Excess of Bad Previous Backlinks Hurting Site Ranking? Google Penguin Involved?

A bit of a backstory

Our company website has been around a while, and has had great success in the past. Around April 2012, however, we had an enormous drop in traffic, from which we have never been able to recover. I believe this is due to the Google Penguin update. However, I am unsure, as I did not own the company prior to 2013. Around 18 months ago, I signed on with an SEO company in order to try to recover our search rankings (despite being the largest supplier of ____ in North America, our rankings were terrible, on the 4th and 5th page). After paying them a grand a month for approximately a year, there was a small increase in our position, but 0 increase in organic traffic (the rankings for our keyword phrases were ~10th to 35th. When I asked the SEO company about this, they cited a lot of excess backlinks and that "more work needs to be done". I checked Google Webmaster Tools and we have a few hundred backlinks (~400), and most of them look pretty high quality
So my questions are:
1. Can you confirm/say pretty accurately that the April 2012 decrease in organic traffic was due to Google Penguin? If not, then what could it be? I do not believe any large changes to the website were made during that time. And the dropoff in traffic was large and sudden.
2. What do you believe I should do, to recover my site? Should I:
a) stick with my current SEO company
b) look at my website and try to improve it? I'm questioning doing that because of our great past results in terms of traffic for our site
c) try a different SEO company? What's to say that my results won't be any different? I might just end up in the same predicament, out another 12 grand next year.
d) disavow my backlinks and start anew (though SEO companies have warned me that it could cause more damage than good)
e) get a new domain and just have the old one redirect to the new one, starting from square one

Thanks

 

I experienced the same thing back in 2008. My site went from #1 in Google for the most competitive search phrase to well below #500 in a matter of hours and never recovered. Within 2 weeks following that drop, Google sent me an email (as I was signed up with Google Webmaster Tools) trying to get me to buy advertising.

Google drops sites in the rankings all the time for no apparent reason. When you cannot get traffic from Google organically, you have no choice but to pay for it. It is Google's crooked little scam to keep its revenue growing.

Good luck.

 

You can easily check if an algorithm update has hit your website if you know exactly when you took the hit. The guys from MOZ are very quick with updating that list and giving as much info as possible: https://moz.com/google-algorithm-change

Indeed, the major Penguin update was back in 2012 so if your website dropped around April, indications are the update might be the reason. Buying a domain or taking over a business is always risky in that direction, as you can easily inherit the bad reputation from the previous owner and have to put much efforts in tackling that. Like you did.

Thing is that dealing with SEO companies, as much as it is needed by some, can be very, very, very tricky. There are a LOT of scammers on the market and there are numerous ways they can get you. Your current company doesn't sound like they are pros in that area too. While it is completely natural to not expect results immediately, working for a longer time on a site and you should have something to show for it. The mere fact that they told you about the bad links only after confronted has to ring a bell - well if they knew that all along, why weren't they focusing on that first. Because keeping those would make all their other efforts in vain.

Thing is that you don't really have that much backlinks to begin with. I've seen people tackling with tens of thousands of bad links and figuring it out in the end. The simple thing for your SEO company to do would be to track the "bad" links, contact the owners asking them to be removed, if no reply or cooperation is received after some time - disavowing is the way to go. Plus, anyone in this business knowing what they are doing should be able to disavow without any issues.

SEO is generally expensive. As you are not a small company, even the $12k/year is not such a big number. I am not saying that to encourage you to look for a more expensive solution. Just wanted to point out that big bucks do not guarantee big results in SEO (though small bucks almost always guarantee disaster). As some general advice, do not be afraid to ask your potential SEO employee/company questions - how do they intend to do their job? where do they intend to focus? what is their long-term plan? You are actually not asking them to reveal some big secrets so if they try to slip with that excuse - leave them. If they start speaking about huge actions in bulk - leave them. If they promise you big achievements within a short time - leave them. What you want are some solid people that have a good, continuous plan and the methodology to follow that plan.

Whew, that went longer than expected. Hope I was able to help still