The Coming DIY Cataclysm
In this regular Street Fight feature, local marketing gurus David Mihm and Mike Blumenthal kick around some of the biggest ideas affecting the local search ecosystem and the broader industry. Send an email or leave a comment if you have specific topics that you’d like them to touch on in future columns!
David: Happy to be back for our first conversation of the spring season! Seems like we’re both in a bit of a conference lull — which I have to say is a nice break — but Greg Sterling is in anything but. You and I were both struck by a couple of his voluminous columns from the SIINDA conference this week; in particular this one about the potential for AI to disrupt the digital marketing ecosystem.
Mike: I think it may already be happening. Or at least we are seeing the beginnings of Facebook and Google consistently applying their learnings to these types of products.
I just took a tour of Google Adwords Express and I have to say I was impressed with the power, ease of use AND very low cost.
It’s an example of an automated product, long criticized, that has gotten quite good when we weren’t looking. Over the past 6 months Google has added a number of features that make it ideal for any business that wants to spend less than $500 (a typical agency minimum) a month.
It starts every campaign by asking the SMB for a goal: a call, a visit or a web action. And then it automatically configures to optimize for that goal, excludes negative keywords, has dramatically upgraded its geo-targeting, and added some very valuable KPI tracking by integrating with Analytics conversions.
David: Wow, I was certainly one of the ones who hadn’t been looking.
My problem with Adwords Express has always been its automated expenditure of most of an SMB’s budget on head terms, leading them to have a crappy initial experience with the product and never try it again. It was “AI” without the “intelligence” component.
Mike: Google has solved some of that initial experience. The product now pre-announces to the merchant on call that the lead was generated by the Ads. The merchant is immediately made aware of the benefit.
And while it doesn’t allow the merchant to pick between display and search it will balance those automatically in an effort to increase response.
David: In early 2015 I actually did a limited pilot for a friend and found that Google Display Network on targeted vertical sites performed better on both a cost-per-click and cost-per-conversion basis than did traditional Adwords. It wouldn’t surprise me if that were even more true in early 2017, as “money terms” have only gotten more competitive and more expensive on Google’s own SERPs.
But it sounds like Google is starting to solve for that, at least partially through AI?
Mike: If it isn’t AI-driven it sure seems like it. Barbara Oliver is running it on high value terms like Engagement Rings and getting decent results for $1 an action.
Attribution is improving as well. Unlike for large businesses, that can get actual attribution based on cell phone data, small businesses do not serve enough customers for Google to be able to surface that data directly.
The voice pre-roll, which precedes the actual call with the customer is a very visceral and powerful tool that lets the business owner know something is happening. And, equally interesting to me, is that the Analytics integration and conversion tracking from the client website is much improved.
David: The attribution side is super-interesting. I’m still not sure detailed analytics are essential to maintain long-term SMB spend, but the immediate (and repeated) voice attribution is a genius feature. It’s real call tracking without the dashboard.
It actually hits Boost where it’s the most vulnerable — sure, a lot of people are seeing your post, but are they doing anything when they see it?
It seems like the improved Adwords Express is one of many DIY products that are finally mature enough (and truly DIY enough) to give DIWM/DIFM agencies and resellers a real run for their money.
Mike: It’s hard for many agencies to do Adwords work for less than $500 a month and there is a huge market for businesses in that space below that price point. Certainly the product seemed good enough to even give some competition in the $500 to $1000 range and I am sure that the return that Adwords Express can drive will improve over time. How can agencies compete with that?
David: At the recent LSA show in San Diego, I learned that 60% of Adwords resellers are actually using Adwords Express to manage campaigns — and the survey that found that was conducted even before this latest and greatest version.
At that point, the question becomes not only how can agencies compete with that, but what value are they even adding for their clients?
Mike: Wow. 60% are using Adwords Express to run campaigns? I just set up two ads and it literally took me a total of 10 minutes and I know virtually NOTHING about Adwords. And that included Analytics integration. The only reason they retain those clients is the awareness differential. As soon as the businesses find out, there will be trouble in Paradise.
David: At the same time these AI-driven products are getting better, the mindset of SMBs seems to be shifting. Yet another great piece from Greg this week relays a Freshbooks survey that found that DIY marketing is either “good enough” or the only financially-viable option for half of small business owners. Only 30% of them are outsourcing it.
Mike: As he notes finding a good fit for outsourcing is hard. But it would seem to me that “good enough” could soon be great if the improvements that I am seeing in AdWords Express continue.
So where does this leave the YPs of the world?
David: Well, exactly. If your addressable market is only 30% of small businesses who want to outsource in the first place, and all you’re doing for them is managing Adwords Express and Boosted Posts, your entire business is tremendously vulnerable to these automation tools.
And I’m sorry but doubling-down on print and counting on natural disasters to “prove” its efficacy aren’t going to maintain your bottom line.
Mike: I wonder whether anyone that doesn’t own a forward-facing consumer experience might be in the same boat… caught in the GAFA vortex in a very painful way if they can’t figure out how to add more value to the relationship.
David: I keep coming back to our discussion last year: its advice is still sound. It seems like the agency business of the future — both large and boutique — will largely add value around integration of best-of-breed point solutions, which I don’t see many large entities like YP attempting to tackle yet. The only question that remains is whether they’ll pivot to that model soon enough.