Posted by randfish

2012 was an amazing year at SEOmoz. We grew tremendously in members, revenue, and employees; finally raised a second round of funding; added some cool features to PRO; and acquired three companies (though, until today, we've only publicly talked about two of those). In this blog post, I'm going to cover our 2012 numbers in some detail and tell you about our very exciting, final acquisition of the year, AudienceWise.

The blog post is broken into several sections for those who'd like to jump around:

• Moz's Acquisition of AudienceWise
• The Opening of Our Portland Office
• 2012 Moz Financials
• 2012 Employee & Customer Growth Data

Moz's Acquisition of AudienceWise

I first met Matthew Brown along with his partner-in-crime at Define, Marshall Simmonds, in Xiamen, China. I was with my grandfather, Si, speaking at SES Xiamen, and the NYTimes' SEO team was hosting us for dinner. I still remember my Grandfather commenting that he'd been a subscriber to the Times for 50 years, and it was about time they took him out to dinner 🙂

Since then, Matthew's gone on to start his own consultancy, AudienceWise, with Tim Resnik, former CEO of a gaming startup and a tremendously accomplished marketer & data junkie. Both have been frequently involved in the Moz community – Matt spoke at Mozcon two years ago and will again. Tim and he are both quiet lurkers on the blog, but with this transaction, I expect that to change a bit. Over the past couple years, we've talked extensively about recruiting them to the SEOmoz team. They were on our list of potential acquisitions for our failed funding round in summer 2011, and part of the "use of funds" we spoke about with Brad Feld in our April 2012 round.

Matt and Tim are really here at Moz to help us scale our in-house marketing and product expertise. Both have built software products in the past (Matt worked with Marshall on SearchCLU, Tim on an online poker subscription service) and have tremendous depth-of-knowledge in the fields of both inbound and paid marketing. We have a lot of phenomenal talent at SEOmoz, but only a few of us are deep into the fields of SEO, social media, content marketing, email, CRO, etc. Matt and Tim are here to help serve as mentors and as internal-consultant experts to our entire team, a role that I've been far too busy to fill effectively the last 18 months.

The AudienceWisers have been by the Mozplex several times, but in their first official visit as employees, they impressed a lot of folks on our team and have already jumped into a ton of projects. For example, Tim is working on visiting our rankings data & how we'll build reports for rankings going forward, and reviewing a big secret project that I'm not allowed to talk about on the blog. Meanwhile, Matt's working with Erica to head up our search for great Mozcon speakers, co-piloting the 2013 ranking factors work with Dr. Matt Peters (as an aside, doesn't Matt & Dr. Matt sound like a good sitcom title?), helping with the new version of the Mozbar, working with the product and engineering teams on the web classification system, and much more. 

I particularly loved the email Matt sent on the allstaff thread welcoming him and Tim:

Some notes on the acquisition:

• The total acquisition price (including salary, stock, and deferred payments) is in the low seven figures.
• SEOmoz is acquiring AudienceWise's process & products (including some research work and software Matt & Tim have built), the team itself, but NOT the consulting business. Matt & Tim will continue to do a small amount of consulting outside of SEOmoz, and our business will continue to remain free from services revenue.
• The AudienceWise Portland offices only hold three people, so we're getting some new space (more on that below).
• Technically, the deal closed in mid-December, but we wanted to wait to announce until Matt & Tim had wrapped up their other obligations and started at Moz full time (which happened last Monday, Jan. 14).
• Matt will be reporting to me with the title "Head of Special Projects," while Tim will be on Adam Feldstein's product team as "Principal Product Strategist." We're doing more with titles in the next couple months at Moz, so these may change. Neither will have any direct reports, but both will be contributing as consultants/advisors/project leads on a number of teams.

I'm sure that Matt & Tim would love to hear from you and are happy to take questions in the comments of this post, so feel free to leave them, and please join me in welcoming them to the Moz team!

The Opening of Our Portland Office (aka Mozlandia)

We Mozzers have long loved Portland from our perch in the Emerald city. We visit on weekends to sample their insanely weird and tasty food carts and restaurants. We stay extra nights after conferences to tour their far-too-cool-for-Seattle clothing stores. We rant jealously about their much lower cost-of-living and their lack of a state sales tax (which adds to the retail goodness). And, of course, we poke fun at their hipsterdom.

In fact, after watching three seasons of Portlandia, and experiencing the magic that city has to offer, we could no longer resist its pull. Starting in April of this year (probably, maybe May or June depending on lease details), SEOmoz will be opening only its second office ever in Portland, Oregon, nicknamed "Mozlandia."

We've already created a poster of our own:

Pictured from left to right: Peter Bray (FollowerWonk), Matthew Brown and Tim Resnik (AudienceWise), Galen Huntington (FollowerWonk), and David Mihm (GetListed).

I'm pretty sure this picture alone means our Portland office is going to be an amazing place to work (honestly, Galen looks WAY more "Portland" than his counterpart in the IFC photo). We'll start recruiting more formally soon, but in the meantime, feel free to check out any of the open positions at Moz, many of which teams may be open to staffing in Portland. We will continue to offer our $ 12,000 referral and signing bonus for software engineering positions in both cities.

2012 Moz Financials

It was a good year for the company financially, despite our focus being on a lot of other issues. We ended the year at $ 21.9mm in revenue – nearly doubling from 2011's $ 11.4mm.

I think 2012 and 2013 are going to go down in our history as "investments in the foundation" years. After our funding round closed in April, we spent the vast majority of the year building products that have yet to launch (stay tuned), building up recruiting and onboarding processes, bolstering our product and team with acquisitions, experimenting with how to handle a much larger big data product (Mozscape – sadly most of our efforts to dramatically grow size & increase freshness in 2012 failed, but we believe we now know enough to have success in 2013), and managing culture at a mid-size company (which went pretty well and led to some nice kudos like Seattle's Best Place to Work).

Below is a look at overall product revenue growth from 2007-2012:

More than 90% of total revenue comes from SEOmoz PRO subscriptions, with additional contributions from the SEOmoz API (these are combined in the "product revenue" chart above). Mozcon tickets sales and DVD sales are not included in this graph, nor is consulting revenue, which ended in 2009.

I did, however, want to show our expenses for 2012, compare them to 2011, and break them down by category so you can get a better sense of what's in our costs (and see how we're spending that fancy VC money!). I didn't have a great way to show this as a visual graph (pie charts over time are funky – I guess I could have done the stacked graph, but they're also funky), yet the chart conveys the data pretty well:

There are a few interesting takeaways from the above:

• Personnel as a percentage remains the same, and I'd guess it will go up a small amount in 2013.
• Hosting is where most of our COGS (Cost of Goods Sold) and pain comes from. It should be going down as we reach larger scales, but in 2012, we chose to invest in building faster rather than going slow and finding solutions to our declining margins. That will change in 2013, and while this year as a whole will probably still be high, we're predicting that our total hosting costs will be ~50% of what they are today (~650K/month) by Q4.
• Contractors are a resource we've leaned on heavily in the past, particularly on the development front. That number will probably remain similar in 2013, though eventually we plan to bring the vast majority of production in-house, and rely on contractors only for specialized needs.
• Facilities is one that will, hopefully, take a huge leap up in 2013. We need a new office here in Seattle, and while we've been a bit stymied on our first six months exploring spaces (we've had two offices we wanted fall through on us), we want to be moving to a much larger headquarters as soon as possible. In the meantime, Mozlandia will help us grow a bit in Portland.
• Not a believer in inbound marketing? If this data doesn't convince you, nothing will. The incredibly low percent of costs that go to attracting traffic and acquiring customers (on the "marketing" line – remember that SEOmoz has no sales team or costs) are a testament to SEOmoz drinking our own Kool-Aid, and investing in sources like content, organic search, social media, email, CRO, and word-of-mouth to spread our brand. It means we can invest much more in research, product, and data. Check out traffic from the last 6 quarters:

Some spikiness from viral content skews the trendline a bit, but in general, we're seeing healthy growth from every channel.

If you have questions about this stuff, feel free to ask in the comments and myself or Sarah Bird (our COO) can answer.

2012 Employee & Customer Growth Data

The financials tell part of the story, but a few other data points felt interesting to me and may be to you as well. First up is our growth in employee count from our first year as a software company to today:

The chart shows headcount of full time employees at the end of each year. We've obviously had a ton of growth here in 2012, and we're budgeting to add another 66 team members in 2013 (though a lack of new office space may slow that down). What amazes me the most is how well our culture has managed to handle this growth. I feel better about the persistence of TAGFEE and the other cultural aspects at SEOmoz today than I did when we were at 50 people, 25, or 5. To be honest, that's not what I expected. I thought things would get invariably harder and worse at this scale, but given the trend, I'm incredibly optimistic about 150, 250, even 500! Though, I know all of those will take incredible effort to succeed.

Next is our customer growth:

18,731 was the final count of paid PRO subscribers on Jan. 1st, 2013 (our historical numbers for prior years were less precise, hence the rounding).

It's pretty remarkable and truly humbling to have nearly 20,000 paid customers using our product. But we know that we've got a long way to go. In 2012, we had four pretty severe incidents and several smaller ones where critical customer data like rankings, crawl info, or Mozscape index updates were missing or late. We launched a few cool features at the end of 2011 and very beginning of 2012 (social analytics, historical link analysis, universal SERPs tracking, and custom reports) but with the exception of Followerwonk (which is a huge addition to PRO, and continues to develop new features itself), it was a very quiet year for features.

2013 is going to be very different. Our first major launch since Wonk is only a few weeks away, and spring should see the start of many more. We also have an entire team of five engineers, under the leadership of Shawn Edwards, focused on uptime and reliability. The levels of unreliability we've had in the past are unacceptable, and the speed of product improvement is, too. In our reviews for each other this month, Sarah and I were chatting about a large release we've been working on since late 2011, and Sarah told me, "If we haven't launched by June, we should both fire each other." I couldn't put it better myself. This year, we need to kick ass for our customers and be more deserving of the incredible support and growth you've enabled for our team.

January 2013 marks my 11th anniversary working in this job (prior to 2004, I worked with my Mom, Gillian, at the web design/marketing company that would become SEOmoz). I've never been more amazed by what the company's accomplished than I am today, but I know every day from now forward presents the challenge to all of us at Moz – to prove we're worthy of the fantastic things we have (customers, revenue, investors, supporters) and to not be trapped by the mistakes of the past, nor fall prey to the pitfalls of the future.

Matt & Tim will be a huge help, as the teams from FollowerWonk and Getlisted have been already. Mozlandia is going to be an exciting new experiment for us. And 2012 was a great year, but honestly, I can't wait for 2013 to get going, and for us Mozzers to be able to show all of you what the remarkable team we've built can do.

Sign up for The Moz Top 10, a semimonthly mailer updating you on the top ten hottest pieces of SEO news, tips, and rad links uncovered by the Moz team. Think of it as your exclusive digest of stuff you don’t have time to hunt down but want to read!

SEOmoz Daily SEO Blog

Posted by @petebray

At Followerwonk, we're all about helping our customers find, engage, and optimize their Twitter audience. We're relentlessly focused on letting you dig into your followers, do advanced searches to help plumb the depths of Twitter, track your social graph, and more.

We're excited for you to explore some of the new metrics we've rolled out today! This new data goes beyond "simple" (yet useful!) items like follower count, friend count, and so on (things that are easily available for our app to process). Our new metrics require us to deeply crawl Twitter users' timelines (that is, their actual tweets and retweets). With this, we're able to surface data that offers new ways for you to better understand your audience, competitors, and prospects.

 

So, without further ado, let's go to the screenshot…

 

 

As you can see, we now tell you an overall engagement percentage for users. Essentially, this tells you how much that user interacts with others on Twitter. For example, users with 82% engagement means that 82% of sampled items from their timeline are @mentions or retweets of other people.

 

Indeed, this engagement metric is composed of two underlying scores that we also surface for you. @Contact is the percentage of a user's timeline that consists of tweets that directly mention another person (you know, a tweet that begins with @name). And Retweets is the percentage of retweets in their timeline.

Finally, in the Tweets with URLs metric, we'll tell you how often their tweets contain links.

 

There are a lot of different actionable strategies you can use this data for, and I want to walk you through a few different scenarios that'll also show you where we're surfacing this data right now. (We plan for more exhaustive ways to bubble this data up to you in the new year.)

 

A few caveats before I begin: this data is "expensive." It requires a lot of API calls, storage, and analysis. As such, we currently only provide these metrics on select Twitter users: namely, those with more than 2,500 followers and, of course, all our Pro members' Twitter accounts. (We do plan to continually expand these metrics to more and more of the Twittersphere.) We also feel that this data is valuable, and so it's exclusively available to PRO users. (If you aren't already a subscriber, this might be just the reason to bring you into the fold!)

 

Listeners vs Broadcasters

 

The bottom-line is that you ideally want to find people who will be receptive to @mentions, and who, if they follow you, are consuming your tweets. There's nothing necessarily wrong with "broadcasters" (those who never engage, and simply tweet URLs and observations). In fact, these accounts are often extremely popular simply because they've honed a particular message strategy that works for them.

 

But the real gold in terms of social media is to find an audience who listens to you: that is, they're likely to engage with you, consume your tweets, and retweet your message to their audience. Ultimately, the real sweet spot is to find this receptive audience among highly influential users (those who, when they retweet you, echo your message far and wide).

 

 

With this in mind, we can use Followerwonk's bio search to search for users with, say, "SEO" in their bio. The results come back sorted by follower count (a good proxy for influence, but we can also order by influence), and we can then rollover each user to find their engagement rate to better understand their likelihood of returning an @mention of them.

 

 

By looking at the percentage of their tweets that contain URLs, we can also find those accounts that may have limited value (and who may be spammers).

 

 

Finding your most receptive followers

 

Of course, while trawling through random Twitter users may be useful, it is perhaps less productive than digging into who follows you right now. There are several ways to do that. For example, in the advanced search options in bio search, you can limit results to just your followers. This will let you search for "SEO" users among only those who follow  you.

 

Of course, we already have special features to more capably examine all of your followers. That's the Analyze feature.

 

And we've now included a few new graphs that surface these new metrics for you.

 

 

Here, examining @followerwonk's followers, we can view a breakdown of our followers by their engagement. You can run these reports for your own account (or on competitors, friends, customers, and so on). That way, you can click on any of the segments and receive overlays of users in that segment. And, on mouseover, we tell you more details on their engagement:

 

 

Of course, you're not limited to this interface. Click the download button and you'll have an Excel (or CSV) report of all of your followers on your desktop in minutes. With that, you can do all sorts of goodness.

 

 

Here, I can sort this data to find all those users who tweet 100% URLs. This is a strong spam signal (but not always, of course). There's some thinking that followers of yours who are "spammy" might decrease your overall influence or network reach. In some ways, this is similar to incoming links to your Web site from "bad neighborhood" sites. What to do? Here's where you can possibly optimize your followers (admit you thought that was a strange expression when I said it above!). Use these spreadsheets to assemble a list of possible spam accounts, do further diligence on them (looking at their actual tweets, for example), and consider forcing them to unfollow you. How? Block 'em.

 

Finding a competitive sweet spot

 

Let's say you're an startup soda company. (Is there such a thing anymore?)

 

You want to aggressively court those customers who are going to really take your message of corn syrupy goodness far and wide. Here's how you can use Followerwonk to help. In this example, we're analyzing 3 of the big boys among soda companies:

 

 

Note that we can compare these companies' engagement. This helps us plan our social media strategy: it might be useful to match their engagement level  Or, maybe not: you might want to run a bit of a contrary course.

 

Since we've done a deep analysis of these accounts social graphs, we can dig deeper:

 

 

You can probably assume that those people who follow all 3 of these soda companies are serious soda-heads. (Is that a thing?) A quick click, and we have another overlay of these users, and a mouseover will tell us all about them, in terms of those most likely to be receptive to our great new soda.

 

And, yes, you can download these reports into Excel/CSV, too.

 

Laying the groundwork

 

As I mentioned, we're expanding these stats across a wider swath of Twitter users, and we're working on other ways to surface them to you.

 

These new engagement stats are the start of a lot of great new features we have in store for you. In fact, the reason we have these metrics at all is because we need them for something even cooler! You'll just have to wait and see what we've got in store for you…

 

Meanwhile, please do let us know what you think. Don't forget to find me on Twitter and say hello!

Sign up for The Moz Top 10, a semimonthly mailer updating you on the top ten hottest pieces of SEO news, tips, and rad links uncovered by the Moz team. Think of it as your exclusive digest of stuff you don’t have time to hunt down but want to read!

SEOmoz Daily SEO Blog