"My Rankings Just Fell!"
If you're rankings dropped it may not be because of something you did. It may just be Google being... well, Google.
There is a patent filing by Google titled "Ranking Documents" which could greatly affect your keywords' rankings in the search engines. Shaad Hamid wrote a great article about it with some commentary by other experts in the industry, though it may be a little technical for those who don't deal with SEO on a regular basis.
What These "Transitional Rankings" Mean in Layman's Terms
The patent discloses how Google will alter the rankings on its results pages with what are becoming known as "transitional rankings." These will look like a sudden, drastic drop in your site's rankings, for what seems to be no reason. For example, your page may rise significantly in Google's search results, then be several pages back the next day. What is happening is that a rise in rankings may send a flag to Google that you are trying to beat their system or utilize methods of which they don't approve. Consequently, they may drop your site back several pages in the rankings and watch to see what you do.
If actions you recently made are undone, it may send a signal that spamming techniques were used, and create an additional flag for Google. However, the more likely scenario is that a ranking will return to its original position over time as if the actions were never performed. If additional actions are taken, especially techniques like buying links or spinning content, it will send even stronger spam signals to Google which will likely result in stronger action being taken. If no action is taken, the rank will likely be restored - unless the ranking fell for other reasons not related to the transitional rankings.Over time, Google will make the adjustments it feels necessary. In their words: "... it may take an unknown (possibly variable) amount of time to see positive (or expected) results in response to the spammer's changes."
Google is trying to eliminate spamming techniques that raise poor quality sites to the top of the search engines. By testing websites with "transitional rankings" and monitoring further actions, Google can get a clearer picture of who is really trying to beat their system rather than provide something that is of value to a user. This move is another step towards giving users relevant results and eliminating sites that are trying to beat Google's system instead of creating quality content. Overall this is a good thing if you're utilizing reputable SEO tactics. Unfortunately, that doesn't mean there are never bumps in the road. These transitional rankings can hit anyone as Google monitors sites to see who is playing by the rules.
What to Do if You See a Sudden Drop
The most important thing to remember if your rankings suddenly drop is "don't panic!" The worst action you can take is to panic and take drastic measures like mass link building (spam) to regain your positioning. Be calm, and see what happens. There is a good possibility that Google is just testing you.
Continue to build good content. It works in Google's favor to show page one results that display content providing value for the user. If you respond to a drop with nothing but continued good content (and maybe an adjustment or two on your site), the transitional ranking will be just that - transitional.
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