Part 1 Video start 0:13 - Indie bookstores have rebounded strongly, why?

Part 2 Video start 8:54 - Amidst broad privacy abuses the FTC is looking to target data brokers around location & health info

Part 3 Video start 20:46 - What does it mean for search when  18-25 year olds looking for  restaurants shun Google for Tik-Tok?

Reference Articles:

  1. Amazon Admits Giving Ring Camera Footage to Police Without a Warrant or Consent
  2. Data-Driven Deportation in the 21st Century
  3. Location, health, and other sensitive information: FTC committed to fully enforcing the law against illegal use and sharing of highly sensitive data
  4. Some Surprising Good News: Bookstores Are Booming and Becoming More Diverse
  5. Small Bookstores are thriving (Greg’s take)
  6. Google exec suggests Instagram and TikTok are eating into Google’s core products, Search and Maps
  7. Zoomers: No Maps (Greg’s take)

Transcript Ep 73:

Greg: Welcome back to the Near Memo and welcome back David Mim from two fabulous weeks of vacation.

David: And they were fabulous. I'm not gonna beat around the bush about that. It was terrific vacation. So thanks for filling in while I was gone.

Greg: Well, we had an esoteric conversation about European antitrust and privacy rules last week, which was kind of fun and interesting hopefully for the people that heard that.

As always David, Mike and me. I, no, it would be me are here, but it's weird to say me are here to talk about search social and commerce through a local lens.

And we're gonna jump right into it. Some really interesting stuff this week, I'm gonna lead off with a New York times piece that we wrote about earlier this week about the sort of resurgence of small bookstores that's been going on for a little while, but the times kind of crystallized it by saying that in the last couple of years, there are 300 new bookstores in the US, independent bookstores that have opened often catering to niches or, or owned by diverse owners, non non-white owners with different kinds of inventory there.

So anyway, it was a very, very encouraging piece and very interesting. And I saw it and that this, my angle on it in the, in the near me, in the near media newsletter was that this reflects the frustration on some level with just the internet that people want local businesses to survive.

They want to be in physical stores.You know, the idea that everything was moving online, absolutely everything would be eCommerce driven is completely false. And this is a symbol of the affinity that people have for their neighborhoods, their communities and local shopping and small businesses in particular.

So that was sort of my grandiose takeaway, but it's, but there's more going on there. Mike, why don't you fill in?

Mike: Well,there's several things going on. One is that Amazon's main competition in the book world was Borders and Barnes and Noble. Borders, as you know, closed and Barnes and Noble is a shadow of its former self with many fewer stores.

And those failures, those declines created space starting 2016, that independent bookstores have moved into.

I think too, the lack of desirability of eBooks. There has been a sort of decline in use of eBooks. I think that people realize that real books are more pleasurable to deal with.

Yeah. And a better way to read

Greg: that's my conclusion as well. Absolutely.

Mike: And, and so into those two spaces, there is now with Amazon at the sort of volume, gotta get it tomorrow level. And nobody else sort of in that field. I think that it has opened up a number of niches for places like Powells to expand into the internet more aggressively, but also smaller bookstores, like in Ithaca.

Interestingly, the very small used book store  there got bought up by a political publisher. And so now that there's more bookstores and there's these smaller bookstores, it strikes me that there may even now be an opportunity for some medium size roll up for consolidation in the industry.

Some consolidation, because there is benefits to scale in distribution and purchasing and stuff that I think a very small bookstore would have a hard time dealing with.

Greg: It's also worth noting that that Amazon has closed all its physical bookstores. Just wanted to throw that in.

David: I was gonna make two comments. First of all, as a rabbid Powells devotee, frequent shopper, they really struggled with COVID.

They had a major, you know, they couldn't quite figure out their staffing mix. Online commerce is still super antiquated. It's very painful to order from them online though. I do it to support a very local business to me. And, and I think that really there sort of tied into the second comment.

I was gonna make that one of the major benefits of being Powells is that it is a tourist destination. It is a place to go. It is a pleasurable activity to be in a Powell store and to try to discover new things. And that experience is I think at least half the half of the winning formula for them in the fact that they are in a well, what used to be a very vibrant tourist city of Portland definitely helps their business not just for local residents, but also for tourists.

And I think that that experience is just impossible to replicate online. Like you have to really know what book you're looking for to make on Amazon order feel anything like a, any, anything at parity with an in-store shopping experience for a book.

Mike:Well, the only thing at parity is the checkout process, right?The rest of it sucks.

Greg: Yeah. Well, what's, what's interesting about Powells is that, is that and this is true of other, other other businesses, you know, a after I'd visited Powells, my experience of. Interacting with them online was very different. So once you it's like it's like meeting somebody in person and then having video calls with them or, or vicarious interactions with them.

It's very different than if you've only had a kind of online experience. And so you're, you're totally right that the, that the community aspect of it, the, just the, the tactile. Visceral nature of being in a bookstore is really something that people want and like, and love. And that's true of most local businesses, most, not all, there's some version of that going on.

There's something there's something tangible, palpable, real local businesses are more trusted, you know, their issues of fraud and, and distrust rampant now online. So I think, you know, this is a very, very positive thing, but it also illustrates the larger point. That well, I don't know how many of these bookstores are, are doing a decent online business.

It looked like from that article that many of them had an online component, but really the, the reality is that you need, you know, the winning formula is some mix of online and offline. You, you can't really survive, I think is an online, only business. There's some very few businesses that are online. That really can make it in a, in a

David: retail.

I don't think survive as an online, only business. I just, they would, they certainly lose on price and they right. They really don't. They, they lose on. Very poor quality of the checkout experience and so well that can, they

Greg: can address that. That's

David: I don't think that's well, theoretically they can, but it's now been almost three years since

Greg: the storm.

Maybe it's a cost issue for them. I don't know. Yeah. But

Mike: although I don't know, addressed the employee issue, you know, my son started working at a retail, moved to Baltimore a couple weeks ago. Got a job in a beer retail. Restaurant and a bar and he got COVID and everybody there got COVID and they were, they, they called him on day five and begged him to come in.

He's like still dragging his butt out of hardly being able to drag his butt out of bed. And they were so desperate because virtually every employee was sick and it's like, I don't even understand how retail operates in that context with scheduling. Impossible to

Greg: ask. Well, I mean, most people are just pretending, like it's not a problem until it is, you know, that's

Mike: what, right.

But you have the issue of bringing the employee in before they're fully better. And then you have the issue of spreading it to your customers. I mean, not only are there logistic issues and management issues, there's ethical issues that are just mind boggling. I don't fully understand how somebody like Powell's could.

It had to be really frustrating, has to be continuing

Greg: to be

David: really frustrating. Yeah. And I say that I, I don't say it to be critical of them just as a, a point of fact that I, I just know they were just really scrambling for really the first year. I think of COVID to keep operations going, let alone, you know, try to grow their business.

Greg: So, okay, so we've got two more, two more items, one on kind of a Roundup of recent privacy developments. And then the, the final item that David is gonna take, which is really interesting is about Google potentially using younger, losing younger users to. TikTok and Instagram for, for what would otherwise be local, local search and other kinds of lookups.

But Mike, why don't we turn to you? You, you chose three items together that kind of comprise a little privacy suite discussion. So the first

Mike: piece of news was big surprise. Amazon is turning over ring data to police even without a warrant. And with no permission from the owners. Amazon has always said that they either needed.

Consent or a warrant turns out doesn't they don't need either. They've been renowned for their very close relationships with police and it just shows how dangerous this kind of data is and how loose. Companies play with it, even though it's just first party data, just first party know that complete control over, but they still abuse that.

Right. And the, the second article that I found fascinating was that ice without any allowance to do so has bought up private information sources. And now has dossier liaison three out of every four Americans which. Incredibly amazing with virtually no oversight and nobody to answer to on these issues sort of an outcome.

I guess nine 11, but just a bizarre overreach that nobody is bothered to reign in. One assumes that they're aware of it.

Greg: And before you go to the third one, ice is immigration and customs enforcement for people who are unfamiliar with the acronym. Right.

Mike: Part, part of homeland's. Security. But they've accumulated massive, massive amounts of data through, through

Greg: public databases.

It's worth noting that this is all public information that anybody theoretically could capture and aggregate. Well, some of,

Mike: some of it is public. Some of the travel information is only they have access to, but it's a combination of, of, of resources, but an abuse that sort of is mind boggling, although hardly less dangerous to, to our individual.

Rights and freedoms and what Amazon is doing with the police. And then finally, the F the FTC, which is charged with enforcing sort of integrity in the marketplace has decided to lo to focus on location, data abuses that they're gonna go after unauthorized uses of sensitive data, including location and personal health information.

So to some extent, this appears to be a response to overturn. Row B Wade and they called out data aggregators and brokers, particularly who collected and resold these types of data. I know that you have a lot of color around that, so maybe you could,

Greg: well, what was, I mean, there's a lot of interesting things in what you said, but just to add some, some additional background to, or additional color to what you were talking about with the FTC.

One of the things that they said is that when a company or aggregator, whomever claims that the data is anonymous or has been anonymized, that that is gonna be deceptive in most cases. And they will go after those companies. So every single. Mobile location, data, company, location, intelligence company, people that do measurement of store visits and bring together various data points for profiles or for audience segments.

All of them say this is anonymized data. And what the FTC said is that in cases where that's not true, there's a consumer deception instance that they'll, that they'll go after. And they, and they added that according to third party research. 95% of these allegedly anonymized data instances can be, you can reconstruct individual identity.

So what they seem to be saying is that the whole industry that captures location data, packages it up and makes it available for sale, which is an ecosystem of app developers, data, aggregators, and brokers, and then brands and retailers and ad network. Yeah. And,

Mike: and software development kits sometimes provided by the likes of Facebook or somebody else yes.

Or in

Greg: that mix between, right. So, so there's, there's a real cloud now in my, in my mind, a real question, mark, putting aside enforcement and the resources to enforce this about what is compliant now, you know, what's legal, what's compliant because it's a, it's a pretty sweeping. Pronouncement and I mean, I'm not disagreeing with it because location is a very, very sensitive piece of information, especially now where people who are gonna cross state lines for reproductive decisions are, are gonna be prosecuted, which they're already talking about in in Ohio for the unfortunate case of the 10 year old, who was raped and went to Indiana for an abortion.

They're talking about prosecuting the doctor across state lines. But anyway, so that's just all very sensitive, but it, it, it, it raises a big question about what kinds of disclosures must you have? What kinds of consent must you get and who who's gonna be compliant? I think it's, it's, it's a, it's a big I, I think they've, they've, they've sort of thrown down the gauntlet and, and we'll see what the enforcement looks like.

That's that's gonna be the big question. Who are they gonna go after? What are the penalties gonna be? What are the, what are the remedial measures that are gonna be mandated? Gonna look like? I

David: happen to think that location is one of the, from a, from a user standpoint. Outside of the context of using maps for a navigational purpose, that it is one of the least helpful pieces of information that I could give a service to make my experience better.

Right. If I'm doing a search, even in Google. Right. And I, and I say, you know, Abortion doctors near me. Right. It would be just as easy for me to type abortion doctors, Indianapolis or whatever. Like, I don't think that the, the concept of location is, is so important

Greg: that default, default location. Yeah,

David: exactly.

So I would be perfectly fine if the FTC said actually no company is allowed to use location data for anything. I don't think the consumer experience would be meaningfully degraded

Greg: by that decision. Well, it would require it would put the burden on consumers to be more specific in their queries and to, to, to refine.

I mean, if you're looking for product inventory, location is helpful. I mean, initially, what, what Google has. even though there's a lot of near me searches going on is that, is that Google has conditioned people to expect that their results will be specific to their location. And so that the near me query Google was saying a couple years ago was sort of falling away.

So people were just doing Indian restaurants or you know shoes or whatever, whatever the queries would be. I, I don't think you're, I don't think you're wrong. And I think that, I mean, I don't disagree with you and I think. It would just place an, an additional burden on for a step. You know, you'd have to do an additional step at your zip at your, at the, at the go where you wanted to get the information.

So it wouldn't be that big a deal. And that would be evidence of consent,

David: you know, and in most cases, in my opinion, the use of location data is just an incredibly predatory thing. It makes me, it makes my eyeballs, my interactions more valuable to an advertiser, as opposed to actually helping.

Greg: Well in, in defense, in defense of that whole industry, which I got to know very, very well over a period of time, you know, I can tell you that I don't think these, most of the people that I talked to were ethical or trying to be ethical, and they were genuinely not trying to provide data on individuals.

They were trying to deliver market segments that could be targeted. In a broader kind of broader framework, so that the, the lo the, the ability to identify people who are frequent McDonald's eaters users, I was gonna say, or who go to the gym often,

David: or users probably worked in that content

Greg: too, actually or, or, or people shopping for cars.

That's, that's incredibly valuable to. To marketers and the idea that you could track and ad exposure to a physical store visit was something that was really a revelation for people who were speculating about which channels were driving. I mean, you still have the last click problem, but speculating about which channels were actually driving behavior.

You, it was incredibly valuable to see that, see those analytics. And so I think there's enormous

David: value again. How does that help? How does that help a consumer? I certainly

Greg: understand how that it doesn't outta year. It doesn't year it, whatever, doesn't it doesn't. I mean, Amazon to come back to Amazon is released a thing called store analytics where they're gonna sell data, shopping data to CPG companies, and they're gonna get that data from their just walkout technology and their dash.

Which will have individualized information on it. And, and that's gonna be very valuable for those CPG companies. But in response to the question, what was that do to the consum for the consumer? They basically say, well, it's gonna provide a better experience sort of generically. And I think that that's total BS.

Mike: okay. Speaking of these abuses of wasn't that long ago that Tim Hortons was settled, the case where their app was tracking their users against their permissions, right. To understand what competitive coffee shops they were going to. Again, this is nothing to do with the consumer. The one question I have about this whole thing though, is whether a first party app online ecosystem, I E Walmart I E target Costco, whatever might.

Give those bigger players an advantage in yes, totally. This whole thing. Totally. It does come to play where the FTC does claim down. Right?

Greg: And it's, it's one of these sort of unintended consequences scenarios because Google and apple and big players, as you say, like Walmart that have a complete soup to nuts relationship with the customer can capture that data and can activate it and use.

It's really, when you get into third party transfers of that data, that it becomes problematic from a, from a a privacy standpoint with the

Mike: exception of Amazon.

Greg: Yes, but so, so it, it, it, it will inadvertently or unintentionally provide an, if they do very strong enforcement of this in advantage to those larger companies that have the full.

The full end to end data access and, and permissions and so on and so forth. And it'll require more transparency at the app level, including discussion of where the data would go and, and it should, and it should include the ability as apple does to say no. And then have that, and then have consumers be confident that that's not gonna be shared a Amazon.

Anyway. All right, moving on to the third item today, which is probably the most provocative one, not withstanding the, the privacy outrages that we just all expressed is Google's SVP. Provoca. Raban hopefully I have not missed you for saying that who is a, who is a really, really good guy. I met him at when he was at Yahoo.

He's a really good guy. He was at the brainstorm tech conference of fortune conference and he was being interviewed on stage and he made the remark, which we picked up from tech crunch that according to Google's internal research, about 40% of younger users, generation C probably were not using Google maps.

or search to find PLA he said places for lunch as a stand in for local, all kinds of local information. And then he added later that they prefer these younger users, a much more visual experience versus the traditional. And specifically

David: he said they go to TikTok or Instagram, which I found. Right. And certainly from a personal experience, not me, but friends.

Significant others. Instagram is a real discovery vehicle for these kinds of experiences. No, no question about it. TikTok was fascinating to me as, as I was chatting with you guys on our slack channel yesterday, just, I can't imagine ever being a TikTok user myself, let alone using it for a, a discovery search experience.

It just seems so foreign to me. And I can't be alone in that, in that feeling. I don't think in terms. My generation and older generations sort of being in that camp. So it struck me that this comment first of all, Mike, you're welcome to give your, your tinfoil hat comment here about this comment, but about the SVP remark.

But aside from that upcoming tinfoil comment, it strikes me that this, it may indicate a need for Google or any. Sort of horizontal tech player to start to bifurcate its products along consumer preferences, because if Google were to go so far in the sort of TikTok discovery direction I don't think anything they're doing in visual search right now has, has kind of gotten there.

But if the, if the sort of basic. Framework of Google maps and the basic framework of go Google search goes too far in that direction. I will absolutely abandon Google and jump to duck, duck, go or bang, or some other sort of more traditional search alternatives. I just, it's not a, it's not a format that I particularly enjoy discovering things in at the same time, Google might lose the 40% of young people for whom.

that sort of framework is their preferred means for discovery. So I think it's a really interesting sort of demographic shift in search behavior. And it may, it, it may pretend a fragmentation of products based on preferred discovery experiences by, by various demographics.

Greg: L let me just qualify with a couple of things and then Mike, you can, you can have at it.

So we, we don't have any larger sense of what that data says. We're just, we're just reacting to a, a, a. Hearsay comment. And, but it's pretty significant. It was a kind of a bombshell that, that large, an audience was had had embraced Instagram and TikTok instead of maps and local for near me queries. And you can do a restaurants near me or similar near me queries on TikTok that exists.

But what you get are these short videos with, you know, creators and influencers, making recommendations. I think that this also adds an interesting new angle to our discussions about visual search, which Mike, I know you probably wanted to talk about more. It, it, it, it gives us more perspective into why Google is kind of pushing the SERP in a more visual direction, even though there's multiple inputs and influences there.

I mean, one of the, one of the things that was striking to me about Google marketing live Let me find the quote that Jerry Disher said, Google marketing live was the ad event, kind of companion to Google IO. And Jerry Disher at Google marketing live said that

David: we're, we're transforming the SERP into an endless stream of visual ideas.

Greg: Exactly. That's a paraphrase. And that, and that was, that was kind of a really interesting and her. In terms of Google's old design philosophy and old perspective. So, Mike, I know you have a whole bunch of things you wanna say, well, it's a

Mike: design philosophy that clearly has changed over the last five years.

The analysis we did it near media showed that images now comprised 35, 30 7% of mobile service images had gotten bigger. Obviously bandwidths have. Faster more images per listing, like on a organic mobile search. You now get up to five images, organized in different ways in local pack, something very similar and images can expand.

So, so, and the most telling of these in this vein is the search by photos feature, which is a purely visual search metaphor. All it shows is the business aim and the star rating, and then a great big picture that typically reflects searcher query intent. And when you click on it, you're brought into a much larger panel of images and star ratings.

So you're theoretically supposed to pick a business to explore based on 98% visual information. When you count the review stars in the image and very little text information. So, and to me that's been, we we've noted this before that it is very Pinterest like Greg, you know, although I'm curious, Greg, how you know that there is a restaurant near me search INAC functionality.

Because I

Greg: did it

David: I went in there. I included a screenshot.

Greg: Yeah. I went in there and I did it because I, I thought what happens when I, I'm not a TikTok user. I mean, I have tick thetic TikTok app, but I'm not really tick TikTok user at all. And, and so I was just curious what would come up when I did that search and there are, there are results and there's refinements.

There are, you can refine the.

Mike: Really topic. Speaking of peace, speaking of privacy breaches, now China knows that you are interested in

Greg: restaurants. Yeah. Which is an important thing for them to be aware of. I think, but Mike,

David: I, I tried to tee off your tin foil comment, and I want you to want you to share that

In this discussion.


Mike: Yes. So I borrowed David's hat for a moment and I felt that. Quote unquote, offhand way in which he dropped this remark was really much more conscious than that. Google doesn't let these things slip. They're intentional. Yes. And I, I think that some of the intentionality revolves around the idea of Google's positioning that they're not a monopoly that users can just click to a different area.

And this is proof that one whole segment has done that as they frequently quote. Around Amazon now generating 55% of product searches. That to some extent, this is Google defending themselves against antitrust monopoly claims.

Greg: I, I think that that's absolutely true, but I think that, I think there are multiple things happening, young people.

One of the reasons why young people go to TikTok, I think is because. Even though on surveys, TikTok doesn't rate very well for trust trustworthiness, you consistently see social media at the bottom and TikTok is sort of there within that hierarchy pretty low, but there's a way in which most young people feel like there's something more real or authentic is always the U the word that is used about human beings, communicating the information.

demoing the product, making the recommendation, showcasing the recipe, whatever it is versus the kind of traditional presentation of results. I mean, I think that, that this, this goes back to the bookstore conversation in a way there's some human affinity for that kind of information. It's a version of word of mouth.

Presented on TikTok versus a kind of list of businesses that have a bunch of anonymous reviews, even though the reviews, it's also a form of

Mike: credit review. I mean, it, it, yeah, somebody you trust intimately and that you align with philosophically to give you a recommendation. So it's stronger than an aggregate review in that

Greg: sense.

Yeah. And you can, and you can do an evaluation. I mean, even if, even if, I didn't know either of you guys and you. Talking about bookstores on TikTok, which is a huge area for TikTok. Incidentally, TikTok is driving an enormous volume of book sales. If, if, if there's a real person in context, I mean, I can see your face.

I can see your expressions. I can evaluate your trustworthiness kind of intuitively. There's just a lot more information there at least about the individual than a written review in text. Now I don't have the benefit of seeing a thousand of those individual. TikTok videos. But there's just something that I think people are responding to about the form, the presentation that's very powerful for younger,

Mike: younger people.

Well, and Google has embraced that to some extent with reviews, by encouraging image uploads. And I believe that they will shortly embrace it with short videos, right. They've been building out short video technology and encouraging it and understand it as well as they understand still imagery. So you're probably gonna see a movement there as well.

Greg: Well, and to David's earlier point. I mean, if Google, what was the, what was the, the SCM rush search engine called oh, you mean yep. It'ss or AHF, sorry. Could confuse the two companies. Yeah, so the, so the, so, yep. Right. I mean, yep. Was just the old Google in terms of the very right Spartan presentation.

We all remarked, I think how it was kind of like refreshing to see something. So. Clean and spare versus the what's bordering on clutter in some cases in the se. And so I think, you know, it's it's, if Google Google responding to this 40% defection rate tries to load up too much, Las Vegas style stuff in the surp, it's gonna be really problematic.

I mean, you know, as what, as what you said earlier, Although I would

Mike: point out that we couldn't hardly, we couldn't remember the name, let alone the URL. I haven't been back to visited in that Ty same thing, typo

David: for Yelp, the typo for Yelp.

Greg: So yes, that was my, that, that's my you know general memory defect, I think not the necessarily the interest of

Mike: well, but it's, it's the nature of search habit is plays a huge

Greg: role.

David: Yeah. I just wanna make one more comment, which I found really interesting further down in the tech crunch. This Google SVP, whose name I will. Sure. Roon Roon comp made the really insightful comment that this generation of 18 to 24 year olds that they supposedly did this user research in with. has never really used a paper map in their lives.

Their entire sort of navigational experience has been through a smartphone and that a made me feel really old, but B the comment that comment is like, okay, the. Entire, as you said, the entire paradigm of maps was basically translating a paper document into a smartphone experience. And what if you, what if you just threw out the, the sort of paper map, frame of reference and what kind of, sort of navigational discovery experience would you create without that as your anchor?

And so that, that to me is a really interesting question. And, and one that could actually spawn some interest. New experiences outside of our, what is today, our traditional sort of maps oriented paradigm

Greg: and people, people should, people should take up that challenge. I mean, I do think there's an opportunity.

That's pretty interesting to, I mean, snap has a map, right. But that's mostly about, I don't use it. It's mostly about identifying where your friends are, but combining a new map experience with some social layer, I think would be, would be kind of interesting. To see, and, you know, hopefully it's very resource intensive to do that, but hopefully somebody will, will do that.

All right. And on that note, we will bring to a close, another hopefully interesting addition of the near memo. And we will be back as always next week. We are running a survey with up city right now. UpCity. About digital agencies and their challenges. What, what products are profit profitable for them?

What their pain points are. All kinds of issues that we'll put together into a kind of benchmarking report that if you complete the survey, you'll get an advanced copy of, plus there are some great offers. Unique offers from companies like David Lee.

David: FENO all leap FENO white spark, zip sprout plan. Sendable a lot of great SaaS companies have, have made significant discounts available to folks who complete the survey, which we think will take around 20 minutes to complete.

So it's not, I said it was only 10 minutes. I said it was only 10 minutes, maybe 10 it's. It's not a five question survey that you can just bang out though. But we would really appreciate your participation. We've already had close to 200 responses in the first couple days would love to get that number as, as high as we possibly can.

Greg: Right. And the data will be very interesting for, for, to compare your, your agency to others and see what's profitable. See where what's being sold. What's easy to sell. What's hard to sell all those kinds of questions. So where

Mike: can they get a link to the survey?

Greg: We will put it in the, we will put it in the transcript for this podcast.

And we will also send out another email to our audience with the, with the survey. I don't wanna repeat a length, the URL right now. Okay.

Mike: So is that a wrap?

Greg: It's a wrap.