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Here’s Why Retailmenot Got Hit by Google Panda

Retailmenot.com, a growing coupon-based website backed by Google Ventures, experienced a stunning drop in both search engine rankings and organic traffic back in May of this year. Google Panda 4.0, the name given to May’s major Panda update, supposedly affected only about 7.5 percent of all search queries, but Retailmenot.com took a much bigger hit than expected.

The incident has raised a lot of questions in the search engine marketing community, particularly focused on how Google Panda 4.0 works, and why Retailmenot.com was hit so hard despite being backed by Google’s own venture capital investment. The problem is multifaceted, but by understanding exactly what happened, you can protect your own web properties against a similar potential drop in the future.

What Happened?

First, let’s take a look at exactly what happened. According to SearchMetrics, by May 21, Retailmenot.com experienced an approximate drop in organic search visibility of 33 percent. This drop does not measure the amount of organic traffic a website receives, but there is a correlation between organic visibility and organic traffic. Essentially, this metric illustrates a cumulative drop in rankings over several keywords that adds up to a third less visibility.

In a broader context, 33 percent doesn’t seem so bad. After all, sites like spoonful.com and songkick.com experienced an approximate drop of 75 percent. But Retailmenot.com’s popularity and support from Google Ventures make it an interesting representative of the Panda update. Other sites, such as medterms.com, experienced as much as a 500 percent increase in visibility—so we know the update wasn’t only giving out penalties. So why, exactly, was Retailmenot.com penalized?

The Mechanics Behind the Drop

The drop was first acknowledged around May 21, just one day after the rollout of Panda 4.0. There is no question that this update is primarily responsible for the significant drop in Retailmenot.com’s rankings. The Panda Update, which started back in 2011, has a clearly defined purpose: to improve user online experience by eliminating spam and pages with low-quality or minimal content from search results. Since 2011, several new iterations of the Panda update, along with occasional “data refreshes” have been applied to Google’s search algorithms in an ongoing attempt to improve search results.

Panda 4.0, in May, was the latest “major” update. While the update surely introduced some new ranking signals and algorithm mechanics, the baseline goal of the update is in line with its Panda predecessors: to reward sites with high-quality content and punish those without it. Google is notorious for keeping its algorithms private, so it’s impossible to say exactly which factors were responsible for shaking Retailmenot.com’s visibility, but it seems like an inferior content program was at the heart of it.

Why It Matters

First, let’s take a look at why this hit was such a big deal for Retailmenot.com. A drop of 33 percent in search visibility doesn’t seem like that much on the surface; it could be the result of a handful of dropped ranks. The world of search is volatile at best, so occasional drops aren’t that big of a deal for most companies (especially big ones like Retailmenot.com). But this particular drop did have a significant impact on Retailmenot.com’s bottom line.

CEO Cotter Cunningham reported in a conference call for Retailmenot.com’s Q2 earnings that organic search traffic represented approximately 64 percent of their total visitors—which is a big deal. Cunningham did report that Retailmenot.com has steadily recovered from the initial drop in rankings, but when 64 percent of your customers are affected by a change in Google’s algorithms, you take notice. Their stock price (SALE) closed at $31.04 at the end of trading on May 21, but by May 23, it had dropped to a low of $23.87. Their stock still has not returned to its original levels, but of course this is likely due to several factors.

Why does this matter to you? Retailmenot.com is just one example of how significant an algorithm change can be. Preparing yourself for possible future changes, and responding immediately to any ranking drops, can help prevent or mitigate the effects of lost organic search visibility. Retailmenot.com wasn’t necessarily engaging in black hat practices; if they were spamming backlinks and posting total junk content, they would have experienced a much larger drop than they did. Instead, it appears as though the volume and quality of their content was just outside of Google’s latest standards, and as we know, those standards are constantly increasing.

So you know it’s important to protect yourself against major search engine drops like these by committing yourself to providing your users with the best possible online experience. But the Retailmenot.com drop is also significant because it shows us that recovery is possible. CEO Cotter Cunningham also reported in their Q2 earnings conference call that some organic search visibility had been restored, and their revenue was still close to their original target.

It’s also interesting to consider why Retailmenot.com was hit by Panda despite being backed by Google Ventures. While Google does seem biased in many of its actions (such as adjusting their search engine algorithms to favor content on their own social media platform, Google+), the fact that a GV-backed site was hit by a major update is evidence that Google has unflinching, equal standards for web quality. Let’s hope this unprejudiced stance remains as they continue to roll out more and more changes.

How to Safeguard Your Site

Google Panda 4.0 is over. If you were going to get hit by it, you’ve already seen the damage, so if you haven’t noticed any significant outliers in your search ranking data, you’ve successfully avoided getting hit by Panda 4.0. If you have experienced a penalty from any stage of the Panda update thus far, it’s time to remove those penalties and start making a recovery.

However, as evidenced by Retailmenot.com’s recent debacle, just because you escaped from a few penalties unscathed doesn’t mean you’ll avoid getting hit by future updates. If you want to make sure your organic search visibility stays where it is and continues to grow, you need to double check your strategy to make sure you’re complying with Google’s standards for user experience:

Google is somewhat unpredictable, and because updates always come without warning, it’s impossible to completely prevent any possible drop in organic search visibility. Still, if you adhere to best practices consistently and do everything you can to give your users a great experience, you should be able to avoid a hit like the one experienced by Retailmenot.com.

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