The Near Memo, Episode 12

Zagat reviews, but shorter and more visual, rise from the Google ashes; The FTC ability to levy fines as a deterrent is knee capped by SCOTUS; Apple privacy changes AND review capability coming this week.

The Near Memo, Episode 12

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Greg: Welcome to Episode 12 of the Near Memo. Exciting, exciting times with David, Mike and me, Greg Sterling.  and we are going to talk, there's too much news this week to really capture it all here. But each week we choose three items and try and give our spin on it. And we're going to start with David today about the relaunch of Zagat.

Mike: Before he starts, I would just like to point out that that comment is so reflective of our industry. That there's what used to be a niche, niche industry. There's so much news we can't cover it every week and I'm trying, I just think that's a fascinating,

Greg: There are more interesting things to talk about then there's time to talk about them and write about them.

David, go ahead.

David: The item that caught my eye this week,  actually sort of surprised me

a) that I was still on the email list and

b) that Zagat was still around, I got an email at my inbox.  I think it was Monday or Tuesday morning this week saying “we're relaunching this again”.

And I just thought that was fascinating. So I took a little bit closer look, and Greg, I think you summed up in our semi daily newsletter this week. Kind of some of the interesting points that caught my attention:  the first being that they're ditching the 30 point scale, which long time local search observers might remember that Marissa Meyer, when she ran local for Google, tried to switch Google places to the 30 point scale,  which was subsequently rolled back.

Mike, how long was it around maybe a year,  and was rolled back in favor of a more traditional five-star rating. So interestingly the guy did not go with they're ditching their 30 point scale. They also did not go with the sort of now standard five point scale. They're going with a 10 point scale, which I still think we'll be much more digestible by the average user.

Mike: So, but still could provide more nuance than a five point scale.

Greg: Well, that's the important point is that you want to balance nuance and simplicity and 10 point scales, I think, does that better than five star ratings, for sure.

David: That’s right. So I think that that was a good decision on their part.

They also, as you noted Greg,  decided to opt for more of a snippet view at the top of their result pages, as opposed to the long form reviews that Yelp has long championed and argued that is what,  searchers are really looking.

Mike: And the Yelp algorithmically really favored these longer form reviews.

David: And algorithmically favor them, that's right. I've been on the other side of that equation. I actually think that Google and Amazon as well, gets really what people want, which is a very much of a snippet view.  I think that Zagat must've done some user research, or I hope did some user research, around what people would prefer.

And they have a snippeted of view about what a given place is best known for,  as opposed to their, formerly very long traditional food critic reviews. So I thought that those two things were interesting. And then Greg, you also noted that the Zagat brand, probably anyone under 30 doesn't even know it.

Which is interesting, but the audience that is going out to restaurants with a lot of money to spend probably does still remember it,  the older crowd. And if Zagat could build a product that is geared towards an older, more affluent audience, they actually could attract some sort of interesting ad dollars or even a subscription from that audience.

Greg: I think it's interesting because it was started as a print book that you bought and given all the substack, the substackification of the internet, that a subscription model might work for them.

The thing that strikes me is that there's so much crap and so much spam now on the internet that what people are really seeking is trust, right?

It's trustworthy information and that's easily digestible. And I think the Zagat brand still has some of that for people and they could build that up.

I do think Google is impossible to displace given it's gravitational force, but I think that there's an emerging distrust of Google reviews. I mean, it's interesting for overall.

I'm in the midst of a survey, we're doing surveys for four countries. And one of the questions we ask is how big a problem is fake reviews and a surprising number of people ( we've only got preliminary results) but this is like a thousand people, each market.

Preliminarily most people are saying it's a major problem. And then a pretty substantial group is saying it's a problem that I recognize. People have a sense that there's a lot of untrustworthy reviews out there and,  so I think there's an opening for Zagat if they can execute.

And if they create a good user experience. Right now it's only Miami and it's pretty thin. It's pretty undifferentiated, but the brand still has some, some strong pull for old-timers like me and Mike.

David:It’s hard to buy trust. Right. So,  I think that they do have a running start,  just with a known brand and a relatively trustworthy brand that Google has not tarnished.

I bet if you asked a hundred people on the street, 99 of them wouldn't even know that Google had at one time owned Zagat.

Greg: Exactly. One sort of quick related digression. What was interesting is that they bought Zagat for $150 million in 2011.

I think if I remember, and they bought it because they failed to buy Yelp and they wanted all the content.

Then they started Local Guides and Local Guides became so successful that they just ditched Zagat because they simply didn't need it. It was superfluous to their more, much more, successful review generation program through local guides.

David: It speaks to their sort of corporate bias towards crowdsourcing everything as opposed to individual editorial.

Mike: And it also speaks to their unwillingness to do human curation. Either it has to happen at scale or they don't want it, and they don't care. They only care that they're generating data.

They don't care if parts of the data are crappy, you know, the part that a business owner might see or a consumer might see are crap. But they don't care because they get enough data out of it. And that is reflected all the way up and it's going to come back and bite them because I believe, and I've been saying this for years, it isa problem, and it's as bad of a problem as fake news, fake reviews, bogus reviews.

And it has to be addressed because, as I'm going to cover, there is significant consumer harm.

Greg: Just real quickly the analogy I used in that little write up was: Amazon versus the Wire Cutter for product reviews, right?

I think nobody wants to, to your point David about snippets and efficiency, nobody wants to wade through scores and scores and scores of reviews to assess their veracity or their accuracy.

What you want is somebody to tell you, somebody you trust to tell you here are the three things, here are the three best Chinese restaurants, here are the three best air purifiers, whatever. It's the Wirecutter editorial model.

And I think the time has come again for that in the midst of this sea of spam. So Mike now onto you.

Mike: Onto the FTC. So some major developments with the FTC. I wrote an article yesterday at our blog, just about how the new acting chairperson, Rebecca Kelly Slaughter had really established herself. She was on the previous commission.

She was a minority member, but in a case of extreme review abuse, I can never remember the name of the company that did it.

Greg: It was Sunday Riley.

Mike: She came down really hard against the majority opinion and stated that, you know, these people were caught dead to rights.

Greg: What were they doing for, for those that don't know..

Mike: For those that don’t know, they were on Sephora’s site, I guess. They were having employees, encouraging employees to leave, bogus reviews or positive bogus reviews, even to the point of encouraging them to use a proxy server to avoid them getting filtered.And it was being led by the president leading the charge of these fake reviews.

And Slaughter. then just a commissioner, felt this was important that the hand slap they received was inadequate. And when on public record that she was opposed to it. So a couple of weeks ago, she set up a new rule making committee to turn the FTC”s  eyes away from just guidance, which is where this typically goes, to a more enforceable rule.

Yesterday, the Supreme Court in the matter of AMG Capital Management, which was misleading people on loans, dramatically to the tune of billions of dollars. And they put a fine in place against these and then the Supreme court in a 9-0 decision decided that they can't levy fines.

Now I haven't read the decision. I don't know about all the legal rulings, but it was 9-0, which means that it's not necessarily a politically based issue, but based on a reading of the law and their ability to enforce.

She immediately, she was already in hearings knowing this case was coming up. She was already in hearings with the Senate and the house to get the law amended, to give her the right to assess fines.

Where this will end up. I don't know, because she really is an anti fake review crusader. And I believe, as we just said, this is an area that just absolutely needs crusading in, or the whole thing of user-generated reviews, as exemplified by Google and Amazon, is going to come crashing down around us.

And it won't really be a place to play.

Greg: I think what happens here without the monetary remedy is that you just have this injunctive relief, which says you don't do this thing again, but there's really no consequence,

Mike: Right? Like I forgot who Sunday Riley was, in just a couple of months, I've already forgotten who they were.

Right. It's just sort of public shaming and there's a massive industry built around fake review generation and you know, I think to her credit, she recognizes that there is some real consumer harm. People are spending money and relying on reviews. Reviews are relied on very heavily and they need an effective tool to address this.

Mike: And the case of Sunday Riley, she was concerned that other businesses who were playing fair would see this ruling and be forced to act in the same behavior.

Greg: To cheat!

Mike: To cheat! That's right. Yeah. So she's concerned about business harm as well. So I don't know how this is going to play out. Hopefully the legislative process will clean this up, but give her authority. She's certainly a person who wants to take that authority and will use it, but we'll see.

Greg: One of the interesting... David, did you want to comment on that?

One of the other interesting things that the FTC has said is that they will step in if Congress fails to act on privacy. This is another interesting kind of position that they're taking.  There's so much, such a cacophony of things going on:

States making different laws and the platforms taking it into their own hands, that the FTC has said that they may take unilateral action. We'll see if that gets overturned in some, if they do it in an overstepping their jurisdictional authority way, but it would be interesting to see that, that they step into the breach.

But on the topic of privacy,  we've written a number of times about iOS 14.5 and the app tracking transparency rules that are kicking in. Apple said it's event this week, that was going to happen on Monday. Well, did they announce it during the event? I don't think they did.

They simultaneously announced the need to opt into tracking will kick in formally on Monday. And that's going to be a big deal for everybody. There's been a lot of coverage of it. Nobody knows what the opt-in rates will be but given my own personal experience, cause I've started seeing some of these things show up in some apps, CNBC and Wall Street Journal and Pandora, I'm clicking no every single time, every single time. And I suspect that's going to be the dominant response by consumers.

David: And Mike has a detailed comparison of the Apple  and Google Maps privacy levels to see just how much more information Google is collecting.

Mike: Google is exempt from the opt-in thing because it's all first party stuff, but the amount they're collecting in just one app ... Google is collecting massive amounts of financial, location, historical data.

Just that alone is enough to profile somebody pretty amazingly, but then you tie it in to everything else [they have]. So to some extent, this is going to just drive that behavior under the hood, within the context of Facebook and Google.

Greg: I mean, those guys are kind of outside of the scope of this for the reason you stated.

I saw an interesting article talking about pre, I forget what the term of art here was, like pre permission messaging in apps.

So in other words, Facebook has talked about doing this, on a pre preceding page before the, before the pop-up you get some arguments that is more expansive about why somebody should opt in.

And then at a certain point, you see, then in the sequence, you see the popup show up and you've got that context. So we'll see if that happens, how widespread that becomes and how effective that isn't counteracting the inclination to say no.

But,  apropos of the reviews topic, Apple is apparently going to introduce native reviews/ratings in the US, it's been doing it outside of the U S,  this next week perhaps.

And that'll mean that Apple will be collecting reviews and direct information from its users rather than relying heavily on Yelp and TripAdvisor, I think, are  others that they use.

Mike: As I recall, it's a thumbs up thumbs down, so there's no review content. And it was also based on location knowledge. In other words, if you weren't physically in that vicinity, you wouldn't be able to leave a review.

Greg: A trust thin. I did see in one of the screenshots of star rating. So I don't know how they generate that exactly. I guess they could sort of extrapolate that from recommended versus not recommended, but that was interesting to see.

Do you think that, if Apple can generate more sort of trust in its reviews, do you think that there's going to be any impact at all?

Mike: What I know about Apple that I think bodes well is, their interest, desire and application of human curation...everything they touch. They feel like you can't do it just by machine, whether it's content or... everything they do, they curate apps. And if they curate this appropriately, then the answer I think is yes, they can do it.

If they see it as this combo of curation plus data, then they can. If they don't, if they do just see as data [they will fail]. Now again, maybe they put in place appropriate ways to prevent people from thumbsupping things.

Greg: I mean, this is an interesting use of location for verification as well,

Mike: And is something Google certainly could do,

David: COULD do it. Cause I was just going to say the same thing. There's nothing holding Google back from doing this. And arguably they have a wider base of maps users across both,  iOS and Android.

Mike: Meanwhile, Google and reviews, I was in a meeting with them this morning and it's like, Oh my God, they're shifting the chairs on the deck of the Titanic today.

How exciting! It was like, give me a break. You know, this is a problem top to bottom and they're putzing around it with some little widget on the edge.

Greg: Why, why do you think there's so much resistance? I mean, Google put out a blog post not long ago about how they purged all these fake listings and they got rid of all these fake reviews, but the problem is still enormous.

Why do you think that they're not more committed to ensuring the integrity of that review ecosystem and the content?

Mike: Part of it is the way they work, which is this ground up engineer driven,  where four or five engineers get together and say, this is a great idea. And they go on and do it.And review moderation doesn't fall into a very exciting category in those things.

The second is there is no.. it's expensive, review [moderation] requires people, so there's that I think holding them back.

And I think there's enough hubris in the organization to think that they can extract the data that they want from these massive volume reviews, without worrying about the crap that flows through the system.

And they've never been good at understanding the human / Google interface where the individual business or the individual consumer is hurt by it. They just see that as a statistical anomaly in the greater system. So there's this whole corporate point of view that I think prevents them from even seeing it as one of the problems they should be solving.

Greg: Do you think that sheer volume, they think that sheer volume will drown out the fraudulent reviews?

Mike: I think they think that they're smart enough to filter out the bad ones. So that's statistically speaking, the reviews are good enough. That's what I think they think.

David: I think that,  Mike, you did say it early on in your answer, but I think that this is just not a very exciting problem and until it actually costs them users fleeing for an Apple Maps search, for example, or a Zagat user or something else, it's not costing them money. It's not a problem that I think you could stake our reputation inside the Google corporate ladder on. So,  it just doesn't get solved,

Mike: right? They don't focus on it for whatever million reasons. Top down, bottom up.

Greg: Interesting sort of related point.  I think this was in the BrightLocal survey,  which addressed the issue of fake reviews to some degree, the most recent 2020 BrightLocal survey, where they found that people did not think that there was a fake reviews problem on Amazon because of the Amazon brand strength.

Amazon is one of the worst offenders. But because Amazon is so trusted and has such a powerful brand to the average user, they don't perceive the same problem that actually exists.

And Google really is the number one review site. And I wonder if they're going to be similarly benefited by the strength of their brand and people just won't see it as a big problem, you know?

All right.

David: We've seen that in the case,  just very quickly to end, we've seen that in the case of business business data,  where Google is seen as infallible, right?

If business information is wrong on Google, the consumer who visits the wrong location or

Greg: Blames the business

David: or calls, the wrong phone number, blames the business, not Google,  which is a really interesting place for Google to be in.

And to your point, we'll see if the fake review problem erodes any of that trust.

Mike: Although, interestingly, on that front, David, I learned of a closed business in Olean today. They had closed permanently and I reported them this morning. And within a half hour, my reporting of them being permanently closed was approved, which I thought was pretty amazing.

That such a serious action would be approved so quickly. Clearly it wasn't done by a human or maybe it was their Duplex or whatever. They call it and didn't get an answer. They're using that to verify things now.

Greg: Yeah. I mean, that's, that's the sort of,  B2B use case for Duplex is business verification.

All right. Well,  so ends another exciting episode of the Near Memo and you can join us each week as we discuss the most important topics in search, social and commerce, and anybody want to say any final things?

Mike: Well, at least the most important to each of us. So whether they're most important to the universe….

Greg: Yeah, they are. This is all objective truth.

Mike: Okay.

Greg: We've gotten that out of the way. I don't have a problem saying that.

David: Join us next week for more deep thoughts from Greg, Mike and

Greg: David. Exactly. All right.