Greg: Good afternoon. Good morning, everyone. Wherever you are, whatever time of day it is welcome again to the Near Memo with Mike, Greg, and David, where we talk about search social media and commerce and what it means, why we think it's interesting. And so on and so forth. I flubbed that a little bit, but that's okay.
We've got a number of, sort of an all SMB program here, I think today. And we're going to start out with Mike and the acquisition by Squarespace. So why was that interesting to you?
Mike: David mentioned Tock and it was the first time I'd actually heard of them several weeks ago in a Near Memo.
And they had recently introduced a subscription-based delivery service that was much, much lower cost than DoorDash type of thing. So it was a much more restaurant friendly and they have taken a restaurant friendly approach and went, looked them up to their, uh, reservations. They just, they come out of the restaurant industry.
So Squarespace is a very horizontal product. But Tock is a very vertical product and I thought it was sort of a brilliant play on Squarespace’s part. I see a huge market opportunity in restaurants. There are a million restaurants in the United States, even with the losses from the last year, and 70% are single unit operations.
It's still an area where a family can create wealth for themselves. Unlike most industries in this country, like retail is now lost to that. And I see it as having a lot of potential there. I mean, I looked this up at the National Restaurant Association, table restaurants make approximately $300 billion in sales annually.
It's a huge market.
Greg: I think it's, I think it's bigger than that.
Mike: Well, this was just table service restaurants, fine dining, right?
And it just offers wealth creation opportunities.
While certain segments like fast food and casual are largely controlled and rolled up by national brands, the desire, and I think this will only increase, for true local ethnic and boutique restaurants will be strong.
And these restaurants have historically used Facebook for their marketing. They're weak on understanding the value of websites and of search. So there's a tremendous amount of upside 9to search marketing and seo). And it's largely under appreciated in that industry.
And as I demonstrated on the Spot to Be case study, I did last year, massive amounts of new traffic is being driven by Google, to restaurants, through Maps and Search and the Local Pack.
And it's a huge recurring revenue opportunity, well beyond website hosting, in terms of several hundreds of dollars, if not more a month, because they need, depending on where they're at in the stack, they need reservation services and they need delivery and all sorts of things that I think are, are, are interesting.
And there's going to be this huge, as you pointed out in this week's newsletter about the pent up consumer demand, I think it's going to really, really strike in in restaurants. I don't know if you remember that, that review I sent you earlier in the week
It was from Chelsea Lapp and she actually wrote up a Bacchus Wine Bar in Buffalo and I went to look them up today to learn a bit more about them. And to my point, their website is offline. I clicked on their website from GMB and their website was offline.
And this review is just so amazing to me. I'm just going to read a couple of little snippets.
But she and her boyfriend created a bucket list of restaurants they wanted to go to Post COVID. And I thought that was fascinating. Right? And this was one of the first ones they went to and they were just so enamored. They thought it was pure magic, even though it was outside their budget and they built their list from TripAdvisor and Yelp, but they wrote this review on Google.
So the whole thing just demonstrates to me all of what you've been saying during the week.
And I just thought it was, I think that it was smart acquisition.
Greg: You know, it strikes me that going out to eat is the new vacation, you know, at least in the short term.
Mike: Yes, absolutely. I mean, there's, you're not gonna be able to travel that much that far.
And once things start opening up and you've been double jabbed, the local restaurant scene is your oyster.
David: I also thought it was a very smart acquisition. Mike I'll piggyback on a couple of things you said. For one thing websites are very sticky product we know in the SaaS world.
And Squarespace sort of already has a pretty good trajectory of sticky revenue and I have to think that a back office, operational system like Tock is also a very sticky product. So I think from that standpoint, it makes sense. A ton of sense. The difference is that Squarespace can only really charge 10 or 15 bucks a month for a website just given the very competitive website building space, but Tock has established a much higher price point, very high value product for the restaurant industry.
It'll be interesting to me to see whether. This means Tock is going to expand beyond the restaurant vertical into some of the other categories where Squarespace is really popular, for instance, salons and you know, health and beauty services. I could very easily see Tock, getting into some sort of appointment booking space.
It's a really well designed app from the consumer side as is Squarespace. So I, you know, without knowing a lot of the financial details (I know some of them were reported as cash and stock), I have no idea what Tock's growth rate is or anything like that, but strategically it strikes me as a very good fit.
Very good, I hate the word synergy, but it seems like a win-win for both players.
Greg: So you have to believe that they've done that analysis. How elastic is this and how many categories could we expand this into? You have to think that they've done that there are probably four or five that they could extend it into.
Mike: Unlike Yelp, both services are very business focused.
David: I was just going to say the same thing that they're really the anti Yelp in terms of their consumer sentiment towards their products. Both very well regarded, I think in the Alignable survey--
Greg: So the interesting question that arises in my mind from this is... you know, I included a chart that sort of laid out a bunch of the website builders, interestingly, WordPress wasn't on there.
But to what extent does this now put pressure on others? You know, Wix has done a bunch of acquisitions and I can't think of off the top of my head.
Mike: They recently announced a GMB integration, for example.
Greg: Right. So to what extent do these website companies now...I mean, they've all had marketing services, GoDaddy's had marketing services forever, but to what extent do they need to really get into these back-office, much more integrated e-commercey kind of functionality to sort of remain competitive with one another? Does this then spur others to do similar kinds of acquisitions or look at this kind of stuff themselves, do you think ?
David: I absolutely think so if they haven't already done it? I think that this, in addition to having a steep learning curve in order to make updates and customizations, WordPress is really at a disadvantage here by not having all this stuff really well integrated out of the gate. Obviously the advantage of WordPress is third-party plugins, but I see Squarespace and Square and Shopify as really being miles ahead of the competition, including Wix, in a lot of this functionality.
And in terms of backend user experience, as someone who's helped several dozen SMBs set up a website, in the last couple of years, the other players are just so far behind the curve that I think that they will probably have to make acquisitions to catch up.
Greg: In fact, Square square went from being a POS system and then sort of CRM tool to building websites. So they went in the other direction.
David: They acquired Weebly in order to do that. And it's made great strides as a platform, both on the UX side, as well as the SEO side of the published website. So I credit, somewhere in the Square employee product ecosystem is someone who understands the importance of SEO.
And they've done a great job of executing.
Mike: It's interesting that a website becomes a feature in a backend office suite.
Greg: Yes, I think it's true. The discussion around websites feels different to me now than it used to. Just a couple of years ago, we don't need to rehash this, but websites were sort of a commodity product and not that interesting anymore.
And now it feels sorta like there's a comeback here and there's much more importance being placed on, on websites, but websites plus these other tools as an integrated platform.
David: That's right. And I think just if I could give a small plug to the Local Marketing Stack, which is this framework, I came up with four or five years ago, I think you're seeing the sort of more fundamental back back office systems like Square and Shopify of course, always had a website, but that this backend functionality is really actually more central to the success of a business than a website.
And we're starting to see the coming together of multiple functions to enable both online and offline commerce, to piggyback on a consistent theme here.
Greg: Yeah. I mean the web, the Web Site 3.0, 4.0, 5.0 is partly being driven by e-commerce in a way. You know even if the e-commerce is just some sort of appointment booking and not total shopping cart transactions.
Okay. So let's go to you David, on that note. And your item this week, messaging in GMB.
David: Sure. So, I forget, I must've seen Joy tweet about this, but she wrote an article for LocalU detailing the process of messaging a business on Google. And after the message had sent, Google prompting her to see if she wanted to get a quote from three other competitors of the business, to whom she had sent the message.
Mike: And for a brand search, it wasn't even a keyword search.It was a brand search. So she looked for a specific business.
David: Right and message them from their Google My Business profile, and then got their competitors showing up on their Google My Business profile. Darren Shaw has also highlighted in the last week that Google now seems to be showing in certain instances, this is not as replicable, but it seems to be showing competitors even for brand searches.
And more and more places on the business profile. And this is interesting to me for a couple of reasons we've talked about. Historically, we've talked about the importance of messaging to Google's 2021 and beyond GMB strategy. So this seems like a bizarre feature for Google to have added in if they want more businesses to adopt messaging.
I mean, this is probably the biggest disincentive I can think of for a business to adopt messages in GMB on top of the fact that it's a pain in the butt to respond to all these in real time. Um, but to present Google with the opportunity to show your competitors seems very, counterproductive.
Greg: I agreed to do this is very, very strange.
I agree. Go ahead.
David: And just to re-emphasize something Mike and I have been saying for years, which is that your, quote unquote, Google My Business profile is not really your Google My Business profile. It's Google's. you need to build equity around things that you actually own, which are your website and your own customer list.
Mike: I used to say, you used to rent your presence at Google, but now it's like, you're renting a chair. at WeWorks.
Greg: Sublet, sublet.
Mike: That's right sublet. You don't know if you're going to get the same chair next week.
Greg: It's a fractional ownership, like a timeshare now.
Mike: Yes, absolutely. Totally tone deaf. Classic Google small business tone deaf.
Greg: So, Yelp kind of does the same thing with their RFP, RFQ products.
Mike: What does that stand for?
Greg: Well, request for proposal or quote. So it's essentially lead gen where you, you look up a plumber and you can, then you can ask for them to give you a quote on (I haven't used it in a while).
And then they have a list below of comparable competitive businesses and they are checked by default. So you're going to send your lead out to multiple businesses unless you uncheck the boxes. And even though you're focused on a single business, you've identified the business, you want to talk to them, they default to this multiple lead approach, which I think is unfortunate
Mike:. Well, some places it makes sense, like in Local Service Ads where you're look doing a search for a quote in
Greg: A category search.
Mike: A category search, right. And you're looking specifically to get a quote in a category search that makes total sense.
And I think Google's work there is actually halfway decent, but putting it on a Knowledge Graph for a brand search seems just effed up.
Greg: Well, that's a head and tail kind of thing. I'm sure the people who are doing the consumer thinking are saying, this is a great service for our customers, you know?
Mike: Well, that's what Google said to us when we asked them about it in a meeting couple of weeks ago. “Oh, it's a great, you know, I've done these searches myself. This is what I would want.”
Greg: All right. So you know, there were a lot of things that caught my eye this week and that were interesting.
We are not going to talk about Amazon opening discount stores or the rumor about them opening discount scores stores before COVID. I'm not going to talk about Walgreens opening a bank.
What I will talk about is the acquisition of advertising platform, Addie by Ground Truth, which is a location intelligence company that does location-based ads and does audience targeting and offline attribution using location data.
And so this is a small business ad platform that enables business owners to create ads across digital media AND traditional media, interestingly; magazines, direct mail, out of home might be in there. I forget the list of the total list.
It's all sort of display, it looks all like it's display advertising and there have been multiple, just sort of as a historical digression, there have been multiple versions of this over the years of people that were trying to simplify display advertising for small businesses and the ad creative and create dynamic combinations.
And, I should go back through the archives. I mean, there's been a whole bunch of these guys, but Ground Truth bought them and it looks complimentary. GroundTruth, I think has made a big bet on this one, small business marketplace while many of its competitors have gone into the enterprise and are dealing with a more sophisticated buyer, butGround Truth has had some traction in small business although not to the complete exclusion entirely of enterprise.
And I think this is an extension of that and an acquisition strategy extending their value proposition, a differentiator from small business standpoint execution, of course. This is a different matter, but kind of interesting.
So you were a big skeptic of this, David, what are your thoughts?
David: I'm not necessarily skeptical of Addie as a product at all, and I'm not skeptical of the strategic fit for Ground Truth necessarily. I just feel that it is not the first place, that it's not the place I would spend my first advertising dollar if I were a small business.
So let's say I've got a Square or a Squarespace Tock sort of integration set up. I'm not sure that I would think to do programmatic advertising until I was in business for a couple of years and I had a full-time marketing person helping me understand where these ads should be placed and how to do proper attribution, all of those things.
I think that the execution of this is more a) complex than of a Facebook promoted post to a specific audience and b) I think it's probably more expensive to do that, particularly when we're talking about traditional media. Now maybe there's a secret sauce there that I don't understand if for instance they're buying unused ad lots on Comcast that are available at a deep discount and enabling an SMB to get into those kinds of slots, I think that's great, but…
Greg: I think there's some, some of that probably going on. You can buy magazine inventory with this also in physical magazines.
David: Right. And so typically we haven't seen the level of return on ad spend on print media that we do in digital, maybe that's changing as digital gets more expensive and more competitive, we might be reaching an equilibrium. I just think it's not, again, it's not the first place I would spend my ad dollars as a relatively small business.
And, and the question then becomes: Okay if I am a sophisticated enough business to have a full-time marketer or to have hired an agency do I need a self-service ad product or is that something that I'm hiring someone to do for me?
Greg: That's a very good point. I think that this product is really probably for a larger business, small business still, but somebody who's more sophisticated.
Mike, I, what, w did you have any thoughts I don't want to,
Mike: This is not something I know anything about, so...
Greg: I don't know the product well enough to really talk about how good or bad it is. We were talking about how PayPerG had a similar kind of objective, although entirely in the digital space, but there have been other people that have had this kind of idea before.
Forever and ever these, these publishers and agencies that work with small businesses, media companies, have all said, “we're the one-stop shop. And we're going to give you complete coverage everywhere you need to be”. And this is sort of another version of that. Although it has an offline component to it, which I found really fascinating because in some instances, I think as David is saying, there may actually be some economical media buys.
We'll have to see how it plays out. It definitely gives them something more to say to the small business than this kind of relatively sophisticated location data ad pitch; “find your audiences wherever they may be”. You can abstract it to a really simple pitch, but when you get into the mechanics of it, it's sort of complicated.
So this may help with acquisition and with a pitc. It's kind of interesting and I I'd like to learn more about it to really get a sense of whether its valuable.
David: Do you know how GroundTruth is going to market today? How are they getting customers today, is it through…..
Greg: So they have, they have direct and they have resellers. I haven't talked to them in awhile. They have resellers and they have direct sales as far as I know.
And I think it's a really tough sell to the small business. It may work quite well. You know, what's interesting about Ground Truth is that they used to work with a lot of franchises. Maybe they still do. They had a lot of franchise and QSR business and they had introduced a pay per visit model.
So you're only going to pay if somebody actually walks into the restaurant or walks into the store, which I thought was fascinating and seemed to be the direction the market was going. It's kind of an arbitrage thing in a way that they're doing, but they're only charging the. 9thDecimal then did this, and was acquired by In Market.
But that model seems to have not really taken hold, which is kind of interesting. Because it seems to be the ultimate performance marketing model for certain kinds of advertisers
David: How much of that is affected by the Apple IDFA coming out.
Greg: This is the big question is how many people are going to opt in.
I've only seen one of those messages so far from Macy's and I, of course, didn't opt in. There's some indication that people are, you know, it depends on how you frame the question. Most people don't want to be tracked. Sometimes they're willing to share dat if they see a tangible reward or return or benefit for it.
Location Sciences, a company in the UK did some research that said 60% of people would not share location or so we're going to see a loss of location data. We're going to see a loss of IDFA information, but I don't know exactly how big it will be. Maybe it's by half, that's not necessarily true on the Android side.
And maybe you can model it and do some extrapolation there. We'll see. In a few months, we'll know better.
David: It's an interesting acquisition and I certainly applaud Ground Truth for attempting to address the SMB market when so many competitors, as you said, are just going up market. Nice to see these solutions enabled for smaller businesses.
Greg: YI do want to talk to them and get a little bit more insight into it. I haven't been having any time, uh, this week, but do you want to say any final stuff before we go this week, plug our Street Fight session.
David: our weekly pitch of the street fight summit. Exactly. And I believe LocalU Advanced is coming up next week?
Mike: LocalU Advanced is next week. And then I just want to pitch our newsletter, which has shifted to three times a week. Is that correct?
David: based on your feedback, you, you being the listeners.
Greg: Yes, absolutely.
Mike: And you can sign up for that at the website NearMedia.co, if you're listening to this podcast.
Greg: Absolutely. And give us, give us feedback. It's been very valuable. The feedback we've received so far. As Mike indicated the frequency change is a direct result of that. And we'd love to hear what kind of coverage you want to see and anything else that you have to say to us, we're inviting you to do that.
Mike: And if you're listening to this podcast and you would love to see our beautiful faces, you can actually watch us on YouTube and follow us there as well.
Greg: All right. And with that everybody have a good week and a happy Easter if you're celebrating Easter. And if you're listening to this after Easter, well, hopefully it was good for you.
And that's all.
David: And enjoy the Final Four.
Greg: Yes. And the final four, of course. All right. So see you see you next week. Thanks.