"Naturally people prefer high-quality content, so we design Google to reflect that," said Jason Freidenfelds, a spokesman for the Mountain View, California-based company. "If you're producing content, avoid the junk. Produce something that's genuinely interesting and useful to people. That's really the sustainable strategy."
It's not always so easy.
HubPages has been the poster child for Panda victims. Founded in 2006 and led by former Microsoft product manager Paul Edmondson, the company hosts a collection of user-generated articles on thousands of topics, written by people from all over the world. After the first Panda update, HubPages lost 49 percent of its traffic. Pages that had been popular were declared spammy and dropped in the rankings.
HubPages, which is ad-supported, saw millions of dollars in annual revenue evaporate, according to Edmondson. The company downsized dramatically through several rounds of layoffs and Edmondson poured his energy into finding the problem and fixing it.
The answer was editing. Because a very small percentage of its content drew the bulk of traffic, Edmondson focused on improving the quality of those top pages, while removing spammy links and excess ads as well as unpublishing hundreds of thousands of hubs.
Traffic started coming back, and Edmonson doubled down. Since early this year, he's hired seven professional writers and editors to liven up the most popular pages.
"How to eliminate, kill or get rid of frogs," for example, was an entry that got a lot of traffic but was very light on information and thus left users unhappy with what they saw. Now, it features a detailed 10-step process that includes original illustrations as well as a link to a frog-killing product on Amazon.com.
"Everything we're trying to do is about improving the reader experience," Edmondson said, from his office in San Francisco. "If we're leaving money on the table but we're comfortable that we're creating a better reading experience, that's OK. Ultimately we're going to create something really special."
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As of August, traffic had increased about 47 percent from the prior year. The lights in the office were comfortably on and Edmondson was predicting annual revenue in the $5 million range, about half the company's pre-Panda level.
But the latest Panda update—the one that Google said helped smaller sites—was a major setback. Edmonson said it may be the result of HubPages' recent acquisition of a user-generated content company called Squidoo, which added 160,000 articles to the company's own 325,000 pages.
Combined traffic is down 46 percent, and Edmondson said the plunge will significantly alter his plans to hire more editors.
"If there was a playbook on how to handle the Panda issue, we would do it to the best of our ability," he wrote in a follow-up email.
Edmondson, like many people punished by Google, is frustrated by the constant struggle to stay compliant with the search engine, even as he pours money into creating a better site. Google controls 68 percent of the U.S. search market, according to comScore, but accounts for 73 percent of HubPages' traffic and more than 90 percent on mobile, Edmonson said.
Plenty of executives can empathize. While Google says that Panda is democratizing search for smaller sites, the playing field isn't level, according to 3Q's Rayden. HubPages has survived, albeit barely, by investing heavily in content creation, but many niche sites no longer exist because they lacked the technical expertise or the money to stay current and invest in content creation.
"If your website is old, isn't designed right, is not designed for usability or your content is stale, you're not going to stand a chance," Rayden said.
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Glenn Gabe, a longtime expert in search engine optimization, published a post on Sept. 29, a week after the latest Panda rollout began, laying out his findings.
Poorly written sites, keyword stuffing, deceptively blending ads into content and over-reliance on "how-to" articles all result in a Panda pummeling, he wrote. As for what works, his advice is pretty simple: "Make sure user engagement is strong, users are happy with your content and they don't have a poor experience while traversing your website."
It's not just small brands playing the new content game. In New York, a 65-person start-up called Contently is working with close to 100 large companies, including American Express, Wal-Mart, Coca-Cola and even Google, to help their marketing departments evolve from messaging to content.
The company has a roster of 55,000 journalists that get hired to assist with storytelling, and Contently's software is designed to help businesses communicate with their fans and followers on social media. Some former reporters are making upward of $80,000 a year, working on a freelance basis for Contently clients, said CEO Joe Coleman.
"In five to 10 years, people will have a very different perception of what a media company is and where the lines are drawn," said Coleman, who co-founded Contently in 2010, just months before Google introduced Panda. "We went into business wanting to create a high-quality product and planting a flag in the ground around quality. We got really lucky."
At online lender Prosper Marketplace, CEO Aaron Vermut recognizes the importance of staying up to date on the latest algorithm changes. Since joining the San Francisco-based company in early 2013, he's outsourced those duties to a third party. But on Monday, Prosper announced the hiring of Cheryl Law, former chief marketing officer at Hotwire, as its CMO. A big part of her job will be helping Prosper transition into this new world.
"We have some resources but not enough," Vermut said. "As the algorithm changes, we put resources into adapting."