Google’s algorithm updates, Panda and Penguin, are making it easier for small businesses to compete with larger competitors.

For small businesses it has been a constant battle to compete with the big brands online.

Many choose to invest large sums in search engine optimisation (SEO), seeing it as the best way to generate leads and sales. I know one small business owner who employed three SEO agencies on three different websites all linked to the same store – sadly within two years that store had closed. It simply could not compete in the retail environment it was in – too much of the marketing budget went into SEO that ultimately failed to deliver.

Prior to recent Google algorithm updates, called cuddly names like “Panda” and “Penguin”, websites that needed a boost in search engine rankings could achieve it with a combination of two things – link building and onsite work. The latter included adding the necessary search engine signals and signposts into the website itself.

This worked – until increased competition for that prime piece of real estate on page one of Google meant allocating more and more of the marketing budget to SEO to keep up with the competition. It even led to some turning to unethical so-called “black hat” ways to cheat the system.

For a small business, taking on someone full-time to do SEO was and still is cost prohibitive while big businesses could afford a whole team working full time. Outside contractors needed to be better than good to compete.

The main currency in the old days was backlinks and if you could find ways to get lots of them and in greater volume than your competitors, you stood a great chance of getting to the top. As an SME in a competitive niche, however, there was one big problem. Link building in volume either takes a lot of time or a lot of money.

Things began to change when Google decided to start demoting some websites that appeared to have an unnatural link profile and reward websites that displayed greater link diversity.

This started as early as 2011 in the case of large US retailer J.C. Penney. This company established for more than 100 years had unwittingly taken part in what appeared to be a paid linking scheme with colleges and universities when they used an outside contractor.

For those that need further proof of Google’s intent, its writers removed a reference to linking between websites – even high quality ones in its ranking article within the Webmaster Tools help documentation as highlighted by this Search Engine Land article.

Paying for links is now frowned upon. The main currency of SEO has depreciated dramatically. Further updates are having a more subtle effect on websites looking for shortcuts via press release distribution and even paid guest posting.

While press releases and article distribution still have value in raising awareness of a small business brand, it is now advisable to handle any linking between websites with care and avoid overloading articles and press releases with too many anchor text links targeting the same keywords repeatedly.

So with these short cuts now exhausted you would be forgiven for thinking SEO as an industry is dying.

That was until good readable content began to be rewarded with a more visible presence on search engine results pages (SERPS). So too were those websites that had been doing things the natural way.

This combined with the rise of Google Authorship and the positive results being reported for websites using it has actually revived SEO and in turn has helped small businesses who focused on their content marketing rank better and avoided some of the old short cuts. It has, in other words, levelled the playing field.

Many of these small businesses can now outrank much larger competitors because they have shown that they can genuinely connect with their website visitors.

So the sea change in the way Google rewards good content means that businesses in competitive niches should be using some form of content marketing or ideally a mix of all forms including video, blogging and image sharing and, most importantly, a strategy to connect with customers.

This can even be done in-house at relatively low cost these days and – dare I say it – without the need to pay an outside SEO contractor.

Google has received its fair share of bad press in recent months but the fact is, as its algorithms evolve into a more intelligent aid to searching online, the old unethical practices used to get ahead will soon die out if they have not done so already.

The hope is that this is not just a brief window of opportunity for SMEs before big businesses with big budgets figure out new ways to beat the system.