In 1998, two graduate students at Stanford University, Larry Page and Sergey Brin, developed "Backrub", a search engine that relied on a mathematical algorithm to rate the prominence of web pages. The number calculated by the algorithm, PageRank, is a function of the quantity and strength of inbound links.[21] PageRank estimates the likelihood that a given page will be reached by a web user who randomly surfs the web, and follows links from one page to another. In effect, this means that some links are stronger than others, as a higher PageRank page is more likely to be reached by the random web surfer.

The term was first used by Internet theorist John Kilroy in a 2004 article on paid search marketing.[citation needed] Because the distinction is important (and because the word "organic" has many metaphorical uses) the term is now in widespread use within the search engine optimization and web marketing industry. As of July 2009, "organic search" is now common currency outside the specialist web marketing industry, even used frequently by Google (throughout the Google Analytics site, for instance).
Organic is what people are looking for; the rest of these simply put things in front of people who may or may not be seeking what you offer. We know that approximately X number of people are looking for Y every day. So if we can get on front of those people, we have a much greater opportunity to create long-term relationships and increase our overall ROI.
People are more receptive to hearing these marketing messages because they are more natural and organic. They’re not paid for and stuffed in their faces through interruption marketing. An indelible experience has intrinsic emotional and psychological value, as people enjoy it. They then feel emotionally compelled to share their experience with others that they have a close relationship with as part of relating, so that they can share in the emotional experience too. This is done through conversation, phone, text, email, Facebook shares, Tweets, and the like.
It increases relevancy: Siloing ensures all topically related content is connected, and this in turn drives up relevancy. For example, linking to each of the individual yoga class pages (e.g. Pilates, Yoga RX, etc) from the “Yoga classes” page helps confirm—to both visitors and Google—these pages are in fact different types of yoga classes. Google can then feel more confident ranking these pages for related terms, as it is clearer the pages are relevant to the search query.
As a SEO analyst the fact that recent changes Google has made has made it hard for websites to rank scares me a bit but on a second thought I see a lot of opportunity here for growth. Because as SEO gets more challenging true meaningful strategies are now needed to optimize a site rather than just link building and basic on page. SEOrs really need to understand the nature of a client’s business, work on their buyer’s persona & understand their clients Goals. I am a big fan of Point #2 & #3 you highlighted under potential solutions. Local businesses (LB) really need to setup up and take full advantage of Google My Business (unfortunately I don’t see many LBs doing that). With point #1 i.e. demand generation, I am bit confused about how that strategy will unfold for small businesses. This would mean a lot more investment from their end on building their brand equity and brand awareness, but some businesses don’t really have that kind of funding. I mean yes, they can implement aggressive social media strategies and take advantage of GMB but that will still be very challenging I feel. Maybe a bit more information on how we can generate demand for small businesses be helpful!
Well, yes and no. Sure, you can get hit with an algorithm change or penalty that destroys all your traffic. However, if you have good people who know what they are doing, this is not likely to happen, and if it does, it is easy (in most cases) to get your visits back. Panda and Penguin are another story, but if you get hit by those it is typically not accidental.