Google PR: Does it really matter?

Been receiving emails in the last 24 hours about the recent and radical changes in Google PageRank. The growing trend is downhill, especially for popular and highly trusted sites. Despite all these, the question remains — does it really matter?

Let me answer several of the more important questions thrown at me.

Does a PageRank drop really matter?

If you’re not selling links for PR juice, why should it matter? So, if you don’t sell ads on your site or blog, the PR is just for decorative purposes. Five years ago, it might represent some sort of authority but that perception has been devalued or totally erased now. Will people stop reading your blog? Will feed readers un-subscribe? Will blogs not link to you anymore?

If you are selling links on your site, a PR drop will matter — financially, that is. Link ad brokers have always used the PR as a huge factor to put a value for a raw link on your site. So, if you’re getting $60 a pop at TLA before, a -2 change in PR could slash that amount to at least third.

Jayvee proposes that blog networks should not rely on AdSense or Text Link Ads for their revenue stream. This is true — but not on blog networks alone but for everyone. I believe it’s even more recommended for independent bloggers as they do not have the same massive clout, sales force or cumulative traffic as a blog network.

In fact, I think this development might even kill the viability of narrow verticals with small traffic within a blog network. Imagine a blog network paying a blogger $250 a month for a blog that only generates 20,000 pageviews. The network might just earn a total $100 when computing a $5 CPM from direct ads. Without additional fixed revenue from link ads (which is independent of site traffic), the network stands to lose $150 a month from the setup. Multiple that with dozens of really very narrow niches that would not be profitable if they’d just go direct ads on a CPM basis.

How will this affect your revenue or business?

It depends. How much of your overall revenue stream comes from selling link ads? Say you have 3 income sources for your blog — AdSense, Direct and TLA. All three contribute equal amounts of monthly income. You got hit by a -2 PR drop. Your link ad prices have been devalued by 66%. If all the rest remained the same, you still have 88.7% of your original income intact. That percentage will shift either way depending on how much you rely on link ads.

The key is always spread your income sources as wide as you can. In my case, this development might set me back between 10 – 15% of monthly revenue projections.

Likewise, it also pays to have your ad deals put on a longer time period. Most of the ads I have here have been paid for the next 6 to 12 months. By the time they’ll expire, the blog would have undergone at least 2 more PR updates. Who knows, it might just improve later?

Does a low PR mean a lower traffic?

This is one misconception a lot of bloggers have. And I mean a lot.

If there’s one valuable lesson this has taught many of us, it’s the realization that high PR does not mean high traffic. So, even at a much lower PageRank, referral traffic from Google still remains the same.

The blog still ranks well for the usual keywords. There’s not been any drastic shuffling in the SERPs. I’d rather lose PR than lose my prized position in the SERPs.

Is this a warning shot from Google?

It sure does look like it. Nobody would believe in the FUD before. Now, the FUD is real. Andrews shares some relevant stats from Ratified — 58 down, 14 up, and 407 steady.

Aaron Wall says maybe it’s time for a better rank system and calls on Yahoo’s WebRank or an Ask CommunityRank. Loren Baker adds that PageRank is no longer a Marketing Metrics.

People from TLA have emailed publishers that they will not change current pricing despite the recent changes and have actually expressed intentions of removing PR for link valuations.

Will bloggers get scared of selling links or doing paid reviews now?

Most likely. The ones that have not been able to sell links (but are already advertising to do so) will be the first one. My question though is this — so why are you still interested in a higher PageRank when you’re not gonna sell links for PR anyway or if we’ve already established that PR does not correlate to higher traffic?

One thing’s for sure, link brokers like TLA or PPP will mostly feel the burn. It’s Google’s way of trumping businesses competing against their AdWords/AdSense tandem.

Footnotes:
CPM – cost per thousand (ad impressions)
SERPs – seach engine result pages
FUD – fear, uncertainty, doubt