Ep 49: GMB PWND by spammer, Google moves toward contextual advertising & The FTC updates review guidelines

Part 1 Video Starts 0:13 - GMB Pwnd; Google abandons FLOC and moves toward contextual advertising standard with Topics

Part 2 Video- Starts 11:06 - The FTC fines Fashion Nova and establishes new review guidelines

Part 3 Video- Starts 21:01 - The practical implications of the new FTC guidelines around gating and review suppression guidelines

Reference Articles:

1. Google GMB's Old Facebook Page Pwnd by Fake Reviews Vendor
2. Google abandons FLOC for Topics API
3. With $4.2M Fine, FTC Kills 'Review Gating' & Review Suppression
4. FTC's Review Guidelines Part I: Business Marketers

Transcript Ep 49:

Greg: Welcome back to the near memo episode 49 or season two, episode four. And, uh, I'm Greg Sterling. I'm here as always with Mike Blumenthal and David Mim to talk about search social and commerce, and what happened this week, that's interesting or controversial or fun. And, uh, we're going to, we're going to lead off with a sort of, uh, a funny.

Somewhat, uh, stupid item today, which is, uh, uh, the, um, the capture of Google's old Google my business, Facebook page by a Google by a fake reviews vendor that sells Google reviews. So, uh, Mike, why don't you tell us

Mike: what has, so in November, when Google switched the brand from Google, my business to Google business profile, they switched all the URLs and in doing so change the name of their Facebook page.

Let the Google facebook.com foresights, Google my business, go away and a spammer picked it up and started selling Google reviews on that page. I asked him how much. The good news is only $4 a review. Um, and I just, no, no, not bad at all, but as many as you want. And I just thought this is such a, as you pointed out an amazing offer, I didn't get that far.

Right. But when they did get the $4, it's just a metaphor for how screwed up the review spaces that Google has not been able to control the bad. Uh, or minimize the value of fake reviews. And it's a metaphor for how bad moderation is at Facebook that, that, that a business that claims to be selling Google reviews.

There's no, there's no legitimate pretense made it through whatever adoration they don't have in place to take over this spot. So when you do a search for Google, my business, Facebook's. By Google reviews is the first page that comes up. It just tells you where we are in the

Greg: it's really, it's really astounding.

It's a kind of a marketing negligence, uh, example on Google's part, you know, totally

Mike: that

David: it does give me some comfort that Google's atrocious efforts at branding and local have finally come back to bite them at some point. So there's a little bit of comedic justice.

Mike: And joy pointed out how many links they let go.

It's like that page, the Google Facebook page is linked by everybody. So

Greg: do do, as I say, not as I do the old adage.

Mike: Yeah. I guess it's just rewards at some level. I, so,

Greg: um, speaking of Google, we're going to talk, uh, about the, the pretty significant change that happened this week. Google abandoning it sort of, uh, Flock approach to next generation ad targeting the post cookies, uh, privacy safe, uh, experiment that they were running and extensively

David: privacy safe.

Well, yes, yes. There's a few take his word for it. So, right. So,

Greg: so at least in theory, it was much more privacy friendly than cookies and, uh, they, they walked away from it and it's completely and announced a new approach called topics. Uh, which we'll discuss, but I think the motivation for doing that is that there was widespread opposition, WordPress in particular and others who would come out against it and, and said that they would block it or not participate.

So there was a pretty significant, uh, opposition to, to it. But David, do you want to talk about.

David: Yeah, no, I just, um, I sort of selfishly want to talk a little bit more about it because it gives me a chance to expand on a sort of throwaway comment I made on last week's near memo, which is that I see advertising digital advertising, generally moving more into the world of content, the pendulum swinging more towards contextual and away from behavioral.

And I think that Google's announcement of topics is a reflection of their realization of. Comment as well, um, in that, so that the topics API essentially is a set of Google defined topics by which they categorize, categorize certain websites. And they're very broad. It might've been a very, you know, sports as a category, right.

Uh, or lifestyle or

Greg: fashion or whatever, just check. This is a concern that marketers have raised that the categories are too broad. There's not enough granularity.

David: Yeah, for sure. I mean, sports could be everything. You know, uh, bowling to golf, which are demographically fairly, fairly different. Uh, you know, you, uh, consumer groups that are going to be kind of reading things about those, those sports.

So, um, so anyway, that the proposal from Google is that they will sort of tag it anonymously to. A user's visitation of sites that fit into these categories and allow advertisers to target this sort of behavioral pattern over just a three week period. So I think it to Google's, I, I would say to Google's credit, like this is a fairly limited window of, of, um, behavioral patterns that you're tracking.

Um, but the, the flip side of that is that it's still required. Uh, browser support, which coming from apple and Mozilla and brave and other browsers seems like there's no incentive for those browsers whatsoever to support this new proposal from Google. So, Mike, you made a, I don't know if it was a funny or a true statement, but it's going to cost Google a lot of money.

Uh it's again, if they want to get safari on board with this new program. So I still think it's probably DOA. And I think that the pendulum will continue to shift even more in the contextual direction. Cause it's the only thing that truly is, uh, you know, privacy, um, privacy sensitive. It doesn't track anything except what your what's in front of you on the screen.

So, um, so that's my that's my general take is I think all of these behavioral, um, aggregations or. Uh, abstractions that Google is trying to put together, I think are not going to have very broad support from any publishers or browsers.

Greg: I, I w I L I like it. I like it. Um, I don't mind the behavioral dimension to it given the three week window, uh, assuming that it's executed as, as, as discussed.

I mean, I think there is a lot of evidence I'm writing today in the newsletter of. Uh, Google Boston consulting group study about privacy ad relevance and personal data. And consumers consistently say that they want relevant ads. They're not seeing ads that are relevant enough to them. And so I, I think this is a nice compromise with between contextual and behavioral.

I like the idea that consumers will have the ability to control the categories that they're, um, that they're being targeted for. Um, if it truly is easy to use. And I think that Google's done a nice job now, I think marketers have, are going to have a lot of concerns about the targeting capabilities, uh, and maybe you're right David, that other browsers won't support it.

And thus, it's kind of a, just an academic discussion, but I think that they've done a good job in sort of migrating from something that was more problematic to something which is much more. Uh, reasonable and I think balances the interests here. So I I'm I'm I support this. I think that they've done a, a pretty good, and I would

David: say even if the browsers do, even if the non-Google browsers sign onto this, um, I do think that the cat, the categories are so broad at this point that they're hardly useful or only marginally useful and that where you would really see a benefit.

A particular ad is, is the context, right? So even if you're, you know, even in the world of traditional media, um, you know, a certain set of brands is advertising on NFL games. Cause they know that topic attracts a certain audience and you don't really need the three. You don't need to know what I did the three weeks before I watched the, you know, Bill's chiefs game.

Greg: So well returns to kind of a TV like demographic, uh, you know, old style, newspaper approach or magazine approach. Here's our audience and, and, you know, you can, you can target them. So that's, that's, that's a big, uh, difference from what marketers have access to, to, to today, which is very granular data. I mean, one, one response is for Google to really blow out the categories and make them much more specific.

And I suspect we'll see something like that.

Mike: So first question is this doesn't affect Google's first party information. It will, it will make their ads much better or

David: more targeted, as we've said for the last year with all of these privacy initiatives, that these only, these only reinforce the strength of Google Facebook.

Greg: Yeah, this is, this is kind of a central problem. And I think, um, I think Ben Evans has pointed this out. Uh, if I remember correctly that the idea that, you know, th th the, the, the German publishers, Axel Springer and others are, are, are appealing to courts in Germany to prevent Google from abandoning cookies, because, you know, they benefit from them.

And so, like these independent publishers, these news publishers, Uh, you know, we'll suffer under this new, more privacy favorable regime. So by advancing the interests of consumers and privacy, your disadvantages, the smaller publishers, uh, and, and, you know, putting Google and Facebook and Amazon, and a few others into a position of even greater power, which is what the GDPR did in, in Europe for, for the big platforms.

Even though that was an unintended con.

Mike: Although cookies are a privacy nightmare and Groover made the gun go right during dairy Gehring fireball. Uh, compare the German company. To a pawn broker who complained that he couldn't get as many goods because the police were cracking down on how steps, which I thought was very appropriate.

It's like, how could this, the European court possibly agree not to reduce the use of cookies, which are a privacy nightmare? Well, I mean, the

Greg: GDPR explicitly requires opt-in consent. Right? Okay. You know, so it's an anti cookie, theoretically anti cookie, uh, privacy scheme. But, um, you know, I mean, there may be some disingenuousness there, but it it's it's.

Yeah. Well, I think, I think there's, they just don't have the kind of, they don't have the resources that the big platforms do to come up with alternatives. So, so let's move on to what is arguably the most important development of the week from our point of view? Um, albeit maybe under the radar a little bit for a lot of people, the FTC, uh, fine against fashion Nova, fast fashion, online clothing seller

Mike: online

Greg: in offline.

They do it. Oh, I didn't know they had stores actually. Well, I'm not a customer. I'm not part of the demographic segment. That would be a customer for them. So I don't under three

David: week browsing history. Doesn't include. What are they ever there

Greg: I go, I read the Vogue. I actually do read the Vogue. Um, they have a good, uh, technology, uh, site, but, but no, I'm, I'm not a customer anyway, online and offline retail.

Penalized, uh, to the tune of 4.2 million by the FTC for failing to, uh, publish all their reviews and review gating. So, Mike, why don't you explain further what

Mike: that means? The, the headline of the story was this $4.2 million fine and fashion Nova, which is with pilot investigation, turns out. Pretty reprehensible company.

They've been sued in California for paying workers $2 and 11 cents an hour. Uh they're you know, they're, pieceworkers, they've been sued previously by the FTC they're in multitude of trademark, uh, suits with Adidas and Versace or Mercedes. I don't know how to pronounce it. Um, and so the Versace, you know, so they're, they're a company that typically.

Asks pays for forgiveness doesn't ever ask for permission. Uh, so they're used to paying fines, uh, and what they did was using platform. Uh, they S which gave businesses the opportunity to delay moderation and publication of reviews below a certain rating. They used it to never publish hundreds of thousands of negative.

Uh, and now you may recall that last year signed a sort of consent agreement with the FTC, uh, to not allow that behavior to go on. And the FTC agreed that to now. Punish Yappo because they were so cooperative with the FTC investigation. Apparently out of that investigation came this fashion Nova case. So, which is interesting, but more to, there are three other things that happened in this announcement.

There, I think were more important that didn't get as much news as even the fine one. The FTC sent letters to. 10 review management platforms, directing them not to take improper steps to avoid collecting or publishing negative reviews based on claims on their website, that they were either gating or suppressing reviews.

Those 10 are particularly vulnerable because once you get a letter from the FTC, you can no longer claim. You didn't know that this was. So those people can be really heavily fined.

Greg: Well, and just, just a quick question on that mic. Do you think this was the sort of the top 10 by market share or visibility in the space?

No.

Mike: It appears in reading the letters and talking to the FTC that it was 10 companies that publicly proclaimed that they offered this service, the ability to circumstance, right. And peers, they took snippets from the website and said, if you're actually doing this, you better stop. Um, so I, uh, we did request to see if we can get the names of those 10 companies will.

They provide it. They also though, so those particular companies are vulnerable. One of the things you have to realize though, is that because of the way the FTC works, this is just guidance. They have to be able to prove that the business was actively deceiving customers, which is very difficult to prove.

Most small businesses are really not very vulnerable if they are still gating or they are suppressing reviews, unless they're in with one of these 10 companies and. The FTC, he goes in and gets them to devolve. Who's doing it. And that's very likely the equally interesting thing that came out of this was the guidance that they made for marketers and the guidance they made for review platforms.

Um, that sort of sets the stage for more rigorous, uh, enforcement that in the big picture review gating. No, no more suppression or selective review and rating display should be, is no longer on me. Tolerated. Interestingly positive and negative reviews should be treated equally. So even so in other words, yacht poke can no longer say, oh, you have two weeks to deal with your negative reviews before we publish them, which is what they said in the settlement.

They have to be published at the same time. So if. The delay due to moderation, positive negative reviews have to be delayed simultaneously, or you have to publish them all and then moderate. But oddly, they still allow for incentives and material connections to occur in reviews, incentives being, give us a review and we'll give you something.

Material connections, being employees or aunt Tilly, reviewing your business. As long as those reviews, reviewers made that. So it's kind of a, not as clean. It should be really small businesses and all businesses need clean guidelines. These guidelines are messy because they continue to allow for things that even Google and TripAdvisor don't allow incentives and material connections.

Greg: So let me just, let me just clarify this one point on material connections. So you're allowed to have your employees and your family members review. If

Mike: it is clearly disclosed, disclosed, clearly disclosed. And I said to them, well, what about the star ratings that are impacted by this? It isn't disclosed there.

How could a review like that ever be considered valuable in an aggregate review rating? Even with disclosure, it's not sensible. And they said to me that it was beyond their legal, their ability. They weren't. In a position to enforce that because it wasn't the crime. So it's

Greg: beyond, well, I mean, I don't think that's entirely accurate because if their charge charges to prevent consumer deception, you know, one could make the very strong argument.

If you have only friends and family reviewing your business, it's it's, it's, it's not, it's not a true reflection of the marketplace. And

Mike: it also creates confusion because Google doesn't allow it. If you get caught at Google, you'll lose those reviews. If you get caught at trip advisor, you lose those reviews.

So it's, it creates this sort of who then is that review going to be written for that material connected?

Greg: Well, it's, it's on, it's on the business's website, I think is what we're, what we're talking about.

David: Mike, does the FTC draw a distinction between or define a review versus a testimonial

Mike: that was where they don't make as great of a distinction as I think needs to be made.

I made the case in my phone call to them that there is a huge distinction. That one is more anecdotal and one is collective wisdom that should be protected as collected wisdom. And there, they said that's an arguable point. And they will be discussing it in the new testimonial and guidelines that are coming out.

And they said that those guidelines will endorsement guidelines that will be coming out the updated and we'll be able to, there'll be a comment period. And he said, so, you know, she gets, it strikes me.

David: You could, you could simply have a page called testimonials that lists all five star reviews and be totally.

Mike: As long as you clearly said, this does not reflect average sort of capabilities that these people have material, whatever. Right. As long as you were clear about it, you could, I suppose. Um, the other important thing was that they set guidelines for platforms. Now they, what a platform is, is a very confusing question because it could date.

It could be everybody from a. Uh, storage a group of storage facilities, you know, a hundred, 200, 500 that has their own review system that they'd built from scratch and do it yourself. It could be something like gather up that provides the tools to do that. But leaves moderation to the business could be something like Yappo or Trustpilot that also does moderation because they, they do the moderation so that Google will approve the reviews for ad-words or it could be something like Google.

TripAdvisor Yelp, all of those are platforms and they gave three broad areas of guidance around collection. Don't just ask, don't do any gating, if you do offer incentives, be sure that it's clear. Um, don't discourage people from submitting negative reviews around moderation, and the big thing in moderation is that you have putting them first.

They have to verify that reviews are genuine in that fake. Uh, can't edit review content and you have to treat positive and negative reviews equally. So you can't set up a system that delays publication of negative reviews so that they dropped to the bottom, that kind of things. So then publication that you can't filter out, you got to show them all or explain clearly what you're showing.

So there's no. So, so

Greg: there are clearly some, some gaps or blind spots or, or ambiguity is, I mean, the testimonial one being, uh, being a very obvious example in the definitions of who, who falls into the platform category, but let's talk about the practical impact of this. So, um, you know, there was, I, I posted this, uh, your piece on LinkedIn and there was somebody who was arguing.

Uh, you know, you still need to do review gating because most, um, you know, the people that are really motivated to write reviews are the, are the critics and the haters. And in order to get balanced, you've got to do selective solicitation of positive reviews. And Mike, you previously talked about a study.

You did, uh, at gather up about the impact of review gating on, on average scores. Can you give us a little

Mike: sure sense of that 20. 20 17 20 18 Google declared that gating was verboten. We switched several large groups of businesses over one day to the next. So we had 10,000 insurance agents that were gaining based and then they stopped.

And what we found was very interesting, that average review. Ratings hardly changed the year before compared to the year after. In other words, it was 4.6 rating across these 10,000 locations the year before 4.61 and maybe 4.59 after statistically insignificant difference with or without gaining. So it didn't affect whether the negative people were going to leave reviews or not.

My contention is if they're that unhappy, they're going to go around your gating system and leave her. At Google. Anyways, secondly, though we saw review volume increased dramatically by almost a 50 or 60%. I think it went from 35,000 to 65,000. Maybe that's almost a hundred percent, uh, total reviews during equivalent periods.

Now some of that review increase could be due to just reviews taking off in the marketplace, but a lot of it was due to the smoother path that consumers had to leave a review. So no real impact on reading. So the idea that somehow a business. Prevent people from leaving negative reviews is really wrong-headed.

And I think consumers, consumers are aware of this. I had a friend call me who had gotten cheated in a housing roofing deal. And I looked at reviews, reviews were stellar. He had looked at him, they were stellar. And I thought maybe the guy is faking review buying fake reviews. I ran him through. Curtis has product, which is called transparency report.

And it said, no, the reviews were legitimate. So then I went through the, his, the vendor's review process and he was gaining, right. So he did manage to get good reviews. Mostly five starts to the three and four-star, and he was gaining at a fairly high number. And my contention is that it might, it may help a little bit if you've got bad.

But it's much better to fix the service then to deal with that kind of duplicity because the vendor's going to get sued regardless.

Greg: So you could argue, you could argue most small businesses are not going to know anything about this decision or these new guidelines, uh, let alone pay attention to them and change their behavior in reaction to them.

But what, what, what, what do we think is going to happen in the market? I mean, this is a big deal, at least conceptually. Is there is anything going to change meaningfully in the market in terms of how people approach?

Mike: I think so, because I think the review platforms are vulnerable yet. Popo was very lucky.

They got off with a hand slap, and I think it's going to be relatively easy for the FTC to investigate review platforms. And if they find a. That like they did with the APOE that the star rating and sentiment filters provided its clients with the means and instrumentalities to easily and deceptively suppressed, negative product reviews and mislead consumers.

If they find that, then they're going to go after those review platforms. And I believe that these review platforms are responsible for a lot of the reviews that are happening. Um, so I do believe that the, at the enterprise level,

Greg: at the enterprise level,

Mike: Well, once you get above one location, it becomes very difficult to run your own review management program, maybe five locations.

But so I think they'll change. They're not going to have to change. They can not make it too easy to deceptively suppress reviews. So I think there will be some change at that level. And then it's going to be in their interest to promote the ideal of ethical review behavior. I mean, this was always an approach we took get.

We tried to be in compliance with all the rules and we used it as a marketing advantage. I think that these review companies will have to take that bent otherwise they're exposed and anybody is using those companies. As we signed with hypo and fashion, Nova is exposed once the FTC starts investigating

David: final trust to go ahead and final question is, do you see review gating or.

Yeah, sort of re cherry picking reviews, which this new ruling, um, you know, puts the kibosh on. Do you see that as a bigger problem or do you see buying fake reviews as,

Mike: yeah, I see buying take reviews at Google is a much bigger problem because most reviews are seen at Google, not at the website. So it's easy to suppress reviews on your website.

It's easy to, but it isn't easy to express your views at Google. And I see the bigger problem at CU. Which is what I pointed out to him. It's like these rules and the same with incentives, these rules apply to only 10% of the review views in the world. When the consumer comes to your website, 90% are happening at Google.

That's where regulation needs to take place as well.

Greg: Just a quick reminder in the report. Uh, Curtis and I did, uh, when I was Uber, all comparing Google, Yelp, Facebook, and TripAdvisor, you know, Google had the most fake reviews. It was about. It's been 11%. If I remember correctly of their reviews, which could be as many as 200 million reviews, depending on what the total corpuses, if you can extrapolate.

So, you know, it's, it's, it's a, it's a big, big problem. And across a lot of categories and certain categories, uh, it was above 20%, you know, 11% was the

Mike: average. I mean, I am not saying what about the future of consumer reviews, given the inability of the FTC. Broadly and force gun, willingness of Google to improve their filter filters,

Greg: Amazon or Amazon is a

David: particular problem.

Not

Greg: bigger problem there. Yeah. Yeah. It's a terrible problem in

Mike: Amazon. I am not optimistic about the future views and I love reviews and I would see that hate to see that well they're

Greg: there, they have been enormously valuable to, to consumers and it's been a really important of the last decade or so.

It's been a really important feature of the local consumers. And it's just really a shame that it's gotten. So polluted now and there really isn't. I mean, there really isn't an alternative that exists. I mean, in PR in the product space, you can use things like the wire cutter or, or particular editorial, uh, rundowns of products, but, um, in the services arena, there's really no substitute for consumer reviews, unless you're getting.

You know, personal recommendation pro some online word of mouth equivalent.

Mike: So, so just the nod that the FTC made to that problem of fake reviews is in their guidance for platforms in the publication section 0.5, they say have reasonable procedures to identify fake or suspicious reviews after publication.

If a consumer or business tells you review, maybe. Investigate and take appropriate action that may include taking down suspicious or phony reviews, leaving them up with appropriate labels, issuing an alert about them and addressing the issue with those responsible for them. Now, because these platforms like Google and perhaps even gather up are protected by section two 30, the FTC is very limited in any punitive action they can take.

If these reviews are left up unchanged, um, Get Google, for example, there's really no action they can take, but it does give them some room to at least insist that they try to follow this guideline. Again, a guideline isn't a rule from the FTCs point of view. A guideline is just sort of the general convention, a recommendation, and it may precede a rule, but rule making is complicated and expensive.

The question is whether the FTC and, uh, the group that leads the FTC. Three Democrats and two Republicans care enough about reviews to invest in roommate. Well,

Greg: on that, on that point, um, I watched the lien of con chair of the FTC, uh, interview on CNBC. It was very interesting. It was mostly been antitrust, but one of the points that she made over and over is that they have very limited resources.

They have a lot of, a lot of things in front of them. They're dealing. And so their ability to go after all the rule breakers and infractions and abuses in the marketplace is quite limited. And so, as a consequence of that, I think what we're going to see is very, I mean, you point out that, um, you know, the platforms are vulnerable and that's probably where those spend their time and energy, but they really are trying to create deterrence, examples that, you know, get other people to stop the bad behavior, rather than, rather than prosecuting.

The, the, the villains that are out there. And I think the fake reviews problem, you know, Google has to decide that it wants to take this seriously. I mean, they already sort of maintained that they do, but in order for there to be real progress or Amazon, they, the big platforms have to decide that they, that they, that they want to get cleaned it up and they don't, and they don't have, as you pointed out to two 30, immunizes them against liability.

So they don't really have any incentive to.

Mike: I guess I got out of the review space at the right time, huh?

Greg: Well, no. I mean, your, your example of the ethical review platform, I think is important. It's really important for, for, uh, ethical companies to, to, to be in the market and to be, uh, be alternatives to, to these other guys, the black hats.

All right. David, any, any final thoughts on any of the. No, have a great

David: weekend or week, depending on when you're listening and join us next week for episode 50. Yes. Big

Greg: Five-O we'll have birthday cake that's right. Or something. All right.