This is our Deep Dive Into Local from February 19th, 2018. In our Deep Dive series, we take a closer look at one thing in local that caught our attention and deserves a longer discussion.
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Mike: Hi, welcome to Deep Dive In Local. This week, besides Mary Bowling, we have Tom Waddington who writes at his own blog, tomwaddington.com. He's a partner with his brother in a digital marketing firm, Wachae. So Tom, maybe you could tell the listeners a little bit about your background. And the topic today we're going to be discussing is advanced verification and verification for Local Service ads. Maybe, you could describe how you've gotten to be so knowledgeable in that arena as well as about your company and what you do?
Tom: Okay. Yes, we do search marketing and we work with a lot of companies that fit into these categories well, fit into the Local Services ads categories. And that's what really prompted us having to get knowledgeable about them, fairly quickly. We deal with companies of various sizes. So, we have some that are very small, and we have some that have a lot of technicians. And so, that made the process for getting them into Local Services ads a little more cumbersome, just because of the amount of employees they have.
On the advanced verification side, I actually don't have any work with any clients that have to deal with that specifically.
Mike: That must break your heart that you're not in the locksmith and garage door repair work?
Tom: Yes, but I got a little fascinated with it. I helped someone on the forum, way back when I was pretty new to the forum, who had a garage door repair business and his listing got suspended. And I was just a little intrigued by it and looked into this situation. Once he got his listing back, I started looking at other...Google My Business listings in his area, in garage door, and just noticed, quickly, that a lot of them should be ineligible. I found a connection to a lot of fraud that expanded to nationwide and...
Mike: And I'm sure Google just jumped right out and got rid of them all, right?
Tom: Yes. Well, I found about, 40, that I submitted in the forum, and got rid of. But it goes a lot deeper than that, of course, and into the AdWords. And it just, for whatever reason, it kind of piqued my interest. And I'm somewhat fascinated with spam, in general, in terms of, like, the fake Google My Business listings. And that was how I got into the forum itself, and really started...I don't know, really got my interest going in that, along with helping people in the forum, and just helping people figure out their problems. So, sharing knowledge with things that I've been through, but also, seeing how bad the spam was in, not only garage door, but then finding out that, pretty much, in just about everything.
Mike: All right. So, let's just jump right in. Maybe, you could describe the differences between advanced verification which is, primarily, AdWords, and Local Service ads verification?
Tom: Right. Yes, it's easy to have some confusion with them because they do overlap a little to where, anywhere in the United States, anyone advertising locksmith services or garage door services, they're going to have to go through advanced verification for their ads to be able to run on AdWords.
And for anyone in the Local Services ads, which does include those two categories, but also includes, three other core ones, HVAC, plumbing, electrician. And there's a few that they're testing in California, in addition to that. But they have to go through an advanced verification check, that's a little different, but they also have to go through employee background checks. So, for the technicians that are going out into people's homes, they want to have them be checked and do a little background checks screening on them.
Mike: So, advanced verification is a company level, and Local Service ads is company level, plus, employee level. So, Local Service ads is a higher degree of vetting, I assume, that protects Google, at some level, from the risk of them sending a criminal in to somebody's home.
On the advanced verification, I know, you and I have seen some emails come across our desk, what are some of the criteria for getting through the advanced verification?
Tom: Yes, where, I think, a lot of people get tripped up is, they say, "Well, I'm a legitimate business." , "I've got a license." , if it's necessary for what they do. This, obviously, varies from market to market, and vertical, what licensing is available. But there are legit companies that are in this, that are going through this, that fail.
And I think, a lot of times, people think of it as, more of, like, "Okay, I have to Google My Business listing, and this is just checking, to make sure that we're legit." And there, is very little correlation with that at all, pretty much, none, so...
Mike: I mean, you could have a fake listing and pass advanced verification?
Tom: Yes. Yes, so, it's a little disappointing, obviously, in that area. So, we think advanced verification, "Okay, this is going to help with spam." And same with Local Service ads, lot of people will say, "Okay, this is great. This is going to get rid of spam." , spam is a very broad term that has a lot of different interpretations, depending on who you're talking to, including, Google. And we all have our own various, specific definition of what it means to us. But Yes, they're really looking more for, Yes, I call it, "Scam versus spam."
So, they're looking for scams. With advanced verification, they're looking for companies that are scamming people, pulling off the old locksmith scams of...
Mike: So besides state licensing, where else do they look for information that somebody is... I mean, obviously, state license, they're just looking as a baseline, to see that somebody really is in business. But then, where do they look, specifically, for inappropriate behavior, I mean, what types of tools do they use to ferret that out?
Tom: They don't give a lot of specifics on that but I do know that they're looking, I would say, they're going to look at you online. Yes, they're going to put more time into this. It's a little surprising because Google, obviously, wants to be able to scale things easily. But I think they are putting time in, to look at a company, try to get an idea of how they interact with their customers, are they pulling off these deals where they say, "Okay, Yes, we come out to your house for 29 bucks and, , it's going to cost you, maybe, this for your repair." They come out there, and all of a sudden, you're paying a $1000. But they're looking...
Mike: So, where do they find that? In reviews, you're saying, they look at reviews to assess it out?
Tom: Yes, I think they're looking online and offline now. I don't know where, offline, they're looking for these things. But I do believe, they're looking at profiles, looking at other...any information they can find about the company online, to try to determine, if you're trying to scam people or not.
Mike: And you mentioned in your article, By the way, Tom wrote a great article as a blog, "What is advanced verification for AdWords?" But that, they look at your AdWords, previous AdWords ads.
Tom: Yes, they'll look at your account as well. So, that's another area where they're looking for abuse. And a lot of people are putting things in their ads that are very misleading. So, I think they're looking into that. So, when someone fails, it's difficult. And I'm glad when you sent me some because I'm very interested, just, to look at, and see what they're going through, who they are, what could possibly be the issue. But it's not like, how we often will troubleshoot a suspended, Google My Business Listing, because there's a lot that we can't see.
Mike: Right, there's no clear set of public rules because Google, in this case, particularly, doesn't want the worst spammers in the world i.e. locksmiths and garage door companies to know all of the things that Google is looking at. But you and I had one, the other day, garage door opener, he emailed me and I brought you in the conversation, , "I'm licensed. I'm a legitimate business. I have a physical location. I failed. Oh my god, I'm pulling... , without AdWords, I'm going to go down the tubes, my children are going to starve." Maybe you could, sort of, elucidate what you found in that case?
Tom: Well, Yes. And that's going to be the common reaction right, it's like, "I'm a legit business." And I believe, in that case, there was a legit location, and everything about it was something you look at and say, "Okay, these guys are what they say they are, at least, in terms of, the type of business, and where they're located." But Google has found something that they didn't like about them. And I think that's true for several cases, where it's not just, like, someone is completely, outright, making up who they are.
Mary: Do you think reviews enter into it?
Tom: Yes, I definitely think, they do. I think that could be... They're looking at what they can find, and certainly, looking online about what they can find, for the business that they're looking into. And the other reason, I'm very concerned about this is...obviously, I think it's great that they're doing this to get rid of people that are pulling off scams, but I'm also concerned that, "Are they going to make a mistake?"
Mike: Yes, of course. I mean, they've made mistakes, right.
Mary: Of course, they are.
Mike: We saw an example of my blog where, in Denver, they were requiring, that anybody who applied for, I think, it was Local Service ads, have a commercial contractor's license. And he was non-commercial, so he didn't have a commercial contractor's license. He had all the appropriate legal requirements for non commercial work, but not for commercial work. And Google had rejected him, and apparently, had rejected hundreds of others in the Denver market.
And I sent that off to Google, or you sent it off to Google, I can't remember, I think I showed it to you. , maybe I did send it off to Google, I send it off to Marissa. And Google responded, and actually fixed the problem, but that was one at scale. I mean, if it's one off, they may or may not have the time. Now, if somebody is rejected for this application once, what happens then, for advanced verification?
Tom: Yes, just one thing on that, real quick, that was for Local Services. So, that was a requirement for that. But Yes, that was a situation where, ... And I can understand, in that case, where the licensing is difficult because there's a lot of different licensing in the various areas and the wording. I looked into that license, myself, online. And it wasn't very clear to me that that was commercial or, that it was requiring commercial.
So, at least in that, it's something broad where there's, I think, going to be enough attention, where people will say, enough people are going to stand up and say, there's enough people not getting in because of it. But if they look at an individual company, and something, whatever it is, triggers them to fail, to where they can no longer advertise on AdWords, that's pretty big.
But I don't think they're going to allow anyone to fail for a little, tiny issue. If you've submitted something incorrectly, maybe your license number, and you entered it wrong, or something like that, I think Google's going to be good at saying, "Okay, there's a little error here. Double-check this." There's an appeal process where they look at it again but...
Mike: How many times can you appeal, if you're rejected?
Tom: Well, you can appeal. And then they'll, basically, like we've seen in some of the other business that we've looked at this, it's case closed, where we've made our decision. Now, you could go back in, and sign up again, and try to get through them that way. Now, if they would acknowledge it or not, I'm not sure, especially, if you just had an appeal and then trying to sign up again. No, you need to make changes, you need to try to figure out what's going on. But I think they will allow people to try to make adjustments. But the problem is, those people don't know what the problem is that they need to fix.
And if they're scamming people, they're going to have to figure that out pretty quick. And if Google determines that you're ripping people off, you're intentionally misleading them with deceptive tactics and behavior, are those companies going to say, "Okay, we're not going to do that anymore, we've changed." How are you going to convince Google that you changed, what kind of time is needed for that, I don't know.
Mike: Yes, it could be after a year or two, and the reviews are good, maybe, it looks better, you can get in at that point. That's interesting. So let's talk, just a little bit, about Local Service ad verification, how is it different, is the Local Service ads...? I mean, currently, advanced verification is rolled out nationwide for locksmiths and garage door openers. So, before we move on though, do you think it will roll out in other categories beyond those two?
Tom: Right now, I'm not sure I don't think so.
Mike: Do you think they'll use something similar, for example, for drug rehab?
Tom: , I wish they would because, , there's a lot of companies that are legit, that have been shut out of that due to the ban. But I think the process of trying to determine which ones are legit, and which ones aren't, is a little too much, maybe, for them at this point, to try to dig into.
Mike: Yes, they've been looking at locksmiths' spams since I first started writing about it in 2008. And in locksmiths, at least, there is a fairly large body of licensing evidence that's been collated, that the locksmiths have gotten together and collated themselves, state licensing is clearer. So, you're right, it could be that they just have more...that it took them... What is it, we're now in 10 years with locksmiths, right, before they have in place, a solution. Hopefully, it won't be that long for drug rehab.
So how is Local Service ad verification different than advanced verification for Adwords?
Tom: Well, one of the biggest parts is having the employees go through background checks, where they're wanting the technicians that are going into the homes, they want them to go through a screening process, an individual background check. So, they're still doing checks at the company level, checking the owner with background checks, and checking the employees.
As to where AdWords, the advanced verification, early on, the AdWords size is, they're just looking for the actual scam of ripping people off. And that's another reason where I'm not sure if they will expand that. If you go back to the paper they did about the spam on Google maps, and the 0.5% of searches leading to...
Mike: Don't get me started on that crappy paper. Yes.
Tom: But if you look at, what, they broke that down a little bit into categories. Although, they kind of grouped contractors all together, except they pulled out locksmiths. But to what they call spam there, that's really scams, right. So, they're talking about people that are, I think, more on the fraudulent side of ripping people off with scams. And so, I would look to those, if there are any possibilities that they would go into beyond what they are now with locksmiths and garage doors. I think it would probably go with that list since that's their concept of it. But Yes, I don't see it expanding anytime soon, but you never know.
Mike: So, what Local Service ads, describe how it's different for those people that are not in this industry, how Local Service ads are different than AdWords, both, in terms of, consumer presentation, and then, in terms of distribution markets, they've done it in cities, they're doing it...and that, sort of thing?
Tom: Yes, if you haven't seen the Local Services ads, it's the five core categories that they're in, HVAC, plumbing, electrician, garage door and electrician, and locksmith. So, there's the overlap of those two categories, being in both, where, if you're a plumber and you're in a city that Local Services ads aren't in, like, Indianapolis, pretty good-sized city, it's not even available. But in other cities like, Chicago, you search for a plumber in Chicago, if you're on desktop, you'll see three listings at the top that almost look like product ad. they're different than AdWords, they're right at the very top and they're very visible. But AdWords are still in place below them.
Mike: Now, so, just a quick question, or a quick comment, that Local Service ads are not bid based, in terms of their pricing?
Tom: That's correct, it's pay per lead. So, you're paying a flat rate for the lead. It does vary a little depending on the market and what the service is. So, it's typically between, I think, $12 is in the range of electrician, and maybe, garage door, upto 25, 26 range, for HVAC, plumbing, and it varies a few dollars depending on the market but...
Mike: And they'll allow a consumer to request three quotes, is that correct?
Tom: Well Yes, , when they initially did it, or at least this summer, when they really expanded it, all these categories, you have the option of messaging them or doing a phone call and right away, you see listings on the search result with a phone number. So, you can just call that phone number. And so, they're not forcing you to select two or three contractors. Initially, they were doing that if you drilled into the listing itself to see more listings. Now, they're not doing that but a lot of people are just going to see the result and call. And same with our mobile, you'll see two, visually, right away. And you can just call. So, you're not having to select those two, or select a certain amount before you receive any kind of next step.
Mike: So, is that number called tracking number that's unique to Google, so Google can tell if somebody just dials it?
Mike: Okay. So, Google bases the payment then, on the call, anybody who calls that number, gets paid. So, in your experience, do you see, do you hear of people requesting multiple quotes, or calling multiple vendors? I was just curious about it from a economic point of view, like, these ads are running one-third, or so, of an AdWords, for similar categories.
So, if Google isn't doing them, isn't getting, at least, three calls per ad, they're not only having the extensive cost of the verification, which has got to be expensive on a per location basis because they're hiring Pinkerton, they also are reducing their income. Do you think that's the case? I mean, do you see this as a loss leader, or do you see Google is selling for calls on every query?
Tom: Yes, it'd be interesting to know. It's really hard to tell unless you happen to have multiple companies that you can see their data. But, , I think...how many people do you think call multiple, off AdWords, or off organic results. If they need a plumber, are they calling them? , a lot of people will call what's ever there, right, and they'll click wherever the...click on, or call the first thing at the top. So, I don't know if there's really any difference between, with Local Services ads, if someone says, "All right, I'll call this one, and then I'll call the next one." But Yes, it's really hard to know what that number is, but Google seems to be fine with it.
I know, like, David Squires believes that they're going to move back to that format eventually, they're going to go back to where they're going to want multiple, a bidding type of, kind HomeAdvisor style, where they're getting more than just that one call, they're trying to make sure that it's more than just the one.
Mike: I saw a comparison in an article that we mentioned, I think, last week, where they were looking at cost per action, comparing AdWords to AdWords Express...to Local Service ads. And it was $54 cost per acquisition with AdWords, versus, $18.00 at AdWords Express. So, there's a significant difference.
Now, as I'm seeing in AdWords Express itself, right now, pricing is quite low. So, it is possible that during rollout, pricing is low, and it will be raised. But there is no formal way for it to be raised through the bidding process, or algorithmic, or at least that, not that we know of, so, Google would have to go in and raise the prices themselves.
Tom: Yes, they'd either have to raise the prices, or require that you're not just going to call one person, one business. But then, you'd have to hide the number, and have someone drill into it and select, "Okay, which of these contractors are you going to call?" , it would be hard to really force that.
And now that they've gotten away from the messaging side of it, and I think they just did, because no one...I just don't think that it was being used very much, the ability to message the contractors instead of calling them, that's not even an option now. So, as far as I know, I know they took it off of HVAC and plumbing, first. And it was still on locksmith and garage door but now, I believe, it's gone altogether.
But Yes, I mean, the cost per lead is good and it's definitely something, if you're in the market, and you're one of these businesses, you should sign up for it. There's no reason not to. If nothing else, try it out, budget some money toward it and give it a fair shot, and see what you think of the leads because the cost is good.
One complaint I had a lot, that I'm seeing, seems like they're actually doing something about, is showing the ad unit less for branded keywords. That was something to where they weren't intentionally trying to do that, but they weren't doing a very good job of having the ad unit not there. So, if someone was a well branded company and they had keywords in their names, say, like, "Bob's Heating, and Air Conditioning, and Plumbing."
Okay, now, if you search that, that's a branded search but because of the keywords, there were times when the ad unit would show... And so, someone searching that, you might have got that call for free, or if you are having to defend your brand because other people were targeting it, you could potentially be spending 2 to 3 bucks for the lead on AdWords. But now, you're paying $25 for it because the unit's showing for your branded keywords.
But I've noticed that they've gotten a lot better at, basically, negative key wording some branding, which helps because that was really skewing the numbers. If you were well branded, versus, someone that wasn't, they weren't having to deal with that issue.
Mike: So, let's talk a little bit about the Google guarantee. Unlike other ad units, and other programs within Google, Google offers a consumer guarantee for anybody who uses this, hires the contractor through this service. So, first question, it's up to $2,000.
One, how do you...have you ever seen that implemented on the back end against one of your clients? Two, if you haven't, what have you heard about its implementation? And three, what do you think about, in terms of, consumer behavior?
Tom: Well now, I don't think it's something that they've had to use much. I don't have any experience with anyone having to do it. But I believe what Google does is, if someone does have a complaint, I think, Google brings it to the company and says, "What's going on here?" And, if it gets to that point, then, if you're the company, you're going to want to deal with it, right. Because you're thinking, "Well, I don't want to have Google have to deal with this because then, I could potentially be kicked out of it or it could affect my ranking on there." So, I don't think it's something that had to be utilized much so far.
Mike: So, Google is using it to create trust in the marketplace. Both, Dave Squires and Andrew Shaolin, have contended that that attempt to create trust in the marketplace, and to create honest actors in them, and to identify honest actors in the marketplace, and guarantee that they are behaving honorably, is an effort to, sort of, replace local branding with their branding. In other words, the consumer says, "This is Google and it's guaranteed by Google. Therefore, doesn't really matter whether I pick company A, B or C."
This creates multiple questions. Obviously, one is the question, in terms of, is, do you think that that is Google's goal to create a branded...a marketplace in which they become the critical brand, not the individual players. Andrew referred to it as the globalization of plumbing.
Tom: Well, I think some of it is, they want to be sure, they're not losing that trust there. Because you look at it, especially, with some of the electrician and garage door, someone's finding these companies through Google. That looks bad for Google, right. So, I got ripped off by this company and they were the ones that are at the top of Google. And they tend to follow the lead sometimes with HomeAdvisor, what's HomeAdvisor doing? What's Porch, what's Yelp doing?
So, I think some of the screen contractor thing came from that. But Yes, they know if people are going to lose trust in what Google has to offer for results, then it's going to hurt them in the long run. , actually, they'd apply that to a local organic results as well.
Mike: So, what they may have started as, sort of, a defensive measure to keep bad actors out of their product, may turn into an offensive effort where they become, like Amazon, they become the marketplace for these types of services. Clearly, as they have greater need for income, which they will have, and as local plays a bigger and bigger part in that, we could see that happening more and more.
Tom: Well, what's interesting is... I don't know if you've tried any of the Google assistant type searches through, either the home device or just a Google assistant on your phone. But if you search these categories, plus a few other... Actually, take a few other that aren't in the Local Services like, house painting. If you search for...if you say you need your house painted, you tell Google assistant, you need your house painted, you will get results that are HomeAdvisor and Porch screened results.
And it's in a format that looks like the Local Service ads. And they aren't any Google guarantees in there because that's not a Google guaranteed category. But Google has switched to several of these categories where the results aren't Google My Business Listings, they are screened, pre-screened results from Porch and HomeAdvisor. That's very interesting but, you just assume that the assistant results is a little bit of a glimpse into the future.
Mike: That basically searches pay-to-play, and only if there's payment, can we guarantee the quality of a given actor. And perhaps, real competition from Google's point of view is Porch and HomeAdvisor, but also Amazon. And maybe, that's where they're looking, who knows.
Tom: But it's interesting to see and show Porch and HomeAdvisor results in there when Google doesn't have any that they can put of their own in because they don't have any Google guaranteed for those categories yet.
Mike: Yet, right. So, it could be a clue to what's coming, or it could be, just, that they need a partner to be successful. Time will tell. Not that I trust Google to keep partners that they start with, right? I mean, they're going to serve their long-term economic interests.
So, final question here. Obviously some actors that are not going to make it into these programs, also, some actors, some businesses are going to become dependent on these ads. What are your thoughts about both sides of that? Can you get by without this? And should you get by without it? And what should a business be doing to minimize the fact that they're going to be paying so much more for leads than in the past?
Tom: Well, Yes. One thing, it's interesting, as I've talked to some garage door companies. And a lot of these guys have been, essentially, out of AdWords for a long time. Some used it, maybe, years ago. And when the fraudulent behavior came in from these bad actors that are, , they're charging so much for the customer that they're able to pay so much more for ads and AdWords. So they, basically, drove up the cost so much that all these other companies, smaller guys, had to get out.
And they found a way to survive providing good quality work, word-of-mouth. And these guys have made it by. And what's hopefully, going to be great for them is, once all of these bad companies are, hopefully, out of AdWords, and these good guys can get into Local Services ads, that they might be able to actually come back into Google and find it to be a good cost-effective way to finding leads. But the companies that, right now, are just so dependent on leads from AdWords, they're going to have a hard time because there's just going to be more and more competition.
And with Local Service ads, there's going to be more and more people getting into it. So, maybe the cost, for now, will be the same but their lead flow, I think, is going to be reduced. In some markets, there's only, maybe, a couple of garage door companies that are in it now, but there's going to be more and more. So, they're going to have to spread out these leads. So, just like you've been saying it forever, people gotta find a way to get customers outside of just Google, and work on their brand, and get word-of-mouth, and not just be living and dying by that next lead from Google.
Mike: Well, I think that's great, a great piece of advice to finish this on. Thank you very much for joining us, Tom.
Tom: Thanks for having me.
Mike: Just a reminder to our listeners that we will be at LocalU Advanced, April 12th, in Austin. Hope that you join us there. And that this Deep Dive is available in...if you're listening to it as a podcast, available in transcript form, with links to Tom's articles at the LocalU block. So, thank you, Tom, for joining us. And we'll talk to you, Mary, next week. Thanks, again. Bye-bye.
Mary: Nice meeting you, Tom. Bye-bye.
Tom: Thanks, you too, Mary. Bye-bye.