Sarah serves as COO of SEOmoz.org, Inc. and is also a law and technology blawger (don’t be as dense as I was, “blogger” + “law”) extraordinaire.
Prior to Sarah’s tenure at SEOmoz, She worked as a litigator for a small firm in Washington State where she managed diverse and complex cases.
Sarah attended Simon Fraser University in Vancouver, Canada; Ko’ University in Istanbul, Turkey; University of Washington School of Law in Seattle, Washington; and East China University School of Law and Politics in Shanghai, China.
Eric Enge: Let’s start by talking a little bit about a performance-based SEO agreement and how both sides of the deal should be thinking about it.
Sarah Bird: A performance-based SEO agreement can work out really well if the parties have a lot of trust and openness, and if there is a good contract in place. But before you get a good contract, there needs to be a lot of good communication. You’ve got to talk about all the details and all the expectations.
Obviously it’s attractive for the merchant, because they don’t want to pay for something if they are not going to see results. And they feel like they’ll get better results if the person who is doing the SEO work has incentive to perform well. So, from a merchant’s perspective, they are only paying for what they actually get.
From the SEO side there is a feeling that if you have a product or business that you really believe in, then you can participate in the upside driven by that. If you know you can do a good job and take them to a whole new level –reaching their customers and selling their product-go ahead and do it. The potential reward can be really, really tempting and really powerful.
So, there are some obvious reasons why these kinds of contracts seem like a great idea; and in fact they can be. I am a pretty conservative person myself, so sometimes I talk about performance-based agreements with a negative slant, but I do believe they can work. It’s just there are so many things you’ve got to do first.
Eric Enge: We have actually done very well with them when we’ve done them. As an SEO consultant, the way I approach it is to determine what level we’ll be working on and how much we’ll be spending. For example, if we are working at a 10K per month level, we might take half of what we are spending and keep it as a fixed retainer fee, and then take the other half and put it into the performance bucket. And if we are successful, we’ll look to double our money on what the base fee would have been.
So, if we take $30K in retainer, and we put $30K at risk based on performance, I want an opportunity to make $60K on that risk piece so we make a total of $90K. And, that’s kind of where I think it really creates the big gain on the other side.
Sarah Bird: Exactly. Clearly it can work. What it sounds like you’ve been doing well is having a lot of those difficult conversations upfront about what both your and their expectations are. Another important part of communicating ahead of time is talking about when it will end; at what point do you no longer get commissions for the work you do? And I think a lot of people leave that part out of the conversation, and then it becomes difficult.
Many months will go by and the merchant will not want to keep paying commission forever to the people they have hired. If they are having success, they will want to keep some of that success for themselves. On the other side, SEO is thinking is that, “Hey great, I am just really starting to kick it into gear and just starting to reap the rewards that I knew I could get with all the time and effort I have invested”.
That is an important conversation to have. I am curious–if you are comfortable talking about your strategies –how long do you typically do your performance-based contracts?
Eric Enge: We look for something like a 6-month time interval. One of the things that’s very complicated about SEO. You never know when you are going to see the return. Sometimes you can get returns really quickly when all the chips fall the right way. But other times it takes six months before you have significant changes in trafficking. It really depends on where the site is currently, what the smartest strategy for them is and what it takes to execute that strategy so search engines will pick up on it. So, it gets complicated, but six months is usually pretty safe time interval.
Sarah Bird: I think that’s a nice time interval. Like you said, you are sure to see some results by that point in time. And, the merchant is probably pretty comfortable with that time period, because it doesn’t seem like a lifetime for them. I think that’s really within the typical range of about four to ten months commitment level on any kind of paper performance agreement. Another thing I recommend is being very clear upfront about who owns the intellectual property that is being created.
That can even include your expertise on what should go in the title tags and what articles should be included. Sometimes you are even writing the skeleton of the article, if or actually fully creating the content. And it needs to be clear who owns the domain. Those are important questions.
Sometimes SEOs even go in and set up the whole domain. They setup the analytics programs, they do everything, and then two months later the merchant tries to boot them out. The SEO has put in all this hard work and gotten the chance to get rewarded for it. I think that’s an important discussion to have for clarity ahead of time.
Eric Enge: But my main concern from that perspective in contracts is that there aren’t any restrictions on any SEO techniques and methods that are inferred by the contract. If we use a novel new technique to help the client out, we certainly would agree to not reveal any details of their specifics. But, as a concept the piece of SEO expertise we have to own, because that’s what we do for a living.
Sarah Bird: Yes, exactly. And I think the more you can set forth what you are counting as your SEO expertise ahead of time in conversation, and hopefully in a contract, the better both parties will be. If their expectations are set, everyone is going to be happier in the end. And if you do have to unwind early, or even if you are just unwinding on time, there are no surprises about what you are taking with you.
People who are just beginning to do SEO on this performance-based level tend to overlook this. It is really critical to have that conversation. I really like that you guys are doing a base monthly retainer, because then there is no complete loss to you for the investment and the work you do. I think a lot of the SEOs have that experience where they give advice, they have great ideas, but they are not in-charge of being able to implement it for whatever reason.
You can give all the advice in the world to a client, but if they don’t implement it, or if they implement it the wrong way, then you may not get any good results. It’s not something the SEO always has control over, so I think that idea where you have a base monthly retainer, that’s at least going to cover a certain amount of your cost and time. It’s a great way to mitigate the risk of loss compared to a solely performance-based SEO agreement.
Eric Enge: If you make a set of wonderful SEO recommendations, and it takes them four months to implement it,
where does that leave you? That’s certainly one reason why we always take some of the money in hard cash rather than put it all at risk. The other way to handle it is to provide the web development resources in the contract. Then specify that you have the right to make the changes you recommend, within reason, of course. This way you start to have more control, which matches up with risk in a very nice way.
Sarah Bird: I think that is exactly right. And I think any SEO company would ideally like to have the manpower to also be able to complete the implementation. And whether or not that’s an option, or the degree to which it’s an option, will really depend on the clients and what kind of business structure they have. So yes, I think that works really great, especially for smaller businesses or for businesses that are just starting out.
They are much more likely to want an expert to takeover all of there web development resources. But if we are trying to go to some huge site that already has tens of thousands of pages, there is no way you could do the web development for a site that size.
I also want to point out that you have to have a lot of trust in whoever you are working with, especially if you are new to the industry. But trust is not a replacement for a contract and people shouldn’t be shy about requesting a contract. If you are asking for a contract, it doesn’t mean that you don’t trust them, it means you want to make sure everyone is on the same page and stays on the same page for the time period that you’ll be working together.
Because you are working with a business, they could always have people coming in and out of roles. New people may not have the same institutional knowledge because they weren’t there when the agreement started. I’ve seen agreements, performance-based agreements, that begin well, but then go downhill when someone new comes in.
If you don’t have that kind of contract written down for everyone to rely on, you can get into trouble even when you wouldn’t anticipate that in the beginning of the relationship.
Eric Enge: I totally agree. When you are trying to build rich information resources to help establish the website as a leader or an expert in its field, you may go off and create lots of different valuable content. So when you do that, one of the things you do, especially if you are working on large websites you start trying to create lots of valuable information, and you end up referring to other things on the web.
You may start referring to information that’s been published by others on pages that maintain a copyright notice. So, there is a concept called “fair use” that is applied in situations like this. Can you outline what it is, how it works and how they should interpret it in terms of not taking risks with the way their content is produced?
Sarah Bird: I think this is a great topic, and it’s a legally hairy one because there will never be a crisp definition of what’s fair use is. On one side of the coin, there is this feeling that, if you created the content, you should be able to own it. I think everyone agrees that we want people who make good content to have a good livelihood. But I also think everyone agrees that this product information–is good for society–its dialogue, its ideas, its speech and in how human beings can advance through it.
There is this natural tension between our core beliefs. We say people should be compensated and deserve to preserve the value they create, but then, we all want the information to be spread around freely and openly. So fair use is how we resolve this problem, and it basically says you can use other people’s’ content as long as it’s fair. You can”t steal that content, you can just use a certain amount of it in certain context.
We are going to call that fair and legal. It’s okay to do it a little bit, because we want to share the idea. We just don’t want to totally rob or steal from the original content owner. So there is no clear definition for fair use. It merely evaluates the factors of context, the purpose and character of the use, the nature of the content, the amount of the work used in relation to the whole, and the impact on the potential market.
The first factor is the purpose and character of the use. If you are using someone else’s content to make money off it, that looks a little worse and feels a little less fair than if you are an academic professor and you are just trying to discuss an idea in a classroom. That’s a noncommercial use of ideas, but the situation isn’t always that clear and the decisions are generally not made that easily. You can talk about it, put it in practice, but somewhere along the line it can always get blurry.
The other factor is the nature of the content. If it is scientific, biographical, historical or factual, then the public has a greater interest in accessing the information. And because the goal of their use is to encourage progression of knowledge, the more academic or scientific the content is, the more likely the court is to say that it’ is fair use.
Eric Enge: Isn’t there also this notion that the things that are purely factual and available from multiple sources are fair game? Information that can be used very broadly, like the fact that Seattle is in Washington State.
Sarah Bird: Exactly.
Eric Enge: But, you still have the notion that if somebody renders the data in a specific way, then their specific rendition of the data can still be protected.
Sarah Bird: That’s where it starts to get blurry. Everyone can agree that the fact that Seattle is in Washington should be fair use because we want to spread knowledge. But on the other side of that tension, you always have to be aware of the content factor. Whether it’s a song, some sort of graphic an artist has created, scenes from a movie or a product review, these things are not as factually based and not actually based in science or biography.
They contain opinion and creativity that’s more highly protected. One of the questions you should ask yourself, among many, is if it is just a fact or if it is somebody’s creative work? If it’s a fact you are probably more in the clear than if it’s somebody’s creative work. That can become a little blurry sometimes, but overall I think we hit the nail on the head with your Seattle example. No one owns that, so you will be fine using it.
Another factor is the amount of work used in relation to the whole. For example, when they launch a new movie, they want you to come see this movie. In the advertisements they often take extracts from critics who’ve written reviews, if it’s “two thumbs up,” or if it’s “fantastic,” or whatever. But you’ll notice they only take a couple words. They don’t take a whole article, they only take a few things and that is considered fair use because you are not taking the critic’s whole work. You are just taking bits and pieces.
If you are online and you are reading a great Search Engine Journal piece on the Google algorithm, we can look at that article and we can take a sentence here and there and then talk about it on our blog, and then expand upon it with our own ideas. So we are interacting with the ideas on Search Engine Journal. Now, we can’t take whole paragraphs or the whole articles and republish it on our blog, because that would be too much and that would be unfair.
But, you can have a dialogue and you can extract little blurbs from it. How much is too much will depend on how large the article is overall, and how important the piece of information is that you took.
Eric Enge: The related question is the role of citation. How does referencing the original work affect the equation?
Sarah Bird: Fair use technically has no laws requiring you to provide any citation. For example, when you are making a mash up of various things you’ve found on the web, you don’t need to cite every single one of them. You can create a new product out of bits and pieces about their products with no problem. But if you want to be a participant in a dialogue and you want to help create that impression that you are using this content to engage in a dialogue and to spread ideas, that’s going to help your fair use in a sense.
You are basically saying “I am participating in the communication of ideas. I am not trying to steal someone else’s glory or content for myself and I am not trying to ignore them. As a matter of etiquette and as a matter of participating in a community, you can give them credit somehow. But citing it or giving attribution is not required by law.
A judge isn’t going to care whether you linked to them or just cited their name. They are not going to ask you that, but as a good net citizen it’s something you should consider. You can just pat the other person on the back and tell them you really appreciate the article they wrote.
As SEOs I think we’re more aware that it’s vital for the other person to get that link back. But I would be misleading people if I told them that, the law says you have to link back when it doesn’t actually say that.
Eric Enge: The law doesn’t care basically.
Sarah Bird: No, the law doesn’t care about that, but it is certainly one of the elements of being a good net citizen.
Eric Enge: Right. So, you are putting yourself in a position where they are less likely to get angry with you.
Sarah Bird: Yes, absolutely. It can help make it clear that you don’t have bad intention, but you really are just trying to engage an idea. There is one final factor we should discuss, which is in some ways the most important factor because it sums up the others. That last factor is whether or not the content you are borrowing from someone else has an impact on the potential market for that content. For example, I can’t go and republish someone’s book in it’s entirety on my website, because that would mean I’ve just stolen part of the market from the original author.
It has an impact on his market, as people can get it from me so they’re not going to buy it from him. I think that sort of sums up what we are balancing on all the factors. It’s important to think about whether or not taking someone’s song, graphic or part of an article, impacts their market and their ability to get value out of the product they created.
Eric Enge: Sometimes it goes further and people actually steal your content.
Sarah Bird: Yes, it does happen. It happens all the time, where someone takes your content, they take your whole blog post and republish it on their site, and that’s obviously not fair use. But there are several things you can do, especially if you are in the US or in some jurisdiction that’s covered by the DMCA. The first, and I think best, suggestion I make is to at least try to contact the website owner and say “hey, you are stealing my content, take it down.” Start by having a professional conversation with them.
Some people roll their eyes when I say some of that stuff, because there are websites who know they are stealing content. They don’t really care that they are stealing content and they are not going to care who contacts them, right? But other times it is a genuine misunderstanding of how the online system works. There are people out there who think that they are not stealing as long as they link back, but that’s not true.
Those are people who think giving attribution is enough, but it’s not the same thing. The first thing I think is to try to contact the website owner. Usually they will have contact information on the website, but if it’s just a scraper site, it’s unlikely they are going to have any contact information on their website.
You can also try to get their who is information, and hopefully that will; be accurate. If it is accurate then they are in the US, and they are more likely to respond to an email. But if you can get an email address for them, that’s a great sign already that the request will be effective.
The important thing about the DMCA is that it does allow you a quick way to get the content that someone’s stolen from you out of the search engines. The whole idea is to protect your content, and obviously you don’t want someone to go to the stolen content, you want him or her to go to your content. So maybe you can get the person who actually runs the website to take it down, but if that doesn’t work you can get Google to take it out of their search engine results so that other people can’t find it. And, that’s sort of the idea behind a DMCA request.
If I am a copyright owner and I have a problem with someone stealing my content, I can send this letter to Google and let them know that. If you do that, Google contacts that website to let them know that they are going to take the content out of their index. So if you are doing work for a client and they get one of these messages from Google by mistake, you can actually respond to Google and tell them that you got this letter saying you were stealing content, but it’s not true.
Then Google, who has to be the middleman, will put it back up. It’s a really quick way for copyright owners to try to address this online stealing of content, but it’s not a full trial or anything, it’s just an incentive for search engines like Google to take content down quickly. And if you’ve been accused of stealing content, they’ll also give you this really quick and easy way to get your site back up. Again, without a trial, without a jury, you just have to contact Google and tell them they have been mistaken, and swear it is your content.
Now if there is still a disagreement, the content owner is now responsible for basically filing a lawsuit, because you’ve got to protect your rights in court. So, the DMCA is the first step, and it works for most people, but, you may have to file a lawsuit if the other website claims it is their content.
Eric Enge: Any experience with how quickly the DMCA requests are responded to by Google?
Sarah Bird: I’ve had good luck with those actually. I think they have fourteen days by statute to respond to DMCA takedown notices, and I had great luck getting into that window. We are talking in matter of days, but I have heard other people say otherwise. I don’t know what makes the difference, and I am just guessing, but maybe they didn’t send the takedown notice to the right place or they didn’t sign it.
There are few things that have to be done for the process to work smoothly. You’ve got to sign the request, you’ve got to swear that you are the owner and you have to be acting in good faith. So it could be that people who are not having success maybe are missing a step. But I am not really sure.
Eric Enge: Right. So, another thing that we usually recommend as an interim step is to contact their hosting company if you’ve already tried and failed to contact the site owner.
Sarah Bird: Yes, exactly. Hosting companies are also required to respect DMCA requests. You can do the same kind of process with asking them to take it down as we just discussed with regard to Google. So yes, I think that’s another great option.
Eric Enge: And if the hosting company doesn’t respond, then they have some liability in this situation?
Sarah Bird: That’s exactly right. That’s how the law gives incentive to the search engines and hosting providers to act quickly. If they act within a certain period of time, then they can’t be held liable for any of the possible infringements taking place. So, it’s a great incentive. It’s not a perfect system, but I think it’s a pretty good one.
Eric Enge: Well, and if you work the system effectively, then you can protect your rights reasonably effectively.
Sarah Bird: Definitely. And I would say there are only two caveats. One is if you are not from the US, but you are trying to use the DMCA to takedown a site or get a takedown revoked, you should probably think twice about doing that. Because foreign companies may not be subject to the laws of the US, but if you use the DMCA process, you are agreeing to be subject to the US jurisdiction that covers our copyright views.
It’s a technicality, but foreign companies and people may not realize that they are agreeing to US jurisdiction if they use this process. It’s not just an administrative thing, it’s an actual legal process. The second thing I wanted to highlight, which probably goes without saying, is to definitely make sure it really is your content when you send a takedown notice. Don’t ever use the DMCA process abusively, because there are really severe financial penalties for abusing the takedown process. So if you send one because you are just trying to get a competitor’s site taken out or whatever, you can get in some serious trouble. Make sure that you are not just guessing that there are some copyright infringements, definitely make sure you are acting in good faith and it’s your content.
Eric Enge: Right, The penalties are actually pretty stiff.
Sarah Bird: Yes, they really are.
Eric Enge: Another interesting thing that happened in the industry recently is that the Federal Trade Commission made some changes in the rules about self-advertising.
Sarah Bird: Yes. It is debatable whether or not you would actually call them changes, but they are being perceived as changes within the SEO and online marketing world. There have been rules for print advertisers and for television advertisers about stealth marketing techniques and about substantiation in place for a long time.
You have to be able to substantiate any claims you make about your products; you can’t just say “Ours is better than Jesse’s,” or “This will make your kids pay better attention in school.” You can’t just make those kinds of claims, you have to be able to substantiate them. For a long time it wasn’t clear whether or not those same standards of disclosure about substantiation applied to the online world as well. So finally, the FTC has come up with some guidelines that say they indeed to apply to the online world.
This should just remind people who make a living on the web to know what’s okay and what’s not okay in advertising. Let’s say you are an affiliate marketer and you are doing some advertising campaign work for some sort of a vitamin company. And say they tell you to put in the advertisement that the vitamin will make people lose 30 pounds. You can’t just to put that in there without being sure it’s true, because you have to have some ownership and responsibility for the claims you are making.
You actually have to go to the manufacturers and merchants and ask for proof for these claims about the product. And if they can’t give you any proof, then you shouldn’t run that in the ad because you will be on a hook for those claims.
Whether or not the claim is true is not the issue, the FTC is more concerned about whether or not you did your homework and got proof. Advertisers have actually made claims about products, and then the FTC has come in and say “Hey, where is your proof about these claims?” Then the advertiser would say ” we don’t have a proof right now, but we’ll get you some”. And then the advertiser does some research, and it turns out their claims were in fact correct.
That is not good enough for the FTC, you can’t just make claims and hope they prove to be true once you finally got around to substantiating them. You need the substantiation ahead of time. I think that’s an important element. You can’t just go with your gut feeling, you have to actually substantiate it in advance of making the claim. And if you are the marketing agency, online or not, you have to make the effort to see that proof before putting the advertisements out on the market.
Eric Enge: Right. So, let’s ask a question about a specific scenario. Say you are an agency and you go back to your client ask them if they can substantiate that 74% of people in the blind taste test picked their cola product over the other cola product. And then they come back to you and send you a nice email that says, “Yes, we did a blind taste test.” But they choose to omit the fact that the blind taste test was done directly outside their headquarters’ building. But they ran this test and you as the agency receive their email saying that they had in fact ran the test. If you have this kind of documentation have you done your due diligence at that point?
Sarah Bird: Well, you are very close at that point. The confirmation that just said, “Yes, we did substantiate”, is not quite enough. You have to ask them to send you the documentation next. They should have that substantiation on hand, it shouldn’t be news to them that they actually have to prepare some kind of document saying that they did substantiate their claim.
If they tell you that it’s not really something they are prepared to show anyone, that should be a red flag to you. Verbal confirmation that claim is substantiated is not enough; you want to see some sort of evidence that they did it.
Eric Enge: Sure. There are certainly a lot of businesses out there that have tiny internal staffing that have grown by being very aggressive about their marketing. But, if your visibility goes up, your exposure to these kinds of issues goes up.
Sarah Bird: Absolutely.
Eric Enge: For example, you have all these social media networks that tend to grow very quickly. I don’t know if they do that much advertising, but if they did, and they made claims, they may not have had time to do any substantiating.
Sarah Bird: Right, and that’s just risky according to what the law and the guidelines say. Now of course every business owner has to decide his or her own risk tolerance level. Some people are going to say that the FTC gets around to validating so few companies’ claims because they don’t have the resources to check everyone, so chances are pretty good that they won’t check me.
That is true in a way. The FTC is only one agency and they’ve got a lot of stuff to do, so they are not going to check everyone. So some businesses are going to be willing to take that risk. I think the risk tolerance level is highly correlated to how big of business it is and the kind of presence it has with consumers. Big businesses just need to be more attuned to this risk. There are just all kinds of factors to consider in deciding what level of risk you are okay with. To summarize, the FTC definitely made it clear that online advertisers are also held to substantiation rules.
Another thing they made clear is that online advertisers are also covered by rules about so called stealth marketing. This basically means that if it’s not obvious that the advertiser is being paid to do this advertisement, there needs to be a disclaimer saying he or she is in fact being financially compensated.
Like Tiger Woods advertising golf balls, we all know he is being paid to do that, so they don’t have to put a little disclaimer up there saying “Tiger Woods received money to do this”. However, there are more subtle things, like if you are going through a chat room and you leave a comment on a blog about a product and link to it, it is not necessarily obvious that you have a financial association from the merchant that would require disclosure. It’s considered to be material to the consumer’s decision, because they never really know how much to trust this person and what they are saying about the product.
The consumer’s perception is going to change if they realize that that person is being paid by the company that makes that product. So if you are an affiliate for someone and you write a nice post talking about how great of a product it is, you should disclose somewhere on your site that you make money every time someone buys the product you are talking about. I think that has people really scared.
In the online marketing world right now, there are people who think that that’s really not a fair law. I personally think it maybe makes marketing much more difficult, and I feel like it hampers peoples’ creativity, but it’s probably a good thing for consumers to know if someone is being paid to talk about a product. So it’s uncomfortable, but it’s probably overall good for e-business. It will increase trust in the marketplace, which I think is always a good thing.
Eric Enge: Right. And when you look at that from Google’s perspective and their effort to address paid links, what’s being said here is not only is it Google’s position, but it’s the FTC’s position as well.
Sarah Bird: That’s exactly right. And you’ll notice that that’s why Google had to move to adding the words “sponsored-links” on its SERPs page through that same idea. We can’t just say that these all happened to get to the top of the page because they were the best matches to your search, because people actually pay Google to put these here.
Google is kind of ahead in the game in that regard. The EU had a law come down specifically addressing stealth marketing and word-of-mouth marketing last summer. They had a very similar disclosure requirement about the financial relationship between marketers and products. So the FTC is actually little behind on this, which I think is causing a backlash now. People have gotten used to marketing in certain ways, and they are kind of getting a rude awakening now. You’ve got to disclose who you are to the consumer, make the relationship clear.
Eric Enge: Thanks Sarah!
Sarah Bird: Thank you Eric!