Google’s Path to Becoming the Transaction Layer of the Web

David: Hey Mike, great to talk to you from cloudy, cool San Diego this week. Most people come down here for the sun, but I’m just happy to escape our 100-degree heat back home.

Mike: Amazing it’s significantly cooler than Portland. No one said that climate change would affect every place equally.

David: I’m here for the AAN show, which you spoke at on the opposite coast last year. Lots of very smart local media folks who are trying to adapt to the changing landscape and in most cases are better-positioned to do so than their nationally owned competitors.

Mike: These folks are the ones that through either passion or savvy are still actively producing local new stories and investigative articles. A great crew.

David: One of the themes of my AAN presentation focuses on Google’s accelerating treatment of the search result as an app—a full-featured experience that is not just a utility for discovery but a portal that also focuses on presentation and increasingly enables transaction.

Mike: They seem to be successfully creating multiple transactional models for different industries—buy a ticket for movies, make an appointment for spas, purchase a product for retail, book a table for restaurants, and get a quote for Home services.

David: Many of our peers were shocked by last year’s joint research from Rand Fishkin and Jumpshot, which found that 60% of mobile searches don’t result in a clickthrough to a website.  

You and I, though, weren’t as surprised (or if we were surprised, we were surprised the number was that low). Your case study with Barbara Oliver last summer found closer to 75% of all conversions happening on-SERP as opposed to on-website.

Google’s been trying its best to answer questions directly on-SERP since the early days of the Knowledge Graph, and in local at least, “answering questions” frequently means putting you in touch with a business.

Mike: We saw it early on with hotels (late 2010) and Google being able to insert itself through the Knowledge Graph into the planning and purchase cycle. But it has been amazing to me that Google has been able to “verticalize” its efforts in so many markets. We are witnessing the creation of new two-sided marketplaces largely using the Knowledge Panel and Local search results.

It is not clear Google will be the market leader in all verticals, but they’ll be an important player in many.

David: From recent personal experience, there’s still massive room for improvement, even in an industry like hotels where Google’s been piloting this transactional SERP for close to a decade.

I happened to be looking for a last-minute hotel last night and had the worst local search experience of my life.

Not only was the presentation layer almost impossible on my iPhone—the density of listings in the Map view made it almost impossible to browse—but the clunkiness of the transactional layer was appalling. I must have clicked “Book Now” on at least a dozen listings, only to be taken to a page of a Google partner telling me that the hotel was actually sold out on my date.

The quality of the transactional layer is only as good as Google’s ability to display accurate real-time inventory.

Mike: They seem to be making strides in that arena in retail by recently partnering with a number of inventory systems and giving businesses that participate the ability to display their inventory for free in their Knowledge Panel and to pay only if they want to also show Local Inventory Ads. Obviously, the feature will only be as good as the data being fed, and if Google is able to ingest in near real time, but it seems to be working as Google rolls it out more widely.

In many verticals, though, the inventory is bookings or a calendar slot for a spa appointment, and while a specific time might be filled, there is more inventory to avoid some of the hotel booking issues.

David: Yup. The Reserve with Google program, at least from the outside, seems to have been popular with both partners and consumers. It has to be a major asset to mention in your sales pitch to SMB customers.

In the context of your inventory example above, I’d be at least a little concerned as a Reserve partner that Google might be gathering a little too much data about those customers, though, and start to monetize some of them directly in the not-too-distant future.

Mike: In the case of Reserve, Google shows a large CTA “Check availability,” which takes the user to a Google interface to see what slots are free and can be scheduled. This creates a reasonable consumer expectation that something will be available, if not immediately, at some point in the near future.

David: Right, which is a much better consumer experience than the hotels example where all of the fancy on-SERP filters set the expectation that I’m viewing real-time availability at final pricing.

But the best vertical for Google’s transactional SERP model has got to be Home Services. The CTA of “Get a Quote” allows for virtually unlimited inventory on both the demand AND supply sides of the marketplace.

It’s just another brilliant attribute of what I think might be Google’s most brilliant product ever: Local Service Ads.

Mike: In speaking with some Home Service companies that use them, they are very excited by the ease of use, the low cost, and the fact that they can be turned off and on at a moment’s notice. Historically, these have been placed at the top of the SERPs, but they will become even more powerful as they are fully integrated into the Local results. We saw some tests of this recently where a large get-a-quote button was added directly to the Knowledge Panel.

David: And, at the risk of a nasty flame war with PETA, I’m going to continue to beat what is already a very dead horse:

If you’re an agency whose customers substantially come from any home service category today, and potentially any service category tomorrow, you’ve got to evolve your business away from reselling Google Ads.

Google’s already automated everything that you’re doing, and as the above screenshot shows, at a cost-per-transaction that is way cheaper than you can possibly deliver to your customers.  

Google is controlling the entire experience—discovery, presentation, and transaction—and there’s just nowhere for you to add value, or make any money from that value.

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After more than a decade in local search, David Mihm now runs Tidings, an email newsletter platform for small businesses that leverages their everyday social media activity, and his own weekly newsletter, Minutive. In 2012, he sold his former company GetListed.org to Moz, helping over 3 million businesses get better visibility in Google and other search engines. Along with Mike, he’s a co-founder of Local University. 

Mike Blumenthal is a co-founder of GetFiveStars, a feedback and reputation platform, and LocalU, which provides small business and agency training in sustainable local search marketing. His motto: All Local All the Time.  He writes at his blog and does a twice a week podcast about Local marketing. 

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Got an idea for what you want Mike and David to discuss next time? Send it to either [email protected] or [email protected], or just leave a comment below and we’ll put it in the hopper!