Abandon Ship! Or do I stay aboard like a good captain?
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I would not abandon ship. You are still ranking, even if it has dropped some. Seems like you have a great business and you have put some time into your site marketing. Based on what I am seeing, I would start bailing water. No reason to abandon ship until you have actually put some effort into it first. I think you are in better shape than you realize, but you need to take care of some basics right away:
- Make your site mobile responsive - MC just stated that this mobile usability was going to be a factor in Penguin. Last summer Google even said it prefers responsive sites
- Add publisher markup and authorship to your site
- Use Schema coding
- Focus on your local SEO efforts and hyperlocal authority
You have some pretty tough competitors, including the university on a very strong .EDU site, so you have to get your expectations aligned properly. Despite this, I think you can do have success.
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You are never going to learn unless you fail, fix your issues and it will make you a better SEO

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I agree with Tim! You are not kicked out of the search engines although I have witnessed websites who have gone in the penguin 1.0 and are back in rankings after cleaning links and doing some active inbound marketing the ethical way!
As far as your website is concern I think you have played half the battle! Link removal and disavow is one thing but in order to come back in rankings you should actively participate in inbound marketing, and get quality links, social shares and build branding in the digital world!
It is difficult but results will take you back in rankings from the desired key phrases and continuous effort will make you stay there for a longer period of time.
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Witness, I've been in and out

clean up your back links
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You must no abandon because you still ranking on 1st and 2nd page for some hard keywords.
1- Make your site faster
2- Make it responsive
3- Improve your social media (specialy your circles and +1's) and clean your toxic backliks (if is the case)
4- Look for long tail keywords. For example, follow not only "photoshop course sydney"; set in the dashboard "photoshop courses at sydney" "learn photoshop at sydney"... and many more... Use the Adwords keyword tool to discover more usefull kwords
5- Rich your snippets! Being at 6th and 8th on the ranks, you could get more traffic and improve your CTR if your snipet were showing 5 stars ratings, your face (Authorship) or something special chars in the description (that in a lot of cases is taken from meta description)
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Thanks for advice. I'll run through all my on page errors and see if there is something wrong there. An easy thing to check and fix.
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Mobile responsiveness, publisher markup, schema coding and hyperlocal all are things I can impliment relatively easily. I'll do some research into them all and see if I can implement them asap. Thanks Tim for your advice and time.
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Thanks Cesar, After panda and the various Penguin updates I've learnt a crazy amount about solid SEO practices. You're right, you learn nothing from getting it right all the time!
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Thanks Moosa,
You're right. I've only just started my quality linking. I guess I was a quite disheartened after the latest set backs. Onwards and upwards I guess!
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Hola Natan,
Thanks for your reply. Site speed and responsive design seem to be very important changes I can make. Thanks.
Plus I need to look more into Rich snippets.
Thanks for the advice brother!