JC Penney is now the poster boy (or girl) for bad behavior in SEO.  They broke one of the cardinal rules of search engine optimization and bought massive amounts of paid links.  They were caught by Google thanks to a NY Times article.  Their punishment?  A huge decrease in natural search traffic thanks to algorithmic and manual penalties by Google (and possibly millions of dollars in lost revenue).  So, why did this happen and what does it mean for advertisers?  I’ll give you a hint – it means a lot of hard work is in store for advertisers as they look to build architecture, content and links with a “white hat” on.

For those of you not familiar with what I mean by “white hat” – this refers to old western movies where the bad guy wore a black hat and good guy wore white hats.  In search marketing circles, “white hat” marketers are ones that tend to play by the rules set forth by the engines and try to influence results without resorting to tactics that are against the rules.  ”Black hat” marketers believe that the rules set forth by the engines are mere suggestions.  Black hats tend to use any tactics available to make more money by gaining higher ranks.  Why this matters is buying links to your site to influence natural search results is considered a “black hat” tactic by the engines.  How do we know this?  Well, Matt Cutts, the guru of spam blocking at Google, was kind enough to tell us:

So, did JC Penney not get the memo?  Why did they continue to utilize paid linking when Google clearly prohibited this behavior?  The answer is simple math.  What is the likelihood that Google will take action versus the expected return?  The expected return for many high profile terms could be tens or even hundreds of millions of dollars in revenue (with revenue near the holiday season even higher).  The likelihood of Google taking action against a high profile advertisers – near ZERO.  It doesn’t take a rocket scientist to figure out why JC Penney and hundreds of other high profile advertisers utilized paid linking – huge return and almost no risk to being caught and punished.

So where does this action leave us now?  I guarantee a lot of CMO’s are asking their marketing teams if paid links are being used on their campaigns.  Even if your team isn’t actively reviewing your campaign for paid links, the rules have now changed.  In every new business pitch and sales presentation, white hat marketers now have the “JC Penney example” to show clients why they should avoid paid linking at all costs.  Now do the math.  If Google (or any other engine) catches a marketer using paid links and removes them from top rankings, what is the financial cost?  How long will JC Penney be in the proverbial doghouse and what implication will that have to revenue?

What should advertisers do now that the rules have changed?  First they should review all current natural search optimization practices for compliance with search engines.  If your campaign utilizes paid links, cloaking, or other deceptive practices – it is time to stop now.  Then, its time to really look at your website and see if it is time to re-design.  Are you held back by an ancient URL structure?  Are your domains a mess with dozens or hundreds of microsites scattered throughout your ecosystem?  Is your CMS too old to do true SEO customization or is it a home grown system held together by Popsicle sticks and bubble gum?  If the answer to any of these questions is yes, you should find a credible agency to look at your natural search approach and your website design.  The problem with most SEO tactics is that major site elements are set in stone and you can’t change them.  That’s the idea behind paid link building – add links so you won’t have to spend big money fixing your site and adding real content.  It would seem that time has run out for advertisers hoping to short cut the process.  Its time to fix your site with great architecture, new rich content for natural search and finally links that are earned from great content and asking for links utilizing a systematic, time consuming process.

Andrew Lovasz is the Group Director of Search Marketing for Organic