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How Does Google AdWords Work? Ad Position

By Ayo Ijidakinro



Summary: Google has published an excellent video explaining how Google AdWords works and gives insight on how ad position is determined. I recommend that any website owner watch this video to understand how he can advertise his website effectively using Google AdWords.

Google Ads are ranked by a metric Google calls Quality Score and the amount advertisers are offering to pay per click. Though many advertisers try to improve the position of their ad by offering to pay more money, improving your ad's Quality Score is often a better approach. Why? Better quality ads generate more business and save money.

Optimizing for Google's Quality Score can help you, because the way Google calculates ad quality is generally in the end-user's (e.g. your customer's) best interest. Better quality ads are probably going to be clicked more often, result in better qualified leads, and thus are more likely to lead to a purchase.

Again, I highly recommend you watch the entire video!



Related Articles:


Get Elastic. 2009. "PPC Myth Week Pt 2: Bid Higher to Appear Higher"
The Click Equations Blog. 2009. "The Preface: Quality Score in High Resolution"

Promotions:

Building link popularity is not an easy task especially for those who don't know much about search engine optimization.
MatrixMT has services to help you.

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How Can Freely Sharing Articles You Author Help You Build Business?

By Ayo Ijidakinro

An image of two kids sharing an ice cream cone can teach us a lesson about sharing expertise on our website to grow business.
Make friends with your customers, both potential and existing, by giving freely.

Summary: Customers ignore advertisements because advertisements saturate our lives and we've learned most of them can't be trusted. So how can you reach ad-weary customers? By freely educating them. If a customer can learn something valuable from you, they are more likely to respect you, trust you, remember you, and recommend you. This technique is often called "Content Marketing." To help you better understand what Content Marketing is and how it can help your company, I thought it would be helpful to share an excellent definition I found on Wikipedia today.

Which is a customer more likely to ignore, a helpful article or a traditional advertisement? Which is a customer more likely to show to colleagues, an educational video or a video advertisement?

Freely sharing helpful articles, videos, etc. to grow your business is an effective method called "Content Marketing." Below is a definition of Content Marketing from Wikipedia.org:
"Content marketing is an umbrella term encompassing all marketing formats that involve the creation or sharing of content for the purpose of engaging current and potential consumer bases. In contrast to traditional marketing methods that aim to increase sales or awareness through interruption techniques, content marketing subscribes to the notion that delivering high-quality, relevant and valuable information to prospects and customers drives profitable consumer action.

The idea of sharing content as a means of persuading decision-making has driven content marketers to make their once-proprietary informational assets available to selected audiences. Alternatively, many content marketers choose to create new information and share it via any and all media. Content marketing products frequently take the form of custom magazines, print or online newsletters, digital content, websites or microsites, white papers, webcasts/webinars, podcasts, video portals or series, in-person roadshows, roundtables, interactive online, email, events. The purpose of this information is not to spout the virtues of the marketer’s own products or services, but to inform target customers and prospects about key industry issues, sometimes involving the marketer’s products. The motivation behind content marketing is the belief that educating the customer results in the brand’s recognition as a thought leader and industry expert.

Marketers may use content marketing as a means of achieving a variety of business goals, such as thought leadership, lead generation, increasing direct sales, improving retention and more.

Content marketing is the underlying philosophy driving techniques such as custom media, custom publishing, database marketing, brand marketing, branded entertainment and branded content." (Wikipedia, 2008.)
Put simply, Content Marketing allows you to build a closer relationship with the customer than mere advertising can provide by freely giving him with educational articles, audio, video, that address his problems and also demonstrate your company's value and expertise.

So do not delay. Start sharing your expertise with your existing and potential customers by writing articles with solutions to their problems and placing them prominently on your website, sending them out in email, and using any other reasonable method. If you share your expertise freely, you will generate goodwill and will gain the potential customer's attention, respect, and business. However, if you do not share your expertise freely, customers will incorrectly assume that you don't share information because you don't have their interests in mind, or worse you don't have the expertise you claim to have. As a result, they will take their business to a more convincing competitor. So apply this saying to your expertise, "Practice giving and people will give to you."

References

Wikepedia. 2008. "Content marketing."


This definition of Content Marketing was shared under the terms of the Wikipedia Licensing agreement.

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Vertical Measures provides link building services.

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Guest Article: How can Patience Provide Rewarding Sales Growth?

By Ayo Ijidakinro

Image from the blog homepage of lightninglabels.com
What lessons can we learn from the success of LightningLabels.com?

Summary: Over a 2 year period, Peter Renton's blog has helped him grow his website, lightninglabels.com, from zero visitors to 22,000 visitors per month (Compete.com, 2008). This is impressive for a business with such a small niche. Today, Peter is going to discuss the rewards of patience as you build your website and how he benefited from writing a business blog. Recently, Peter estimated that his blog drives at least $2,000 per month of additional business to his website. I hope you enjoy this article.

I believe every business should have a blog, but to launch a successful blog you need to be patient and committed. You simply cannot judge the success of your blog for at least 12 months, so you need to continually update your blog even when few people are reading it. Unless you are very lucky or famous, building blog traffic is a slow and gradual process.

A blog can do a number of things for a business. First and foremost, it should provide a more personal face for your company. The blog author or authors should be visible and be allowed to write in a personal, conversational tone. A blog is not about telling the world how great you are; you should leave that to your main site. Instead, you should use your blog to educate and inform, and possibly entertain if it is appropriate.

When you start writing your blog you should do a handful of posts and then announce to the world that you have a blog. You can do online press releases, contact industry publications, email your customer list and get the word out any way you can. This should provide an initial bump in traffic for you which will hopefully result in a number of regular readers.

Our company blog is now two years old, and is the oldest blog in our industry. For many months, though, I would write blog posts and look at the traffic and be disappointed. Here is the breakdown of approximate number of daily visitors and how it has grown:

MonthDaily Visitors
3rd25
6th31
9th45
12th 65
18th114
24th147
The numbers above are for unique visitors viewing pages on the blog web site, but with any blog you can subscribe to the content without visiting the site by using an RSS reader. Our growth in the number of subscribers has followed a similar curve to that of daily visitors, and today we have about the same number of subscribers, around 140.

These are not huge numbers but for a vertical market such as digital label printing you can’t expect to have thousands of readers. One important feature that every business blog should have is a prominent link back to the company’s main web site. We get more visitors to our main site from our blog than any other source other than the search engines. People find our blog go to our web site and become customers. I estimate that we get around four new customers a month resulting in around $2,000 in sales directly from the blog.

So how do you grow the number of visitors to your blog? Here are a number of ways we have done it:

1. Search engines – every new post is indexed by the search engines within a day or two and after two years we have over 170 posts and more than 50,000 words written about our industry. All these words are indexed and able to be searched with more words being added with every post.

2. Promoting the blog – we promote the blog at every opportunity. We provide a link to the blog in our customer emails, press releases, articles, even in my email signature.

3. Commenting on other blogs – I subscribe to dozens of blogs and I regularly make comments on these blogs. These comments usually provide a link back to our company blog. One word of warning: be careful to make the comment meaningful otherwise it will be deleted as spam.

4. Blogrolls – Develop a relationship with other bloggers and you can get your blog placed on what is called a blogroll. This is a list of blogs (with links) that a blogger publishes on their blog.

5. Your main web site – a link to your blog should be prominently featured on your main company web site.

We get many people who visit our own main site, then go and check out our blog and place an order. We have no way of measuring the actual impact that our blog has on these people but I know the blog helps create the impression that we are an industry leader. Our blog is also mentioned in trade publications now and has resulted in speaking and writing engagements for me that increases our exposure in our industry. But this all took time and perseverance.

Peter Renton is the founder of Lightning Labels, Inc., the leaders in digital label printing and custom labels. He writes regularly about the label printing industry on his company blog at http://blog.lightninglabels.com.


References

Compete.com. 2008. "Snapshot of LightningLabels.com"

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How can I analyze the reasons for a low conversion rate?

By Ayo Ijidakinro

Picture of an example chart analyzing your company's website conversion rate versus the competitor's.
Sometimes in-depth research is required to generate an accurate comparison between your website and your competitors'.

Summary: The past two articles have emphasized the importance of product mix in determining website success. How can you figure out if a low conversion rate is due to a poor product mix versus a bad website? This question will be discussed in this article.

How can you identify the reason for a low conversion rate? As I mentioned in a previous article stressing the importance of analytics, you can't measure yourself against yourself. The best way to measure your success and identify methods of improvement is to benchmark your website against your competitors.

What type of benchmarking do you need to do?

Since this article is discussing website conversion rate, the answer is to compare your conversion rate to the conversion rate of your competitors. For example, do you sell Caterpillar tractors? What is your conversion rate on those tractors? What is your average competitor's conversion rate? Even better, what is your best competitor's conversion rate?

If your conversion rate on a product is 8%, is that good or bad? Well, it always depends on the average for your industry. If the average conversion rate for that product, in your industry, is 3%, then you're doing great. If the average conversion rate for that product, in your industry, is 15%, then you have some serious catching up to do.

What conclusion should the data help you reach? Here are two conclusions:
  1. If your conversion rate is below the competitor average, then you probably need to improve your website.
  2. If your conversion rate is low, but at or above the competitor average, then improving your website is unlikely to help generate a higher conversion rate. Perhaps you need to sell a different product. You're already at or above the industry average. Unfortunately, this product doesn't look like it sells well in general.
Unfortunately, figuring out the conversion rate for your competitors can be difficult. It may require some in-depth research. Each company will likely have to find industry specific resources in order to do their own analysis.

(Now that we are on the subject, I am interested, myself, in finding this data. I will do my best to dig around and see if there is a conversion rate research database out there. However, I doubt there is one. Nevertheless, if you are aware of one, I would appreciate your notifying me about it.)

UPDATE: I've found a wonderful database of conversion data at http://index.fireclick.com/. Read more about Fireclick's web site conversion rate database.

In conclusion, make sure that you are benchmarking your conversion rate against your competitors and not against yourself. Benchmarking how you rank in your industry is the only objective way to identify whether a conversion rate is low because the product you're selling just doesn't sell well or if you have a problem with your website and marketing approach. By doing this benchmarking you allow your business to make much more intelligent decisions in product selection and web strategy.

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What gave The Popcorn Factory the highest conversion rate on the internet?

By Ayo Ijidakinro

Picture from the homepage of the Popcorn Factory, the website with the highest conversion rate in 2007.
The Popcorn Factory's basic homepage doesn't explain their high conversion rate.

Summary: In December of 2007 the Popcorn Factory had the highest conversion rate, 29.50%, of any major website (MarketingCharts.com, 2007). For most retail websites, a conversion rate of 10% is considered excellent. Anything below that is considered average (Eisenberg, February 3rd, 2008). What can we learn from The Popcorn Factory to help us improve our own conversion rates? In this article we will answer that question by looking at one very important reason behind their success.

No doubt there are many reasons that The Popcorn Factory has one of the highest conversion rates online. However, as I researched this article, one reason kept coming up, product selection. Not all products sell well online (Warren, 2000). The Popcorn Factory has done a good job of identifying what sells well online and investing their resources in those products. They have done this in the following ways:
  1. The Popcorn Factory sells a product the customer already wants to buy.
  2. Their online product mix is specific to online tastes and is different than their offline product mix.
  3. Their products are well suited to being delivered by mail.
Let’s discuss each of these points one by one.

The Popcorn Factory sells a product the customer already wants to buy. If you manufacture a product, improving on this point may be difficult for you. However, if you are an online retailer retailing other vendor’s wares, then this is entirely within your control. The simplest way to increase your conversion rate online is to start with great products. This quote bears that out:

“People's motivations trump any great or poor [website] design. If people have made up their mind (persuaded themselves), that they want to buy flowers or popcorn from the particular retailer then they'll work through almost any poor shopping process…” (Eisenberg, January 29th, 2008)

How can you improve your product mix? Put extra effort into the product selection process. Read product reviews, see what people are talking about. Are there any trends you can take advantage of? Product strategy is not my area of expertise. Nevertheless, the key point I want you to take from this article is that bad product selection will trump good website design. So don’t invest more money in improving your website or increasing your online marketing if you don’t already have products that the customer desires. After all, we can put lipstick on a pig, but it’s still a pig. A better website might just end up being a better color of lipstick for a litter of ugly piglet products.

That brings us to the next point.

The Popcorn Factory’s online product mix is specific to online tastes. The Popcorn Factory has a print catalog as well as their website. Cheryl Zatz (the Vice President of Marketing for The Popcorn Factory as of at least October 2006) made clear in a ComputerWorld.com case study that, “the Web site doesn't simply replicate the paper catalogue: the number of products is limited, to avoid creating navigation problems for users, but the site does include a number of exclusive lines.” (Warren, 2000)

If you already sell products offline, moving online may not be as simple as putting pictures of your products on your website. Here the Popcorn Factory specifically faced a navigation issue. They didn’t want to overwhelm users. Nevertheless, not all products are tailored to the online world. For example, a clothing store that sells suits and dress shoes will probably find dress shoes are far easier to sell online than suits. Clothing that needs to be tried on first may be harder to sell than shoes that have fairly universal sizes. Such differences may affect policies such as return policies. Return policies online may have to be different than the return policy you’ve used successfully in the past.

These are just some of the things to think about. There are probably dozens of factors I could list. However, hopefully you see the point. When you decide to go online make sure you think through how the customer’s preferences are different online than when he is buying from you in your store or even over the phone. Your online policies, prices, product descriptions, may need to be different.

This brings us to our last point.

The Popcorn Factory's products are well suited to being delivered by mail. The Popcorn Factory started as a mail-order business, so their products are already nicely suited to being delivered through mail. What does this mean for those of us who don’t have mail-order businesses to learn from? We can take a look at the products we’re trying to sell online and make sure they really fit the online purchasing model. For example, the majority of cars will probably always be purchased locally. The internet is a powerful marketing tool for cars, but most customers want to test drive the car they ultimately buy. On the other hand, tin cans of popcorn are very easy to sell online. The cost is low; if you don’t like the popcorn, you’re not out a lot of money. Popcorn is a pretty standard product that is hard to mess up, so there isn’t much fear of completely botched service.

Thus, it is wise to ask yourself the following questions: Do customers understand your product well enough that they would feel comfortable buying it online? Is your product’s value proposition only convincing when seen in person? All of these factors will affect your conversion rate. Again, these factors are far more important than the overall look and feel of your website.

In conclusion, product selection on your website is going to have a larger impact on your conversion rate, than even the best website design can have. The Popcorn Factory achieves a high conversion rate, not because of outstanding website design, but because of outstanding products. Focus intensely at improving the product selection on your website and you will naturally see an improved conversion rate.

References:
MarketingCharts.com. 2007. “Top 10 Online Retailers by Conversion Rate - December 2007”
Eisenberg, Bryan. January 29th, 2008. “Top 10 Online Retailers by Conversion Rate: 12/2007”
Esenberg, Bryan. February 3rd, 2008. “Top 10 Online Retailers by Conversion Rate: An Analysis”
Warren, Liz. May 18, 2000. “Positive approach to e-business will pay dividends for SMEs”

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Internet Discounters: Do you really provide a discount?

By Ayo Ijidakinro

Picture of an everyday low prices sign.

Summary: If you are an online discounter, how can you convince customers that you really provide a discount? You can't expect the customer to trust you. You must provide the customer with evidence either by showing your prices versus competitor prices or by offering a deal so good the customer can't refute it.

"Super sale!!", "Only One More Left!!" These are phrases we hear all the time. But do customers believe those statements? After hearing overstated hype so often, customers are now skeptical that prices being advertised are really lower than average. If you can convince the customer your prices are good, you are many times more likely to win their business. You don't want the customer to just window show.

There are two principal ways to convince the customer that you provide a meaningful discount.
  1. Show actual prices of your competitors.
  2. Find one product you can sell so cheap, that customers don't question your discount.
Showing actual prices from your competitors is effective because such facts can't be questioned by the consumer. The key is that the company you use as a comparison does not need to be another discounter. You don't have to convince the customer that you have the best price on the web, you just need to convince the customer that you truly provide a discount. Therefore, if you sale an identical product as a premium retailer such as Nordstrom's, and you can prove your price is lower, by all means refer to the competitor explicitly. This evidence makes a far stronger statement than your merely stating you provide a discount.

Your second option to convince the customer that you provide a great discount is taken from Walmart's playbook. Do you remember November 28, 2003 when a Central Florida Walmart offered a DVD player so cheap ($30) that it caused a stampede? Sam Walton, the founder of Walmart, began Walmart's use of this technique to draw in shoppers.

Sam Walton realized that if he offered even one product at an unforgettable price, he could draw in shoppers to shop at his store at an incredible rate. Such outlandish sales accomplished two things. First, it generated publicity and drew in shoppers for higher margin products. Second, it gave Walmart a reliable reputation for low prices.

However, you may be worried that you can't profit by copying what Walmart has done with success, because while Walmart was selling more than just the $30 DVD player to visiting shoppers, your website tends to sell only one or two products in a single shopping cart.

That's a valid concern. Your best option here is to try and cross-sell higher margin products or services to make up for margins you lose on your sale.

Nevertheless, if neither of the suggestions in this article seem to work for you, you may need to consider another reality.

You may do well to ask yourself, "Am I really able to provide the customer with a discount?" Some industries are so competitive that it isn't possible to offer a better price than what your competitors offer. If that is the case, then can you really build a business based on discounting? Sometimes it is wise to consider another business model. For instance trying to be a premium retailer instead of a discounter, essentially becoming a Mercedes of your industry instead of a Kia.

No matter what you end up choosing, be honest with the customer. The worst thing you can do is tell the customer an untruth. If you offer a consistent discount, then by all means state this on your website. However, if you don't offer a discount, it is best not to lose the customer's trust by telling him that you, like Walmart, have "Always low prices."

By being honest and providing evidence that your website's prices are lower than the competition you will win customer trust, generate buzz, and have a consistently higher sales conversion rate for your website.

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What is the value of a single website visitor?

By Ayo Ijidakinro

Google Analytics statistics for TechCrunch.com.  Posted on CrunchNotes.com
Google Analytics statistics for TechCrunch.com. Posted on CrunchNotes.com

Summary: By looking at the revenue per customer of Amazon.com and TechCrunch.com we can estimate how much the average business should be spending on its website. Website owners know that if the amount they're spending on their website exceeds the site's revenue generating potential they will quickly find themselves in bad shape financially. However, many site owners don't know what a mature site's ultimate revenue earning potential will be. This post attempts to help you calculate this on a per visitor basis.

We all seek to increase the number of visitors to our website. However, the amount that many companies spend to acquire a single visitor is often far beyond the value of that visitor. It is intelligent to analyze your website’s revenue potential to ensure you never spend more to acquire a visitor than the amount of revenue that user will generate.

Unfortunately, most of us face a catch 22. Because most of us have never had tens of thousands of visitors hit our website every month, we don’t know how much money we can generate from each visitor.

We optimistically imagine that if we can get traffic at what feels like a reasonable cost, then we will be able to recoup the investment to obtain that traffic.

But as a reality check, let’s look at someone else’s data to see what type of revenue generating potential is reasonable to expect from our website.

First let’s look at a successful content website. Yesterday I was watching this Yahoo! Tech Ticker about TechCrunch.com a successful technology blogging website. In the video, Michael Arrington, the founder of TechCrunch.com, reveals that TechCrunch.com has an annual revenue run-rate of $3 million. Then today on Michael Arrington’s blog, he posted the above graph from their Google analytics data. This graph shows that in January TechCrunch.com had 2,647,027 visitors.

So how much revenue is TechCrunch.com generating per visitor to their website? At the current reate, TechCrunch.com would get about 31.8 million visitors per year. At $3 million in revenue per year that is about 9.5 cents per visitor.

So, one of the most successful content websites, TechCrunch.com, generates only 9.5 cents per visitor. Are you operating a content website? Are you spending more than 9.5 cents per visitor to acquire readers? Remember you must include all costs in this figure, including any costs to author and host content.

What if you sell a product? Let’s look at another example. As of this writing, Amazon.com gets about 600 million visitors per year and generates $14 billion in revenue for these 600 million visitors. Thus, Amazon is making about $23 per user.

If you operate an e-commerce website, do you think your revenue per customer is similar? Can you build out this website, grow it, and advertise it for less than $23 per customer?

What should we, as website owners, do with this information?

Steve Pavlina, who is currently generating significant income from his website, has this to say: “Your business should put cash into your pocket, so before you ‘invest’ money into it, be clear on how you’re going to pull that cash back out again.” ("10 Stupid Mistakes...", March 2008)

What’s the point? Please make sure, before you invest any money into your website, that you are being realistic about your revenue generating potential. Don’t pour money into your website only to find that you quickly run out of budget and only have a small revenue increase to show for all of your money, time, and effort.

Do you operate a content website? Then ask yourself, realistically, should I be spending any money on advertising? Perhaps you should be focusing on generating quality content and nothing else.

Do you operate an e-commerce website? Then ask yourself, realistically, should I be more concerned with increasing my traffic or increasing my revenue per customer? Perhaps you should be increasing your revenue per customer and forget about increasing your traffic at this time.

If you are to be successful, the answer to these questions must be impacted by a realistic assessment of the value of a single website visitor for your company.

Make sure you carefully compare your income per customer to your investment costs per customer before you invest a penny in your website.

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[Video] Improve Site Conversion Rate By Using a Better Background Color

By Ayo Ijidakinro



Summary: A study by Lindgaard, in 2006, showed that customers form an impression of your website in 50 milliseconds. A negative first impression will lower your web site conversion rate. A major component of the customer's first impression is color. White or light backgrounds tend to yield a better impression than black or dark website backgrounds. This video is a discussion with examples.

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Well Written Press Releases Will Generate Traffic

By Ayo Ijidakinro

Graph of press release readership over a 28 day period.

Summary: Press releases are an excellent way to promote your company and website. My last press release was read by at least 745 readers over a period of 28 days. Spend some time thinking about what your company has done recently that is worth writing a story. Don't wait until you have earth shattering news to release a press release. You should release whenever you have news that you know some people will find interesting.

Have you written a press release in the last six months? If not, you're missing out on a good way to generate exposure for your company.

I was looking at the number of readers my last press release received and I was pleased. Within a period of 28 days my press release was read by 745 readers. To put this in perspective, if only 1% of readers end up attending one of my classes that would result in over $1,117.50 in new business. (Assumes a conservative estimate of $150 per attendee.)

Graph of press release readership over a 28 day period.

You might be thinking, well $1,117.50 isn't much. But it only cost $80 to publish the press release. That would represent a return on investment of 1,397%!

Furthermore, this number of 745 readers doesn't even include the readers that read my press release as it was picked up by other websites. Even if these readers don't purchase automatically, it is still valuable to get my company's name and content in front of thousands of new readers.

Why am I telling you this? Is it to brag about my success with press releases? Not at all. It is to encourage you to try using a press release for your company. You may be pleasantly surprised at the success you achieve. To help you get started, I am including a link to PRWeb's explanation on writing press releases.

The best online service to use to release your news is PRWeb. You also want to try local newspaper or magazine editors. Also, if there are periodicals for your industry, send your press release to them directly. Editors are accustomed to receiving press releases directly in email or by snail mail; be tactful with your approach, but don't hesitate to contact them.

What can you write about? Here are some ideas:
  1. New product releases.
  2. New discoveries your company has made.
  3. Company milestones (e.g. 1,000th customer, 100th employee, etc.).
  4. New employee hires of note (e.g. new CFO or new Sales Director).
  5. New office opening.
  6. Store opening.
  7. Customer success story.
  8. Exciting ways customers are using your products or services.
The list could keep going, but hopefully you're starting to see the variety of press releases you can write.

So make it a goal to write a press release within the next month. Start getting your name in front of thousands instead of hundreds. Upload your press release to PRWeb and send it to newspaper and magazine editors in your local area or industry. A well written, interesting, press release will get results.

Additional Reading

Barebones Guide to Writing Successful Media/Press Releases
Submitting Press Releases to Help Search Engine Optimization
How to Write a Social Media Press Release

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