Part 1 Video start 0:13 - Restaurants sue Google for adding Order buttons through 3rd parties to their Business Profile
Part 2 Video start 8:25 - Publishers argue ad providers are scraping too much content to deliver contextual ads
Part 3 Video start 12:18 - Yelp’s 2021 showed solid financials but user declines and review acquisition headwinds
- Suit: Google 'Deceived' Consumers with Online Ordering
- Publishers say companies selling contextual ad tools are scraping their data unfairly
- Yelp's Hidden Headwinds: Declining User Traffic and Aging Reviews
Ep 55 (editors note: It is in fact #55):
Greg: All right. Welcome back to the Near Memo. We think this is Episode 56, but we're not entirely sure.
David: 55. Could also be 55
Greg: Yes. We've lost count at this point. We've done a lot of them and they're always fun. And the point of this, just to talk about search, social and commerce with a sort of local angle on all of that.
And I'm here with Mike and David has always. And, you know, it's always difficult for us to choose three topics or three-ish topics to talk about because there's so many interesting things going on, but I'm going to start off today with a lawsuit that was filed in the Northern district of California federal court by a Florida based company that is called the lime lime green or something.
It lime. Yeah, no FreshLime is is Jamie and his company. Um, now I'm blanking on the name. Anyway, it's a small restaurant chain that is based in Florida and they're suing Google for the online ordering button that was placed on a local business profiles in approximately 2019, but tested prior to that but sort of massively rolled out in 2019 and.
Um, subsequently Google gave restaurants the ability to opt out and gave them a little bit of additional control over who the delivery companies were. But you click the click, the button, go to a landing page, chooses delivery company, door dash Postmates, one of the big national companies. And then they fulfill the order from the local restaurant.
And a lot of people were upset by this, a lot of sort of local agencies that worked on behalf of restaurants. A lot of restaurants themselves were up in that. Feeling that Google was sort of improperly diverting traffic from what would otherwise go directly to them, to these national delivery companies and the restaurants have to pay like a 30% commission.
Um, and so there's this sort of sense that Google was pulling a kind of bait and switch, which is the language used in the, in the complaint. And the complaint alleges a whole bunch of claims. Uh, Uh, you know, deception there's some you know, appropriation of trade names and Goodwill. There's a bunch of claims in the lawsuit.
And they're asking for compensatory damages, which is money hypothetically lost because of this behavior and punitive damages, which are used in situations of agregious contact conduct to punish the defendant. If they're found to be liable, So that would be, you know, there's a, there would be a formula, but they're asking for, for a multiple of the, of the compensatory damages.
So it's, it's, it's raises some interesting questions about what Google is allowed to do with business identities and business names. Um, but there's just a broader ethical issue, which, which we've talked about informally in the past about Google doing. For local businesses or to local businesses or with local business information without getting them to opt in or asking permission what Google did was create an opt out after an outcry.
So thoughts, thoughts on that?
Mike: The way Google develops in local is they work with a singular or two very large companies. They integrate that data feed into the business profile and they don't create an interface to it through the dashboard or any other means. They just see if it works right. If it works. If it doesn't, they keep it and then build an interface to it.
So they have this sort of backwards way and it ends up putting a great burden. At least this did, and people on the ground who had to deal with DoorDash and GrubHub, whoever was building the fake websites and the fake listings of their food stuff. And it puts a burden on their business that they weren't anticipating.
Or that they didn't agree and they didn't agree to because this is how Google does it. So it's sort of a self centered development technology. I don't know if it's designed to cheap businesses, but it has. Well, I I'm
Greg: sure Google would never say that we were intending to cheat businesses. I'm sure Google is focused on the user experience and thought this is going to be great for two, two things.
They think it's going to be great for users because it creates convenience. And it's also going to be good for them as a kind of it's, you know, sort of they're, they're doing a lot of transaction-based things and this is part of that. And so, you know, it's, if they think that they're, they're creating a lot of value all the way around the, the parties that are not concerned.
In this calculus or the local restaurants, you know, it's interesting when Google works with, you know, they just rolled out this vehicle ads in beta, I guess. And they had some case studies in their blog post, and those are all big companies, CarMax and, and a couple of others, big auto dealers. And they, they, they invite them to participate and it says voluntary thing.
We'd like you to be a beta tester in this new program, but they don't do that to local businesses. I mean, there may be examples where they have, but by and large, they don't do that. And so they got themselves into trouble and this is a, this is a, would be class action lawsuit. So if the class is certified, it could be.
Every restaurant, hypothetically in 2019 and where Google put an order button on their profile, it could be thousands and thousands and thousands of restaurants.
David: Yeah, I would just add Greg to piggyback on what you were saying earlier. I think unfortunately it's. You know, long-standing pattern, as Mike said, not just to think about scale, but also I think to have product managers at Google who simply do not consider the impact of their product decisions on local businesses at all.
Um, and so even though I don't find the I don't find the motivation to streamline the user experience objectionable in any way, the fact that nobody in the room, you know, thought to raise their hand and say, Hey, how was it? How's uh, you know, the mom and pop pizza parlor, you know, gonna take this, maybe we should at least talk to a couple of them before, you know, before rolling this kind of thing out.
So I think that that's, that's been a sort of systemic issue with Google in local for as long as all three of us have kind of been involved. Um, the second thing is I think this, this highlights the, the persistent mantra that, that Mike and I are. Bang the drum for, for years, which is that your Google business profile is not your Google business profile.
It is Google's and that they will do what they want to with it. So to the extent, I mean, I realized, you know, search is is, is the dominant channel for a lot of businesses with respect to customer acquisition. But to the extent you can build a multi-pronged customer acquisition Set up channels.
I think that that's to your advantage so that you're not beholden to a single decision that a 25 year old product manager at Google makes.
Mike: I have one final comment. I want ringside seats and popcorn.
Greg: I, you know, I would, I would, I would say that Google probably did make a conscious decision not to make this. Uh, program just in the same way that everything is opt out, because once you ask people to opt in and the numbers are going to be really small, they're going to be really tiny. They would have had to do a lot of education, a lot of outreach, it would have been expensive.
They would have gotten limited or, you know, very limited participation. And it wouldn't have, it wouldn't have flown.
David: They could have gone about it in the same way that they just did the auto S um, example that you just mentioned, Greg, they could have started by going to. You know, nationally with 10,000 to 20,000 locations and said, Hey, we're going to roll this pilot out.
Would you like to participate? And that would have been a perfectly scalable test across probably a million locations and just talking to maybe a dozen and they
Mike: could have also simultaneously released a feature so that you could have removed the button if you wanted to that wouldn't have been rocket science.
Greg: That that was nine. That was like nine months later. Um, you know, that the opt-out code. So, okay, well, so moving on now to David and item, that is sort of at a high level, similar in terms of the legal. Uh, concepts involved that you, that you observed from the morning blue brew newsletter having to do with contextual targeting and the objections of, of some publishers to what's going
So why don't you say it's a bit of a strange segue, but I did find the
Greg: item interests. No, it's not. It's perfectly logical and rational.
David: Uh, so, so I, this was a confusing article from morning. To me, not because it was poorly written, but because I didn't necessarily understand the objection that these publishers, so that the story goes that these publishers are up in arms that contextual ad targeting networks are inappropriately scraping their content and allowing for ad targeting options that are outside the bounds of their agreements with, with some of these platforms.
And For the reason it caught my attention was, was primarily that it's, it really does signal the awareness now on both the buyer side, as well as the publisher side, that we are moving into a post cookie world where contextual ads are probably going to be the most effective form of display advertising moving forward.
And the publishers being up in arms probably reflects the fact that they want a. See you at the table or a more prominent seat at the table where more seats at the table to determine this new future. But in this specific case, I didn't really understand their, the grounds for their objection, given that they can always just opt out of working with these demand side platforms that, that are serving the ads on their properties.
That the objection was that, oh, well, they're, they're doing, they're trying to do deals with brands directly and that these guys are undercutting them by allowing. Additional audience targeting based on their, their content. Um, and so I just, it was an again, somewhat confusing article to me to understand the, the grounds for for protests.
But I think another signal in a range of many signals, we talked about Google's topics model probably about a month ago on this podcast, just to, just to show the importance of context, moving forward as the best remaining sort of ad targeting option in a. Well,
Greg: I, I can, I can support the, the statement that you made, that a lot of publishers are hoping that they can establish direct relationships with advertisers.
Again, I mean, that has to be the level of scale, sufficient scale, but I think that that's, they see the demise of cookies as an opportunity to go back to the way it was originally. They sold ads directly to particular advertisers. And so any the persistence of any of these networks as middlemen dis you know, disintermediating them is, is something that they don't like.
David: Right. And I think that the, the sites with large enough scale, I mean, I think McClatchy was mentioned as one of the. One of the sites local media consortium as well as groups representing BBC McClatchy and others. I mean, I do think that when you get to that level or did that my former former employer when you get to that level, there probably is enough scale there.
If you're talking about, you know, millions of eyeballs a week across a wide range of time. To do deals directly. So I think that there's probably going to be a middle ground sort of marketplace concept that may not be as favorable to the, the tech platform as it is to the publishers.
Greg: Okay. And, and speaking of yes.
All right. Dog is making her presence known again. Yes. All right. Well, we're moving on to Mike, who did some digging into SCC documents, filed by Yelp and found some interesting developments that we've talked about a little bit before in the past, but in more detail. So Mike, why don't you sort of explain
Mike: what you have been tracking?
Yep. Traffic unique visitors for you. Although I had been tracking their June numbers and they stopped publishing June numbers. And so I had to wait for the 10 K to see if they republished numbers, which they did in the 10 K. And I'm always struck when I listened to these presentations and look at the PowerPoint, how sales.
I know you said Greg, that all of these 10 presentation, financial presentations or sales pitches, but Yelp particularly. So they always lead with the top level numbers. They never tell you any nuance behind the numbers. And they. Just like when you go to you, listen to Apple's presentations, it seems more factual to me than Yelp's, which seemed so much more sales aid.
Some of it has to do with culture, but maybe they're all like this. Anyways, their presentation was totally fluff and the 10 K you know, brought out some interesting stuff. So one impressive numbers from Yelp, a really good recovery during COVID, given that they lost a lot of restaurant business on their end.
They made it up with additional products and service ads and changing out there selling model. I got rid of a lot of their yellow page, like sales people and sales department hammering small businesses over and over again.
Greg: Could. I mean, it's like 50% smaller, isn't it? Something like that.
Mike: pretty, yeah, there's a lot 2000 people.
I mean, it was a big number and yet they were still able by focusing on large multi locations and self-serve, they were able to come in with numbers that, that were very good. And this is a significant change because it also removed some of the annoyances that small businesses had with their sales technique, which were very, very hard.
So really deceptive. Um, types of sales. So, so it was the most from a financial point of view is large, a good story of recovery and of structural changes to their business. But when you dig into their numbers, what you see is that they're unique visitors, but, you know, have basically peaked in 2017, they dropped in 2019.
They recovered to roughly 2017 levels in 2019. So they've been sort of low. They were flat prepared. And then just plummeted during the pandemic and, and you're seeing tremendous drop in their desktop traffic. You're seeing sort of static. Um, no growth in their app. And they have been haranguing people for years to use their app, but you are seeing growth in their mobile traffic, which I assume is coming from Google, but also likely coming from apple and the increased use of apple.
And, but they still haven't demonstrated to me that they're even going to be able to get back to previous levels. And so while they have redone their business model and they've brought out new products, I made it easier to sell them what pride more value. Ultimately it depends on users in there. It's not clear to me that they're going to be able to grow that.
The other interesting number is the growth in their review volume, which has been declining pretty much straight line since 2014. Dropped huge amount in 20 20, 20, 21. But, but they always talk about the top level 244 million reviews, literally almost a hundred million of those are old. And so, you know, one of their key values is current long form reviews, and it's not clear to me that that they're going to be able to replace these old reviews.
Greg: So that, that was the thing to me. That was the most striking about your, your article, which is on the, in the analysis section of our, our our site Yelp's hidden headwinds is, is the idea that almost half of their reviews are, are, are stale older than 2015. I mean, that's kind of amazing to me. It's, it's, it's, it's tied undoubtedly to the decline in usage.
And the user growth, but, but just real quickly to throw this in there, I think in the most recent blight, bright, local consumer reviews survey, they said that, you know, a substantial majority of people won't look at a review that's older than a year. Um, but most people want reviews of that are as recent as three months or even more recent than that.
So the, the focus is on really recent reviews. And this is a big, big problem, I think. Right?
Mike: So without reviews, there's no way to recharge their growth, but
Greg: right. And, and the
David: fact that y'all makes it so difficult to leave a review or for a first-time review anyway, to show up. Um, and the fact that they expect these Warren piece length reviews, and those are the, the reviews that they, you know, sort of stayed there, their business reputation on I think it's going to be much harder for them to increase.
Reviewed growth you know, absent a radical shift in their stance on businesses, soliciting reviews from their customers. I think, you know, we're finally, we're finding in an era where businesses do understand the importance of reviews. They probably understand the importance of Yelp reviews in particular, maybe not to the same extent that, you know, Mike demonstrated with his with his case study of Yelp reviews a few years ago.
But I think we're finally at the point where it's like now is the time to make this shift Sustain their, the value of their business or on the consumer side. And potentially finally start to bring SMBs back into the fold who had largely abandoned Yelp due to the aggressive sales tactics of the past,
Mike: to their credit.
Go ahead. Their user interface coming from search has dramatically improved. And the other day when I did it, I think I searched for specific business and then went to the uplifting. They actually asked me in a short form way, whether I'd done business with them and wanted to recommend. In an uptown fashion prior to the asking me to leave a review.
So they are moving towards a simpler review model, but Yelp is pretty intransigent and some of these things,
Greg: well, I mean, it's, it's interesting that you described that sort of updated user experience because I, you know, I mean, I've talked about this before years ago. Um, I had a conversation with Luther Lowe.
Who's now their policy guy in DC, but before the. In a more operational job. And I suggested to him that, you know, that Yelp solicit reviews on behalf of its customers, you know, especially with these booking and a request for quote, kinds of scenarios where they know that there's, there's an engagement.
And I think, I think this, this sort of forces them to do more of that kind of thing. If they don't explicitly embrace that they have to do more review solicitation on behalf of their. Uh, on behalf of their their, their, their businesses. Um, th I think they're, they're compelled to do it. Um, you also pointed out Mike that you know, one of the things that stands in their way, one of the friction points is that new reviewers don't see their reviews published on Yelp because Yelp doesn't have enough trust in these people that aren't, that don't have a history.
So you write a single review and Yelp filters it out, and then it creates a disincentive to participate in the future.
So, I mean, another, another final sort of point was that you know, there, the Yelp earlier when they, when, whenever they did that deal with Uber, I guess it was last week. Might've been Monday where the, the Uber explore tab is yeah, it's powered by Yelp. That's, that's a bid for more user user engagement.
Uh, and then Chad, Richard, who's that who's one of their SVPs in the blog post that was announcing that talked about how they're distributing through their API, that distributing gal to in-dash infotainment systems. Um, usage is another question, but they're
Mike: not thinking to anybody in their right mind uses the name dash infotainment system, because they're always so crazy.
You know, it's like I have shoppers. Some are less, some are less crappy than those, but I yet to see one that works and I've tried a number of them and rental cars and my own cars. And I consistently in the last car, I insisted that we, which didn't we bought a used car and it didn't have CarPlay and went out.
A new head so that it could get carpet because the interface and that was so bad, so frustrating that I, I replaced it. I can't imagine. I don't know. Toyota's terrible. Honda is terrible. Maybe there are some good ones out there. I don't know who, so that distribution channel isn't going to deliver anything.
So my bottom line,
Greg: let's just say, at least from my experience. All right. So I think we've come to the, the rapidly quickly, we've come to the end of another episode. That's that kind of flew by for me. Um, and as always, we appreciate your attention and thank you for joining. Tell your friends about it.
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