Video Deep Dive: Last Year (2017) in Local Search
Mike Blumenthal


This is our Deep Dive Into Local from December 11th, 2017. In our Deep Dive series, we take a closer look at one thing in local that caught our attention and deserves a longer discussion.

If you have a special topic you would like us to discuss for the Deep Dive in Local, please reach out to us. If you would like to be on one or the other of our segments, reach out and send us the topic and your availability.

If you are interested in sponsoring this weekly show also please let us know.

Our weekly discussions are also now available as a podcast as well. SUBSCRIBE TO THE PODCAST HERE.


Mike: Hi, welcome to The Deep Dive, with Mike and Mary, and this week we have David Mihm, for what we are temporarily calling Last year in Local. So why don’t you kick it off David, with what you saw were salient trends in local last year.

David: Sure. Well, I would say the biggest overall trend to me was, which I wrote a predictions post just about a year ago. And the biggest trends I think I largely got right, which are the number of beneficiaries of organic visibility in Google declining, and in particular, on mobile the increase in certain paid ad engagement across various formats. So I think that’s still the big story of last year. I don’t think it was quite as dramatic as I had predicted. Certainly, if you are in one of the formerly Home Services ads, now Local Services ads markets, you would have seen that as a major, major trend, disrupting your entire customer acquisition process.

But potentially, if you’re in markets in which those ads haven’t rolled out, or which have not been affected by product listing ads yet, you might not have seen that. So I think we’re in this kind of interesting place in local, at least as it relates to Google, where we can see the writing on the wall, we can see Google moving increasingly to a predominantly paid model in local.

The shift in resources and, sort of, the shift in behavior, I don’t think has happened yet. So I think that the both in terms of small-business strategy, in terms of agency strategy, in terms of budget. I don’t think that people have really fully prepared for what’s happening, and I think I was maybe a year ahead with some of these predictions. But I think we can see the writing on the wall, especially, with Local Services ads, and Product Listings ads, where Google is headed.

Mike: We talked about this last week at Street Fight as well or the week before, I lose track. But that it isn’t just putting ads everywhere, it’s sort of a goal to become not just the search engine of choice, but the commerce engine of choice for a range of local transactions, And to dis-intermediate local brands. So I think it goes beyond just putting ads everywhere to a bigger strategy.

David: Sure. Mary, did you have any thoughts? Do you think I was overly generous with my ratings, as my friend Kevin Gash did here in Portland?

Mary: No, I don’t think you were overly generous at all. I think that the hardest thing for most SEOs and agencies is letting go of old stuff that they think is still working. And it’s almost impossible to get them to let go of these old ways of thinking about the Google algorithm instead of thinking more about more marketing now, and we have to combine what we’re doing online with offline. And I think one of the biggest things that small local businesses can do to help themselves is, in everything that they’re doing, to promote themselves, to encourage people to search for their brand online.

Because that’s going to give them, not just a picture, a big picture of what the brand looks like, with the reviews and actions that you can take and that sort of thing. But it also gives you an idea of what other people are seeing when they search for your brand too.

David: Yes, and that ties in really well with how Mike, I think sort of brilliantly, explained concept of Google as the new homepage,

Mary: Right.

David: So in many cases, Google is actually presenting a richer picture of a local business than their own website does, or …, any other web presence that they have. So, as you said, you’ve got reviews, obviously, you’ve got photos, you’ve got all this information that Google is pulling surreptitiously or not from mobile devices. Like, when a given place is busy, what people are ordering, all of these kinds of things.

We’re seeing snippets now pulled from the business’s website, directly into three-pack listings in the Knowledge Panel. So, I think that Google’s really made big strides this year in presenting this totally immersive experience of a local business right there on the Google server. So I think that’s another big shift, is the knowledge panelization and the degree to which Google is now hosting so much content about a business.

We see it in non-local areas in AMP and then in local Google posts. All of this stuff is now in Google’s cloud, not in your own cloud. And I’m not sure that’s necessarily a healthy trend for society, but as marketers, we gotta realize that and we have to make sure that we are enabling clients to look good in this new homepage.

Mike: Yes, I mean, to the point of my post was that Google was so aggressive in rolling out features to the Knowledge Panel, messaging, posts, Q&A, all of these things, that clearly is a desire to engage different segments of different verticals, with the Knowledge Panel, or with a GMB. But like you said, it’s to speed Google’s transition as the new homepage. I mean, that’s certainly their goal, to be one of the go-to places.

And so, it makes it incumbent upon these businesses to recognize that you’re dealing with the devil, and that you definitely, it’s what you need to engage with these things, to maintain your new client flow, but that you absolutely have to put in place tactics and strategies to develop a direct consumer relationship on an ongoing bases, so that you control and you’re not renting consumers back from Facebook or Google, email, and mobile numbers, and regular newsletters, whatever you need to do to stay in touch…

David: Direct mail. I mean…

Mike: Direct mail, right. That this is a deal with the devil, and as powerful as it is, , with the trend towards modernization of it. Again, I don’t think the specific things like posts are going to be more entice, but your share of the search results are going to be more enticed. And so, it just makes it very difficult and will be increasingly expensive, So what else so you have David, that you thought was…

David: Well, I think we can continue down this, sort of renting space from Google, and Google as a dis-intermediary. But we certainly saw voice search, if it hasn’t exploded, certainly accelerating this year. It was predicted a couple years ago by Mary Mika and others, to be 50% of search by 2020. , I don’t really care about the specific number, but it’s certainly going to be a huge chunk of search that we need to be paying attention to.

Anybody who is an NFL fan has just been bombarded, one ad, it’s almost like Google and Amazon are playing a game in the football game with their ads of Echo versus Google Home. Literally, every commercial break, there is one or the other. And so, I think you’re going to see both Home and Echo making massive sales this holiday season. I think we’re going to see a ton of voice searches happening next year. And I think we need to think about that like the three of us certainly have been advising people for the past couple of years.

Think about the kinds of searches people are going to be doing via voice. They are going to be more conversational, they are going to be longer strings. And the kinds of results that Google and Amazon are returning, much more focused on featured snippets, shorter lists, so there’s fewer businesses that are going to be represented. And then Google and Amazon both I think are going to be trying to monetize the interaction.

If you say, “Yes, I need a plumber.” “Okay, we can book that for you.” That’s really where they’re going to be I think taking their cut. It’s not necessarily in advertising, you can’t really insert, “This business brought to you by Google,” before every result.

Mike: Well, you can.

David: You can, but customers don’t really like that if you try to… So I think you’re going to start to see Google and Amazon potentially taking a cut, as far as a booking fee or some sort of transaction facilitation fee, moving forward. But all of these things I think are very important to start thinking about now. I think by the end of 2018, we’re going to see voice well on it’s way to being at least a plurality of searches if not an outright majority by the beginning of 2020.

Mike: I would just note, …you missed the presentation by Forester at the Brandify Conference, you had to leave. I think that in the noise of Google Home versus Amazon Echo, we missed the fact that 60% of voice search is currently occurring on Siri and occurring in a demographic closer to mine than yours, That people over 65 are the biggest users of voice because they hate typing with thumbs. And frequently, those are not commercial searches, they’re informational retrieval searches.

And so I think that that story get’s distorted by Google, sort of puffing up its chest and saying, “Oh, we’re going to compete against Amazon with this typical throw shit at the wall strategy,” I think that the conversation is probably more nuanced than that, that often gets addressed. That’s all.

Mary: And I think Google can really influence the number of voice searches, just like they influence the number of contributions by local guides. Every time they recognize you’ve been somewhere, you get a little text from them saying, “Do you want to rate this place? Do you have any photos?” Blah, blah, blah. All they have to do is start prompting us to use voice and a lot of people will use it.

Mike: Right. But there are some limits to it. I saw Benedict Evans did a good article on the limits, as did Apple Insider last week. That to some extent, voice is like a command-line interface. That you have to know the rules to succeed in certain things. And there is a limited amount of head-space, so there’s going to be a limited number of things that people do with it. Now they very well could be local search and finding plumbers, but it isn’t everything. In other words, there is a limit to the way voice functions because it has to be structured in a way that the device understands.

And so, …it’s not a universal interface, And we don’t know how that’s going to shake out either in terms of, which of these things that we remember, are able to remember, are we going to actually behaviorally do with voice. I think I’m generally optimistic about voice, but I don’t see it as a panacea to solve our search problems because of that sort of structural issue. I have learned…like for me, I do a lot of Knowledge Panel searches, like, I’m looking for a piece of data from Google.

What’s the answer to this question? What’s the game score of this? I actually do look up the Buffalo Bills score just so that when I come into work on Monday morning, I’m not totally stupid to everybody around me, because everybody will… “Oh, what about those bills? What was that snow storm like? That was pretty good. Oh, Yes.” So at least I can be socially compatible. But with Apple, I do things like remind me to do this, or send Abby a text, or put this on her shopping list, Those are very constrained use cases that I have learned to integrate with some effort. And it would be interesting to see how far they go beyond that.

David: Well, and that speaks to…Yes, Mary, I don’t know if you wanted to jump in. I’ll just say quickly that so much of the success of voice depends on personalization and the extent to which, at least so far the public seems unconcerned about privacy, I think is helping these services make advances and become more widely adopted. I don’t know if that’s ever going to change, but I do think that we did see this year that the Echo was subpoenaed in a criminal case, as far as what the guy was searching for. And I think…

Mike: We saw that Home was listening in on conversations all the time,

David: Exactly. Clearly Amazon and Google are both trying to gather as much voice data as they can. It’s a huge privacy invasion, no one seems to care. But the flip side of that coin is that they need to gather that data in order for these voice devices to be useful, as you just pointed out. So, they need to know that Abby is your daughter, and they need to know how to send an invite to her calendar and all these things. So I think it’s going to be interesting. I think the privacy ship has totally sailed, unfortunately. I guess I would say that it does seem to me that in a lot of the cases, the privacy trade-off would be worth it, in terms of easier quality of life. So, we’ll have to see where that goes.

Mary: Yes. Well, the thing that kind of concerns me there is, Amazon is making a big play to put their devices in work spaces. In work spaces, so that they can listen in on what’s going on inside the private halls of commerce. And I think that opens up another problem with privacy. It’s like, would you want an Amazon Echo sitting in your boardroom, with the possibility of someone listening in on it?

Mike: And I think that there still is…I think there will be a privacy apocalypse, where there is a change of consumer sentiment about it. I think that we haven’t seen it yet, but I don’t know if it’s going to happen this year, but I think perhaps some point in the future. And I think Apple is particularly well positioned, not because they’re a better company, but because they don’t need the data to sell their hardware,

David: Yes. And they’ve certainly, I think, they have made it a bigger priority. I think that their stance against the FBI a year and a half ago or so, in the San Bernardino case where they refused to, sort of, open a back door. I guess, that’s my best expectation of a tech company, is that they won’t actively hand data over. I think I do expect that all of us are going to get hacked on every platform at some point, but I want the company that’s actively working to prevent that under all circumstances, whether it’s a criminal element, a foreign government or our own government. I want the company that’s going to stand up to those guys, and say, “No, this is my customer’s data.”

Mike: Interesting sort of anecdote on this front is that Google gave me a Home Mini when I was at the Tap Contributor, as payment for my labor in 2017.

Mary: You’re very valuable to them.

Mike: And I brought it home, my wife said, “Not in my home you’re not putting that thing.” So … I mean my wife is not technically savvy, but she is savvy enough to know that Google wants to know everything about us and she has drawn the line on that sort of technology, interestingly. So, I see this as a growing potential trend in the coming year, where general consumers think, “What have I just done?” . So, what else have you got for us David?

David: Well, I think it was a huge year for Google My Business and there was a lot of things that Google added, I think this year, that were largely positive, Post being on of them. I know you were an early proponent of that and I’m still a skeptic, but I think that it’s a great thing for small businesses, so I think that was big. Q&A, Messaging, websites, Reserve with Google, the Local Services ads, all on the small business front, and the API on the back-end to help bigger brands and bigger resellers. So it feels to me like this is as many features as Google My Business has shipped in one year as they’ve shipped in the previous, maybe ever, seven or eight years.

Mary: Yes. And it seems like these are going to stick, too. It seems like stuff that they’ve tried various versions of it and figured out stuff, that’s actually going to stick this time around.

Mike: Right. So that to me, when you look at that in the middle level, that says that, , Google spent all those years melding Local to Plus and then all those years separating Local from Plus. And now with this rapid…and last year, we saw back-end features being fixed. And now with this rapid roll-out of new features, in fact, just today, they came up with a new interface on the dashboard for the homepage for businesses. It just reflects at the highest levels of Google resource allocation to Local, and no longer using Local as a pawn in another’s game, like in the Plus scenario.

But using Local as the queen in the game as a primary strategic resource, both in the United States, but most importantly, globally. But really, that whole shift says a lot about Google. Also, they’re leveraging all these things to again, gain eyeballs from businesses. They gave up that front page, for the first time ever, they allowed businesses to write to that front page, and consumers to write too with Q&A and the quality of the Q&A, I mean, it’s skanky, I’ve been doing some research on Google Q&A and the quality of the questions. Some 10% of them are reputation related, where they just go off on a tear, nothing to do with a question or an answer,

But, so this is the first time Google has ever given up the ability to write directly to search results. So they’ve basically acknowledged that Facebook’s tactic of giving a business a page, even if you have to pay for every time somebody see’s that page. But where they give a business a page where they have some visibility, So there’s another big change, which I think, which leads to Facebook though clearly Facebook has made any reach for a small business page at this point, I mean, there is no free organic reach in Facebook. So, what we see on Google as organic reach is, that clear organic reach is still significantly more than what you get with Facebook,

David: Correct. And I think that’s part of the reason you’d see in your case study analysis of Barbara Oliver, Google is still driving 70 plus percent of the leads to Barbara because she would have had to pay Facebook via the boosted post or pure ad, to get that same visibility. So, Yes, I think it’s certainly an accelerating trend. We’ve seen, when was this? In October of 2017, Facebook experimenting actually with segmenting out a personal feed from a page feed in certain countries, in Eastern Europe primarily, I think.

So, they’re clearly thinking about, okay, well, how do we squeeze even more blood from these nickels, right, or whatever that analogy is.

Mike: Nickels from this blood, I’m not sure.

David: Whatever. So I think that writing is on that wall. I think Instagram is still an incredible organic visibility for businesses. But that’s going to increasingly become pay to play I think, in future years. Not to jump ahead to next month’s Deep Dive, but certainly Facebook. , Facebook is the… I think Google envies Facebook to a certain extent. I mean, their stock price has totally shot up, they do much better job at monetizing mobile users than Google. And so I think that Facebook is dramatically either ahead of Google or behind Google in terms of the organic visibility, but I think that’s Google’s bench mark. I think that’s where Google knows that they need to get in order to keep their share price going up. So, Yes. I see Facebook as necessary. I think every business should be on Facebook. I think it should be considered more of a retention play, with some of the things that they’re doing around Messenger, and asking questions. I think, increasingly, businesses will need to be on there to respond to their customers and engage with their customers. But as far as an acquisition vehicle, Yes, it’s almost entirely pay to place.

Mike: Which made me think of two interesting ad stories from the year as it applies to local. One, that digital advertising had surpassed television in total ads spend. And the other was that virtually all advertising growth accrued to Google and Facebook, with many of the other players showing negative growth. Which I think affects Local as much as it affects the general ad world. I think both big stories last year that show the general monopoly in a classic economic sense of an oligopoly, , controlling the bulk of ad sales.

David: Yes. Mary, did you want to weigh in on that or?

Mary: No, I think the other kind of interesting thing with Google too, is how they seem to have really committed to the fact that different types of businesses need to be treated differently online. And that they really are trying to provide something for every different type of business, and fit every different type of business into some bucket that they have.

Mike: Yes. Except for, drug rehab and escorts.

David: So, Yes. You sort of bring that up half-jokingly. But they did figure out a way to solve spam this year in the locksmith’s category, which was Local Services ads. So, I think that’s a perfect example, Mary, of them treating different verticals and different types of businesses differently. If you are a service area business, those Local Services ads, not only do they increase revenue for Google, but they immediately cut out all of the fake listings coming from…you would know better than I would, Mike, but Israel, Poland, where ever these things pop up from. , they can’t afford these ads and they can’t get through Google’s manual screening process, so…..

Mike: Which led to…it wasn’t just Local Service ads. I mean, they basically have. So Local Service ads has this type of verification where,…because a business might be in a person’s home, they actually do an investigation down to the employee level. But Adwords in general, l implemented local vetting called advanced verification, where they look at it at the business level to make sure there’s a business license, that there isn’t some criminal activity on the part of the business.

So even just general Adwords , there’s been a strong effort in those verticals to limit the types of abuses, which I think, , again, in the end, Google’s not going to make any less money, they are going to make more money doing this, I don’t see it as this kindhearted gesture, I see it as necessary to prevent lawsuits and as necessary to increase consumer trust in these ads. And once they’ve created a relatively even playing field, all these local businesses that haven’t been in Adwords will be in Adwords, So, I see it as, long haul, the best thing they probably could have done from an income point of view was get cleaned up.

Mary: And quite possibly, for the searcher too.

Mike: Yes, absolutely. For everybody. It’s the only way they could have won at this game. But clearly, it’s also a play against the likes of, Front Porch and Home Advisor, and I see that as also expanding their battle in that front. So, one story that I think was important that people in Local…that I payed attention to throughout the year, and that is that, Amazon’s building up of their own logistics network to service the last mile of delivery. And their partnerships in part of that, for example, you can now do returns at Kohl’s. So you can walk in and drop something off at Kohl’s. And they also built this Amazon Flex. But they also built up the rest of their logistics network. They have warehouses within one-day delivery of probably 60% of the United States population now. They built out there own trucking…they built out a number of new warehouses, they built out a airplane logistics system, they built out a sea-going logistics system, and they extended the logistics all the way back to the factories in China. So they have an end-to-end logistics from the factory in China to the local person, and have started doing pickups at warehouses for many local, or the bigger local merchants as well. So, becoming both their own logistics network to create this tie of equipment between whatever various parts of the world and consumers. But also to create a tie between various local merchants and consumers. And I see this as being the infrastructure needed for them to further, the foundation for them to make a bigger play in Local.

But not in the way that they do, which is to control the marketplace, It’s not legion, it’s not CRM, it’s the marketplace, Which is where I think we’ll see a big battle. So, what else you got on your list there, David?

David: I think we at least covered my, sort of, year-end review for the most part. I had a couple of other items, Snapchat being one of them, or now Snap being one of them. But I think for the most part, we’ve hit the highlights and…

Mike: Snap is interesting, in a sense, just because it shows the power of monopoly to destroy upstarts, Which should be an ongoing conversation in our society, just to some extent. But I think one of the problems in Local right now is the dominance of the two major players prevents certain types of businesses from having even a fighting chance to take off. So, anyways, go ahead with you summary. Sorry I interrupted you.

David: No, that was the summary.

Mike: Oh, wow.

David: I think, , more ads at Google, interesting time for transitioning of both strategies and marketing dollars, advertising dollars. The duopoly of Facebook and Google is big. Amazon I think will make more of a play in the coming years. And Apple’s sitting there, just waiting for this, what did you call it? Privacy apocalypse. So, I think that’s a good summary in 280 characters.

Mike: All right. Well, thank you very much for joining us, and until next year.

David: Yes. Sounds good. See you guys in 2018.

Mike: All right. Bye-bye.

Mary: Bye guys.

Want more local SEO tips?
Join Our Next LocalU Webinar with Dale McGeorge, Noah Leaner & Joy Hawkins
February 27, 2024 at 3pm ET

Posted in ,