Part 1 Video start 0:13 - Amazon getting into Local Ad space
Part 2 Video start 9:18 - AHref’s new Yep It search engine delivers creator benefits, is that enough to get off the ground?
- Amazon Reportedly Moves Deeper Into Local Ads, Creates 'Start-Up' Ad Business
- Sr. Business Development Manager, Local Ads
- Yep It, Says Ahrefs
- A wholly owned subsidiary of Apple will extend loans for its Pay Later service
- New features available with iOS 16
- Google Ads Automatically Created Assets Beta Feature
Transcript Ep 68:
Welcome back everybody to the Near Memowith David, Mike, and me talking about this week's developments in search, social and commerce through a local lens. And it's always, we have a lot to talk about. So we're going to just jump right in with both feet and heads and limbs. Today we're going to be talking about Amazon local ads, AHref’s new search engine. Yep. And then we're going to be talking about Apple and its WWDC announcements, especially around Spotlight and Siri. And so this week, just to we're we had a technical malfunction a minute ago, so we're doing okay. I don't want to go off on some diatribe and then only have to do it again.
Okay. We're still with you. All right. So Amazon posted some jobs for local ads for a new business unit within Amazon ads. That's going to develop quote unquote, the future of local ads. And as elaborate as the job description is it doesn't really reveal much about the program. They talk about media partners and they talk about you know, building the future.
As I just mentioned. You know, is this going to be purely on the Amazon platform? Is this going to be a syndicated product that goes out to third parties? My guess is yes to both, but we don't know. And it'll be fascinating to see what eventually shows up once they get this in place. You know, Amazon is the number three ad player in the market after Google and Facebook with something like $31 billion last year in ad revenue, that's clearly a growing market for them.
And then position that against Facebook and Google's numbers that Facebook's $150 billion and Google was well over two hundred. I'd have to look it up well over two, 200. Yeah. So, you know, it's, it's, it's still. Small a fraction of what the other two are making like legendary times Twitter or something like that. And it's not, yeah, Amazon is, is far and away.
The number three player in this space. And the thing that's interesting about Amazon is that they were, they were early into local on the consumer side. But, abandoned those efforts. For example, they had a thing called Block View, which was part of their A9 search unit and that pre predated Google Street View.
And they actually own some patents, which are probably implicated by street view, but that's a different conversation. They also had a yellow pages product, you know, for a long time that they abandoned and they've done some stuff around trying to make local services available in conjunction with product.
On their platform, but there have all been kind of half-hearted or incomplete efforts. And, you know, I think they got scared by the ground game that you need to have if you're dealing with small businesses. But now this may be different because it's probably substantially a technology play.
And local ads of course, aren't just for small businesses, therefore multi location brands and anybody who's trying to drive, you know, offline sales or footprint. Which is most businesses in the country still, you know, e-commerce is still about 20% even with tthe big pandemic bump that it got. So, you know, we're looking at 80 ish percent, still fulfilling and transacting in local.
Do you think this is taking place? I mean, Walmart, last week we read, we talked about them being able to warehouse and deliver local products for local businesses. Do you think that Amazon's likely goal is. Do this, do something similar in other words, way to move up Biotics and then warehouse local products.
Oh, they do. I think they're, I think they're, I think they're offering delivery for, for local businesses. I think they, they announced that. I mean, that was a recent announcement. So I think that's very relevant. The, the ads will help with that fulfillment, that logistics piece I suspect. So in some ways it looks to me like there's Google with.
Hi integration with available products, doing a search plan, this, but no last mile delivery. There's Walmart that has last mile delivery in the rural and suburban areas and is now moving into third-party servicing of warehousing products and so on. And then there's Amazon. It seems to me that what we're seeing is the beginning of the sort of Sumo recipe, others sort of staking out their own territory, getting ready to jump into the.
Go belly to belly as it were. Well, interestingly, Google did have, you know, as we've discussed in the past, they did have their express delivery service, which they basically have walked away from it. There may still be some, you know, some hint of an operation there, but that was a big part of their strategy.
And then they decided that that was not going to be profitable for them. They still are working on drones though. Yeah, but I mean, th th. W w it remains to be seen how much coverage you can get with drones. You know, you certainly can't go dropping stuff on people in urban areas, you know, in New York, what the hell is this?
You know, plume hit people on the head. There's liability. There's all of that. You can get the wrong, your bronc package goes to the wrong place. So yes, there is a, there's definitely a, sort of a, a last mile element here that Amazon has. And Walmart has the Google doesn't have. So it'll be really interesting to see what, what, what actually appears when this gets off the ground.
It strikes me that most of the third party delivery services are really in the end, too expensive to succeed long haul in and of themselves. Right? Uber, Uber, Instacart, small businesses can't afford the cost of those as a standalone, sir. And so it, it, you know, they're going to give, they're going to go out of business.
They've been running unfavorable, unit economics. I E they're running at such big losses. How long can they stay around? You know, I mean, well, I mean, Google could partner with, you know, conceivably one of those, one of those firms, I suppose. Although I did, I did calculate Uber eats had about a four year runway given the amount of money they raised in the star.
Somebody brought up the point that you know, if they've been losing money up till now and they get more volume to scale, they're just going to lose more money in the future. There are no, these economics can't be turned around in most cases. So, yeah, I mean, and, and, and recruiting drivers has been a kind of a problem ever since the pandemic, because.
You know, the cost of gas, which the drivers bear substantially themselves. That's a, that's a fundamental crop. So do you think this puts Google at a disadvantage in this whole scenario? I guess vis-a-vis Walmart and Amazon as the last, as the, or do you think that they would partner up with Amazon or, or Walmart to, Google's not going to partner with Amazon?
Well, Amazon define ads though. I mean, they could buy apples partner with Walmart though. I thought for Google express, but then also. Also ordering through Google home, the, the Google assistant devices, they had a pretty interesting Walmart did a pretty, I don't know if it's still alive, a pretty interesting reordering e-commerce initiative where, you know, you would, you would sign in and then they had your grocery list and you could reorder stuff that you was on your list, which I thought was pretty interesting and a clever way to do it.
So you don't, you don't have the kind of cold start. That would otherwise exist, but you know, Google Scott, you know, Google and Amazon have massive consumer audiences and Walmart does too, but not quite to the same degree. So I think Google is still got a built in advantage in terms of the eyeballs.
And you know, there was a digital commerce, 360 survey that survey that I wrote about last week or two weeks ago, I wrote it. Retailers and what they saw as the most are consumers and what they saw as the most influential channels or most influential marketing vehicles. And we talked about email being number one, they did a companion survey with retailers that talked about search being the most effective new customer acquisition channel.
So search has, which I thought was interesting. Yeah. Yeah, exactly. I mean, it was, it was paid search, organic search, you know, they sort of. It was like paid search product listings, which is organic and then content, which is another version of search in all likelihood. They're not probably talking about their blogs, they're talking about content in organic search results so that there's built-in advantages there that you know, for, for, for both sides of the market, that should keep Google in a very strong position going forward.
But, you know, I wouldn't, I wouldn't underestimate Amazon by any stretch of the imagination, but they just have this kind of. Track record and local to date, but we need to move on to. Yep. And what you think is interesting David, about the new H refs $60 million. Yeah, another week, another new search engine announced we didn't get the full fully expected search announcement from apple that many of us were waiting on, but Mike, we'll talk about that in the next segment.
But HRS did announce a new search engine. Yeah, but.com. I've kept, we wish I could remember who said this on Twitter, but we'll know that yet this made it when it stops looking like a typo for Yelp. That's, that's very funny. That's definitely my, that was my reaction when I first saw it on Twitter.
I suppose the opposite is also true that Yelp, well, it totally failed. It's like a typo double-edged sword. Double-edged sword. But I don't want to make light of this. I actually want to applaud the team at the HRS for not just a, I got fairly strong MVP Tim Soulo. I think who's their CMO came out and was after all the fall.
Tech crunch coverage and the press release and wanted to make clear that, Hey, this is a work in progress. This is not meant to be our be all end all. And it is a very good MVP. I think it's the UX is, is clean. Interestingly there was a lot of chatter that it looks like what Google used to look like.
So it's very 10, 10 blue links based, which is oddly refreshing to, to those of us who look at search results every year. And may have some consumer interest as well, especially in categories where a universal search, just, just not as useful as it should be, or as accurate as it should as it should be.
But it makes, you know, from a, from a product standpoint, it makes sense. HRS has been sitting on a mountain of, of link graph data now for. 10 or 12 years. And not that difficult probably to turn that link data into a similar sort of back rub algorithm that Google started with. So why not give it a shot?
The interesting hook from a marketing standpoint is not necessarily initially targeted at consumers. The initial hook is that they are going to share revenues with content creators, which seems to. Poor a little bit of salt in the wound especially with, with EU searches where Google has been forced by the EU to share revenue with certain publishers.
AHS is saying great. We're gonna, we're gonna build revenue sharing agreements as part of our, as part of the ethos, the reason behind this product, which I think is just a really interesting. Unique position for a search engine to take in the market. Right. We've seen Neeva and duck, duck go sort of focus on privacy.
We've seen I can't remember the name of it now, but there was a search engine that came out five or six years ago that was focused on sort of doing good and sharing profits with charity. There's good, sir. Good search. I think is the one you're in search. Brave is using their. And F E T point searcher reimbursement.
And there's, there's a Cosea in Europe, which is you know, environmentally supportive. So there's only so many new hooks out there for a search engine to take. And I thought this was an interesting one from H refs and. I've I have tried, you know, a handful of searches on yet. I don't think the quality is there yet where I'm willing to, to switch over, but just kudos for taking a big swing and at least getting on first base.
I think with the, with the release itself, I think that you know, I think it's really healthy that there are these, you know, we went, we went, there was a period of time where search was intensely competitive, and then we went for years without any sort of new blood. In the market, you know, with some ankle biters and now we're, we're seeing more people, people are now starting to feel like, yeah, there's an opening here for something new, which I think is really healthy and important.
And Google should definitely welcome it because it helps them with these antitrust trust case. Exactly scenarios. So it's only one click away, but I share your. Yeah, in a different way. Yelp has only one LOA. In fact, the, the, I share the, the sort of nostalgia for the simpler, the cleaner SERP, you know, I, I looked at it and I thought, oh, there's, you know, I felt a certain kind of relaxation looking at the page, you know, which is kind of minimalist appeal.
The clutter is kind of gone, even, even as we see, you know, lot, all the innovation that Google is doing on the. So you know, I hope I hope she has, which there will be. Yeah. So that's where they're going to get the money to do the, the revenue sharing from. So we'll, we'll see when that, when that starts showing up, I, you know, they, they, they deserve to be applauded and you know, hopefully they'll, they'll make it self sustaining.
Hopefully it will, it will work. I mean, I feel like there's a B2B search opportunity that has. Been taken advantage of when I'm, I'm doing a lot of research in a B2B context, the results are very uneven. There's a lot of data and a lot of information out there that I know exists that is not ranked, you know, that doesn't rank, or it doesn't rank as well.
You get a lot of kind of thin content showing up on page one in Google listicles. So I think there's an opportunity for somebody to build a, a kind of curated B2B search engine that has better higher quality information. Then than what you can get on Google, but that's just my little editorial aside. So let's move on to apple and Siri and Spotlight Mike, but before, before you jump into that, do you want to say anything about a buy now pay later apple pay later?
That was that was maybe in a way. That was the thing that kind of got the most attention out of like the a hundred million soft. I mean, it's a hot FinTech thing right now, obviously. And in many situations, unfortunately it's a consumer abuse sort of thing. You know, apple is in a unique position. To offer it.
They have, they're so much cash that they can finance it themselves. One and two, they know so much about their users because they have 825 million subscriptions. At this point, they have 825 million credit and debit cards. They understand who buys what, when, where, and how so they, they are ex. And what was interesting was just the, in the four paint, there were four payments and I read that they, if they don't get.
They're just going to write it off and no longer give that person credit, but they aren't even going to report it to a credit bureau, which I thought was interesting. And it points out the conflict between credit and reputation. That apple sees that they don't want to be the person to ruin your credit.
They don't want to be held accountable for that. So the most, but they get 25% down and then three equal payments over your next three paychecks, zero interest feed. That's coming from the vendor from the business. So. They're obviously using the profit, that's being extracted from consumers as their opportunity, which I think is interesting and are able to live on the much smaller margins that are just going to come from the vendor because they have so much cash.
It's interesting. I mean, I've thought about doing it. David thought about using it to, although in not such a nice way, I might say David I was going to, I was going to buy a certain product that was right up to the line before they shut off my apple subscriptions. You talked me out of it though.
Mike, you talk. Okay. All right. All right. So it's interesting to me, but, well, go ahead. Well, what's, what's, what's interesting is that, you know, it used to be the case that you know, Google would announce some product that was competitive with preexisting products in the market, and they wouldn't say, oh, these other third-party products are dead now because Google is, has introduced their version.
And, and in nine out of 10 cases, Google didn't kill anything, you know, because either their product was substandard or they didn't market it. So they didn't get a lot of adoption or, you know, whatever. And likewise here, 50% of the U S market, 30% of the world market uses apple. Only some percentage of those are interested in, or have a credit card on file with apple.
And only some percentage of those are interested in this particular aspect of financing. So it's basically serving their base. It is not going to impact. I did, for example, who rely on buy now pay later on unfortunately to make ends meet. Right? I do think this will force a shift though, in the buy now pay later, you know, affirm Klarna and all these other companies, which, which in some cases have been trying to expand out into sort of eco e-commerce becoming e-commerce sites as well as, you know, this financing vehicle, because apple is so, you know, th th th the, the genius here is that it's.
Whoever takes apple wallet. This will automatically be in place. There's no new deals that they have to do. Right. Although I tried to do cash pay or direct pay and because my two local banks don't are not apple wallet compatible. I can't use apple paid to send money to my kids. Which is unfortunate because I don't trust Venmo as far as I can throw my phone which I wouldn't do anyway.
So that's how much I, you know, I don't trust Venmo at all. And I would much rather be on apple paid. It's just transfer money. I mean, I've used Venmo and looked at somebody sent me Venmo the other day I went in, I looked and I could see all the money they'd paid to their daughter and their wife and their.
Once to be a social network, as much as it wants to be a payment, a social network with your, with your expenditures, which to me is a totally inappropriate place to be sharing that. So anyways, but I'm not here to talk about buy now pay later. Okay. Let's talk about spotlight. Let's talk about Spotlight spotlights.
Interestingly, we talked that we speculated about last week and whether the rumors of an apple search engine are true and my contention largely then, and, and has been. Apple has had a search engine that they've slowly incrementally been building. And we see more of that slow, incremental building that relies a great deal on sort of advanced AI and increased processor power so that this, their features of search are going up simultaneously with their microprocessor advances, which is interesting to me because they control both the whole stack, but the increase, the improved.
Interface the Spotlight and the improved capabilities. So first the interface, so a spotlight, which is their primary access to their search engine. Although there are others, the Safaria URL bar and Siri, but Spotlight is now going to be integrated around the homepage, front and center. So unlike the IPP, which is going to have trouble developing consumer interest, Apple's putting this on the front of every home screen, right above the menu.
Task bar at the bottom below the apps. So every consumer is going to see this and it says search, and it's quite obvious what you do with it. So consumer, uptake's going to be very fast, I think in very quick, unlike now, where you have to swipe over to get to the interface. I can't even do this now, so I will definitely inquire swipe left.
Right. But you didn't have to notice swipe left. And that has to be part of the behavior. This is going to be totally integrated. So there, they've got that side nailed and then. Th they're using this AI to do things like understand the text in video, in videos and images, and this Spotlight will search what, whatever, where you put in, if it relates to text in your images in photos or notes, it'll surface all of that information for you.
So it's still using this sort of federated approach of internal and external sources. Also there've been improving series knowledge graph Thought of as a voice interface, but it really is a voice interface integrated to a knowledge graph. And the knowledge graph is now going to be better integrated into spotlight, which has also been a problem because Siri's been on one side and Spotlight been on the other, but things like.
Plans and arrival times for flights and information from your reminders are now going to all be integrated through Siri, into spotlight. So that's a big move integrating the two search engines into one. And they've also noted that they're going to be integrating and being able to access live sports events, which I think is a huge consumer attraction.
At least to some of us. I'm not pointing any fingers at the moment. Oh, David raised his hand. And so that's interesting. And then finally they noted that they will be delivering rich results when searching for businesses and sports leagues and teams, which I don't care about, but David does. So, but so this is the search engine.
This is what they're going to deliver to us, which is, and becomes more visible, more powerful, and incrementally, more available as the hardware gets more sophistic. Even as we noticed one year to the one you less than one year to the next they've improved their processor speed by 30%. So we're seeing massive gains in hardware on the phone level, which gives them all kinds of potential to do interesting stuff with search as just not as a destination, but as a feature of a phone or whatever.
So I'm excited about it. I think this. But they they've, they've got, they've got an index. Clearly they have a search engine index. They have, they have a crawler, they have a crawler that's been crawling for a number of years. And some of that data makes its way into these federated results. But most of web search is still reliant upon what, whoever your default safari URL bar.
Default search engine is right. So they prompt you to go do a web search if you're not seeing what you want there. And then that's going to be Google in my case. Being more duck, duck go for somebody else. But to think that they are not preparing for the end of Google is to not understand that apple works on a 10, 5, 10 year horizon all the time.
And clearly if we can see that Google apple relationship at risk apple clearly sees that either through antitrust or some other reason Google. Decides not to whatever. I'm sure they see that as a vulnerability. And I'm sure they're planning for it. I don't doubt that one iota, probably. So. And then, and then the question will be, you know, and this is quite long before the horse, will they ever try and monetize search?
Will they ever put, put ads in there? I mean, they've, they're making more money now with search ads in the apps. And, and it's a, I don't know what the number is, but it's, it's in the billions now I think. And it's a, it's a growing category right there though. There, there was a demand because. Firstly, their search engine in the app stores, not that good.
Right? Which doesn't bode well for search engines in general, but they do, you know, they are working on it and there's a business side demand there, which doesn't exist on the phone. Right. They typically, so, and it's probably will pretty soon though, if this gets major consumer adoption, I bet you're going to want to advertise.
Break in there so well, and it'll be, it'll be, it'll be seen, you know, again, we don't have any numbers. I mean, Andrew Shortland argued on Twitter that, that there was a meaningful volume of search queries. Well, I see it when I look at restaurants and spas and hotels, I see a ton of dark AppleTree.
Right. I don't see it as much in traditional bricks and mortar and service area things, but I see a ton of it in those kinds of areas, which are very tourism and travel related as well as recreation bar. So it's kind of is that maps, is that maps you can't tell because Google that there's no way to put a tracking with most of these links to, there's no way to put tracking URLs.
And so you can't tell where it's coming from. So it's dark traffic, but. Some, well, people say you can put a tracking URL through like a moment feed might allow it and then it might get through to apple. And if it does, you might be able to track some of this, but it's, it's, it's coming in and it's dark.
It's not saying it's from Google. It's saying it's from apple. David says, if, if we start to see some meaningful growth in search query volume or traffic coming from apple, then there will be demand. Marketers who who see it as a less competitive opportunity, you know, it's like a new opportunity, right?
But that all relies on. I mean, if, to the extent that apple builds more advertising opportunities on its own products, it makes itself more vulnerable to criticism that it levels against Google and others. There was some noise early this year that they were going to release analytics, data, traffic, data to partners via.
Like a, not an API, but via like a CVS download or, you know, to, to partners like mom and feet. I don't know if they did that. I don't, I don't, I'm not, I'm just using monkey's example. I don't know if it was them, but I heard through several sources that apple was going to be releasing some amount of, of traffic data.
So that may, that information may be. And moment feed, of course is now part of Uber all as you. Well, maybe you could check and see if they've got that. They don't, they don't talk to me anymore. Oh, shucks.
No, I, I don't, I don't know what's going on internally, Uber all anymore. That, that that channel is closed. I have to be in full disclosure. I do own apple stock. It's been very, very good to me. I'm continuing to bet on spotlight. There's a minor financial interest in the depth of Mike's family is so yes. Yes. I do not own any apple stock in the interest of, or do I though? Mostly because I sold some years ago and it's too expensive to get back in now, so, oh, that's your lower, I think at 1 42 or something.
All right. Well, any, so with those stock tips here
where maybe we should just, you know, do go into stock picking and stock tips instead of the internet, I think we'd have our follower count would shrink by 90% if we did that. Yeah. All right. Any final words on any of the developments this week before we adjourn? Sign up for another week. Just, we didn't, didn't talk about the sign, but it looks like some of the Google marketing live announcements around automated ads are now in the wild, a couple of reports on that this week.
So if you do paid search, I would be, I would have my sort of spidey sense tingling at this point. So yeah, I mean, then that's a very interesting topic that we've touched on a number of times in the past and will undoubtedly come back to, is the automated, creative and automated. You know, at assembly that they're, they're moving toward essentially, or are now not moving toward there in the middle of it.
All right. Thank you very much for listening this week. Subscribe to near media.co and we'll see you again next week for episode 69.