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On the other hand, the #1 site is not well optimized but, as the industry leader, they get a lot more traffic that I do. I have grave suspicions that it is this high traffic that gives them their edge over my site.
I would be interested to hear other views on this.
If it were based on pure traffic - unique or not - the only thing people would ever see are the major 'brands,' and leaving the rest of us at the bottom of the SERPs.
I have several news sites where feature stories routinely rank much higher than CNN and the other big guys - even though I would venture to guess they pull 50-100 times the daily traffic.
In your example, as pmac said, backlinks are probably in play here. You didn't mention PR, but if the 'Industry Leader' has thousands of pages on its site, there may be a lot of the internal links giving it a boost as well.
sachac, you're obviously doing all the right things - so what's so bad about being #2 at the top of a 2.7m slice of the market?
If not more visitors then better targetted visitors at any rate. :)
But anyway - Google does not as we know rank by visitors (although they do sometimes track results and have a lot of toolbar data no doubt.)
Regarding the comment that I ought to be happy to be #2. Well, I am. However it is not only about trafic. Its more about building a brand.
The big guns in my category have deep pockets and could afford to advertise and promote their brands nationally. I am trying to get the same level of branding on a shoe string on the Net.
If/when I move up a notch, I can promote the fact that I am #1 on the Net. Being #1 in any category is very, very powerful branding. On the other hand, #2 simply does not cut it.
Example: Google has enough brand that people will signup for adsense without even knowing the split, do you know of any other ad company that could have pulled that off without a major fight? I doubt it. THAT'S BRAND in a nutshell.
Branding starts from within.
Then, by checking your competitions backlinks you can know exactly who links to them. This information is gold. Go to those sites that link to your competition. Quite often they will be open to some sort of partnership (especially if your site has good content and is useful). If you're looking for one-way links, offer that site some content in the way of articles. IF you do succeed with the article route not only would you be one of few links on that page (thus passing you more PR), but you'd get the added benefit of branding when people read your articles (which is what you're looking for!). Sounds like you're doing well so far though! :)
Dave.