This is the eighth installment of our Deep Dive Into Local series. For the week ending 10/19/15, David Mihm, Mary Bowling and Mike Blumenthal shared their thoughts about the previous week in local. The complete video is posted in the Local U forums (paywall). In the second half of that video, they take a deeper strategic and tactical dive into one interesting area that caught their attention during the week. These deep dive segments, made available publicly, will typically be about seven minutes in length and be posted two weeks after being posted in the forum and don't include the discussion of the week's critical developments.
Mike: Here we are with the Deep Dive, welcome back. Isn't that what they always do on TV? "Welcome back." You know me, I'm like ready for prime time, right?
David: Let's not get ahead of ourselves.
Mike: Oh, really? You're always so disappointing, David. You're such a realist.
So the interesting thing to me about the API, as I mentioned I think last week, was that we're seeing some rumors and a trend towards GMB being included under AdWords, right? So the API was announced under AdWords' Ad Developer blog, it wasn't announced by local people. There's been rumors in Europe of Google going around and showing and discussing with a large IYP AdWords resellers, how they would best utilize and could benefit from the API. I don't know if you remember but in middle September, some people were seeing some integration of AdWords into the GMB business list view. So there's been these clues that GMB is moving over. Also, I've heard several other rumors that -- not totally confirmed but highly trusted sources -- that indicated that GMB had moved out of GEO and into AdWords.
When you look at this over the large arc of Google's local history -- that was one time where I thought my hands made sense right into the screen -- the first era of Google Local was 2005-2008 where they primarily were interested in gathering data, the world's information. The quid pro quo in that context was Google would give you a boosting rank, for example, if you added data in return for the data. So when you claimed your listing, you'd get a little bump. If you added the information in the enhanced data at the bottom, you'd get a little bump, those sorts of things. That was the first era. The second era was under Carter Maslan with the forward-facing 2009 Places campaign where they thought if they could turn -- this is also in response to Yelp -- Google into a consumer driven factory of joy and local eating, they could bring businesses into the fold and you remember the Portland campaign, David. Particularly when they had NFC chips on the signs, it never worked, that sort of stuff. But they were doing the Yelp elite meetups, that sort of thing so as to drive --
David: Which they're still doing with Google local guides, and I would also say that, as cynical as I am of the Hotpots campaign, I actually think it has undergirded a lot of what they're doing in the Maps app with the now unified Google+ login across properties. I think that that infrastructure and concept is still here with us six years later. So actually that seems to be --
Mike: Moving towards elite reviewers who are generating 80% of the reviews and are trusted, right?
David: Yep. But I think a lot of that is still around, which, unlike a number of Google products as I mentioned a few minutes ago.
Mike: A sidelight on that is that Google knows who most SEOs are in the world, and most SEOs have their reviews filtered as a matter of policy. If you're an SEO and you want your reviews not to be filtered, become a Google Local guide. Just a tidbit there, right? Then, 2010, Marissa Mayer comes in, they're going to turn Google Local into a productivity suite with Punch'd, TalkBin, Offers, Coupons, all these great tools. Well, then Plus gets announced in 2011. Marissa still is out on her high horse proclaiming Google+ Local, trying to brand it independently of Google+. But she loses that battle, and Google+ dominates local as a communication platform -- communicating with customers on reviews, communicating with customers through the knowledge panel and posts, and then also internal communication circles. That's the fourth stage and then clearly, over the last year, Google+ has been taking it on the chops. And now we see a transition from Google Local as a place for small businesses to be found, rather, it's become a place where AdWords can now find small business addresses so they can do location extensions in their AdWords campaign.
And when you see the new GMB integrated with the list and individual cards, it's essentially designed to allow for multiple businesses, different businesses to be in the same dashboard at the same time, right? So it's no longer this constraint and for years, Google wanted agencies to claim the individual listing in their own account or they wanted the business to do it. There was this fallacy that it was somehow the business claiming the account, right? Now, they've really come full circle on that and have put in place a system where an agency can claim multiple local businesses into the same account and then use it as an AdWords. And they're partnering very heavily with their big AdWords resellers. I calculate that there's almost seven million businesses with verified listings right now.
David: That's it?
Mike: What's that?
David: That's it or you're talking the U.S.?
Mike: U.S. only, seven million, just under seven million. But when you compare that to the number of AdWords clients, that's a huge number, right? So this is a great funnel for the AdWords team, particularly driven through their IYP. That's the arc. I think it's very interesting.
David: Totally and, in all seriousness, I think that a lot of this is driven by Facebook. Mary's point that everything Facebook is doing is seamless. Even an SMB can provision an ad at a click of a button with boost. Fundamentally, AdWords is a very complex product, right? You have to worry about bids, you have to worry about keywords, you have to worry about market, you have to worry about time of day, all of that stuff.
Mike: Even AdWords Express does that.
David: Even AdWords Express, exactly.
Mary: Even AdWords Express is incredibly complicated.
David: Google's finally waking up to the fact that they need people like us who understand the space to actually bring SMBs on board and prove to them that search works.
Mike: What I don't understand though is why -- like what Facebook does is they bring out a product. They refine it. They make it work, and then they keep it. Then they bring out a new product. They make it work, and then they keep it. It seems to be functioning as part of a big grand strategy. With Google, they change directions every two years, and they throw away the previous two years of work. So now, there's no productivity tools in there. There's no communication tools in there. And meanwhile, Facebook is gradually adding those things while Google has tried them and rejected them. Just enough time for even a business to adapt them or think about adapting them, they're gone. It's so crazy.
David: To me, Eve and I were talking about...oh, sorry. Go ahead Mary.
Mary: I was just going to say that a lot of small businesses and small agencies that work with small businesses still don't get the fact that Google+ just doesn't matter anymore. Because Google made such a big deal about it for such a long time, and they've invested so much trying to be a part of it and now, Google's wiped all that effort away.
Mike: Yeah, you need special tools just to find a Business Plus page. You need Michael Cottam's tool or Darren Shaw's Whitespark tool just to find a plus page or a special search operator in Google. Only a geek can find a Google+ page these days.
David: I was just going to say I think one of the reasons -- it's just something that is completely mind boggling to me that Google actually, to me, seems to promote internal churn, right? They like their employees to have a hand in multiple departments, multiple parts of the business even if they're not losing employees to Facebook or Square or LinkedIn or Apple or anybody else. There's no institutional knowledge built up in Local anymore. I think with the departure of Brian McClendon to Uber, right? No one who was there five years ago is there anymore. People today, product managers and everybody else, they don't even know what Google's necessarily tried in the past, let alone have a cohesive arc the same way that you said Facebook seems to. Google has sown its own seeds of difficulty in Local through its either lack of focus on Local over the years and continued shell game reorganization of which department Local's in.
To that extent -- look, I'm thrilled to see that there's finally some agency functionality built into this dashboard. But I do think, long-term, they see the writing on the wall that they have a major hurdle in front of them if they're going to grow the AdWords space among SMBs.
Mike: Here's what I see, though, in even a bigger picture of what we've been talking about that as we have approached and now hit, I think, "peak Google" where their meteoric increase in profit and sales is starting to decline. Like every mature industry, this happens where there's an S-curve up really steep above the average for the economy and then it starts tapering off to the average for the economy growth. That's happened in Google. We're now in a phase where that means two things: Hire a new CFO that's going to be in cost-control mode to maximize profit, and they start, as we've talked about before, where they just say they're going to start monetizing more and more things to maintain some modicum -- and their goal being free cash flow so that they can support the development of all these new next moon shots, next S-curve type meteoric rises in Alphabet, right? We have to view this in a bigger picture of a mature company having hit peak for their current capability. With that, did I get the last word?
David: You got the last word.
Mike: I did! I am good. With that and the last word, we'll say goodbye for this week's Deep Dive.
David: Thanks for listening.