Is "Six Sigma" really helpful into SMP (Sales , Marketing & Presales) domain?
Tuesday, September 7, 2010
Is Six Sigma really helpful into SMP (Sales , Marketing & Presales) domain?
Search Engine Marketing (SEM)
SEM Glossary
The following search engine marketing (SEM) glossary of terms was created by Anvil Media, Inc., our sister company.
1. A/B Testing: A method of advertising testing by which a baseline control sample is compared to a variety of single-variable test samples. This method has been recently adopted from direct marketing within the interactive space to test tactics such as banner ads, emails and landing pages.
2. Affiliate Program: A Web-based pay-for-performance program designed to compensate "affiliate" partner web sites for driving qualified leads or sales to a "merchant" web site. Typically, the merchant pays a percentage of any sales resulting from any click through (via banner or text link) to their Web site from an affiliate partner's Web site. Service providers like Commission Junction help track and manage payments.
3. Algorithm: A mathematical formula used by search engines to determine which web sites in their database to present in search results, in which order. While search engine algorithms change regularly, primary on-page factors include keyword density and source code optimization. The primary off-page factor is link popularity.
4. Anvil Media, Inc.: Founded in 2005 and based in Portland, Oregon, Anvil Media, Inc. is the Northwest's largest and fastest growing privately held search engine marketing agency, providing search engine optimization (SEO), pay-per-click (PPC) and link development management services to a variety of clients ranging from startups to Fortune 500.
5. Asynchronous JavaScript and XML (AJAX): A group of inter-related web development techniques used for creating interactive web applications. A primary characteristic is the increased responsiveness and interactivity of web pages achieved by exchanging small amounts of data with the server "behind the scenes" so that entire web pages do not have to be reloaded each time there is a need to fetch data from the server.
6. Attention Profile (APML): An Attention Profile consists of all the information online about what users read, write, share and consume. APML, or Attention Profiling Mark-up Language, allows users to alter and share their own personal Attention Profile in much the same way that OPML allows the exchange of reading lists between News Readers.
7. Bounce Rate: This is the rate of visitors that enter your site, and leave within the first 5 seconds (as calculated by Google Analytics) without viewing another page.
8. Blog/Web Logs: A self-published, managed or maintained Web diary. Usually updated daily or weekly, blogs have historically been personal, but gained notoriety after the 2004 election as an influential media outlet. Companies now use blogs to extend their brand and improve their organic search visibility.
9. Buzz Marketing: See "viral marketing."
10. Click-through Rate (CTR): The percentage of those clicking on a link out of the total number who view the link or text ad.
11. Cloaking: In terms of search engine marketing, this is the act of getting a search engine to record content for a URL that is different than what a searcher will ultimately see. It can be done in many technical ways. Several search engines have explicit rules against unapproved cloaking. Those violating these guidelines might find their pages penalized or banned from a search engine's index. As for approved cloaking, this generally only happens with search engines offering paid inclusion program.
12. Click Fraud: A type of internet crime that occurs in pay per click online advertising when a person, automated script, or computer program imitates a legitimate user of a web browser clicking on an ad, for the purpose of generating a charge per click without having actual interest in the target of the ad's link. Read Anvil's click fraud article.
13. Content Management System (CMS): a software platform that aids in the management of content on a Web site.
14. Contextual Link Ads/Inventory: To supplement their business models, certain text-link advertising networks (like Google) have expanded their network distribution to include “contextual inventory”. Most vendors of “search engine traffic” have expanded the definition of Search Engine Marketing to include this contextual inventory. Contextual or content inventory is generated when listings are displayed on pages of Web sites (usually not search engines), where the written content on the page indicates to the ad-server that the page is a good match to specific keywords and phrases. Often this matching method is validated by measuring the number of times a viewer clicks on the displayed ad. These ads typically do not perform as well as traditional text ads on search engines, but the lower cost justifies the expense.
15. Conversion: A site visitor completes a desired action. Generally a download, signup, purchase, etc.
16. Conversion Funnel: A series of steps or actions a user must take in order to complete the desired conversion action (i.e. eCommerce shopping cart).
17. Conversion Rate: The relationship between visitors to a web site and actions considered to be a "conversion," such as a sale or request to receive more information. This metric is often expressed as a percentage.
18. Cost-per-Click (CPC): System where an advertiser pays an agreed amount for each click someone makes on a link leading to their web site. Also known as PPC or paid listings.
19. Cost-per-Thousand (CPM): System where an advertiser pays an agreed amount for the number of times their ad is seen by a consumer, regardless of the consumer's subsequent action. This term is heavily used in print, broadcasting and direct marketing, as well as with online banner ad sales. CPM stands for "cost per thousand," since ad views are often sold in blocks of 1,000. The M in CPM is Latin for thousand.
20. Crawler/Spider/Robot: Component of search engine that indexes web sites automatically. A search engine's crawler (also called a spider or robot), copies web page source code into its index database and follows links to other web pages.
21. Directories: A type of search engine where listings are gathered or reviewed by humans, rather than by search engine crawlers. In directories, web sites are often reviewed, summarized in about 25 words and placed in a particular category. The largest and most popular directory site is Yahoo!
22. Doorway/Landing/Gateway/Bridge/Jump Pages: A web page created expressly in hopes of ranking well for a term in a search engine's organic/non-paid listings and which itself does not deliver much information to those viewing it. Instead, visitors will often see only some enticement on the doorway page leading them to other pages, or they may be seamlessly redirected to a real page within the existing web site. With cloaking, visitors may never see the doorway page at all. Several search engines have guidelines against doorway pages, though they are more commonly allowed in through paid inclusion programs.
23. eBuzz: Also referred to as guerilla marketing or grassroots marketing. See "Online Public Relations."
24. GoogleDex: GoogleDex is the score given to a term based on the number of pages that Google has indexed and posted as results for that term.
25. Grassroots Marketing: See "viral marketing."
26. Guerilla Marketing: See "viral marketing."
27. Index: The collection of information (contained in a large database) a search engine has that searchers can query against. With crawler-based search engines, the index is typically copies of all the web pages they have found from crawling the web. With human-powered directories, the index contains the summaries of all web sites that have been categorized.
28. Inbound/Back Link: A text or graphical hyperlink from one site to another. Google and other search engines' algorithms consider a site's popularity based on the quality and quantity of inbound links from relevant third party sites to help determine search positioning. See "Link Popularity."
29. Key Performance Indicator (KPI): Defines and/or measures progress towards company goals.
30. Keyword Density: The frequency of repetition of a given keyword or phrase within body text on a web site. The higher the frequency (measured in percentages) the greater the likelihood of a higher ranking in search results. In Anvil's case, you'll notice a higher density of the phrase "search engine marketing" within the web site, as that is the most relevant phrase used to describe the service offering.
31. Link Bait: Any content or feature within a website that somehow baits viewers to place links to it from other websites. Matt Cutts defines link bait as anything "interesting enough to catch people's attention." Link bait can be an extremely powerful form of marketing as it is viral in nature and can impact visibility in search results.
32. Link Development: The act of requesting or securing inbound links to your web site. Also see Link Popularity and Inbound/Back Links.
33. Link Popularity: A raw count of how "popular" a page is based on the number of backlinks/inbound links it has. It does not factor in link context or link quality, which are also important elements in how search engines make use of links to impact rankings.
34. Listings: The information that appears on a search engine's results page in response to a search. See "Results Page."
35. Local Search: Search engine results constrained by region/location, based on the searcher's location or intent. With the addition of Web 2.0 capabilities, local search results may include business ratings, reviews, maps and driving directions.
36. The Long Tail: First coined by Chris Anderson in an October 2004 Wired magazine article to describe the niche strategy of certain business such as Amazon.com or Netflix. In relation to search engine marketing (SEM) the Long Tail refers to the keyword phrases that are highly detailed and specific and may generate low volumes of searches and traffic, but add up to generate a majority of traffic for sites with deep content or product SKUs.
37. Meta Search Engine: A search engine that gets listings from two or more other search engines, rather than through its own efforts.
38. Meta Tags: Information placed in a web page not intended for users to see but instead which typically passes information to search engine crawlers, browser software and some other applications.
39. Meta Description Tag: Allows page authors to say how they would like their pages described when listed by search engines. Not all search engines use the tag.
40. Meta Keywords Tag: Allows page authors to add text to a page to help with the search engine ranking process. Not all search engines use the tag.
41. Meta Robots Tag: Allows page authors to keep their web pages from being indexed by search engines, especially helpful for those who cannot create robots.txt files. The Robots Exclusion page provides official details.
42. Mobile Search: An evolving branch of information retrieval services that is centered on the convergence of mobile platforms and mobile handsets or other mobile devices. The services allow users to find mobile content interactively on mobile websites, and mobile content shows a media shift toward mobile multimedia.
43. Multivariate Testing: A process by which more than one component of a website may be tested in a live environment. It can be thought of in simple terms as numerous split tests or A/B tests performed on one page at the same time. See A/B testing definition for more information.
44. Online Public Relations: see SEM PR for a full description
45. Online Reputation Management (ORM): The act of monitoring, addressing or mitigating undesirable search engine results or mentions in online media for a company or product. Techniques include generating new content and creating posts on existing content. For more information, visit Anvil's article: Online Reputation Management, The New PR.
46. OpenSearch: A collection of technologies that allow publishing of search results in a format suitable for syndication and aggregation. It is a way for websites and search engines to publish search results in a standard and accessible format. Originally developed by Amazon and recently adopted by Yahoo!, OpenSearch relies on abstract-based microformats (dataRSS, eRDF, FOAF, GeoRSS, hCard, hEvent, hReview, hAtom, MediaRSS, RDFa, XFN, etc.) to integrate syndicated content into search results.
47. Organic/Natural Listings: Listings that search engines do not sell (unlike paid listings). Instead, sites appear solely because a search engine has deemed it editorially important for them to be included, regardless of payment. Paid inclusion content is also often considered "organic" even though it is paid for. This is because that content usually appears intermixed with unpaid organic results.
48. Outbound Links: Links on a particular web page leading to other web pages on a different domain.
49. Page Views: The number of times a page (an analyst-definable unit of content) was viewed.
50. Paid Inclusion/Pay-for-Inclusion (PFI): The act of purchasing the ability to be indexed by search engines. Unlike PPC, position within search results are not guaranteed, but unlike organic SEO, PFI guarantees a level of frequency in indexing and enables optimization and submission of large numbers of pages within a site. The end result is ideally a higher position in search results for larger, database-driven sites.
51. Pay-per-Call: The ability to track offline sales through unique toll-free phone numbers. Currently available on FindWhat and CitySearch properties, this service is ideal for offline-based businesses like plumbers, contractors and other service industries.
52. Pay-per-Click (PPC): Stands for pay-per-click. See "Cost Per Click" and "Paid Placement."
53. Paid Listings: Listings that search engines sell to advertisers, usually through paid placement or paid inclusion programs. In contrast, organic listings are not sold.
54. Pay-for-Performance: Term popularized by some search engines as a synonym for pay-per-click, stressing to advertisers that they are only paying for ads that "perform" in terms of delivering traffic, as opposed to CPM-based ads, where fees are based on impressions or views instead of clicks.
55. Paid Placement: Advertising program where listings are guaranteed to appear in response to particular search terms, with higher ranking typically obtained by paying more than other advertisers. Paid placement listings can be purchased from a portal or a search network. Search networks are often set up in an auction environment where keywords and phrases are associated with a cost-per-click (CPC) fee. Overture and Google are the largest networks, but second tier players like FindWhat are gaining in popularity as CPC prices increase. Portal or site sponsorships are also a type of paid placement.
56. Rank: How well a particular web page or web site is listed in a search engine results. Generally, sites on the first page (or within the first 10 listings) generate significant visibility and traffic. Overall, saying a page is "listed" only means that it can be found within a search engine in response to a query, not that it necessarily ranks well for that query. Also called position.
57. Reciprocal Link: A mutually-agreed upon link exchange between two sites. See "Link Development."
58. Results Page: The page that is displayed after a search phrase is typed into a search engine. Also referred to as search engine results page or SERP.
59. Robots.txt: A file used to keep web pages from being indexed by search engines. The Robots Exclusion page provides official details.
60. Return-on-Investment (ROI): Historically associated with sales and marketing efforts; when applied to SEM efforts, refers to numerical, percentage or ratio of revenue generated over total cost of activities. ROI typically factors in paid placement and associated management costs, but a more detailed analysis may factor in profit (true cost). If ROI is measuring paid placement only, it is typically referred to as return on ad spend (ROAS).
61. RSS Feeds: Real simple syndication (RSS) is a relatively new and easy way to distribute content via the Internet. For email marketers, it is a way to distribute messages while avoiding spam filters. Typical applications include email newsletters, blogs or even Web sites. Similar to newsgroups, RSS feeds require a special "reader" like Bloglines or NewsGator to view messages.
62. Search Engine: Any service generally designed to allow users to search the web or a specialized database of information. Web search engines generally have paid listings and organic listings. Organic listings typically come from crawling the web, though often human-powered directory listings are also optionally offered. Top tier search engines include Google, MSN, Teoma and Yahoo!
63. Search Engine Marketing (SEM): The act of marketing a web site via search engines, whether this be improving rank in organic listings (search engine optimization), purchasing paid listings (PPC management) or a combination of these and other search engine-related activities (i.e. affiliate programs, shopping feeds or link development).
64. Search Engine Marketing Public Relations (SEM PR): The art of leveraging traditional PR materials to increase visibility and traffic via a hybrid of interactive PR strategies & tactics, including SEO, PPC and SMO. Tactics may include press release optimization and distribution, article syndication and social media outreach. See SEO PR article for more information.
65. Search Engine Optimization (SEO): The act of altering a web site so that it does well in the organic, crawler-based listings of search engines. In the past, has also been used as a term for any type of search engine marketing activity, though now the term search engine marketing is more commonly used as an umbrella term.
66. Search Engine Positioning (SEP): Synonymous with SEO, search engine positioning is the act of altering a web site to perform well in organic or natural search results.
67. Search Engine Results Page (SERP): A page of results generated by search engines based on weighted elements in each engine's algorithm. Each page typically consists of 10 URLs, with no more than 2 URLs per domain.
68. Search Engine Submission: The act of submitting specific URLs to popular search engines like Google, MSN and Yahoo! to ensure the web page gets spidered and indexed.
69. Search Personalization: The ability to personalize SERPs based on personal profile information, settings or location (IP address).
70. Search Terms: The words (or phrase) a searcher enters into a search engine's search box. Also used to refer to the terms a search engine marketer hopes a particular page will be found for. Also called keywords, query terms or query.
71. Shopping Search/Feeds: Shopping search engines allow shoppers to look for products and prices in a search environment for rapid and easy comparison. Premium placement can be purchased on some shopping search indices via "XML feeds."
72. Site Optimization: The act of fine-tuning web site content and code to perform well in search engine results. See "Search Engine Optimization."
73. Social Media: An umbrella term that defines the various activities that integrate technology, social interaction, and the construction of words and pictures. This interaction, and the manner in which information is presented, depends on the varied perspectives and "building" of shared meaning, as people share their stories, and understandings.
74. Social Media Marketing (SMM): A form of internet marketing which seeks to achieve branding and marketing communication goals through the participation in various social media networks (MySpace, Facebook, LinkedIn), social bookmarking (Digg, Stumbleupon), social media sharing (Flickr, YouTube), review/ratings sites (ePinions, BizRate), blogs, forums, news aggregators and virtual 3D networks (SecondLife, ActiveWorlds). Each social media site can be optimized to generate awareness or traffic. For more information, read Anvil's SMO article.
75. Social Media Monitoring & Analysis: The process of monitoring and analyzing data generated by social media and related marketing and optimization efforts. For more information, read Anvil's social media monitoring article.
76. Social Media Optimization (SMO): A set of methods for generating publicity through social media, online communities and community websites. Methods of SMO include adding RSS feeds, adding a "Digg This" button, blogging and incorporating third party community functionalities like Flickr photo slides and galleries or YouTube videos. Social media optimization is a form of search engine marketing.
77. Spam: Any search engine marketing method that a search engine deems to be detrimental to its efforts to deliver relevant, quality search results. Some search engines have written guidelines about what they consider to be spamming, but ultimately any activity a particular search engine deems harmful may be considered spam, whether or not there are published guidelines against it. Examples of spam include the creation of nonsensical doorway pages designed to please search engine algorithms rather than human visitors, or a heavy repetition of search terms on a page to increase keyword density. Also referred to as spamdexing.
78. Submission: The act to submitting a URL for inclusion into a search engine's index. Unless done through paid inclusion, submission generally does not guarantee listing. In addition, submission does not help with rank improvement on crawler-based search engines unless search engine optimization efforts have been implemented. Submission can be done manually (i.e., you fill out an online form and submit) or automated, where a software program or online service may process the forms behind the scenes.
79. Unique Visitor: A visitor that interacts with a site. They may interact more than once, but within analytics reporting, they are only counted one time.
80. Universal Search: Google's process of blending listings from its news, video, images, local and book search engines among those it gathers from crawling web pages.
81. Viral Marketing: Any marketing technique that induces Web sites or users to pass on a marketing message to other sites or users, creating a potentially exponential growth in the message's visibility and effect. See article, "Viral Marketing: Miracle Cure or Common Cold?" by Kent Lewis for more information.
82. Visitor Session: Interaction by a site visitor. The session ends when the visitor leaves the site.
83. Web 2.0: The use of World Wide Web technology and web design that aims to facilitate creativity, information sharing, and, most notably, collaboration among users. These concepts have led to the development and evolution of web-based communities and hosted services, such as social-networking sites, wikis, blogs, and folksonomies.
84. White Papers: Technical documents used primarily to generate leads for business-to-business technology companies. The technical papers typically include industry research, statistics and deep technical information. Download Anvil's SEO White Paper for an example of how it's done correctly.
85. XML Feeds: A form of paid inclusion where a search engine is "fed" information about pages via XML, rather than gathering that information through crawling actual pages. Marketers can pay to have their pages included in a spider based search index either annually per URL or on a CPC basis based on an XML document representing each page on the client site. New media types are being introduced into paid inclusion, including graphics, video, audio, and rich media. These feeds are commonly used for Shopping Feeds
The following search engine marketing (SEM) glossary of terms was created by Anvil Media, Inc., our sister company.
1. A/B Testing: A method of advertising testing by which a baseline control sample is compared to a variety of single-variable test samples. This method has been recently adopted from direct marketing within the interactive space to test tactics such as banner ads, emails and landing pages.
2. Affiliate Program: A Web-based pay-for-performance program designed to compensate "affiliate" partner web sites for driving qualified leads or sales to a "merchant" web site. Typically, the merchant pays a percentage of any sales resulting from any click through (via banner or text link) to their Web site from an affiliate partner's Web site. Service providers like Commission Junction help track and manage payments.
3. Algorithm: A mathematical formula used by search engines to determine which web sites in their database to present in search results, in which order. While search engine algorithms change regularly, primary on-page factors include keyword density and source code optimization. The primary off-page factor is link popularity.
4. Anvil Media, Inc.: Founded in 2005 and based in Portland, Oregon, Anvil Media, Inc. is the Northwest's largest and fastest growing privately held search engine marketing agency, providing search engine optimization (SEO), pay-per-click (PPC) and link development management services to a variety of clients ranging from startups to Fortune 500.
5. Asynchronous JavaScript and XML (AJAX): A group of inter-related web development techniques used for creating interactive web applications. A primary characteristic is the increased responsiveness and interactivity of web pages achieved by exchanging small amounts of data with the server "behind the scenes" so that entire web pages do not have to be reloaded each time there is a need to fetch data from the server.
6. Attention Profile (APML): An Attention Profile consists of all the information online about what users read, write, share and consume. APML, or Attention Profiling Mark-up Language, allows users to alter and share their own personal Attention Profile in much the same way that OPML allows the exchange of reading lists between News Readers.
7. Bounce Rate: This is the rate of visitors that enter your site, and leave within the first 5 seconds (as calculated by Google Analytics) without viewing another page.
8. Blog/Web Logs: A self-published, managed or maintained Web diary. Usually updated daily or weekly, blogs have historically been personal, but gained notoriety after the 2004 election as an influential media outlet. Companies now use blogs to extend their brand and improve their organic search visibility.
9. Buzz Marketing: See "viral marketing."
10. Click-through Rate (CTR): The percentage of those clicking on a link out of the total number who view the link or text ad.
11. Cloaking: In terms of search engine marketing, this is the act of getting a search engine to record content for a URL that is different than what a searcher will ultimately see. It can be done in many technical ways. Several search engines have explicit rules against unapproved cloaking. Those violating these guidelines might find their pages penalized or banned from a search engine's index. As for approved cloaking, this generally only happens with search engines offering paid inclusion program.
12. Click Fraud: A type of internet crime that occurs in pay per click online advertising when a person, automated script, or computer program imitates a legitimate user of a web browser clicking on an ad, for the purpose of generating a charge per click without having actual interest in the target of the ad's link. Read Anvil's click fraud article.
13. Content Management System (CMS): a software platform that aids in the management of content on a Web site.
14. Contextual Link Ads/Inventory: To supplement their business models, certain text-link advertising networks (like Google) have expanded their network distribution to include “contextual inventory”. Most vendors of “search engine traffic” have expanded the definition of Search Engine Marketing to include this contextual inventory. Contextual or content inventory is generated when listings are displayed on pages of Web sites (usually not search engines), where the written content on the page indicates to the ad-server that the page is a good match to specific keywords and phrases. Often this matching method is validated by measuring the number of times a viewer clicks on the displayed ad. These ads typically do not perform as well as traditional text ads on search engines, but the lower cost justifies the expense.
15. Conversion: A site visitor completes a desired action. Generally a download, signup, purchase, etc.
16. Conversion Funnel: A series of steps or actions a user must take in order to complete the desired conversion action (i.e. eCommerce shopping cart).
17. Conversion Rate: The relationship between visitors to a web site and actions considered to be a "conversion," such as a sale or request to receive more information. This metric is often expressed as a percentage.
18. Cost-per-Click (CPC): System where an advertiser pays an agreed amount for each click someone makes on a link leading to their web site. Also known as PPC or paid listings.
19. Cost-per-Thousand (CPM): System where an advertiser pays an agreed amount for the number of times their ad is seen by a consumer, regardless of the consumer's subsequent action. This term is heavily used in print, broadcasting and direct marketing, as well as with online banner ad sales. CPM stands for "cost per thousand," since ad views are often sold in blocks of 1,000. The M in CPM is Latin for thousand.
20. Crawler/Spider/Robot: Component of search engine that indexes web sites automatically. A search engine's crawler (also called a spider or robot), copies web page source code into its index database and follows links to other web pages.
21. Directories: A type of search engine where listings are gathered or reviewed by humans, rather than by search engine crawlers. In directories, web sites are often reviewed, summarized in about 25 words and placed in a particular category. The largest and most popular directory site is Yahoo!
22. Doorway/Landing/Gateway/Bridge/Jump Pages: A web page created expressly in hopes of ranking well for a term in a search engine's organic/non-paid listings and which itself does not deliver much information to those viewing it. Instead, visitors will often see only some enticement on the doorway page leading them to other pages, or they may be seamlessly redirected to a real page within the existing web site. With cloaking, visitors may never see the doorway page at all. Several search engines have guidelines against doorway pages, though they are more commonly allowed in through paid inclusion programs.
23. eBuzz: Also referred to as guerilla marketing or grassroots marketing. See "Online Public Relations."
24. GoogleDex: GoogleDex is the score given to a term based on the number of pages that Google has indexed and posted as results for that term.
25. Grassroots Marketing: See "viral marketing."
26. Guerilla Marketing: See "viral marketing."
27. Index: The collection of information (contained in a large database) a search engine has that searchers can query against. With crawler-based search engines, the index is typically copies of all the web pages they have found from crawling the web. With human-powered directories, the index contains the summaries of all web sites that have been categorized.
28. Inbound/Back Link: A text or graphical hyperlink from one site to another. Google and other search engines' algorithms consider a site's popularity based on the quality and quantity of inbound links from relevant third party sites to help determine search positioning. See "Link Popularity."
29. Key Performance Indicator (KPI): Defines and/or measures progress towards company goals.
30. Keyword Density: The frequency of repetition of a given keyword or phrase within body text on a web site. The higher the frequency (measured in percentages) the greater the likelihood of a higher ranking in search results. In Anvil's case, you'll notice a higher density of the phrase "search engine marketing" within the web site, as that is the most relevant phrase used to describe the service offering.
31. Link Bait: Any content or feature within a website that somehow baits viewers to place links to it from other websites. Matt Cutts defines link bait as anything "interesting enough to catch people's attention." Link bait can be an extremely powerful form of marketing as it is viral in nature and can impact visibility in search results.
32. Link Development: The act of requesting or securing inbound links to your web site. Also see Link Popularity and Inbound/Back Links.
33. Link Popularity: A raw count of how "popular" a page is based on the number of backlinks/inbound links it has. It does not factor in link context or link quality, which are also important elements in how search engines make use of links to impact rankings.
34. Listings: The information that appears on a search engine's results page in response to a search. See "Results Page."
35. Local Search: Search engine results constrained by region/location, based on the searcher's location or intent. With the addition of Web 2.0 capabilities, local search results may include business ratings, reviews, maps and driving directions.
36. The Long Tail: First coined by Chris Anderson in an October 2004 Wired magazine article to describe the niche strategy of certain business such as Amazon.com or Netflix. In relation to search engine marketing (SEM) the Long Tail refers to the keyword phrases that are highly detailed and specific and may generate low volumes of searches and traffic, but add up to generate a majority of traffic for sites with deep content or product SKUs.
37. Meta Search Engine: A search engine that gets listings from two or more other search engines, rather than through its own efforts.
38. Meta Tags: Information placed in a web page not intended for users to see but instead which typically passes information to search engine crawlers, browser software and some other applications.
39. Meta Description Tag: Allows page authors to say how they would like their pages described when listed by search engines. Not all search engines use the tag.
40. Meta Keywords Tag: Allows page authors to add text to a page to help with the search engine ranking process. Not all search engines use the tag.
41. Meta Robots Tag: Allows page authors to keep their web pages from being indexed by search engines, especially helpful for those who cannot create robots.txt files. The Robots Exclusion page provides official details.
42. Mobile Search: An evolving branch of information retrieval services that is centered on the convergence of mobile platforms and mobile handsets or other mobile devices. The services allow users to find mobile content interactively on mobile websites, and mobile content shows a media shift toward mobile multimedia.
43. Multivariate Testing: A process by which more than one component of a website may be tested in a live environment. It can be thought of in simple terms as numerous split tests or A/B tests performed on one page at the same time. See A/B testing definition for more information.
44. Online Public Relations: see SEM PR for a full description
45. Online Reputation Management (ORM): The act of monitoring, addressing or mitigating undesirable search engine results or mentions in online media for a company or product. Techniques include generating new content and creating posts on existing content. For more information, visit Anvil's article: Online Reputation Management, The New PR.
46. OpenSearch: A collection of technologies that allow publishing of search results in a format suitable for syndication and aggregation. It is a way for websites and search engines to publish search results in a standard and accessible format. Originally developed by Amazon and recently adopted by Yahoo!, OpenSearch relies on abstract-based microformats (dataRSS, eRDF, FOAF, GeoRSS, hCard, hEvent, hReview, hAtom, MediaRSS, RDFa, XFN, etc.) to integrate syndicated content into search results.
47. Organic/Natural Listings: Listings that search engines do not sell (unlike paid listings). Instead, sites appear solely because a search engine has deemed it editorially important for them to be included, regardless of payment. Paid inclusion content is also often considered "organic" even though it is paid for. This is because that content usually appears intermixed with unpaid organic results.
48. Outbound Links: Links on a particular web page leading to other web pages on a different domain.
49. Page Views: The number of times a page (an analyst-definable unit of content) was viewed.
50. Paid Inclusion/Pay-for-Inclusion (PFI): The act of purchasing the ability to be indexed by search engines. Unlike PPC, position within search results are not guaranteed, but unlike organic SEO, PFI guarantees a level of frequency in indexing and enables optimization and submission of large numbers of pages within a site. The end result is ideally a higher position in search results for larger, database-driven sites.
51. Pay-per-Call: The ability to track offline sales through unique toll-free phone numbers. Currently available on FindWhat and CitySearch properties, this service is ideal for offline-based businesses like plumbers, contractors and other service industries.
52. Pay-per-Click (PPC): Stands for pay-per-click. See "Cost Per Click" and "Paid Placement."
53. Paid Listings: Listings that search engines sell to advertisers, usually through paid placement or paid inclusion programs. In contrast, organic listings are not sold.
54. Pay-for-Performance: Term popularized by some search engines as a synonym for pay-per-click, stressing to advertisers that they are only paying for ads that "perform" in terms of delivering traffic, as opposed to CPM-based ads, where fees are based on impressions or views instead of clicks.
55. Paid Placement: Advertising program where listings are guaranteed to appear in response to particular search terms, with higher ranking typically obtained by paying more than other advertisers. Paid placement listings can be purchased from a portal or a search network. Search networks are often set up in an auction environment where keywords and phrases are associated with a cost-per-click (CPC) fee. Overture and Google are the largest networks, but second tier players like FindWhat are gaining in popularity as CPC prices increase. Portal or site sponsorships are also a type of paid placement.
56. Rank: How well a particular web page or web site is listed in a search engine results. Generally, sites on the first page (or within the first 10 listings) generate significant visibility and traffic. Overall, saying a page is "listed" only means that it can be found within a search engine in response to a query, not that it necessarily ranks well for that query. Also called position.
57. Reciprocal Link: A mutually-agreed upon link exchange between two sites. See "Link Development."
58. Results Page: The page that is displayed after a search phrase is typed into a search engine. Also referred to as search engine results page or SERP.
59. Robots.txt: A file used to keep web pages from being indexed by search engines. The Robots Exclusion page provides official details.
60. Return-on-Investment (ROI): Historically associated with sales and marketing efforts; when applied to SEM efforts, refers to numerical, percentage or ratio of revenue generated over total cost of activities. ROI typically factors in paid placement and associated management costs, but a more detailed analysis may factor in profit (true cost). If ROI is measuring paid placement only, it is typically referred to as return on ad spend (ROAS).
61. RSS Feeds: Real simple syndication (RSS) is a relatively new and easy way to distribute content via the Internet. For email marketers, it is a way to distribute messages while avoiding spam filters. Typical applications include email newsletters, blogs or even Web sites. Similar to newsgroups, RSS feeds require a special "reader" like Bloglines or NewsGator to view messages.
62. Search Engine: Any service generally designed to allow users to search the web or a specialized database of information. Web search engines generally have paid listings and organic listings. Organic listings typically come from crawling the web, though often human-powered directory listings are also optionally offered. Top tier search engines include Google, MSN, Teoma and Yahoo!
63. Search Engine Marketing (SEM): The act of marketing a web site via search engines, whether this be improving rank in organic listings (search engine optimization), purchasing paid listings (PPC management) or a combination of these and other search engine-related activities (i.e. affiliate programs, shopping feeds or link development).
64. Search Engine Marketing Public Relations (SEM PR): The art of leveraging traditional PR materials to increase visibility and traffic via a hybrid of interactive PR strategies & tactics, including SEO, PPC and SMO. Tactics may include press release optimization and distribution, article syndication and social media outreach. See SEO PR article for more information.
65. Search Engine Optimization (SEO): The act of altering a web site so that it does well in the organic, crawler-based listings of search engines. In the past, has also been used as a term for any type of search engine marketing activity, though now the term search engine marketing is more commonly used as an umbrella term.
66. Search Engine Positioning (SEP): Synonymous with SEO, search engine positioning is the act of altering a web site to perform well in organic or natural search results.
67. Search Engine Results Page (SERP): A page of results generated by search engines based on weighted elements in each engine's algorithm. Each page typically consists of 10 URLs, with no more than 2 URLs per domain.
68. Search Engine Submission: The act of submitting specific URLs to popular search engines like Google, MSN and Yahoo! to ensure the web page gets spidered and indexed.
69. Search Personalization: The ability to personalize SERPs based on personal profile information, settings or location (IP address).
70. Search Terms: The words (or phrase) a searcher enters into a search engine's search box. Also used to refer to the terms a search engine marketer hopes a particular page will be found for. Also called keywords, query terms or query.
71. Shopping Search/Feeds: Shopping search engines allow shoppers to look for products and prices in a search environment for rapid and easy comparison. Premium placement can be purchased on some shopping search indices via "XML feeds."
72. Site Optimization: The act of fine-tuning web site content and code to perform well in search engine results. See "Search Engine Optimization."
73. Social Media: An umbrella term that defines the various activities that integrate technology, social interaction, and the construction of words and pictures. This interaction, and the manner in which information is presented, depends on the varied perspectives and "building" of shared meaning, as people share their stories, and understandings.
74. Social Media Marketing (SMM): A form of internet marketing which seeks to achieve branding and marketing communication goals through the participation in various social media networks (MySpace, Facebook, LinkedIn), social bookmarking (Digg, Stumbleupon), social media sharing (Flickr, YouTube), review/ratings sites (ePinions, BizRate), blogs, forums, news aggregators and virtual 3D networks (SecondLife, ActiveWorlds). Each social media site can be optimized to generate awareness or traffic. For more information, read Anvil's SMO article.
75. Social Media Monitoring & Analysis: The process of monitoring and analyzing data generated by social media and related marketing and optimization efforts. For more information, read Anvil's social media monitoring article.
76. Social Media Optimization (SMO): A set of methods for generating publicity through social media, online communities and community websites. Methods of SMO include adding RSS feeds, adding a "Digg This" button, blogging and incorporating third party community functionalities like Flickr photo slides and galleries or YouTube videos. Social media optimization is a form of search engine marketing.
77. Spam: Any search engine marketing method that a search engine deems to be detrimental to its efforts to deliver relevant, quality search results. Some search engines have written guidelines about what they consider to be spamming, but ultimately any activity a particular search engine deems harmful may be considered spam, whether or not there are published guidelines against it. Examples of spam include the creation of nonsensical doorway pages designed to please search engine algorithms rather than human visitors, or a heavy repetition of search terms on a page to increase keyword density. Also referred to as spamdexing.
78. Submission: The act to submitting a URL for inclusion into a search engine's index. Unless done through paid inclusion, submission generally does not guarantee listing. In addition, submission does not help with rank improvement on crawler-based search engines unless search engine optimization efforts have been implemented. Submission can be done manually (i.e., you fill out an online form and submit) or automated, where a software program or online service may process the forms behind the scenes.
79. Unique Visitor: A visitor that interacts with a site. They may interact more than once, but within analytics reporting, they are only counted one time.
80. Universal Search: Google's process of blending listings from its news, video, images, local and book search engines among those it gathers from crawling web pages.
81. Viral Marketing: Any marketing technique that induces Web sites or users to pass on a marketing message to other sites or users, creating a potentially exponential growth in the message's visibility and effect. See article, "Viral Marketing: Miracle Cure or Common Cold?" by Kent Lewis for more information.
82. Visitor Session: Interaction by a site visitor. The session ends when the visitor leaves the site.
83. Web 2.0: The use of World Wide Web technology and web design that aims to facilitate creativity, information sharing, and, most notably, collaboration among users. These concepts have led to the development and evolution of web-based communities and hosted services, such as social-networking sites, wikis, blogs, and folksonomies.
84. White Papers: Technical documents used primarily to generate leads for business-to-business technology companies. The technical papers typically include industry research, statistics and deep technical information. Download Anvil's SEO White Paper for an example of how it's done correctly.
85. XML Feeds: A form of paid inclusion where a search engine is "fed" information about pages via XML, rather than gathering that information through crawling actual pages. Marketers can pay to have their pages included in a spider based search index either annually per URL or on a CPC basis based on an XML document representing each page on the client site. New media types are being introduced into paid inclusion, including graphics, video, audio, and rich media. These feeds are commonly used for Shopping Feeds
Business Process Glossary
Business Process Design Glossary
A
Activity - a process, function or task that occurs over time with identifiable results. A business process is made up of several activities strung together
Activity Based Costing (ABC) - an accounting technique used to determine the costs associated with manufacturing and selling a product or service which does not take the organizational structure of the company into account
Activity model - a chart which represents a business process by demonstrating its activities and their interdependencies
B
Baseline - the current condition of a situation that differs from its previous or future representation
Benchmarking - the measurement of an assessment process which measures points throughout the progression of an activity against those of recognized leaders in order to set priorities and targets
Best practice - a methodology for accomplishing business tasks that is considered superior to all other methods
Business case - a structured proposal for business process improvement which includes an analysis of business process needs or challenges and the proposed solutions
Business objectives - an organization's tangible, precise, intentions that outline the measurement of their success for a given time period, e.g., decrease total costs by 20%, become the largest supplier of widgets in the United States
Business process - a set of associated procedures or activities with defined roles and relationships carried out to realize a business function in pursuit of business objectives
Business Process Design (BPD) - the creation of a business process
Business Process Improvement (BPI) - the improvement of an organization's business practices through the analysis of activities to reduce or eliminate inefficient or irrelevant activities that simultaneously improves quality, productivity, timeliness, or other strategic or business purposes, also called functional process improvement
Business Process Redesign (BPR) - see Business Process Reengineering
Business Process Reengineering (BPR) - a structured approach to transform and improve the methodology of manufacturing an organization's products or services which reduces resource requirements, also called business process redesign
C
Continuous process improvement - the commitment of a business to encourage and empower employees to improve business process design
Cross functional process improvement - business process redesign with the goal of eliminating stove pipe operations
E
Economic analysis - a method of comparing two or more ways of accomplishing a set objective, given the costs and benefits of each
Event - an external happening that causes a business to react
F
Function - roles, responsibilities, actions and activities specific to a company position or business department
Functional area - a grouping of actions or processes that categorize an aspect of a business
Functional Process Improvement - see Business Process Improvement
I
Information - knowledge, data, intelligence specific to an event or situation; a group of facts
Inventory Holding Cost - the sum total of all the costs associated with maintaining inventory
ISO 9000 - quality management and assurance standards adopted by the International Organization for Standardization (ISO)
J
Just in time (JIT) - a methodology that reduces inventory, wait time and spoilage in calling for the delivery of material, products or services at the exact period in which they are required. Effective use of JIT can reduce inventory holding cost.
K
Knowledge - understanding, familiarity, awareness
M
Management systems - software and other tools used by business managers to support business processes
Method - a system for carrying out a business process based on knowledge and information
O
Organization - a group of two or more people who work together to accomplish goals that can not be achieved alone
Organizational Dynamics - how an organization functions to accomplish its tasks
Organize - a strategic arrangement of an entity, space or process based on knowledge and information
Organization diagnostics - the process of identifying business challenges through study and accumulation of data
P
Paradigm - a philosophical and theoretical framework
Performance measure - an indicator used to evaluate progress towards business goals and objectives usually measured against a target or known standard
Procedural rules - a set of governing principles for taking action to accomplish a task, activity or carry out a role
Process - a systematic series of actions meant to achieve a specified end result
Process model - a chart or graphical depiction of a business process detailing the arrangement of task interdependency, controls, and allocated resources
Q
Quality - conformance to requirements
R
Redesign - see Business Process Redesign
Reengineering - see Business Process Reengineering
Resource - people, materials, technology, information and/or knowledge that serves to support a business function
S
Scenario - a sequence of operations carried out in a specific order to produce a specific result
Stove pipe - jargon referring to a business function that operates vertically but inefficiently or ineffectively, e.g. the marketing department does not coordinate their work with the sales department
T
Total Quality Management/Total Quality Leadership (TQM/TQL) - a business ideology in an organization that values continual improvement which integrates fundamental management techniques with improvement efforts and technology
Trigger - an event that generates a necessary response as per a set timeframe
V
Value added activity - an extraneous activity in a process that adds worth to the business function but is not considered essential
W
Workflow - an automated business process during which information (usually in the form of documents) or tasks are handed from one participant to another, based on some trigger, for their action set forth by a set of procedural rules
Workflow application - a computer software or online-based program that is used to more efficiently manage all or part of a business process that would otherwise not be automated
Workflow management systems - see management systems
Z
Zero Defects - a quality standard when the requirements are met
A
Activity - a process, function or task that occurs over time with identifiable results. A business process is made up of several activities strung together
Activity Based Costing (ABC) - an accounting technique used to determine the costs associated with manufacturing and selling a product or service which does not take the organizational structure of the company into account
Activity model - a chart which represents a business process by demonstrating its activities and their interdependencies
B
Baseline - the current condition of a situation that differs from its previous or future representation
Benchmarking - the measurement of an assessment process which measures points throughout the progression of an activity against those of recognized leaders in order to set priorities and targets
Best practice - a methodology for accomplishing business tasks that is considered superior to all other methods
Business case - a structured proposal for business process improvement which includes an analysis of business process needs or challenges and the proposed solutions
Business objectives - an organization's tangible, precise, intentions that outline the measurement of their success for a given time period, e.g., decrease total costs by 20%, become the largest supplier of widgets in the United States
Business process - a set of associated procedures or activities with defined roles and relationships carried out to realize a business function in pursuit of business objectives
Business Process Design (BPD) - the creation of a business process
Business Process Improvement (BPI) - the improvement of an organization's business practices through the analysis of activities to reduce or eliminate inefficient or irrelevant activities that simultaneously improves quality, productivity, timeliness, or other strategic or business purposes, also called functional process improvement
Business Process Redesign (BPR) - see Business Process Reengineering
Business Process Reengineering (BPR) - a structured approach to transform and improve the methodology of manufacturing an organization's products or services which reduces resource requirements, also called business process redesign
C
Continuous process improvement - the commitment of a business to encourage and empower employees to improve business process design
Cross functional process improvement - business process redesign with the goal of eliminating stove pipe operations
E
Economic analysis - a method of comparing two or more ways of accomplishing a set objective, given the costs and benefits of each
Event - an external happening that causes a business to react
F
Function - roles, responsibilities, actions and activities specific to a company position or business department
Functional area - a grouping of actions or processes that categorize an aspect of a business
Functional Process Improvement - see Business Process Improvement
I
Information - knowledge, data, intelligence specific to an event or situation; a group of facts
Inventory Holding Cost - the sum total of all the costs associated with maintaining inventory
ISO 9000 - quality management and assurance standards adopted by the International Organization for Standardization (ISO)
J
Just in time (JIT) - a methodology that reduces inventory, wait time and spoilage in calling for the delivery of material, products or services at the exact period in which they are required. Effective use of JIT can reduce inventory holding cost.
K
Knowledge - understanding, familiarity, awareness
M
Management systems - software and other tools used by business managers to support business processes
Method - a system for carrying out a business process based on knowledge and information
O
Organization - a group of two or more people who work together to accomplish goals that can not be achieved alone
Organizational Dynamics - how an organization functions to accomplish its tasks
Organize - a strategic arrangement of an entity, space or process based on knowledge and information
Organization diagnostics - the process of identifying business challenges through study and accumulation of data
P
Paradigm - a philosophical and theoretical framework
Performance measure - an indicator used to evaluate progress towards business goals and objectives usually measured against a target or known standard
Procedural rules - a set of governing principles for taking action to accomplish a task, activity or carry out a role
Process - a systematic series of actions meant to achieve a specified end result
Process model - a chart or graphical depiction of a business process detailing the arrangement of task interdependency, controls, and allocated resources
Q
Quality - conformance to requirements
R
Redesign - see Business Process Redesign
Reengineering - see Business Process Reengineering
Resource - people, materials, technology, information and/or knowledge that serves to support a business function
S
Scenario - a sequence of operations carried out in a specific order to produce a specific result
Stove pipe - jargon referring to a business function that operates vertically but inefficiently or ineffectively, e.g. the marketing department does not coordinate their work with the sales department
T
Total Quality Management/Total Quality Leadership (TQM/TQL) - a business ideology in an organization that values continual improvement which integrates fundamental management techniques with improvement efforts and technology
Trigger - an event that generates a necessary response as per a set timeframe
V
Value added activity - an extraneous activity in a process that adds worth to the business function but is not considered essential
W
Workflow - an automated business process during which information (usually in the form of documents) or tasks are handed from one participant to another, based on some trigger, for their action set forth by a set of procedural rules
Workflow application - a computer software or online-based program that is used to more efficiently manage all or part of a business process that would otherwise not be automated
Workflow management systems - see management systems
Z
Zero Defects - a quality standard when the requirements are met
Wednesday, February 4, 2009
Suchit Singhal View for Job Market in 2009
Job market @ 2009
When work shrinks, what happens to workers? It really depends how much the work has shrunk and for how long. The Indian job Market is desperately searching for answers to these questions. Although work has reduced in varying degrees across sectors, what companies still don't know is whether the reduction is temporary or not. Confronted with this confusion, the HR respoNSE has so far been ad hoc both on hiring and firing.
Though the pink slip syndrome is getting increasingly evident in financial services, media, retail and aviation it's not widespread as yet. It's the hiring freeze that's more evident. And that itself is a big change for a job Market where companies were piling up talent at all levels till as late as the third quarter of 2008.
The suddenness and enormity of the downturn has made most HR heads believe that the worst is yet to come. While hirings will continue, 2009 could well be the worst year in the last 10 years in terms of recruitments as well as compensation and increments.
So, is there a bloodbath ahead on the job street? It's difficult to predict, say most recruiters. It is tough to estimate how the job Market will be, but we are optimistic. Surely there are headwinds, but it's not complete gloom, says E. Balaji, CEO, Ma Foi Consultants.
Talking of sectors, IT companies are likely to start hiring in 2009, but not in large numbers. IT was hit hard early in 2008 during the subprime crisis in the US. It has seen the churn and has bottomed out, says Sampath Shetty, Vice President (Permanent Staffing), TeamLease Services. Speak to HR heads and recruiters and you realise, most of the sectors are hiring, but are armed with a strategy. Organisations are looking for certain skills and are hiring only crucial talent. In 2009, recruitment will move from mass hiring (Spray and Pray) to targeted hiring (Sniping), says Pradeep Bahirwani, Vice President, Talent Acquisition at Wipro Technologies. This means that employees with certain skillsets are still being sought after at least in IT. On the flip side, this also means that hirings will certainly be impacted at the freshers' level because organisations do not need numbers.
Among other sectors, banking and financial services are unlikely to see a turnaround, though insurance will be an exception and will continue to hire. Private banks in growth phase such as Axis Bank will continue to recruit, so will a large number of PSU banks. Recruitments for FMCG and telecom are likely to be on track. Retail is in a wait-and-watch mode and while pharma will hire, it will again not be a big job creator.
The logical outcome of cost cutting across the industry will mean reduced headcounts and no replacement recruitment. This is because employee cost is going to be a key factor in improving the bottom line of a company. What does this mean for the paypackets? The variable pay component will dip till the situation improves. Clearly, there would not be any quantum jumps in salary. Right-pricing of talent will continue, says Neelam Gill Malhotra, Vice President and Head (HR), CSC India.
Compensation experts believe that increments in 2009-10 could well be inflation-hedged. Based on this, Omam Consultants predicts an average salary increase of 8 per cent in 2009-10. However, don't bank on it yet. As companies are facing pressure on cost, they will start looking at freezing increments. Omam points out that an important factor this year would be that increments will not be for all or across all levels.
That said, another reality check may come in the form of salary cuts. Aviation, retail, financial services and realty sectors are already seeing this trend. Compensation experts say organisations that have doled out more frenzied hikes in times of growth are likely to be the first to go for pruning. While optimists will dispute it, the scare on job street is no passing cloud.
When work shrinks, what happens to workers? It really depends how much the work has shrunk and for how long. The Indian job Market is desperately searching for answers to these questions. Although work has reduced in varying degrees across sectors, what companies still don't know is whether the reduction is temporary or not. Confronted with this confusion, the HR respoNSE has so far been ad hoc both on hiring and firing.
Though the pink slip syndrome is getting increasingly evident in financial services, media, retail and aviation it's not widespread as yet. It's the hiring freeze that's more evident. And that itself is a big change for a job Market where companies were piling up talent at all levels till as late as the third quarter of 2008.
The suddenness and enormity of the downturn has made most HR heads believe that the worst is yet to come. While hirings will continue, 2009 could well be the worst year in the last 10 years in terms of recruitments as well as compensation and increments.
So, is there a bloodbath ahead on the job street? It's difficult to predict, say most recruiters. It is tough to estimate how the job Market will be, but we are optimistic. Surely there are headwinds, but it's not complete gloom, says E. Balaji, CEO, Ma Foi Consultants.
Talking of sectors, IT companies are likely to start hiring in 2009, but not in large numbers. IT was hit hard early in 2008 during the subprime crisis in the US. It has seen the churn and has bottomed out, says Sampath Shetty, Vice President (Permanent Staffing), TeamLease Services. Speak to HR heads and recruiters and you realise, most of the sectors are hiring, but are armed with a strategy. Organisations are looking for certain skills and are hiring only crucial talent. In 2009, recruitment will move from mass hiring (Spray and Pray) to targeted hiring (Sniping), says Pradeep Bahirwani, Vice President, Talent Acquisition at Wipro Technologies. This means that employees with certain skillsets are still being sought after at least in IT. On the flip side, this also means that hirings will certainly be impacted at the freshers' level because organisations do not need numbers.
Among other sectors, banking and financial services are unlikely to see a turnaround, though insurance will be an exception and will continue to hire. Private banks in growth phase such as Axis Bank will continue to recruit, so will a large number of PSU banks. Recruitments for FMCG and telecom are likely to be on track. Retail is in a wait-and-watch mode and while pharma will hire, it will again not be a big job creator.
The logical outcome of cost cutting across the industry will mean reduced headcounts and no replacement recruitment. This is because employee cost is going to be a key factor in improving the bottom line of a company. What does this mean for the paypackets? The variable pay component will dip till the situation improves. Clearly, there would not be any quantum jumps in salary. Right-pricing of talent will continue, says Neelam Gill Malhotra, Vice President and Head (HR), CSC India.
Compensation experts believe that increments in 2009-10 could well be inflation-hedged. Based on this, Omam Consultants predicts an average salary increase of 8 per cent in 2009-10. However, don't bank on it yet. As companies are facing pressure on cost, they will start looking at freezing increments. Omam points out that an important factor this year would be that increments will not be for all or across all levels.
That said, another reality check may come in the form of salary cuts. Aviation, retail, financial services and realty sectors are already seeing this trend. Compensation experts say organisations that have doled out more frenzied hikes in times of growth are likely to be the first to go for pruning. While optimists will dispute it, the scare on job street is no passing cloud.
Suchit Singhal View on Current Economical Crisis
The Current Economical Crisis—Causes and Consequences
Report- 1
It is not yet clear whether we stand at the start of a long fiscal crisis or one that will pass relatively quickly, like most other post-World War II recessions. The full extent will only become obvious in the years to come. But if we want to avoid future deep financial meltdowns of this or even greater magnitude, we must address the root causes.
In my estimation two critical and related factors created the current crisis. First, profligate lending which allowed many people to buy overpriced properties that they could not, in reality, afford. Second, the existence of excessive land use regulation which helped drive prices up in many of the most impacted markets.
Profligate lending all by itself would not likely have produced the financial crisis. It took a toxic connection with excessive land-use regulation. In some metropolitan markets, land use restrictions, such as urban growth boundaries, building moratoria and large areas made off-limits to development propelled house prices to unprecedented levels, leading to severely higher mortgage exposures. On the other hand, where land regulation was not so severe, in the traditionally regulated markets, such as in Texas, Georgia and much of the US Midwest and South there were only modest increases in relative house prices. If the increase in mortgage exposures around the country had been on the order of those sustained in traditionally regulated markets, the financial losses would have been far less. Here is a primer on the process:
The International Financial Crisis Started with Losses in the US Housing Market: There is general agreement that the US housing bubble was the proximate cause for the most severe financial crisis (in the US) since the Great Depression. This crisis has spread to other parts of the world, if for no other reason than the huge size of the American economy.
Root Cause #1 (Macro-Economic): Profligate Lending Led to Losses: Profligate lending, a macro-economic factor, occurred throughout all markets in the United States. The greater availability of mortgage funding predictably led to greater demand for housing, as people who could not have previously qualified for credit received loans (“subprime” borrowers) and others qualified for loans far larger than they could have secured in the past (“prime” borrowers). When over-stretched, subprime and prime borrowers were unable to make their mortgage payments, the delinquency and foreclosure rates could not be absorbed by the lenders (and those which held or bought the "toxic" paper). This undermined the mortgage market, leading to the failures of firms like Bear Stearns and Lehman Brothers and the virtual failures of Fannie Mae and Freddie Mac. In this era of interconnected markets, this unprecedented reversal reverberated around the world.
Root Cause #2 (Micro-Economic): Excessive Land Use Regulation Exacerbated Losses: Profligate lending increased the demand for housing. This demand, however, produced far different results in different metropolitan areas, depending in large part upon the micro-economic factor of land use regulation. In some metropolitan markets, land use restrictions propelled prices and led to severely higher mortgage exposures. On the other hand, where land regulation was not so severe, in the traditionally regulated markets, there were only modest increases in relative house prices. If the increase in mortgage exposures around the country had been on the order of those sustained in traditionally regulated markets, the financial losses would have been far less. This “two-Americas” nature of the housing bubble was noted by Nobel Laureate Paul Krugman more than three years ago. Krugman noted that the US housing bubble was concentrated in areas with stronger land use regulation. Indeed, the housing bubble is by no means pervasive. Krugman and others have identified the single identifiable difference. The bubble – the largest relative housing price increases – occurred in metropolitan markets that have strong restrictions on land use (called “smart growth,” “urban consolidation,” or “compact city” policy). Metropolitan markets that have the more liberal and traditional land use regulation experienced little relative increase in housing prices. Unlike the more strongly regulated markets, the traditionally regulated markets permitted a normal supply response to the higher market demand created by the profligate lending. This disparate price performance is evidence of a well established principle of economics in operation – that shortages and rationing lead to higher prices.
Among the 50 metropolitan areas with more than 1,000,000 population, 25 have significant land use restrictions and 25 are more liberally regulated. The markets with liberal land use regulation were generally able to absorb from the excess of profligate lending at historic price norms (Median Multiple, or median house price divided by median household income, of 3.0 or less), while those with restrictive land use regulation were not.
Moreover, the demand was greater in the more liberal markets, not the restrictive markets. Since 2000, population growth has been at least four times as high in the traditional metropolitan markets as in the more regulated markets. The ultimate examples are liberally regulated Atlanta, Dallas-Fort Worth and Houston, the fastest growing metropolitan areas in the developed world with more than 5,000,000 population, where prices have remained within historic norms. Indeed, the more restrictive markets have seen a huge outflow of residents to the markets with traditional land use regulation (see: http://www.demographia.com/db-haffmigra.pdf).
Toxic Mortgages are Concentrated Where there is Excessive Land Use Regulation: The overwhelming share of the excess increase in US house prices and mortgage exposures relative to incomes has occurred in the restrictive land use markets. Our analysis of Federal Reserve and US Bureau of the Census data shows that these over-regulated markets accounted for upwards of 80% of “overhang” of an estimated $5.3 billion in overinflated mortgages.
Without Smart Growth, World Financial Losses Would Have Been Far Less: If supply markets had not been constrained by excessive land use regulation, the financial crisis would have been far less severe. Instead of a more than $5 Trillion housing bubble, a more likely scenario would have been at most a $0.5 Trillion housing bubble. Mortgage losses would have been at least that much less, something now defunct investors and the market probably could have handled.
While the current financial crisis would not have occurred without the profligate lending that became pervasive in the United States, land use rationing policies of smart growth clearly intensified the problem and turned what may have been a relatively minor downturn into a global financial meltdown.
Never Again: All of the analyst talk about whether we are “slipping into a recession” misses the point. For those whose retirement accounts have been wiped out, or stock in financial companies has been made worthless, those who have lost their jobs and homes, this might as well be another Great Depression. These people now have little prospect of restoring their former standard of living. Then there is the much larger number of people whose lives are more indirectly impacted – the many households and people toward the lower end of the economic ladder who have far less hope of achieving upward mobility.
All of this leads to the bottom line. It is crucial that smart growth’s toxic land rationing policies be dismantled as quickly as possible. Otherwise, there could be further smart growth economic crises ahead, or, perhaps even worse, a further freezing of economic opportunity for future generations
Report- 2
The house of cards built on easy credit has finally come tumbling down, triggered by the failure of one of the most flimsy of the cards, subprime mortgages. We'll look at the causes—it's important to understand causes if one has any reasonable chance of analyzing the present and assessing the outlook—and weigh the likely outcome of the government's actions. Not to keep you in suspense any longer, we believe the bailout and associated actions, adding yet more credit to an economy already over-ripe with easy credit, far from solving the problem (i.e., getting banks to lend again), will make matters ultimately worse, by postponing the necessary adjustments, building up inflation, and destroying the dollar and its purchasing power, devastating savers and undermining the foundations of the economy. This will be a protracted slowdown as corporations and households de-lever and attempt to restore some health to broken balance sheets. Nevertheless—to jump ahead to the critical conclusion for investors we'll discuss next time—we are far beyond the time for wholesale liquidation, if it means selling quality companies well below their intrinsic values. It may be too early for aggressive across-the-board buying, but remember the words of the late, great John Templeton, who advised us to “buy at the point of maximum pessimism.” What Brought Us Here? It is critical to start by analyzing the causes of the problem, and assessing the likely outcome. Only by understanding that, can we hope to know what to do. So what brought us here, and what's next? The root cause of our current problems is clear: excess credit creation over these many years. Too much money and artificially low interest rates always and inevitably lead to speculation and mal-investment. Whatever excesses there have been on Wall Street—and there have been many, as well as the abject ignoring of any sense of fiduciary responsibility—nonetheless, blaming “Wall Street speculators” for the mess is a little like blaming a drunk child when the parent left the open bottle in the playpen. Critical to understand is that this is not a normal cyclical downturn. Such is triggered by tightening money and higher rates in a deliberate attempt to cool an “overheated” economy and restrain inflation. The resulting recession can be sharp but is typically short. Similarly, it is relatively easy to get out of a cyclical recession: do the opposite of what triggered it, that is, ease money and lower rates. But this is not a cyclical downturn; it is, rather, a secular de-leveraging contraction. Tighter money and higher rates did not trigger it, and easing money and lowering rates will not get us out of it. Au contraire. We currently have easy money and low rates, rates that are actually negative at the short end. And easier money and even lower rates, such as we've seen over the past year, have not helped. (Indeed, despite the Fed slashing the overnight loan rate from 5¼% to 2% in the seven months to April, rates in the real market—mortgage rates, credit card rates, etc.—actually increased and, of course, available credit contracted.) This is important to recognize. Selling Begets Selling Thus, this de-leveraging process is likely to be a protracted process as banks, other firms, and households restore health to their balance sheets. But such a process feeds on itself, as we have all-too-painfully seen this year. Companies sell assets to raise capital, which pushes down prices, which forces others to raise capital, pushing prices down further, which causes banks to contract credit. And as banks contract, small businesses have difficulties, reducing purchases, and so on. So much of the selling in the market has been forced (by financial companies needing to raise capital to meet ratios; by investor receiving margin calls, and funds getting redemptions). The waves of forced selling then cause panic among investors, leading to the very worst kind of selling, blind liquidation of thinly traded securities into down markets. This can, and has, driven prices down sharply and suddenly. Will the Bailout Work? The banks have no capacity or appetite for lending, which is why lower rates haven't helped. And why, given that for investment banks to reduce their average leverage from 30 times to 20 times would require that $6 trillion of assets be sold, the government's $700 billion bailout won't change the picture either. (Another question: Do they buy bad assets at prevailing prices, in which case it won't improve banks' capital ratios at all, or do they defraud the taxpayer and buy back at above-market prices, as Paulson seemingly wanted to do?) It may plug a hole short term, but it doesn't mean the banks open up and start lending again. Washington is attempting to solve the problem by doing more of what caused the problem in the first place (and—greatest irony and travesty of all—with the very same people in charge who caused the problem in the first place, who encouraged the excesses, and who didn't see the problem until too late). By trying to keep asset prices up, Washington is repeating the error of the 1930s and ensuring that the downturn lasts longer. No parallel is precise, but we might look at what happened when Japan's stock market and real estate bubbles burst at the beginning of the 1990s. The Bank of Japan slashed rates, down to ½% on long-term government bonds, and bought up bad assets from the bankrupt banks. (They didn't open the monetary spigots, as has Washington.) Neither high interest rates of shaky banks have been a problem in Japan for many years. But that didn't cause banks to resume lending. Japan also increased deposit insurance (covering accounts in full until 2006.) That simply slowed the needed restructuring, and caused the banks to withdraw, as The Wall Street Journa l put it, “led to the establishment of zombie banks.” There has been essentially zero net capital investment in Japan in the last 15 years. Despite near-invisible interest rates and strong banks, Japan has been in either recession of deflation (or both) for most of the past 18 years. And Japan had one huge advantage over the U.S. today, namely that households had low debt and high savings. It's Not Pretty Ahead Not only will current policies not solve the problem, they protract the downturn and delay the needed resolution. But they make matters worse by ensuring more inflation, already at a 17-year high in the U.S., adding another disincentive to save. Taxes will go up, further suppressing economic growth or chances of a recovery. The likely result is a severe case of stagflation So the economy is likely to enter a recession soon, but it will be a long and painful experience coming out of it, a protracted period of sluggishness, with other economic problems. And the market, likewise, is likely to be sluggish for some time, though once we see some stability return, specific sectors and individual companies will recover sooner, while we will see short-term rallies. Next time, we'll look at the outlook for various markets, including, most importantly, the dollar, and then discuss how investors should act in the current crisis (clue: don't dump quality companies below their intrinsic value into a declining market).
Report- 1
It is not yet clear whether we stand at the start of a long fiscal crisis or one that will pass relatively quickly, like most other post-World War II recessions. The full extent will only become obvious in the years to come. But if we want to avoid future deep financial meltdowns of this or even greater magnitude, we must address the root causes.
In my estimation two critical and related factors created the current crisis. First, profligate lending which allowed many people to buy overpriced properties that they could not, in reality, afford. Second, the existence of excessive land use regulation which helped drive prices up in many of the most impacted markets.
Profligate lending all by itself would not likely have produced the financial crisis. It took a toxic connection with excessive land-use regulation. In some metropolitan markets, land use restrictions, such as urban growth boundaries, building moratoria and large areas made off-limits to development propelled house prices to unprecedented levels, leading to severely higher mortgage exposures. On the other hand, where land regulation was not so severe, in the traditionally regulated markets, such as in Texas, Georgia and much of the US Midwest and South there were only modest increases in relative house prices. If the increase in mortgage exposures around the country had been on the order of those sustained in traditionally regulated markets, the financial losses would have been far less. Here is a primer on the process:
The International Financial Crisis Started with Losses in the US Housing Market: There is general agreement that the US housing bubble was the proximate cause for the most severe financial crisis (in the US) since the Great Depression. This crisis has spread to other parts of the world, if for no other reason than the huge size of the American economy.
Root Cause #1 (Macro-Economic): Profligate Lending Led to Losses: Profligate lending, a macro-economic factor, occurred throughout all markets in the United States. The greater availability of mortgage funding predictably led to greater demand for housing, as people who could not have previously qualified for credit received loans (“subprime” borrowers) and others qualified for loans far larger than they could have secured in the past (“prime” borrowers). When over-stretched, subprime and prime borrowers were unable to make their mortgage payments, the delinquency and foreclosure rates could not be absorbed by the lenders (and those which held or bought the "toxic" paper). This undermined the mortgage market, leading to the failures of firms like Bear Stearns and Lehman Brothers and the virtual failures of Fannie Mae and Freddie Mac. In this era of interconnected markets, this unprecedented reversal reverberated around the world.
Root Cause #2 (Micro-Economic): Excessive Land Use Regulation Exacerbated Losses: Profligate lending increased the demand for housing. This demand, however, produced far different results in different metropolitan areas, depending in large part upon the micro-economic factor of land use regulation. In some metropolitan markets, land use restrictions propelled prices and led to severely higher mortgage exposures. On the other hand, where land regulation was not so severe, in the traditionally regulated markets, there were only modest increases in relative house prices. If the increase in mortgage exposures around the country had been on the order of those sustained in traditionally regulated markets, the financial losses would have been far less. This “two-Americas” nature of the housing bubble was noted by Nobel Laureate Paul Krugman more than three years ago. Krugman noted that the US housing bubble was concentrated in areas with stronger land use regulation. Indeed, the housing bubble is by no means pervasive. Krugman and others have identified the single identifiable difference. The bubble – the largest relative housing price increases – occurred in metropolitan markets that have strong restrictions on land use (called “smart growth,” “urban consolidation,” or “compact city” policy). Metropolitan markets that have the more liberal and traditional land use regulation experienced little relative increase in housing prices. Unlike the more strongly regulated markets, the traditionally regulated markets permitted a normal supply response to the higher market demand created by the profligate lending. This disparate price performance is evidence of a well established principle of economics in operation – that shortages and rationing lead to higher prices.
Among the 50 metropolitan areas with more than 1,000,000 population, 25 have significant land use restrictions and 25 are more liberally regulated. The markets with liberal land use regulation were generally able to absorb from the excess of profligate lending at historic price norms (Median Multiple, or median house price divided by median household income, of 3.0 or less), while those with restrictive land use regulation were not.
Moreover, the demand was greater in the more liberal markets, not the restrictive markets. Since 2000, population growth has been at least four times as high in the traditional metropolitan markets as in the more regulated markets. The ultimate examples are liberally regulated Atlanta, Dallas-Fort Worth and Houston, the fastest growing metropolitan areas in the developed world with more than 5,000,000 population, where prices have remained within historic norms. Indeed, the more restrictive markets have seen a huge outflow of residents to the markets with traditional land use regulation (see: http://www.demographia.com/db-haffmigra.pdf).
Toxic Mortgages are Concentrated Where there is Excessive Land Use Regulation: The overwhelming share of the excess increase in US house prices and mortgage exposures relative to incomes has occurred in the restrictive land use markets. Our analysis of Federal Reserve and US Bureau of the Census data shows that these over-regulated markets accounted for upwards of 80% of “overhang” of an estimated $5.3 billion in overinflated mortgages.
Without Smart Growth, World Financial Losses Would Have Been Far Less: If supply markets had not been constrained by excessive land use regulation, the financial crisis would have been far less severe. Instead of a more than $5 Trillion housing bubble, a more likely scenario would have been at most a $0.5 Trillion housing bubble. Mortgage losses would have been at least that much less, something now defunct investors and the market probably could have handled.
While the current financial crisis would not have occurred without the profligate lending that became pervasive in the United States, land use rationing policies of smart growth clearly intensified the problem and turned what may have been a relatively minor downturn into a global financial meltdown.
Never Again: All of the analyst talk about whether we are “slipping into a recession” misses the point. For those whose retirement accounts have been wiped out, or stock in financial companies has been made worthless, those who have lost their jobs and homes, this might as well be another Great Depression. These people now have little prospect of restoring their former standard of living. Then there is the much larger number of people whose lives are more indirectly impacted – the many households and people toward the lower end of the economic ladder who have far less hope of achieving upward mobility.
All of this leads to the bottom line. It is crucial that smart growth’s toxic land rationing policies be dismantled as quickly as possible. Otherwise, there could be further smart growth economic crises ahead, or, perhaps even worse, a further freezing of economic opportunity for future generations
Report- 2
The house of cards built on easy credit has finally come tumbling down, triggered by the failure of one of the most flimsy of the cards, subprime mortgages. We'll look at the causes—it's important to understand causes if one has any reasonable chance of analyzing the present and assessing the outlook—and weigh the likely outcome of the government's actions. Not to keep you in suspense any longer, we believe the bailout and associated actions, adding yet more credit to an economy already over-ripe with easy credit, far from solving the problem (i.e., getting banks to lend again), will make matters ultimately worse, by postponing the necessary adjustments, building up inflation, and destroying the dollar and its purchasing power, devastating savers and undermining the foundations of the economy. This will be a protracted slowdown as corporations and households de-lever and attempt to restore some health to broken balance sheets. Nevertheless—to jump ahead to the critical conclusion for investors we'll discuss next time—we are far beyond the time for wholesale liquidation, if it means selling quality companies well below their intrinsic values. It may be too early for aggressive across-the-board buying, but remember the words of the late, great John Templeton, who advised us to “buy at the point of maximum pessimism.” What Brought Us Here? It is critical to start by analyzing the causes of the problem, and assessing the likely outcome. Only by understanding that, can we hope to know what to do. So what brought us here, and what's next? The root cause of our current problems is clear: excess credit creation over these many years. Too much money and artificially low interest rates always and inevitably lead to speculation and mal-investment. Whatever excesses there have been on Wall Street—and there have been many, as well as the abject ignoring of any sense of fiduciary responsibility—nonetheless, blaming “Wall Street speculators” for the mess is a little like blaming a drunk child when the parent left the open bottle in the playpen. Critical to understand is that this is not a normal cyclical downturn. Such is triggered by tightening money and higher rates in a deliberate attempt to cool an “overheated” economy and restrain inflation. The resulting recession can be sharp but is typically short. Similarly, it is relatively easy to get out of a cyclical recession: do the opposite of what triggered it, that is, ease money and lower rates. But this is not a cyclical downturn; it is, rather, a secular de-leveraging contraction. Tighter money and higher rates did not trigger it, and easing money and lowering rates will not get us out of it. Au contraire. We currently have easy money and low rates, rates that are actually negative at the short end. And easier money and even lower rates, such as we've seen over the past year, have not helped. (Indeed, despite the Fed slashing the overnight loan rate from 5¼% to 2% in the seven months to April, rates in the real market—mortgage rates, credit card rates, etc.—actually increased and, of course, available credit contracted.) This is important to recognize. Selling Begets Selling Thus, this de-leveraging process is likely to be a protracted process as banks, other firms, and households restore health to their balance sheets. But such a process feeds on itself, as we have all-too-painfully seen this year. Companies sell assets to raise capital, which pushes down prices, which forces others to raise capital, pushing prices down further, which causes banks to contract credit. And as banks contract, small businesses have difficulties, reducing purchases, and so on. So much of the selling in the market has been forced (by financial companies needing to raise capital to meet ratios; by investor receiving margin calls, and funds getting redemptions). The waves of forced selling then cause panic among investors, leading to the very worst kind of selling, blind liquidation of thinly traded securities into down markets. This can, and has, driven prices down sharply and suddenly. Will the Bailout Work? The banks have no capacity or appetite for lending, which is why lower rates haven't helped. And why, given that for investment banks to reduce their average leverage from 30 times to 20 times would require that $6 trillion of assets be sold, the government's $700 billion bailout won't change the picture either. (Another question: Do they buy bad assets at prevailing prices, in which case it won't improve banks' capital ratios at all, or do they defraud the taxpayer and buy back at above-market prices, as Paulson seemingly wanted to do?) It may plug a hole short term, but it doesn't mean the banks open up and start lending again. Washington is attempting to solve the problem by doing more of what caused the problem in the first place (and—greatest irony and travesty of all—with the very same people in charge who caused the problem in the first place, who encouraged the excesses, and who didn't see the problem until too late). By trying to keep asset prices up, Washington is repeating the error of the 1930s and ensuring that the downturn lasts longer. No parallel is precise, but we might look at what happened when Japan's stock market and real estate bubbles burst at the beginning of the 1990s. The Bank of Japan slashed rates, down to ½% on long-term government bonds, and bought up bad assets from the bankrupt banks. (They didn't open the monetary spigots, as has Washington.) Neither high interest rates of shaky banks have been a problem in Japan for many years. But that didn't cause banks to resume lending. Japan also increased deposit insurance (covering accounts in full until 2006.) That simply slowed the needed restructuring, and caused the banks to withdraw, as The Wall Street Journa l put it, “led to the establishment of zombie banks.” There has been essentially zero net capital investment in Japan in the last 15 years. Despite near-invisible interest rates and strong banks, Japan has been in either recession of deflation (or both) for most of the past 18 years. And Japan had one huge advantage over the U.S. today, namely that households had low debt and high savings. It's Not Pretty Ahead Not only will current policies not solve the problem, they protract the downturn and delay the needed resolution. But they make matters worse by ensuring more inflation, already at a 17-year high in the U.S., adding another disincentive to save. Taxes will go up, further suppressing economic growth or chances of a recovery. The likely result is a severe case of stagflation So the economy is likely to enter a recession soon, but it will be a long and painful experience coming out of it, a protracted period of sluggishness, with other economic problems. And the market, likewise, is likely to be sluggish for some time, though once we see some stability return, specific sectors and individual companies will recover sooner, while we will see short-term rallies. Next time, we'll look at the outlook for various markets, including, most importantly, the dollar, and then discuss how investors should act in the current crisis (clue: don't dump quality companies below their intrinsic value into a declining market).
Wednesday, January 14, 2009
Micro Economic Situation
Hello,
My Name is Suchit Singhal, an IT professional staying in Delhi and working in a Software Development company.
I invite you, your associate & your friend for free blogging.
Please share your thought & idea on “Micro Economic Situation”
Keep blogging…..
Regards,
Suchit Singhal
My Name is Suchit Singhal, an IT professional staying in Delhi and working in a Software Development company.
I invite you, your associate & your friend for free blogging.
Please share your thought & idea on “Micro Economic Situation”
Keep blogging…..
Regards,
Suchit Singhal
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