube videos. Right.

Rand Fishkin:

So, you know, on the video side, if you’re producing videos, I like to keep them on my site. I like to host with Wistia, but I also recognize that putting them on YouTube as well after a time period, you know, after sort of a delay gets people who are really loyal to subscribe to my site. And then that’s more visibility for the YouTube video and channel over time.

Bridget Willard:

And, and Not only that, but like, uh, now in the search results, still sit, they’ll say key moments in the video. I found that out on accident, like, cause I was just, I always Google myself cause I’m a marketer. So like I saw like was the key moments to this interview I was on with the Torque Magazine and it’s not even dependent upon putting timestamps has to do when people share it. I’m always sharing videos at a certain timestamp. And I’m like, oh, this is really interesting.

Rand Fishkin:

I find it very infuriating in a lot of cases because they will essentially just steal the portion of the video that answers the searcher’s exact question and the search and the, the channel gets no value from the, the searcher. But I

Bridget Willard:

Don’t know. Well, that’s why I always end up doing a pair. Like either a video comes first and then a blog post or a blog post and then a video.

Rand Fishkin:

Yeah.

New Speaker:

Because, uh, we forget that we’re humans and we’re social animals and uh, our face matters. We lose so much communication by not having tone, inflection. And then all of the micro-expressions, batting my eyelashes, you know, fixed, fussing with my hair, like all of that matters, our body language matters and we lose all of that with being online and this last, whatever prison sentence we’re in with COVID I just got my second shot yesterday. I know it feels like somebody punched me in the arm and whatever, I’m fine with it,

Rand Fishkin:

But you’re not going to die or kill anyone.

Bridget Willard:

Right. I’m not going to die from that. Probably die on the freeway, but whatever Texas, I got to a sedan, but see the thing is sometimes people forget that email marketing. And like even today I was like, what Honda has a truck? I mean, cause I love Honda and I’m not getting those. Uh, I just keep getting them telling me about the Civic. They’re not even using that opportunity for me to know they have a truck and it’s been out for four years.

Bridget Willard:

Um, so, uh, I, I had one more question that came in actually through my email marketing list. Um, Warren Laine-Naida, he was asking, um, so with data protection, he’s in Germany with dad with data protection, siloing, SEO, social, and the customer journey. How do we prepare, how does small businesses prepare for the future? Well,

Rand Fishkin:

So I think these, um, you know, data privacy and a lot of the laws and regulations fortunately are going to be relatively minimal impact for small businesses. And that is mostly because the big platforms will acquiesce to whatever the law demands and then, uh, your marketing dollars in spend can go towards those. What I do worry about significantly, I think, you know, proposals like Google’s flock, which is this like cohort based advertising, um, system. And, uh, the way that Facebook is going to be doing less targeted, less personalized ads, you’ll essentially have to pay more, to reach a less likely to convert audience. And that will mean again, that ad prices are driven up and that, um, you know, you have more competitors for each inventory item. Uh, your ad efficacy might not be as high. The conversion rates might not be as high. I, I hope like there’s part of me that kind of hopes this sparks a little bit of a mini revolution amongst small advertisers to put maybe more of their dollars and effort into other forms of non do opoly advertising marketing, right.

Rand Fishkin:

That they contact whatever it is, content agencies and, and influence marketing agencies and folks who help with digital PR folks who up with email marketing, social media marketing, and, and think beyond just throwing money at Google and Facebook. So if, look, I think if you’re a very savvy online advertiser, you are already investing in a significant portion of your budget in that driving attention and awareness outside of ads and building a, uh, some sort of a flywheel model rather than purely doing out investments that will protect you from a lot of these changes that are coming with, you know, death of third-party cookies, uh, California privacy act, um, the, the new one in Canada, that’s being considered GDPR, all that stuff.

Bridget Willard:

Right. So we have like two minutes left. I have one more question. It comes from Matthew Campbell, from myweddingsongs.com. Um, he, he wanted to ask you about the, you know, your difference between Moz and SparkToro and how, how you, um, like what value is it? Cause I heard you on another podcast. He doesn’t know that, but what value is it that to take venture capital and lose control for like the mom and pop business?

Rand Fishkin:

Yeah. Yeah. I mean, let’s see. So it, I say it’s very unusual or unlikely that a mom and pop business would do it, but actually I started Moz with my mom Jillian and right. And we, we raised venture capital. So I mean, the big reason that I did that initially is because I felt that, um, if I didn’t, I wouldn’t be a real entrepreneur, I wouldn’t be taken serious. Oh really? Oh yeah. I mean, I, I still have that, like, you know, imposter syndrome, I’m not good enough. I don’t get to be playing with the big kids and I want it to be invited to all the Silicon valley events. I wanted, you know, whatever people in that world to take me seriously. And.

Bridget Willard:

I’m not supposed to be crying. There is no crying in baseball,

Rand Fishkin:

But that’s, I mean, that was really the driver for me, for me. And I, I have a lot of regrets about that, but I also know myself. I know that if I hadn’t done it, I would always think that I wasn’t good enough. That I wasn’t worthy. Like, you know, how your parents tell you things about yourself. It might, my dad always used to say, when he described me to other people, he would say, “oh yeah, Rand, he’s a, uh, what do you call it? Um, high potential, low achiever kid.” Right? And, and, um, you know, I was like a, B plus a minus student and, and my right. Like I probably, I probably, if I really applied to my, so if I could have been a straight a student and I just wasn’t, and so

Bridget Willard:

You’re still going to get a 21% email open rate, so what difference does it make?

Speaker 4:

But it, it, you know, it really, it, it is true

Rand Fishkin:

That when really apply myself, I can do better, but it’s, it’s just tough. And so that venture capital thing was very compelling to me. Right. It was really exciting this idea that maybe I could be one of the people chasing the hundreds of millions and billions of dollars and, you know, try and build something huge and scale as, as big as I could. You know, when I got introductions to like, you know, to Brad Feld, right? Who’s like this giant and titan in the venture capital world. And oh man, he, he really liked my business and he wanted to be friends, too. And like, I, it felt really good. And I think Brad’s actually one of the best people in venture capital.

Rand Fishkin:

But the incentives of that business and that model are not, they’re not at the core a match for my values. I like small businesses.

Rand Fishkin:

I like, I like buying craft coffee. I don’t like Starbucks. I like going to Etsy, not Amazon. You know, I like the local stoneware hardware store, not, you know, home Depot. Like I like small, not big. And I don’t love what, you know, sort of the, the wealthy class in, in US does to sort of weird shape the rest of the economy. Um, so at, at the macro level, it just was not a great fit. And I think I had that tension.

Rand Fishkin:

Obviously when I left Moz, I was like, how can I fund a business without that asset class? And so I managed to convince a bunch of investors to put money into our little LLC SparkToro and fund it, even though they’re going to pay ordinary income tax rates on their profit sharing. Yeah. But I think it’s going to be a win.

Rand Fishkin:

I, what I hope to do is I hope in ten years. I can point to SparkToro and say, look, this is more successful than 90% of venture investments. It’s not as successful as the top 1%, but it’s more successful than 90% of them. And it returned more money than 90% of investments. Maybe investorsp Private investors, should look at more companies like this and be willing to pay the higher tax rate in order to get a higher percentage odds of success and long-term survivability and profits over time and their money back versus a one in a million shot at whatever it is, Uber or WeWork or Airbnb or Google, Facebook that kind of, and

Bridget Willard:

And literally investing in your community, literally investing in people.

Rand Fishkin:

I mean, the whole idea behind the venture model is you got to build monopolies. Right? You’ve got to build wealth extraction vehicles that take the, suck the air out of the market. So it’s innovation. Yes. But it’s also dominance. And what I want to see is lots of businesses, small and medium businesses competing. I think that’s when you get a really healthy economy, lots of employment, lots more income equality. That that’s the world that I want to see and further. So I hope I’m making my own little difference.

Bridget Willard:

Well, you are. And in 10 years, what’s even more important is that you’re going to be able to look at yourself in the mirror and know that you did something that followed your values.

Rand Fishkin:

Yeah, no, it’s weird.

Rand Fishkin:

Bridget, somehow all these people who get super wealthy, they manage to feel okay about themselves, even though they’re not. Yeah. Even though they’re not doing great things, I don’t think they are. I think they’re just like you and me, but then when they get wealth, well, anyway, well this is another conversation

Bridget Willard:

And have a conversation for sure. But I mean, there is, but you do have, if you, if that bothers you and you choose that, then you’re going to go that way and you’re going to justify access. What we do is yeah. That’s all I’m saying.

Rand Fishkin:

Everyone is the hero in their own story.

Bridget Willard:

Well, unless they want to do the hard work. So thank you for doing the hard work. Thank you for being honest with us. Um, um, I really appreciate your time. Like I said, you, you’re amazing. I feel like your gift to the world is teaching. Uh, you cause like there’s a lot of people who are good at SEO, like join the club, but that doesn’t mean, you know, how to communicate and that you care enough to be part of that ecosystem is meaningful to me, to my audience. And namaste.

Bridget Willard:

So, um, I hope all of you guys will go to sparktoro.com. Just go try it out today, go, go try it out. 10 free searches. It’s totally different ways to search. And it’s really fun. I mean, I looked at it again. I didn’t look at it. I looked at it again last night and you can search by all these different ways, not just some generic Google search. So thank you very much, Rand. I really appreciate it.

Rand Fishkin:

My pleasure. Really great chatting with you, Bridget.