Part 1 Video Starts 0:13 - Meta/Facebook's Q4 'Wipeout': Dip or Beginning of the End?
Part 2 Video- Starts 20:53 - Deep dive into reviews and moderation covering Yelp, Google & the FTC
- Facebook's Q4 'Wipeout': Dip or Beginning of the End?
- Yelp Trust & Safety Report for 2021
- How reviews on Google Maps work
- The 10 Review Platforms Who Got FTC Warning Letters
Transcript: Ep 50
Greg: Welcome back to the near memo with David, Mike, and me, and we're as always here to talk about the week in search, social and commerce. Um, and as usual, there's more news than we can fully discuss in our 25 ish minutes. Um, but we're going to do our best. This weekend's kind of, uh, the theme is reviews and some of the activity that's been going on at the FTC.
Uh, Google and Yelp have news around reviews this week. And the FTC did, uh, did some important, uh, we actually covered this week stuff that happened before, around the, the fine with, uh, fashion Nova the review guidance. And then of course the notification of the 10 review platforms. And we'll get into that in a second, but first up, because it's such a big deal.
We have to talk a little bit about what happened with Facebook and its earnings. And it's, it's a kind of. Uh, wipe out. I don't know where it is this morning, but they lost something like 240 billion in, in market cap value yesterday, which somebody pointed out on Twitter. Uh, David, I think you were the one that flagged this, but this is more that they lost in one day than most companies have ever been worth.
You know, in the it's sort of the Zenith of their valuations, which is really an astounding thing. And, uh, Zuckerberg personal losses were pretty astounding in terms of billions. Dollars and net worth, but he's still worth something like 90 billion or whatever it is not any money I'd like to be worth a tiny little fraction of that.
Um, anyway, so, so what is your, what is your take on the question of whether or not, um, you know, they, they lost users for the first time they're struggling. They, they claim that apple is going to cost them 10 bucks. Uh, dollars this year, the privacy, uh, changes that apple instituted in iOS 14, five and beyond.
Um, is this, is this a temporary thing? Is this a dip, uh, an investor opportunity in other words, or is this, uh, signify the cumulative impact of all that has come before? And they're really starting to flatline in this, in this country and that growth is going to be elusive for them going forward. What do you guys think of.
David: Yeah, I would, uh, as we were saying in the, in the green room before, uh, I will not be buying on the dip for ethical reasons, just because I don't want to support, uh, Facebook as a company, but I don't really see this, um, current frenzy over the, whether it's the apple privacy loss, uh, that Facebook is projecting or the drop-in users.
I don't see as kind of an existential. Threat to them. Um, the reality is that most of their growth opportunity is actually still in developing world countries. Um, and I haven't, I haven't seen any data that they're losing users over there that engagement's dropping over there. They still own WhatsApp, which is a huge installed user base that I don't see going away that they've barely monetized if at all.
So, I mean, I think there's still plenty. Like I happen to be, I happen to think the metaverse as a concept is stupid and even stupider in Facebook's execution. You know, whatever, we'll see kind of where that goes, but I, I actually see their sort of next five-year horizon is still pretty strong unless there's like a major antitrust thing that comes out.
But I think it's, this is kind of a typical overreaction, everybody piling on. Um, you know, I'm happy to see it, frankly, but, um, I don't, I don't think it's gonna be a longterm impact
Greg: for them. So the best investors are very nervous. Right? It's the market is volatile. People are very scared. And I think part of the reaction was the surprise versus Google, Microsoft apple results.
Right? So everybody was doing really well and their peers kind of outperformed for the most part. And Facebook came along and, you know, I think the revenue expectations, but law, uh, but, but on the bottom line they, they missed and then all the user stuff. So people, people were, were surprised by that, that took them by surprise.
And I think that that exaggerated the impact, perhaps I, I would tend to agree with. Although, I do think that some of what has come before the, the bad behavior that we've talked about many times is having an impact on user engagement and user growth. At least in the United States. I don't know, Mike, if you have any, you know,
Mike: I paid service, I have a history of ignoring Facebook.
I'm happy I have, I just don't engage with them much. It's like, I, I don't understand that. There, you know, they, I don't understand why they get in this blame game. Right? It's Apple's fault and small businesses suffer. It's just bullshit. Right? They've got a huge user base. They have a huge marketing engine.
They have a huge advertising capability and they have the ability to switch from behavioral to contextual if they want, do they know they can see what people are reading. They understand it. They can create different advertising models. So. I just see their sort of hand-wringing is, uh, the boy crying Wolf.
And I typically tend, I just tend to ignore it. So, and I'm going to continue to ignore it and not see, I have no place in my life. I'm with David. I think their idea that matter versus like I have no interest in going there.
Greg: No. Well, that's it that's a separate conversation. I mean, I think it's, I think, I think it's interesting and I think.
Show up in ways that are different than what people expect. You know, uh, they may have some challenges there. Um,
Mike: I mean, it is true that they don't control the platforms that they depend on. Right. They don't control Android, they don't control iPhone and they are very dependent on them. And that's true.
And I, this is one aspect of sort of the Sumo rest of all is at the top, going up against each other, apple, Microsoft, Amazon, Facebook, Google the. Those companies only have each other to compete with. They're so far out ahead of everybody else. And in that mix, I see Facebook as the most vulnerable because they control so little of their own future in that regard, which is why the metaverse is so important to them, but also why they're vulnerable to what should be reasonable privacy actions on the part of the apple perceived as.
Uh, and which I cannot for the life of me understand how this is negative to small business, but even that claim,
Greg: I mean, I understand why they make that argument, but in fact, um, you know, it's, what's fascinating is that as we've discussed before small businesses have embraced Facebook more than they've seemingly embraced Google
David: man, Instagram, even more, in my opinion, I think, I mean, I, don't the number of businesses who are pulling.
Menus and everything else exclusively on Instagram and nowhere else, I think is that that wave is higher than the wave of just posting to Facebook in 2010. Yes. Well, it's simpler,
Greg: right? I mean, it's simply Graham is an easier platform even than Facebook, but it's, but it's really striking to me how Google has invested.
I mean, I don't want to get us too off course on this, but Google has invested so many resources over the last two decades in acquiring small business customers. Um, and even for something that's kind of, self-evidently valuable as GMB GBP, and they have only had mixed results. Whereas Facebook has arguably done the less in terms of partnerships and marketing and they've had much greater success.
David: to me now easier product is definitely one. And I also think that the sort of that Google's reluctance to share and reluctance to push just how dominant. The Google business profile is in customer acquisition is also a huge hurdle for them. And I don't understand, I don't fully understand the reason for that, but when you see on Instagram that you post your menu and it gets 500 likes in three hours, I mean, that's an immediate reinforcing signal that Google just has never provided.
And I don't know if they will provide well,
Mike: they're bringing that argument out in their antitrust defense. Small businesses are not going to be as visible for free on Google. And this is providing the bulk of mobile. Leads, they are doing it. They're under duress, but
David: right. Only one forced to it, but it's, it seems to me a massive product marketing failure on their part.
And, um, I think in addition to the much simpler products that Facebook has, you know, that's, that's gotta be a contributing factor. So, um, Greg, I was going to ask one, one question before we move on, um, you know, back to the metaverse concept. So, I mean, it feels, I feel like we've, we've in some ways seen this movie before.
Google reorient read constituted itself as alphabet. And it has all of these, you know, big moonshot vets like fiber and the loon Waymo, you know, Waymo, everything else, and their stock price just keep, you know, kept sort of trucking along because they were making so much money on their number one business of ads.
Um, and I wonder how much of this is. I don't think investors ever liked any of those other moonshot projects. They were just willing to subsidize them while Google was still making a bunch of money. So I wonder how much of this is like a sort of delayed reaction to investors, not believing in the longterm vision of the metaverse, but then also coupled with the, you know, the, the apple announcement and the, the Lawson ad revenues where there it's like, okay, well, this company has no long-term future.
We hate their long-term vision and they're no longer going to be this cash machine. So we're paying.
Greg: I, I think that, I think that there's some possible truth to that. I think people probably see the metaverse concept is flimsy. You know, it's, it's, it's kind of embryonic still, and there's no proof there that Facebook is going to have any success.
Right. And there's, you know, I mean, it's, it's, it's certainly top of mind for a lot of people. It's the, it's a buzzword that everybody's talking about with the, you know, Microsoft bought Activision for $75 billion or whatever. You know, obviously they're making a huge bet there and all the VR and AR stuff is top of mind for people.
But I think in, in Facebook's case, there's no indication yet that they're going to have any success. So I do think that what you're saying is right, that people are, don't have confidence that the long-term vision is going to, it's going to play out. And so th this, this suggests, you know, well, this is where the bulk of the revenue is gonna come from for the foreseeable future.
And if it's flat-lining, or, or the growth is really moderating, then we want to get out, you know, Hedge or something. So, but let's, let's move on to, um, the perennial topic of reviews that we seem to be preoccupied with.
David: What's the, uh, the version of perennial that is per week, not per year.
Greg: Um, I don't know if there is one
David: accurately per weekly for weekly.
We're going to click
Greg: the yes. Um, so, so we had, we had, uh, information this week from. And from Google, Google talking about which we'll get to in a second about how they, how they, uh, fight review spam, fake reviews, review moderation, and Yelp talking about its own process in as sort of a simpler way. And well, what did the ups say, David?
David: Yeah, at least its annual quote trust and safety report and quote for the. And a couple of interesting sort of nuggets, um, close to 20 million reviews were contributed to Yelp, uh, last year. Um, that was once like once a week at Google. Right. Uh, something close to that. Mike Mike would be a lot closer to that stat than I am, but, um, yeah.
Greg: yeah. Well,
David: I mean, I think, yeah, there's certainly a grain of truth to that. Um, To that
Greg: it's like a 10 X difference at Google.
David: Yeah. Yeah. Um, so of those 19.6 million reviews that were contributed, uh, they said, um, 71% got through their review filter and 22% did not, uh, and 6% were removed, uh, for violating other policies.
Um, or by review. 6% you can kind of set aside the 20 to 22% of reviews are filtered on Yelp. And that is to me, just an astonishingly high number of, of filter reviews, particularly relevant or relate in relation to the report that you published while you were at Uber, all Greg with, um, the transparency company around the percentage of fraudulent reviews on Google.
I don't remember that number being. Being anything close to 22% and clearly Google has almost no review moderation in place. So
Greg: 10 point it was 10.7% across 19 categories with a total of a million reviews looked at. Yeah,
David: so that to me says, Yelp is filtering over 11% of legitimate reviews with its filter, which says to me you're not presenting a more accurate view of the world on Yelp.
Google is presenting. It's just a different view. You're you're seeing a, um, the, the bell curve of reviews or the bell curve of ratings is probably lower on Yelp because there are, there are positive reviews that are just not getting through that are completely legitimate. And, you know, the, the factors that play into helps filter, you know, not that many.
And the big one is just casual reviewers, who aren't hardcore Yelpers, who are writing eight paragraph tomes of every place that. Um, those reviews from average people are just not, not getting through this, this filter. And I think that that's a, it's a pretty disingenuous, um, you know, it's a pretty disingenuous way for Yelp to position this as trust and safety.
When they're presenting an equally inaccurate, uh, picture or. Um, an equally accurate picture as Google and other other,
Greg: okay. Before you, before you jumped in, jump in, Mike, let me just tell, tell, tell people that the, the number we found of, of, of dubious or suspicious or questionable reviews that were high, high high had a high probability of being spam or fake was 7.1% for Yelp million reviews on Yelp across 19 business categories.
David: There's still 7% of reviews getting through their filter that are fraudulent.
Greg: Well, unless yes. Right. Okay. So that could then that number of
David: the number of actual reviews that are getting through, or they're getting filtered, then it's even higher. Right? So if there's a, that, that to me is like a, you know, an exclamation point on this statement is that Yelp's filter is not very good and it's filtering out a huge range of legitimate, positive reviews.
And as a result, they're presenting just as inaccurate, if not a more inaccurate picture of what a business experiences.
Mike: Right. So gather up. I did do research on the bell curves for men number of review sites and it, and Yelp's bell curve is lower than Google's and everybody else's it's one of the lowest.
Mm, it's an edit. It's a decision on the part of Yelp that serves their interests. It's a way of fi it's a one way of them fighting spam inexpensively by driving up the cost of leaving spam. One of the easiest ways to leave spam is to create profiles and drop a single review or two reviews on that profile.
Then move on it's you can't use that tactic at Yelp, so you ha it's much more expensive for spammers to do it. So the casualty of that. These short, these, uh, newbies that haven't left her interviews. Also, it serves Yelp's focused on this longer format, uh, snarky or negative review that they've always highlighted.
So it was both, it serves editorial view as well as their cheaper, despite spam, the way they're doing it, then more sophisticated human curation and or more sophisticated algorithms. Um, and it does, as you said, skew things, and there is some research that shows. Not allowing, uh, so the station, which they don't and the way they moderate skews from reality a fair bit.
Um, so you're actually right on all those points and it's just how Yelp rolls, so right. And it is within their purview to make these decisions. Through section two 30, they can make these editorial decisions any way they want. And they've done it in a way that antagonizes and alienates businesses from the review world, which forced causes many of these businesses to think they need to do things like review gating review.
I run a conferencing, all that sort of stuff. So it's an interesting dynamic where Yelp and Google's behaviors create some of the features that the FTC is criticizing well
David: before we make the segue, there's one other piece of this.
Greg: I'm not ready to make the segue, but go ahead.
David: There's one other piece of this report that I found pretty interesting.
Um, they Yelp said that about 1,850 consumer alerts, essentially badges of shame were placed on Yelp profiles. Due to these businesses, basically soliciting reviews on Yelp, which strikes me as an insanely low percentage of all businesses and probably an insanely low percentage of businesses who are actively soliciting reviews on Yelp, which does violate their terms of service.
And to me, you know, as a small business, if I'm looking at something. 20 million, probably businesses, us businesses on Yelp and Yelp is filtering only 2000 are putting a badge of shame on only 2000 of them. That makes me a little more likely Mike to actually try some spam spam by Yelp's definition and ask for reviews.
It seems like they're not cracking down particularly heavily on, you know, some of these solicitation efforts if only 2000 badges were placed in the entire year. Certainly some
Mike: of it's just performance, David, you know, that. They did they Huff and puff, and then they go away. So most review sites, many review sites, steps, listening and Yelp for a while, and then started back up again.
I can attest to that fact
Greg: what I was going to say to sort of conclude this section is, is that, um, you know, years ago, I mean, Yelp has moved more and more into sort of SAS services, right? They have RPS and they have different kinds of services that, that people can see that businesses can subscribe. Uh, booking online booking that they should use.
I had this conversation with Luther Lowe from Yelp maybe a decade ago, maybe, maybe not that long, but, um, you know, that they should, they should use those tools and then become a re reuse solicitor to themselves. Right. And so the same way that Amazon kind of does that you booked a business, um, you know how well.
Uh, rate the business. I mean, they do the very top at the version of that. If you've checked in somewhere, they prompt you to do the review, but, but, but this, this is a kind of closed loop system that would benefit them in terms of verified purchaser kind of approach and benefit the businesses that are engaged, that are using these tools because it encouraged them to use the tools.
That would be one of the benefits of using. And they would get more reviews and the reviews would presumably be legitimate. And it just seems to me to be a no brainer, but yet they, they at least in that initial conversation, uh, you know, Luther was quite skeptical that this couldn't also be faked.
Somebody could create a face fake booking and then generate reviews and then simply not, you know, I don't know, but it, it just, it just seems to me, that's, it's an obvious thing that they should be. Yeah,
David: absolutely. And the check-in offer thing, you know, that's been around and been, uh, been a legitimate, uh, recommendation by Yelp that businesses should post a check-in offer and Yelp will follow up to get a review.
That's the best way to get reviews on Yelp. That's a, that's a white hat best practice, but from a, at a sort of macro level, you know, that exacerbates the problem. Only showing reviews from hardcore Yelpers. If you're limiting the set of reviewers to people that not only have the Yelp app on their phone, but also are active check writers and even know what that means, which, you know, if you'd said the word check-in to my mom, she'd think you were, you know, checking in for a flight or something.
Why would I do that at a restaurant? Right. So, yeah.
Mike: Uh, it'll be interesting to see what the, there, their quarterly financials are next week. It'd be interesting to see what they report out.
Greg: So. With that, we're going to S turn toward Google, uh, Google earlier this week, uh, posted about their review moderation process and how they're using machine learning to catch fake reviews.
And, um, you know, Mike, you had a fairly jaundice reaction to that blog.
Mike: I think it is performance theater, right? There is nothing new in there that they haven't said before. One, two, they're trying to gain the public relations edge on establishing the conversation about their quote unquote sophisticated moderation procedures.
It's it is techno optimism. Of the most fantastical kind because their AI doesn't work for review moderation time. And again, we've seen this. So I went and asked, I, let me tell you a little experience. I had a client came to me with a review that clearly violated Google's terms of service. I said, report it through their channels, which is through the business profile.
There's a report to review. He did. He was denied even though clearly. Violated a specific statute in their terms of service. He, I then said left, posted in the forum. He posted in the forum with two links, referencing his business profile and the rule and because of the two links his post got no. And the forum didn't show.
So I had to figure spammy link builder. It was panning link builder. So I had to figure out how to get his posted in the forum. We finally got it in. I then escalated that and upon review it was then taken down because it was truly a violation. So that's their review moderation process. Untenable to any business in the world, without somebody like me charging $200 an hour to guide them.
Greg: Exactly. I mean, you're, you're like a super insider and what fraction that tiny little fraction of the public has access to people like you or joy or exactly what
Mike: and thing. And so I got an extra bottle of bourbon out of the deal, so I'm happy, but so their moderation process does. That's clear they're in their AI process is lame and they have not invested the resources in it.
Right. So that whole piece talking about how sophisticated their AI is. Misses a lot. One of the things they miss is review networks. Review networks are set up by spammers in the paid world where reviewer a reviews, these three businesses and reviewer B reviews. Two of those three businesses and reviewers see reviews, two of the same businesses, reviewer beaded.
And it's very easy to spot. We've pointed these out to Google for years and they still can't spot them,
Greg: which is crazy
David: because I mean, I can remember my earliest days as an se. 2006 or something SES in San Jose. This is exactly the kind of thing that Matt Cutts was all over from an organic perspective is identifying lik networks and they shut down.
You know, they did not actually shut them down, but they just made a ton of businesses, totally ineffective in terms of these private blog networks. And, uh, the fact is with reviews it's, in some cases it's even easier because these are all people who have to have Google accounts and Google must have.
Some sort of easy machine learning, even like an Excel filter or Tableau filter to figure out the,
Greg: so you see, what's crazy to me is that, is that this is not a plug for the transparency company, the company that, that I did the research with Uber all, but, but th this guy who runs the transparency company, Curtis Boyd, who CRE you, you know, it's a very small company, um, and he's created a methodology that is very sophisticated, but pretty hot, pretty reliable.
Identifies questionable reviews. I mean, it's, it's much more sophisticated than what's what Google is doing. And he's one guy with a bunch of freelance developers. And why is Google with all its resources, not able to D to duplicate this
Mike: kind of approach we contend it's not, not able, it's not willing.
Greg: clearly, clearly it's not willing because it is able, right.
Mike: And so it's willful not. And an afterthought. I spoke to engineer and he said, hold it, this is this question. Isn't about whether their AI can ever be made. Good enough. It's about whether they're willing to devote attention to the problem at the level it deserves.
Right. And the, and his contention was, they were not willing to do that
Greg: possible reason for that. What could be the possible reason for that? I mean, somebody who really cynical would say, well, Google is now starting to make money off of. Uh, people, these review fraudsters because it's getting into LSAs and you know, there are other scenarios where maybe there's some monetary indirect monetary benefit, but th I'm I'm sort of, I don't know,
Mike: I'm not, we can't give you, let me, let me explain to you why, what I see happening here.
Google is a bottom up engineering firm in which engineering, small engineering groups are allowed to experiment and find multimillion dollar solutions or data sources. On their own, they test those, the ones that work bubble up and get tested by 10 or 20 or 30% and finally baked into the product and then maybe new to knows, but it's a bottom up engineering and review spam is not, uh, an exciting time.
It has to be the priorities for, it would have to be set at the highest levels. There's no profit to be made. There's only people to piss off in it, right? Every time they tightened down their bad AI, you can see the complaints in the forms of good reviews, being nuked, going up, Google wants to do it at scale.
They don't want to put the human moderation in that it requires, cause that is more expensive. They obviously can afford to do. Or
Greg: they've got review grade, they've got, um, search quality. That right. That rates are search quality.
Mike: Why can't they do it? But they're trying to do it completely in an automated way.
And this whole piece was them telling the FTC, oh, you have requirements for moderation of this ilk. And we are doing that. It was a strictly, a PR ploy to get in front of this story to be out there. It, it is it's it's reprehensible because they, along with Amazon, but they in the local space are single-handedly fucking the whole space up.
Greg: so in parallel, in parallel to this blog post that went out, they had another blog posts on how AI is being used in search, and they talk about bird and they talk about mum and they talk about neuro mapping and they, and they, and they're saying, oh, look at all the sophistication that we're bringing to search.
Um, that, you know, didn't use to exist. I, it clearly they have the tools to do this even on a, just a pure
Mike: basis. Although that piece I've heard of magical realism, right? This is sort of a, a theme. And in literature, they IM they sort of involve themselves with magical techno optimism, through a combination of hubris and some brilliance and some good.
They think that AI can solve many, many more problems than it can actually solve. It's a statistical model that has huge gaps at each end that requires human moderation. And they're unwilling to put in place moderation. If they're unwilling to do, if they can't, you can't trust that work and review is where it's a fairly trivial problem to solve.
You can't trust their AI any place. It would be my story about that. Not that this stuff is so amazing, but. They're telling us it's amazing. And it isn't, that's the story.
Greg: See, I, I think that, I think that this, you know, I mean, I've talked at various points about we've discussed trust and the sort of erosion of trust across the board, you know, in different brands have different trust levels and you get different surveys that say different things, but across the board, trust is down.
Um, people use services, but they don't trust them. That's the sort of trend. And I think that Google could rehabilitate some of that, even though they have a very, very strong brand records. They could rehabilitate and an increase user trust, but they said, Hey, Hey users, we're making significant investments in fighting review fraud.
You can come
Mike: here. And that's what they said in the article is the problem. But
Greg: it's not really to the it's. Yeah. Okay. So, but they could, they could really do, they could make a sincere effort and then they could mark it. As, as a benefit of using Google, but Yelp has already
David: sticking out that position.
Correct? They're claiming that ground. Well, it's
Greg: it's not, it's not only one, you know, it's not only, it's not only the, the, the province of one company. It's not like who gets there first. It's like, who's really doing it, but clearly that's,
David: I guess that's what I'm saying is Yelp is trying to, like, they.
Reading these tea leaves and trying to say we are the most trustworthy and you know, their BS is just as bad as Google's BS.
Greg: Well, this is what apples, this is. This is what apple has done with its PR. You know, apple has marketed privacy, you know, both in a genuine and in a cynical way. They've made privacy.
One of the hallmarks of the, of the, uh, iPhone. And I think that's having some resonance with people. Um, And, and, you know, I mean, I think that has helped. I, it, apple has also got some trust issues in some ways, but, but Google could, you know, I dunno, I mean, Google, Google could really do a lot more than it's doing, but it doesn't feel compelled to for one reason or another.
And they they're protected by section two 30, they're protected by the first amendment and they don't have any liability for any of this fraud that's going on, which you know, is actually scaring people. And some wrong directions. In some cases, it's just, it's real. It's very frustrating to me because reviews are really critical tool.
I mean, Mike, you pointed out in your, in your piece on the 10 review platforms, let's talk about that for just a minute. The 10 review platforms that reviews have been really important development on the internet and consumers rely on them very heavily. And you know, there's a danger to that. If this, if this kind of spam and fraud continues as it has.
So, I mean, we're, we're sort of running a little long today, but why don't you say something about the. The 10 platforms.
Mike: So when the FTC announced their $4.2 million fine against fashion Nova yacht poked client, they simultaneously re we've released guidelines for marketers and brands as well as platforms and sent 10 letters to review management platforms that they had found were making claims on their website.
Of either gating or review suppression or treating negative reviewers differently than positive reviewers. They had found claims of those on their websites from these review companies. And they sent out 10 letters. We, uh, near media filed a foyer request to get those 10 letters we did. And on that list is companies like grade data's owned by my previous employer and reputation.com dealer rated.
Um, and a number of other signposts, which has been the industry for a long time. Um, I rate what a great name E Y E R a T E I re anyways, number of companies I've heard of and some I haven't, um, and sent them specific, uh, criticisms of their marketing that would open them up to. Violations, uh, by the FTC,
Greg: essentially review gating this the main
Mike: review gating review suppression.
In other words, not just publishing negative reviews and different paths for positive negative views. All three were mentioned all three
Greg: incidentally. One of the things that I found funny about the piece, the piece of the letters that you, the relevant text on their websites that you exit. Is it, they all say the same thing.
We're the only company that allows you to separate out you satisfy the dissatisfied customers and treat them differently and, you know, sort of benefit your, your, your scores with, uh,
Mike: with positive. And just as a historical note, I created, helped create conceived of that idea and shared it with my co founders.
I gather up the idea of gay. It w it was at the time, a way to help businesses feel more comfortable with what was perceived and is often the irrational world of reviews. And at the time it wasn't considered unethical or inappropriate, it was considered reasonable business practice. So one of the points I'd like to make is that what is ethical and what isn't is a somewhat shifting field in this, depending on what Google decides to enforce or what the FTC decides to enforce, what businesses historically have done or don't do.
Clearly there is a need for ethical review behavior and reviews have become something separate from testimonials. Uh, the FTC unfortunately has historically treated them in the same bucket as testimonials. I believe that they are so significant in our economy that they should, they deserve at this point to get their own specific.
Legal and ethical treatment. And I believe the FTC is the right agency to do that, but the FTC is underfunded under-resourced and it's unlikely that they will enforce it. Thus, they would need to partner with state attorney generals, who don't seem that interested in this issue, but I see it as somebody needs to create this environment, Google could, but they clearly won't.
Amazon loan, Amazon mode. Right? And so I am short haul and, and these firms that Google that the FTC sent letters to the reason for a letter is because this isn't a rule. There is no law about brief views, deceptive review practices being illegal. There's no law about it. And there's currently no. At the FTC to make a rules expensive and time-consuming for the FTC.
So they create guidance. Once they create guidance, they have to then notify the business that there may be an issue. If the business doesn't reform, then they could get fined it upon examination or an audit by the FTC. So these letters were sort of the baseline to these 10 companies who were clearly in the FTCs sites.
They're looking for another example. And it puts those 10 companies at risk. And more importantly, like in the fashion Nova Yappo situation, it puts those companies, customers at risk of an audit of exposure and of a fine. Um, and so my suggestion is to those companies, including great us and to some extent, gather up to which has always tried to stay at the leading edge of this, that they need to make the change and they need to help their customers make the change sooner rather than.
Otherwise, somebody got it. Somebody else is going to end up with a fine out of this deal and it's not going to help things that much. If they do
Greg: the brand, the brand damage, it seems to me is more, is more concerning to two companies than the, than the fines.
Mike: In most cases. Yes, probably is not a way you want your company's name, dragged through some high profile FTC press release.
Um, but it doesn't help the industry either because it creates the impression of cheating. Whereas like, historically again, these are shifting ethical sands and so it's not necessarily cheating. It may not be currently appropriate. And I think businesses need to see where the puck is going so that they can change their behavior now, but many will just hide the behavior.
Many of these review platforms will take the marketing message off their website. Leave it as a feature in the plant. And bet that the FTC isn't gonna catch him. It's a business decision, a bad one, but a business decision. Okay.
Greg: I think what you have to do, I think it's entirely legitimate to understand your customer's experience.
And then if you have customers that have had a bad experience to be able to treat them separately from customers that have a good experience, I think that's entirely legitimate. But what has to happen is that inquiry needs to be separated from review public review, solicitation and public.
Mike: Well, the way we did that at gather up was when we segmented happy and unhappy, we gave him both the opportunity to leave reviews and we gave them both the opportunity to give us private feedback.
Uh, although we highlighted the private feedback a little bit more visually on the negative side, it wasn't a lot more, but it was a little UI nudge. And what we found was that most customers preferred to give you negative feedback privately. They did not want to go out to Google and leave it. Rant. They wanted to tell you what the problem was to the manager.
Greg: Exactly. That's exactly true. I mean, I, before, before overall I did some research with associates and we, we, we asked, uh, consumers about their willingness to change reviews. We're not the only ones that did this. I mean, there've been a lot of, uh, similar surveys. And I forget what the precise percentage was, but it was something in the upper eighties, plus, you know, 89% or something like that, of customers who had a bad experience and left a negative review, we're willing to change the review if the business address their concern.
So, you know, I mean, people are very open to having their, you know, being modified or whatever. Um, If the business is listening and responding to them and you know, there are ways to do this. I think that are ethical and satisfy everybody. And, um, you know, don't run a foul of these new, these new guidelines, you know, it's just, it's just much of a review, uh, generation and review, uh, solicitation going on.
It's really, it's really just about the. You know, it's not really about customer satisfaction or customer intelligence or, or, you know, feedback it's really about, we need to generate reviews because this is part of the algorithm and we want to rank higher and that's the way a lot of people look at it.
Mike: All those positive benefits will be denied if we don't clean up the act now, right? We're all in this glass house together. None of us can throw stones, but there it is incumbent upon the industry. That's both Google, Amazon and includes the FTC. And it includes all of these review platforms and marketers to understand that we're at the precipice of soiling our own, you know, vets.
Yeah. So David, you
Greg: get the last word you wanted to add something.
David: I was just going to say that I think that the, the. The push towards, you know, soliciting reviews and segmenting and gating and all of that stuff. I don't think it's just a ranking question. I think it's also a conversion question, right? I mean the, the five, five gold stars, uh, it makes a huge difference threshold.
There's a threshold below which customers won't do business with you.
Greg: Absolutely. It's go ahead.
David: Yeah, I think it's not quite as. I don't want to give SEO too much credit as a, as a motivator. I think a huge part of it is just they, you know, businesses want to be perceived as a relatively good business by someone who's looking at their profile.
Greg: the ultimate objection is objection. The ultimate objective is not ranking, but conversions. And that's what Darren, Darren and the local ranking. Showed is that when he, when he inserted that question about Google conversion factors, as opposed to ranking reviews are the, I think the top three categories right.
Are review related. And so this is the number one factor that is driving people to convert. And so you're, you're absolutely right when I said ranking, I, you know, sort of implied in that idea is you're getting customers in there and they're doing business with you, um, ranking as a step two to conversions, ultimately.
So, um, I was going to try and make a bad, a bad statement about bad joke about conversions and, you know, anyway, I can't do it. This is a plug for the plug for the survey that we sent out. Uh, if you're listening and you didn't fill out our survey, we're trying to understand how we can do a better job of, uh, catering to your interests, what content you're interested in, um, what kinds of research we should be doing.
So. Fill out our survey. It's not obviously discoverable on our site, but you'll see it come through again. Um, in the next couple of newsletters, um, it's going to be really helpful to us. We've already gotten some interesting feedback and we need a little bit more. So, uh, thanks for doing that in advance.
And, um, thanks for listening to episode
David: 50 of the near memo, Greg. You not only did you downplay it, you didn't mention it. So thanks for sticking with us for 50. Yes,
Greg: it's a big milestone for us. So thank you.
Mike: And thank you for listening to my ranting. I appreciate it. Always,
Greg: always, always enjoyable
Mike: and entertaining.