October was a tough month for PayPerPost (PPP) bloggers. Many PPP opportunities required a blog to have a certain PageRank to be eligible to take them. Unfortunately, right before the holidays, a very large number of PPP sites saw their PageRank drop to zero. Suddenly, they were unqualified for the better paying blogging opportunities.

Posts from Matt Cutts at Google confirmed that this was an intentional penalty, not just the usual suspect data from the Google Toolbar. The belief passed through the forums and the blogosphere that these sites had lost all ability to provide benefits through links (e.g. “link juice”).

Meanwhile, we were still seeing our clients benefit from PPP opportunities, both in direct traffic (suggesting that the sites had not lost search engine rankings themselves) and in ranking benefit (suggesting that link juice was still being passed. Clearly, something else was going on and I was determined to discern the facts scientifically. The details on my investigation follow.

Hypothesis: The “penalty” Google imposed on PPP blogs is more cosmetic than actual.

Prediction: If the penalized sites are truly unable to pass any link juice, then a link from that site to a page on another site will have no impact on Google’s rankings.

To test this theory, I had a group of sites each use unique, fantasy anchor text to link to a brand new page (unindexed and never before linked) on a single site (so that there were no variances of site trust on the destination page). The destination pages all included different excerpts from the text of Beowulf (so that the content of the page was unique across the site) and did not include the targeted keyword on the page. If the destination page later returned in a search for that keyword, it would be shown that the site was still passing link juice.

The anchor texts were created using a password generator, using six or more characters in length, and had no more than five hundred (500) Search Engine Results Pages (SERPs) in Google at the time of creation (many were misspellings of other words or used as forum logins by others, so they did have a few SERPs).

Methodology: The test consisted of eighty-three (83) sites. Fifty-four (54) were PPP blogs that had been “penalized” by Google (PPP Group) and twenty-nine (29) were non-PPP sites (Control Group). The members of the PPP Group were located via a posting on the PPP forum. We asked PPP bloggers that had been penalized to participate in this test so that we could determine whether their blogs still provided any SEO linking benefit.

Each blogger was given a unique combination of anchor text and destination page on the target site and was told to place the link on the homepage of their blog. Once the links were live, the target site was monitored daily to determine if/when it started ranking for any of the fantasy anchor texts in Google, Yahoo, and MSN. The test was allowed to run for six weeks.

Results: Of the PPP Group, fourteen (14) caused pages to be ranked in Google (25.93%) and thirty-two (32) to be ranked in Yahoo (59.26%). Of the Control Group sites, fifteen (15) ranked in Google (51.72%) and sixteen (16) ranked in Yahoo (55.17%). None of the sites caused pages to be ranked in MSN.

Conclusions: Clearly, the claims that PPP blogs have lost all ability to pass link juice have been definitively proven false.

However, the possibility that an actual penalty has been imposed still remains. The PPP sites pushed pages into Google at half the rate of Yahoo, while the Control Group pushed pages into Google and Yahoo at very similar rates. This suggests that Google may have lowered the actual PageRank for the pages. Whether this was to zero so that only the link juice from the page itself is passed (none of the link juice coming into the page would be passed) or to some other amount is unknown.

Alternatively, this differential rate may be due to Google’s attempts to reduce the influence of Google Bombs. The anchor texts for the PPP Group were actually somewhat more competitive than that for the Control Group. On average, the keywords in the PPP Group had 196 SERPs while the keywords in the Control Group had 129 SERPs on average, a difference of about one-third. If the efficacy of the Google Bomb filters is based upon the number of pages that rank for a keyword (as many believe), then this could account for much of the delta.

Another lesson learned is that it appears that MSN will not rank a page based only on the anchor text of the links coming into the page. The key phrase must be on the page itself.

Commentary: It’s very possible that the penalty imposed by Google is not purely cosmetic, and that an actual lowering of PageRank did occur. As it happens, PageRank is no longer all that large a component of Google’s relevancy calculation, so even if PageRank was actually dropped to zero, PPP posts still have definite SEO benefit for advertisers.

That’s no consolation to Posties who lost revenue due to not being able to take on new paid blogging opportunities, and I sympathize with their pain. Unfortunately, Izea’s connecting the sale of links to PageRank was a sure-fire way to draw some ugly attention from Google. Hopefully Izea/PayPerPost advertisers will be willing to accept RealRank as a suitable proxy for PageRank.

Further testing will be needed to determine whether or not the penalty was cosmetic, and if not, how severe a penalty was imposed. I still believe that at best the penalty is quite limited. Google’s ability to programmatically determine which blogs are doing paid blogging seems too still be somewhat ineffectual. Many PPP blogs were not hit with the penalty, and there are numerous reports of sites that have never had anything to do with PPP having their PageRank zero’ed out. The risk of collateral damage was quite high and even a purely cosmetic penalty would achieve Google’s goal of punishing the sale of PageRank. It’s probable that Google didn’t want to take that risk.

The next round of testing will begin in a week or two. If you’d like to take part, please drop me a line through the blog.