I Fell For a $300,000 SEO Scam with David Melamed of Tenfold Traffic

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David Melamed

David Melamed is the Founder and Chief Strategy Officer of Tenfold Traffic, a search and marketing agency with over $50 million of paid search experience. David has had a passion for marketing since he was a child, and over the past 10 years he has built a successful career in SEO, PPC, and digital advertising. 

Before founding Tenfold Traffic, David oversaw marketing for companies such as Cayre Equities and Gamestaq.com. Currently, he is also the host of the Fixing Incentives Podcast, where he speaks with business leaders about the behavior that powered their growth.

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Here’s a glimpse of what you’ll learn: 

  • David Melamed tells the story of how he fell for a $300,000 scam
  • How David learned to scale profitability using paid search
  • The SEO mistakes that David made and what he learned from them
  • What is the secret to a successful SEO strategy?
  • David’s SEO advice to marketers and business owners

In this episode…

There’s a lot that can be learned through making mistakes. This is especially true in the marketing world, where trial and error is essential for seeing what works. In fact, the best marketers are the ones who can take the lessons they learned from failing and apply them in the future. So, if big mistakes equal important lessons, how much can be learned from a $300,000 mistake?

For David Melamed, the answer is a lot. David is an SEO expert that has worked in marketing for over 10 years. He has become a trusted figure in enterprise SEM and digital advertising, but this wasn’t always the case. Throughout his career, he has made mistakes and grown from them, including a $300,000 SEO scam. Today, he’s here to share the story of how it all happened — and the valuable lessons he learned along the way.

On this debut episode of the Fixing Incentives Podcast, host David Melamed, the Founder and Chief Strategy Officer of Tenfold Traffic, is interviewed by Dr. Jeremy Weisz, the Co-founder of Rise25. David recounts how he lost $300,000 on a failed SEO strategy and the important lessons he learned from the experience. He also shares some of his expert SEO advice and recommendations. You won’t want to miss this exciting episode!

Resources Mentioned in this episode

Sponsor for this episode…

This episode is brought to you by Tenfold Traffic.

The only projects I take on currently are performance-based relationships.

What that means is…

All marketing would go through me on my own dime and we negotiate a revenue share.

I don’t want someone to give me money if I don’t generate a return.

But, if I am making someone a ton of money, then I want to share in the revenue.

In other words, I want to participate in the full value I am creating.

Right now, I am only looking for one or two companies a year to pour my heart and soul into.

An ideal partner is someone who has a converting funnel and can let me work my magic.

If you are a company that knows your lifetime value of a client and wants to spend as much as you can to acquire that customer and dominate the market, then I am your person.

If you are looking for a vendor, then there are several people I have vetted and can refer you to.

Visit www.davidmelamed.com to learn more or email me at david at tenfoldtraffic dot com.

Episode Transcript:

Intro  0:03  

Welcome to the Fixing Incentives Podcast where we talk about the incentives that drive success. Now, let’s get started with the show.

David Melamed  0:14  

David Melamed here, the host of Fixing Incentives Podcast where I talk with top business leaders about their journey, and the behavior that powered their growth. I have Dr. Jeremy Weisz here of Rise25, who has done 1000s of interviews with successful entrepreneurs and CEOs. And we have flipped the script and he will be interviewing me.

Dr. Jeremy Weisz  0:33  

David, thanks for having me. You know, when you told me this, just you didn’t tell me the whole story. You just told me a lead into the story, which was Jeremy, you think we should talk about the $300,000 SEO scam? And I go, of course, you know, so I’ve been waiting to do this episode with you. So I can hear about it. Because I know nothing about what you’re about to say, before we get into this $300,000 SEO scam. I just want to mention, this episode is brought to you by Tenfold Traffic and, you know, I know for you, David, only projects you’re taking on currently is performance based relationships. And I asked you what does that mean? And you said basically, that is all marketing would go through you. Um, a lot of it could be on your own dime, potentially, and you negotiate a revenue share, because ultimately for you, you don’t want someone to give you money if you don’t generate them or return, which I think is great. You know what company wouldn’t want that. But if you’re making someone a lot of money, you want to share in that revenue, so you just don’t want to take this monthly fee, just pay me whatever 1000 2000 5000 if I’m making you, you know, $2 million, I would like to share in that you’re willing to share in the risk of time and money in that as well. So if you someone out there is thinking and listening this and go, this sounds great, this is exactly what I want. I know you’re only looking to take on one or two companies per year, to pour your heart into and so on to to partner with. In an ideal partner for you, as someone who has a converting funnel, they can handle scale, and then you can help work your magic on that. So if you are a company and you know your lifetime value of a client, you want to smash you know, spend as much as possible to acquire a customer to dominate the market. You can email David at david@tenfoldtraffic.com or go to his website, davidmelamed.com. That’s davidmelamed.com. So that’s a pretty, pretty compelling offer for the right company. But we won’t get into that now. You know, that’s what you’re about, I guess making compelling offers. Let’s start with the $300K SEO scam. And just start off what? What was the initial part of that story? How did this come to be?

David Melamed  2:45  

So first, I would just say I call this scam and may or may just be a mistake. And scam was my way of deflecting blame for what turned out to be one of the most expensive lessons of my career. But it all started with I got hired by a company to take over their their paid search and I was young, didn’t have a lot of experience. And there are countless spending about 15 or $20,000 a month and it was kind of a mess. And you I just like learning a lot. I took in a lot of information. within about three weeks, I had their spend scaled to over $150,000 a month profitably. And things were going really well. And-

Dr. Jeremy Weisz  3:30  

How did you learn, David, just for a second? So you’re, you know, newer in the industry? How did you learn to dig in and scale it profitably like that?

David Melamed  3:41  

So that’s a great question. I don’t have a great answer to it. I read a ton. And I tried a ton of things. And some things were obvious to me, in this case, there was a whole bunch of broad match keywords thrown into an ad group. And it just logically didn’t make sense that the ad copy would match so many different types of types of searches. So that was just kind of, you know, just thinking about the problem scope and kind of playing it out. So maybe some of that’s intuition. Yeah, um, I was coming off of a job that I had for about a year as an SEO agency, and probably about half my time was spent learning so I was reading you know, blogs like stunt double and and you know, SEO Moz at the time, which became Moz eventually and you know, search engine roundtable and search engine land wasn’t around back then. I think spin was spinn.com which is like social bookmarking site that eventually became Search Engine Land or Marketing Land one of the two I think that might have just been starting around them. This is probably 2006 2007 but There was a lot of information available. Seo book and ShoeMoney’s blog at one point in time, I remember the first time I came across paid search and I was coming up through the SEO world Originally, I saw a blog post on ShoeMoney about using a keyword three times ad creating an arrow visually. So it would be you know, the first word on the first line, the last word on the second line, and then the first word on the third line, and showing how that improve click through rates back in the day and die, the idea of just like, doing clever things to get the click through rate just it spoke to me and resonated. So a lot of it was just messing around with an intuition. The good news was, I came into this company, and no one else knew what they were doing, but they were spending money. And you know, back then without a ton of competition, you could be profitable, even if you are making lots of mistakes. So I was lucky that I had the benefit of an account to learn on by doing.

Dr. Jeremy Weisz  6:01  

Yeah, so okay, we’ll get back to the story. But I just one thing that stuck out is, you know, you really looked at things at a granular level, you weren’t just kind of making generalizations or even trying to do a lot with a little you kind of went in individually and dug into it on granular level. So you scale 250,000 a month, profitably, what happens next?

David Melamed  6:24  

So that was in the first three weeks by that by the next six weeks, we’re already up to about $300,000 a month in ad spend. It was just got it was basically just like scale this as much as possible. And my bosses turned to me and basically said, we’re spending a fortune of money. This is an industry that had 30 $35 clicks, cost per click in some cases, and they’re like, there has to be a better way to get this traffic. I’m paying Google all this money. Maybe we should start investing in SEO, what can we do to get more traffic and not pay for it? 

Dr. Jeremy Weisz  7:01  

Logical question. 

David Melamed  7:02  

Yeah, certainly is, is logic.

Dr. Jeremy Weisz  7:05  

But if it’s if it’s profitable, you know, just spend as much as humanly possible, right?

David Melamed  7:09  

So they weren’t scaling back their spend, they wanted more traffic 

Dr. Jeremy Weisz  7:12  

Got it.

David Melamed  7:14  

So like, in their mind is I maybe their intention was maybe we could scale back the spend. But it was I mean, this is how-

Dr. Jeremy Weisz  7:21  

They wanted to do both. 

David Melamed  7:22  

Yeah, they will they This is a company that had ads in hundreds of newspapers, that billboards in the sky, everything was about testing, it was a direct response, lead generation company. So anything that worked would work, but they recognize it’s the same, the same person searching, that’s clicking on the ad is clicking on the organic listings, they wanted that traffic, they were spending a lot of money, they said, David go figure this out. And so I started, you know, trying to find great vendors or people that I already knew and strategies, and I got introduced fellow who Um, I don’t know, if he, you know, played with some games with how he presented himself or not. I am to like him a lot. I some things he told me as he had the first patent on on chat for websites. And I was involved in, you know, in digital marketing, for since probably 1998/99. Again, it might all be true. It might not be it might have just been some embellishments. But he seemed very credible. And he set up a meeting and him and his partner flew out from where they live to, you know, to the east coast where our offices were to meet with us. And during that presentation, they had a very interesting and compelling offer, which is they said to, to my boss, and to me. Anyway, they said to me, you’re spending $30 a click, and you’re advertising everywhere in the country. And you see the search volume. Almost all of it is people searching for vendors nearby. So yeah, the keywords were keyword plus Denver, Colorado keyword plus A0224, etc. And they said, so you’re doing very localized search. And you’re also dealing with $30 clicks and the value of a sale being around $300 and a page that’s converting pretty well. Would you say it’s worth it to pay $30 for a website that ranks in this industry that brings in traffic and of course, we You all said yeah, of course would be a no brainer. So like, Okay, well we propose to do is build you 10,000 websites, one for each of the 10,000 largest cities in the United States, and to rank in every city. And their sales pitch was essentially Listen, if you get only one visitor a year, per website, basically paid for what you would pay if you’re paying on the PPC side. And if you got one sale a year per website, it basically gives you a 10x return across the board. So yeah, it was a huge investment. Even though we were spending this much on paid search, we were doing it in pieces, we could always pull the plug on it. And we deliberated and I was very nervous about it, I wasn’t very confident about it. But at the end of the day, it made sense, especially because of how they framed it, which is there aren’t many websites optimized for your keyword and this random town in Colorado. So we’re just going to rank number one, by exact match domains at the time those were ranking decently. But the basic argument was, let’s just spam Google with websites now it’s not spamming in the traditional sense, because we provide a real service, we provide a real value, someone searching for this, that called us got what they were looking for. But obviously, Google’s intention was, you know, to prop up those local businesses, not the nationwide lead generation companies. And, but that was the underlying idea. And after, you know, being very nervous and deliberating. The decision fell on my shoulders, Boss turns me and said, David, what do you think?

Dr. Jeremy Weisz  11:49  

Your fate, if it doesn’t work, you’re fired. No.

David Melamed  11:53  

Something along those lines, I basically said, Well, if we want to swing for the fences, this is it was swinging for the fences. And we gave them a deposit to start work. What we didn’t really understand fully at the time was they were building software to build the websites. And that meant that they would all have very similar source code. And the content, even though it would be somewhat unique, wasn’t going to be very unique. And the design was going to be way more design and content. It was all in all, a very spammy strategy that had I understood technology a little bit better, we’ve realized, it would have been insanely simple for Google dot catch on and block this quickly. And that’s fundamentally what happened in then was for about a month, it seemed like it was working, or we were kind of like, well, we have to roll out a few sites at a time. So Google doesn’t catch us. We were told that they were spending, you know, $70-80,000, building the software for the loan plus all the support and help. In the end, I don’t think they spent more than like 10 15,000 on that I could be wrong, but I’m just they’re like, we need to give her another month. One piece of the strategy was all the sites were going to be interlinked. So they’d be localized, but not interlinked. But it was going to be a big blogging network, basically type thing like these private blog networks. And at the time, these things would maybe work, it was pre panda. So there wasn’t signed, I was gonna attack it directly. But it wasn’t, you know, there was still, you know, Google was so good at catching these things. Yeah. Matt Cutts was there as that, you know, looking for the spam. And the idea that this would work was just really-

Dr. Jeremy Weisz  13:58  

Ticking time bomb. I said, Yeah, like it may work for a time period. But ultimately, it’s not going to work forever.

David Melamed  14:06  

Yeah, I mean, there’s two huge flaws in our thought process. The first flaw was, it’s worth $300, a lead in a certain market with a website and we want to build 10,000 websites. Why cut corners? Why try to spam with this? Like? Because what first of all, why start with 10,000? websites? Like-

Dr. Jeremy Weisz  14:26  

Yeah, totally.

David Melamed  14:27  

You’re doing the software? Start with 100 websites.

Dr. Jeremy Weisz  14:29  

Start with the five biggest cities. 

David Melamed  14:31  

Yeah, what were the least competitive, mid level cities, but start start with something small. And if it’s the point of scale, is once you’re building the software doesn’t matter if you do 100 or 1000 or 10,000. Then why charge us per site. That sales which are $30 per site was I mean, clearly the cost wasn’t based on each site. They weren’t hosting separately, but if it was worth it to rank in that market, the right thing to do was should have been the higher writer to actually research that market and figure out what content would be useful to people in that market around this topic? How can we create a utility and value instead of just trying to rank a website? And that was that was a fundamental mistake. Um, it was, you know, it is sounded good. And then it costs us a lot of money. And it almost put the company under. 

Dr. Jeremy Weisz  15:27  

Did it work at all, was there any part of it that that generated anything or no?

David Melamed  15:32  

A few random visitors here and there, I think maybe it generated like three leads before like, the whole network got, like ding them, like completely knocked out index. It was like, it didn’t even take off. It sounded so promising. And it made so much sense. And it was exciting. And you know, I was young and dumb. Yeah, this was not, I don’t know, if I was sold to. And that’s why I would call it an SEO scam. Or this is just a big mistake and thinking about SEO, I think it’s a it is a big mistake. When you think about SEO is the, a few years later, I came to the conclusion that the best SEO strategies are the ones that don’t think about SEO, if you forget it, like Google’s trying to accomplish something specific. And that’s really taught, provide users with the right information at the right time from credible sources. Or that utility. Anything that’s trying to manipulate or game or, or take advantage of that that’s not focused on the user. it you know, it’s just, it’s a ticking time bomb. It’s like, eventually, it’s going to get dinged and maybe you’ll make a profit, maybe you won’t, but it’s not worth it. I see this today with like, Google, my business local profiles, where people will use all these virtual offices, these things haven’t really worked in ages, where if they work, it’s very short term, or they they got a bunch of fake reviews, and then they don’t realize that they could get their account banned for life. And they just think of these shortcuts. And it’s just like, like, no one wants to do the hard work. But the hard work is the only thing that’s sustainable.

Dr. Jeremy Weisz  17:12  

Yeah. So then once that got shut down, what happened to you and the company?

David Melamed  17:19  

So it got shut down. Well, first of all, I ended up being the one taking very angry calls to get paid because we were paying in installments. So like, I was getting yelled at Where’s my money? So I had to deal with those phone calls. I don’t know why they-

Dr. Jeremy Weisz  17:32  

From the other company?

David Melamed  17:34  

Yeah, yeah. And I did not enjoy that all this also was coming to my head around the time of the Olympics in China, where they shut down their ports for about a week, week and a half. And that caused a huge scrap metal. I guess-

Dr. Jeremy Weisz  17:55  

Like a shortage?

David Melamed  17:58  

Yeah. No, drop the prices. Because that the suit, the demand went down, because it wasn’t going to the factories, and the spike that built up and, you know, the value of leave, cut in half, and we were scrambling to survive, people got laid off. So I don’t know if it was because of this campaign, or if it was just bad timing.

Dr. Jeremy Weisz  18:19  

Maybe both? Yeah.

David Melamed  18:20  

Yeah, maybe both. But it definitely created a lot of chaos, and was a very tough lesson to learn.

Dr. Jeremy Weisz  18:28  

So then did you end up having to pay out all that money? Or did it shut get shut down before you end up paying them? The whole sum?

David Melamed  18:37  

I think then paying the whole sum it might have been over time, I’m not positive. I do know that that vendor and the owner of that company are still friends. So they get along. 

Dr. Jeremy Weisz  18:48  

Really? 

David Melamed  18:48  

They’d consult with each other. I don’t understand. I don’t talk to either of them nowadays. On but they’re still buddies. I think it’s just because like the idea behind it was it was it sounded like a good idea. They were aligned with it. But it really was just like a greedy selfish tactic to be perfectly frank.

Dr. Jeremy Weisz  19:09  

Yeah. What happened to your job? Did you stay at the company?

David Melamed  19:13  

I went through a roller coaster at our peak, we were at about 70 employees. When I started, we were only two or three. Eventually, you know, people got laid off and then I took a salary cut eventually got laid off. That was a different tough lesson where I hired a vendor, run the paid search, I was running myself. That vendor, worked with them, through all their struggles, never lost that income. But I lost my job because they were dependent on whatever volume he was bringing. They weren’t dependent on me anymore. A couple years later, I went back and worked with them for a little while. But that was, yeah, it definitely wasn’t going to last long term.

Dr. Jeremy Weisz  19:58  

So David, a couple of lessons stick out. Okay, I want to add any others that I may be missed, but um, one that sticks out is put the user first always put the user first and Google’s putting the user first. Another one is, you kind of saw this, in the, I guess, in this time period, these are more of a blackhat, in in kind of converting you more to a white hat, you know, in SEO terms, meaning like, just totally not even the gray area of this is, this is actually just, again, like you’re saying, not thinking SEO terms, thinking, what’s gonna help the user terms, overlaid with whatever SEO strategy and don’t. Another is don’t try to outsmart Google, you know, they’re gonna be hunt you down and find you. You mentioned Panda. I mean, if people don’t know that, that was just like, something that Google put out that kind of caught a lot of sites, and maybe we’re not doing white hat related things and just stay up to date with the industry and what’s going on. Are there any other lessons there that, that we should in other part is another lesson, I guess, is, you know, taking responsibility. So it sounds like the fact that the owner and this provider are friends means like, you know, the owner ultimately, probably just took responsibility. He, you know, got the data and said, Listen, I’m gonna make this calculated risk, didn’t blame the provider, you know, it sounded, you know, at the time, like, it was gonna do well for them. And it obviously got slapped by Google, and sound like the writing’s on the wall. But ultimately, he kind of took responsibility for anything that happened and didn’t blame this particular person for, for it not working, I guess. But what other lessons did you come away with? Now, looking back,

David Melamed  21:48  

So that that is a great point about owner taking responsibility. At the end of the day, that that is what happened here, some present a strategy that was a good strategy, or seemed like a good strategy, they use value pricing, and did a good job of selling a price, the price would have been worth it if it worked. And the fact that it didn’t work doesn’t mean that was necessarily a scam. Although I still think that they you know, he definitely embellish things to get the sale. This is the actual real lesson, here is a lesson that I still see companies struggle with today, which is the mindset of, if it only brings me one customer, it would be worth it, or it will pay for itself. The best and most successful marketing is not the marketing, that gives you that 10x return that covers all your losses, you’re not a venture capital firm, that that could take these huge losses for that one big, you know, investment that goes public, the real marketing and good marketing is, you know, be happy with that 30 50%, you know, return on investment, or even a 200 or 300 or 300% return whatever the number is you need. The reality is, is that it’s a shortcut to not take the right risks. I’ve just like, like, if you instead, instead of we just said, Let’s spend $250, to build one website, get it to rank and if it makes us 300, then let’s reinvest and reinvest, we would have had a good viable long term strategy. But the fact that we were looking for this swing for the fences make us millions, the idea was it was pie in the sky. And it’s, it’s a telltale sign, it’s a huge sign to yourself. If you’re thinking of doing something and you say to yourself, Well, if it just works, if it only gets me that one customer it pays for itself, it’s worth it. That’s a sign that you’re you’re it’s it that you’re taking a shortcut and actually thinking through what you’re trying to do here with marketing.

Dr. Jeremy Weisz  23:45  

The last thing so final question, David, I want to point people towards your website, and they can check out tenfoldtraffic.com, email you there if they have questions. Last question is about SEO. Like we talked about, obviously, some some less than optimal ways to do it. I’m wondering some of the resources you recommend that you look at currently, and maybe one SEO tactic or something advice you have for people actually looking to do it the right way?

David Melamed  24:17  

Yes. So I mean, my favorite SEO tool is this really cool website called Google.com. 

Dr. Jeremy Weisz  24:25  

Never heard of it. 

David Melamed  24:27  

There’s really no better strategy than actually running a search for the keywords that you think you need to rank for. looking at what’s on the page, reading the ads, reading the snippets looking at what features Google showing, opening up the pages, really getting a feel for the landscape of what pages are ranking, why are they ranking? What’s going on there? Do I think the person searching for this is finding what they’re looking for and maybe even better strategy than this instead of focusing on your own business. Every time you run a Google search for your own needs. Pay attention to if you’re finding what you’re looking for, and how you’re finding it. And what type of content or experience is actually serving the needs that you have. I think that that’s probably the best strategy. And the best tool out there available. There’s obviously many other tools. But I think that’s probably the number one most overlooked invest tool in terms of tactics. I think everything really boils down to utility. So when someone’s running a search, they’re in a certain frame of mind, they’re trying to accomplish something specific. And especially with search engines, were like in other channels like Facebook, you could get someone to stop scrolling and catch their attention and divert their attention. When people search, I probably ran 50 Google searches today, I cannot recall a single ad I saw, I cannot recall a single page I saw. I just opened tabs, you know, as I go through it, what looks interesting, I might even open every page that I opened. So I think it’s it’s very, very important to to recognize what the actual intent of that specific searcher is. And you could go as granular as that searcher in this location on this device, or something like that. But really try to think about what actually is this person looking for? and what isn’t missing? What’s missing? What would help this person? If you want a good content strategy? What’s the one embarrassing confession about your industry, that you’re afraid of anybody knowing you’re afraid you’ll go out of business, if everybody finds out that you make money that way, and then just blow the whistle on your industry, every industry has room for a whistleblower, and people will still pay even if you give away your secrets, and you’re the one they’re going to trust if you’re the one that blows the whistle. So like think about what are you afraid to say? And then say that and think about what’s missing? about like, like, what can you do to provide quicker utility to the exact intent of this person searching in this context. And probably the best way to do this is to talk to your users to look over their shoulder. Pay attention to the emails and complaints that they have the listen to call recordings from customer service, go through your live chats, and really, or research complaints online that you see. But it’s really just understanding, you know, what people need in that moment and giving them exactly that, because search engines are only for exactly what they’re looking for. 

Dr. Jeremy Weisz  27:29  

David, amazing, thank you. Listen to more episodes of the podcast because Dave is probably going to share the biggest lumps that he took on the head and also some of the successes as well. So David, thanks for having me Everyone, check out more episodes and checkout tenfoldtraffic.com. 

David Melamed  27:44  

Awesome. Thanks so much.

Outro  27:47  

Thanks for listening to the Fixing Incentives Podcast. We’ll see you again next time and be sure to click subscribe to get future episodes.

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About David Melamed

David Melamed is the Founder of Tenfold Traffic, a search and content marketing agency with over $50,000,000 of paid search experience and battle tested results in content development, premium content promotion and distribution, Link Profile Analysis, Multinational/Multilingual PPC and SEO, and Direct Response Copywriting.

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