Author Archives: ghotchkiss

Will Customer Service Disappear with the Elimination of the “Middle”?

First published October 18, 2012 in Mediapost’s Search Insider

In response to my original column on disintermediation, Joel Snyder worried about the impact on customer service: The worst casualty is relationships and people skills. As consumers circumvent middlemen, they become harder to deal with. As merchants become more automated, customer service people have less power and less skills (and lower pay).

Cece Forrester agreed: Disintermediation doesn’t just let consumers be rude. It also lets organizations treat their customers rudely.

So, is rudeness an inevitable byproduct of disintermediation?

Rediscovering the Balance between Personalization and Automation

Technology introduces efficiency. It streamlines the “noise” and marketplace friction that comes with human interactions. But with that “noise” comes all the warm and fuzzy aspects of being human. It’s what both Joel and Cece fear may be lost with disintermediation. I, however, have a different view.

Shifts in human behavior don’t typically happen incrementally, settling gently into the new norm. They swing like a pendulum, going too far one way, then the other, before stability is reached. Some force — in this case, new technological capabilities — triggers the change. As society moves, the force, plus momentum, moves too far in one direction, which triggers an opposing force which pushes back against the trend. Eventually, balance is reached.

A Redefinition of Relationships

In this case, the opposing force will be our need for those human factors. Disintermediation won’t kill relationships. But it will force a redefinition of relationships. The challenge here is that existing market relationships were all tied to the “Middle,” which served as the bridge between producers and consumers. Because the Middle owned the end connection with the customer, it formed the relationships that currently exist. Now, as anyone who has experienced bad customer service will tell you, some who lived in the Middle were much better at relationships than others. Joel and Cece may be guilty of looking at our current paradigm through rose-colored glasses. I have encountered plenty of rudeness even with the Middle firmly in place.

But it’s also true that producers, who suddenly find themselves directly connected with their markets, have little experience in forming and maintaining these relationships. However, the market will eventually dictate new expectations for customer service, and producers will have to meet those expectations. One disintermediator, Zappos, figured that out very early in the game.

Ironically, disintermediation will ultimately be good for relationships. Feedback loops are being shortened. Technology is improving our ability to know exactly what our customers think about us. We’re actually returning to a much more intimate marketplace, enabled through technology. Producers are quickly educating themselves on how to create and maintain good virtual relationships. They can’t eliminate customer service, because we, the market, won’t let them. It will take a bit for us to find the new normal, but I venture to say that wherever we find it, we’ll end up in a better place than we are today.

The Good Side of Disintermediation

First published October 11, 2012 in Mediapost’s Search Insider

You know you’ve found a good topic for a column when half the comments are in support of whichever side of the topic you’ve lined up on, and half are against it. Such was the case last week when I wrote about disintermediation.

This week, I promised to present the positives of disintermediation. I’ll do so at the macro level, because there are market forces at work that will drive massive change at every level. But there were also some very interesting questions raised last week by readers:

  • Is disintermediation killing relationships and our ability to deal with people?
  • Are the benefits of disintermediation tied to social status, driving the haves and the have-nots even further apart?
  • Is more information good for the market, or does it just create more noise for us to wade through?
  • What will the social cost of disintermediation be?
  • What are the global implications of disintermediation?
  • In knowledge-based professional markets where experience and expertise are essential (i.e. health care) what role does disintermediation play?
  • Are we just replacing one type of “middle” with another (for example, online travel agencies for traditional travel agencies)?

Each of these questions is worthy of a column itself, so I’ll file those away for future writing over the next few weeks. But today, let’s focus on the silver lining inside the disintermediation cloud.

I’ve written about Kondratieff waves (also K waves) before. In the world of the macro-economist (who are of mixed opinion about the validity of the theory), these are massive waves of disruption (often driven by technological advances) that first deconstruct the marketplace and then rebuild it based on the new (improved?) paradigm.

The Industrial Revolution was one such wave. What that did was create a new marketplace built on scale. Bigger was better. It introduced mass manufacturing, mass markets and mass advertising. It also created the “middle,” which was an essential part of getting goods to the market. Given the scale of the new markets, it was essential to create a huge support infrastructure. Most of the wealth of the 20th century was built on the back of this particular K wave.

One of the characteristics of a K wave is that the positive benefits outweigh the negatives. After the period of destruction as the old market is torn apart, the new market scales to new heights. Technology fuels increased capabilities and opportunities. The world lurches ahead to a new possibility. We were better off (arguably) by most metrics after the Industrial Revolution than before it. We were more productive, had a higher standard of living and could do things we couldn’t do before.

Today, we’re in the middle of another K Wave disruption, and I believe this one is going to dwarf the impact of the Industrial Revolution. Of course, K waves by their nature are long-term phenomena whose impacts take decades to roll their way through society.

This particular K Wave is reversing many of the market dynamics established by the previous “Bigger is Better” one. We’ve begun to deconstruct the gargantuan support system required to service mass markets. Inevitably, there will be pain, and last week’s commentators zeroed in on many of those pain points. But there will also be growth. And the bigger the wave, the bigger the growth. In this case, the same factors I talked about last week – democratization of information, better user experiences, solving the distance problem – are all being driven by technology. As this wave continues, the market will become more efficient. Information asymmetry will be lessened (if not eliminated) and the superstructure of the “middle” will become unnecessary.

A more efficient marketplace means new opportunities. More businesses will start and grow. Previously unimagined sectors of a new economy will emerge. This new economy will be global in scope, but hyperlocal in nature. Pure ingenuity will have a chance to flourish, freed from the constraints of the need for scalability. Once we get through the stumbles inevitable in the transition period, the economy will ramp up for another bull run. But we have to get there first.

The Disintermediation of Everything

First published October 3, 2012 in Mediapost’s Search Insider

Up until five years ago, I had never used the word disintermediation. In fact, if it would have come up in casual conversation, I would have had to pick my way through its bushel of syllables to figure out exactly what it meant.

Today, I am acutely aware of the meaning. I use the word a lot. I would put it up there as one of the three or four most important trends to watch, right up there with the Database of Intentions, which I talked about last week. The truth is, if you’re a middleman and you’re not dead already, you’re living on borrowed time.

Why is the Middle suddenly such a bad place to be? A lot of people have made a lot of money in the Middle for hundreds of years. The Middle makes up a huge part of our economy, including a lot of middle-class jobs. Systematically eliminating it is going to cause a ton of grief. But the process has started, and there’s no turning back now.

Three big shifts are driving disintermediation:

The Democratization of Information

The Middle exists in part because we didn’t have access to what, in game theory, is called perfect information. Either we didn’t have access to information at all, or the information we had was not reliable or useful to us. So, in order to function in the marketplace, we needed a bridge to what information did exist.

Think of travel agents (which for the majority of us, is someone we probably haven’t spoken to for a few years). Travel agents were essential because we were walled off from the information we needed to arrange our own travel. We had no access to the latest airfares, hotel availability or room rates. If you had asked me what was the best hotel in Istanbul, I would have had no clue. We used travel agents because we had no choice.

Today, we do. The travel industry was one of the pioneers in democratizing information. The result? The travel marketplace is infinitely more efficient than it was even a decade ago. The average person can now put together a six-week multi-stop vacation relatively easily.  The middle is being eliminated. In 1998, there were 32,000 travel agencies in the US. Today, through elimination and consolidation, that number is closer to 10,000. Disintermediation has cost thousands of travel agents their jobs.

The Improvement of User Interfaces

When’s the last time you spoke to a bank teller? If you’re like me, it’s probably the last time you had to do something that couldn’t either be done through online banking or at a local ATM.  99% of our banking can now be done quicker and easier because banks have invested in creating platforms and interfaces that enable us to do it ourselves.  It’s better for us as customers, and it’s much more profitable for the banks. Disintermediation in banking has created a more efficient model. Ironically, unlike travel agents, bank tellers have not lost their jobs. They’ve just changed what they do.

The Overcoming of Geography

The final factor is the problem of distance. When mass manufacturing became possible, the distance between the factory and the market started to grow. Suddenly, distribution became a major challenge. Supply chains were born, making a lot of people very rich in the process. Becoming big became essential to overcoming the problem of distance.

But technology has made physical fulfillment much more efficient. Getting a product from the factory floor to your front door is still a challenge, but our ability to move stuff is so much better than it was even a few decades ago. The result? Massive disintermediation. And this particular trend is just beginning.

So What?

Much of what we’re familiar with today is part of the Middle. Just like travel agents, video stores and bank tellers, every year something we have always taken for granted will suddenly disappear. Huge swaths of the economy will be disruptively eliminated. That’s the bad news. The good news will have to wait till next week’s column.

A Decade with the Database of Intentions

First published September 27, 2012 in Mediapost’s Search Insider

It’s been over 10 years since John Battelle first started considering what he called the “Database of intentions.” It was, and is:

The aggregate results of every search ever entered, every result list ever tendered, and every path taken as a result. It lives in many places, but three or four places in particular hold a massive amount of this data (ie MSN, Google, and Yahoo). This information represents, in aggregate form, a place holder for the intentions of humankind – a massive database of desires, needs, wants, and likes that can be discovered, supoenaed, archived, tracked, and exploited to all sorts of ends. Such a beast has never before existed in the history of culture, but is almost guaranteed to grow exponentially from this day forward. This artifact can tell us extraordinary things about who we are and what we want as a culture. And it has the potential to be abused in equally extraordinary fashion.

When Battelle considered the implications, it overwhelmed him. “Once I grokked this idea (late 2001/early 2002), my head began to hurt.” Yet, for all its promise, marketers have only marginally leveraged the Database of Intentions.

In the intervening time, the possibilities of the Database of Intention have not diminished. In fact, they have grown exponentially:

My mistake in 2003 was to assume that the entire Database of Intentions was created through our interactions with traditional web search. I no longer believe this to be true. In the past five or so years, we’ve seen “eruptions” of entirely new fields, each of which, I believe, represent equally powerful signals – oxygen flows around which massive ecosystems are already developing. In fact, the interplay of all of these signals (plus future ones) represents no less than the sum of our economic and cultural potential.

Sharing Battelle’s predilection for “Holy Sh*t” moments, a post by MediaPost’s Laurie Sullivan this Tuesday got me thinking again about Battelle’s “DBoI.” A recent study by Google and EA showed that using search data can predict 84% of video game sales.  But the data used in the prediction is only scratching the surface of what’s possible. Adam Stewart from Google hints at what might be possible, “Aside from searches, Google plans to build in game quality, TV investment, online display investment, and social buzz to create a multivariate model for future analysis.”

This is very doable stuff. All we need to create predictive models that match (and probably far exceed) the degree of accuracy already available. The data is just sitting there, waiting to be interpreted. The implications for marketing are staggering, but to Battelle’s point, let’s not be too quick to corral this simply for the use of marketers. The DBoI has implications that reach into every aspect of our society and lives. This is big — really big! If that sounds unduly ominous to you, let me give you a few reasons why you should be more worried than you are.

Typically, if we were to predict patterns in human behavior, there would be two sources of signals. One comes from an understanding of how humans act. As we speak, this is being attacked on multiple fronts. Neuroscience, behavioral economics, evolutionary psychology and a number of other disciplines are rapidly converging on a vastly improved understanding of what makes us tick. From this base understanding, we can then derive hypotheses of predicted behaviors in any number of circumstances.

This brings us to the other source of behavior signals. If we have a hypothesis, we need some way to scientifically test it. Large-scale collections of human behavioral data allow us to search for patterns and identify underlying causes, which can then serve as predictive signals for future scenarios. The Database of Intentions gives us a massive source of behavior signals that capture every dimension of societal activity. We can test our hypotheses quickly and accurately against the tableau of all online activity, looking for the underlying influences that drive behaviors.

At the intersection of these two is something of tremendous import. We can start predicting human behavior on a massive scale, with unprecedented accuracy. With each prediction, the feedback loop between qualitative prediction and quantitative verification becomes faster and more efficient. Throw a little processing power at it and we suddenly have an artificially intelligent, self-ssimproving predictive model that will tell us, with startling accuracy, what we’re likely to do in the future.

This ain’t just about selling video games, people. This is a much, much, much bigger deal.

The Tricky Intersection of Social and Search

First published September 20, 2012 in Mediapost’s Search Insider

People don’t trust search ads. At least, 64% of people don’t trust search ads.

Apparently, search is not unique. According to the same research, nobody trusts ads of any kind. That’s not really surprising, given that it’s advertising. Its entire purpose is to make us suddenly want crap we don’t need. Small wonder we don’t trust it.

But you know what we do trust? The opinions of our friends.

Nothing I should have said up to this point should come as a shock to anyone reading this column. The only thing I found mildly surprising here was that we had such a low level of trust in search ads. Typically, search advertising is better aligned with intent and less hyperbolic in nature. But, apparently, we marketers have bastardized even the purity of search to the point where it’s less trusted than TV ads (gasp!)

So, to recap, we don’t trust ads, we do trust friends. This seems to present a simple solution: combine the two so that pesky advertising can bask in the halo effect of social endorsement.  You’ve been hearing about this for many years now, including several Search Insider columns from my fellow pundits and myself.

So, given that we’ve been testing the waters for sometime, why haven’t we got this advertising/social thing locked down yet? Why are Facebook stockholders wailing over their deflated portfolios? Why are we still stumbling out of the starting gate in our efforts to marry the magic of social and search? This shouldn’t be rocket science.

In fact, it’s more complex than rocket science. It’s psychology; it’s sociology and at least a handful of other “ologies.” When we talk about combing search and social — or for that matter, any type of advertising and social — we’re talking about trying to understand what makes humans tick.

If we talk about the simplest integration of the two, where social acts as a type of reinforcing influence that is subordinate to the primary act of searching, it’s not hard to follow the train of thought. We search for something, and in the results, we see some type of social badge that indicates how our social connections feel about the options presented to us. In this case, intent is already engaged. Social just serves to grease the decision wheels, helping us differentiate between our options. This type of integration can easily be seen on Google (Plus integration) as well as vertical engines such as TripAdvisor or Yelp.

But that type of integration doesn’t really fire the imagination of marketers and get their market acquisition juices flowing. It’s just hedging your bets on a market that’s already pretty easy to identify and capture. It does nothing to open up new markets. And it’s there where things get muddy.

The problem is this niggling question of intent. Somehow, something needs to activate intent in the mind of the prospect. It’s here where we truly need to be persuaded, moving our mental mechanisms from disengaged to engaged.

To do this, you need to reverse the order of importance between the two channels. Social recommendation needs to be in the driver’s seat, hopefully engaging and moving prospects to the point where they initiate a search. And that’s a much bigger hurdle to get over. Once the order is reversed, the odds of success plummet precipitously.

Here are just a few of the hurdles that have to be cleared:

Trust – Whichever channel is chosen to deliver the social recommendation, it has to be received with trust. This factor can be affected by how the recommendation is presented, the social proof that accompanies it, the aesthetic value of the interface, and the recipient’s attitude towards the channel itself. There is no lack of nuanced detail to consider here.

Alignment of Interest – When the recommendation is delivered, it must be of interest to the recipient. This relies on an accurate assessment of context and intent. Whatever the targeting channel, there has to be a pretty good chance of delivering the right message at the right time.

Social Modality – So, let’s assume you’ve figured out how to get the first two things right – you are using a trusted channel and you’ve done a good job of targeting. You’re not home free yet. Here’s the thing – we don’t act the same way all the time. We adapt our behaviors to fit the social circumstances we are currently in. There are predetermined modes of behavior that we conform to. It’s why we act one way with our coworkers and another way with our children. It’s why it’s okay to tip a waiter in a restaurant, but not okay to tip your mother-in-law after Sunday dinner. This modality is carried over from the real world to the virtual world of social networks. And it’s very difficult to determine what mode a prospect may be in. But it can make all the difference in the success of a socially targeted advertising message.

The Fight for Attention – This is the big one. Even if you do everything else right, your odds for successfully capturing the attention of a prospect and holding it for long enough to generate actual consideration of your product are not nearly as good as you might hope. You’d probably do better at a Vegas craps table. It all depends on what the incumbent’s intent is. What brought her to the online destination where you managed to intercept her? How critical is it that she finish what she’s currently doing? How engaged is she in the task at hand?

With the first example of search/social integration (search first, social second), the odds for success are pretty high, because intent has already been established. You’re just using social endorsement to expedite a process that’s already in motion.

But in the second example (social first, search second), we’re talking about an entirely different ball game. You have to derail the incumbent intent and replace it with a new one. Think of it as the difference between pushing a car downhill that’s already started to roll, and pushing the same car from a standing start up the hill.

No wonder we’re having some difficulty getting things rolling.

A Benchmark in Time

First published September 13, 2012 in Mediapost’s Search Insider

That’s the news from Lake Wobegon, where all the women are strong, all the men are good-looking, and all the children are above average. — Garrison Keillor

How good are you? How intelligent, how talented, how kind, how patient? You can give me your opinion, but just like the citizens of Lake Wobegon, you’ll be making those judgments in a vacuum unless you compare yourself to others. Hence the importance of benchmarking.

The term benchmarking started with shoemakers, who asked their customers to put their feet on a bench where they were marked to serve as a pattern for cutting leather. But of course, feet are absolute things. They are a certain size and that’s all there is to it. Benchmarking has since been adapted to a more qualitative context.

For example, let’s take digital marketing maturity. How does one measure how good a company is at connecting with customers online? We all have our opinions, and I suspect, just like those little Wobegonians, most of us think we’re above average. But, of course, we all can’t be above average, so somebody is fudging the truth somewhere.

I have found that when we work with a client, benchmarking is an area of great political sensitivity, depending on your audience. Managers appreciate competitive insight and are a lot less upset when you tell them they have an ugly baby (or, at least, a baby of below-average attractiveness) than the practitioners who are on the front lines. I personally love benchmarking, as it serves to get a team on the same page. False complacency vaporizes in the face of real evidence that a competitor is repeatedly kicking your tushie all over the block.  It grounds a team in a more objective view of the marketplace and takes decision-making out of the vacuum.

But before going on a benchmarking bonanza, here are some things to consider:

Weighting is Important

It’s pretty easy to assign a score to something. But it’s more difficult to understand that some things are more important than others. For example, I can measure the social maturity of a marketer based on Facebook likes, the frequency of Twitter activity, the number of stars they have on Yelp or the completeness of their Linked In Profile, but these things are not equal in importance. Not only are they not equal, but the relative importance of each social activity will change from industry to industry and market to market. If I’m marketing a hotel, TripAdvisor reviews can make or break me, but I don’t care as much about my number of LinkedIn connections. If I’m marketing a movie or a new TV show, Facebook “Likes” might actually be a measure that has some value. Before you start assigning scores, you need a pretty accurate way to weight them for importance.

Be Careful Whom You’re Benchmarking Against

If you ask any marketer who their primary competitors are, they’ll be able to give you three or four names off the top of their head. That’s the obvious competition. But if we’re benchmarking digital effectiveness, it’s the non-obvious competition you have to worry about. That’s why we generally include at least one “aspirational” candidate in our benchmarking studies. These candidates set the bar higher and are often outside the traditional competitive set. While it may be gratifying to know you’re ahead of your primary competitors, that will be small comfort if a disruptive competitor (think Amazon in the industrial supply category) suddenly changes the game and blows up your entire market model by resetting your customer’s expectations. Good benchmarking practices should spot those potential hazards before they become critical.

Keep Objective

If qualitative assessments are part of your benchmarking (and there’s nothing wrong with that), make sure your assessments aren’t colored by internal biases. Having your own people do benchmarking can sometimes give you a skewed view of your market.  It might be worthwhile to find an external partner to help with benchmarking, who can ensure objectivity when it comes to evaluation and scoring.

And finally, remember that everybody is above average in something…

The Berkowitz Guide to Creating Content that Matters

First published September 6, 2012 in Mediapost’s Search Insider

I made it! I got through the summer without writing too many “filler” columns triggered by the realization it was already Wednesday and my editor was expecting something in her inbox by end of day. There were no summer vacation columns, no “10 things I learned about [fill in blank],” and with the exception of one column about the joy of digging holes, no lame reminiscing about the zillion years I’ve spent doing this. Sometimes I even managed to write about search.

Of course, now that we’re safely past Labor Day, all that comes to a crashing halt. Because, yet again, it’s Wednesday (as of the time I’m writing) and, yet again, the well is dry.  So, it was sad yet somehow consoling that I read the final column of David Berkowitz, the one MediaPost writer I know who has actually logged more columns (400) than I (383 as of this one). David recapped what’s he’s learned from writing a little over 300,000 words, squeezed out every week over the past eight years. As David so astutely says, “I know not every post is amazing, but I still put in the time. It takes just as long to write an average column as it does to write a great one.”

I would urge you to take the time to read David’s column. I’ve been talking a lot lately about the importance of content creation. In the new information economy, content is currency. We all have to start thinking like publishers. And that means that many of us will have to create content. David’s lessons are valuable ones.

One of the thing’s I’ve most admired about David is his ability to write both from his heart and his head. He has a keen intellect, but he’s also a good and decent person, and both qualities shine through in his writing. Being genuine is an often-overlooked gift.

Whatever forms your content takes, make sure you’re creating it for the right reasons. Speak because you have something to say, not just to fill a room (or blog post) with noise. I especially liked David’s Lesson #2: “Big ideas matter, even if they don’t spread.” The columns I’m most proud of are often the ones that got the fewest retweets or comments.

Long ago, when I started writing and speaking, I had to come to terms with the fact that I will seldom go “viral.” I don’t seem to have a flair for creating memes.

But after watching other speakers who are more “meme”-worthy get swarmed after a presentation while I stood quietly to the side, I began to notice a pattern. Often, someone would come up and say, “Thank you so much for what you talked about. It was a different angle and it gave me something to think about.” I decided then and there that it was these individuals I was writing and presenting for. There may be only a handful of them in the room, or reading my column on any given week, but if I can pass along something that causes them to adjust their perspective and see something that was previously undiscovered, it’s been worth it. Retweets are not always the best measure of importance.

Writing should never be a “to-do” task. Yes, the weekly rhythm of this column can frankly be a pain in the butt some days when my to-do list overflows —  but that feeling always goes away when I start writing. As David said, “Each column is a learning experience, starting with a thesis, or a hypothesis, or a half-decent idea for the middle of a nonexistent story.”

Yes, writing is a learning experience, forcing you to put some semblance on structure to half-formed thoughts, but it’s also a chance each week to learn a little bit more about yourself. I like to think of writing as sharing little shards of your soul. You put yourself out there in a way that few others do.

At least, you do if you write as well as Mr. Berkowitz does.

Climbing the Slippery Slopes of Mount White Hat

First published August 30, 2012 in Mediapost’s Search Insider

On Monday of this week, fellow Search Insider Ryan DeShazer bravely threw his hat back in the ring regarding this question: Is Google better or worse off because of SEO?

DeShazer confessed to being vilified after a previous column indicated that Google owed us something. I admit I have a column penned but never submitted that Ryan could have added to the “vilify” side of that particular tally. But in his Monday column, Ryan touches on a very relevant point: “What is the thin line between White Hat and Black Hat SEO?” For as long as I’ve been in this industry (which is pushing 17 years now) I’ve heard that same debate. I’ve been at conference sessions where white hats and black hats went head to head on the question. It’s one of those discussions that most sane people in the world could care less about, but we in the search biz can’t seem to let go.

Ryan stirs the pot again by indicating that Google may be working on an SEO “Penalty Box”: a temporary holding pen for sites that are using “rank modifying spammers” where results will fluctuate more than in the standard index. The high degree of flux should lead to further modifications by the “spammers” that will help Google identify them and theoretically penalize them. DeShazer’s concern is the use of the word “spammers” in the wording of the patent application, which seems to include any “webmasters who attempt to modify their search engine ranking.”

I personally think it’s dangerous to try to apply wording used in a patent application (the source for this speculation) arbitrarily against what will become a business practice. Wording in a patent is intended to help convey the concept of the intellectual property as quickly and concisely as possible to a patent review bureaucrat. The wording deals in concepts that are (ironically) pretty black and white. It has little to no relationship to how that IP will be used in the real world, which tends to be colored in various shades of gray. But let’s put that aside for a moment.

Alan Perkins, an SEO I would call vociferously “white hat,” some years ago came up with what I believe is the quintessential difference here. Black hats optimize for a search engine. White hats optimize for humans.  When I make site recommendations, they are to help people find better content faster and act on it. I believe, along with Perkins, that this approach will also do good things for your search visibility.

But that also runs the danger of being an oversimplification. The picture is muddied by clients who measure our success as SEO agencies by their position relative to their competitors on a keyword-by-keyword level. This is the bed the SEO industry has built for itself, and now we’re forced to sleep in it. I’m as guilty as the next guy of cranking out competitive ranking reports, which have conditioned this behavior over the past decade and a half.

The big problem, and one continually pointed out by vocal grey/black hats, is that you can’t keep up with competition who are using methods more black than white by staying with white-hat tactics alone. The fact is, black hat works, for a while. And if I’m the snow-white SEO practitioner whose clients are repeatedly trounced by those using a black hat consultant, I’d better expect some client churn. Ethics and profitably don’t always go together in this industry.

To be honest, over the past five years, I’ve largely stopped worrying about the whole white hat/black hat thing. We’ve lost some clients because we weren’t aggressive enough, but the ones who stayed were largely untouched by the string of recent Google updates targeting spammers. Most benefited from the house cleaning of the index. I’ve also spent the last five years focused a lot more on people and good experiences than on algorithms and link juice, or whatever the SEO flavor du jour is.

I think Alan Perkins nailed it way back in 2007. Optimize for humans. Aim for the long haul. And try to be ethical. Follow those principles, and I find it hard to imagine that Google would ever tag you with the label of “spammer.”

Direct vs. Distributors: Clash of the Compensation Models

First published August 24, 2012 in Mediapost’s Search Insider

The world of marketing is heading for a head-on collision, thanks to consumers who seem to think they have the right to inform themselves prior to purchasing. The problem? We marketers trying to jam a semi-trailer full of legacy channel baggage into the sleek new  two-door direct-marketing roadster we’re taking for a spin.  Simple physics dictate that something has to give. My money’s on that bloated distribution chain.

Here’s how this particular pain was recently expressed to me: “We’re double paying for our leads. We get them through pay-per-click, they come to our site, go through the quote engine and get a price, then they go to one of our dealers and buy there. We have to turn around and pay the dealer a commission again, on top of what we already paid to get the lead in the first place. We have to figure out how to stop people from doing that!”

I get the frustration. I truly do. But in this case, it’s just a byproduct of transitioning to a more efficient marketplace. There are also vestiges of hard-to-change buying behaviors. When you have one leg in the old world of marketing and one in the new, and the two are diverging rapidly, groin injuries are not a surprising outcome.

The problem here is that traditional distribution networks were created to get around the problem of geography. For many reasons, you had to be in the same market as your prospects to sell to them. Buyers simply didn’t have the resources available to adequately research future purchases, so they used relationships with distributors as proxy. They relied on the opinion of a person they knew, knowing that if that person steered them wrong, they knew where he/she lived. This risk mitigation mechanism became more effective the more you did business with a particular distributor, so distributors expanded their scope of service, becoming one-stop shops for multiple products or services. The religion of the relationship ruled the market.

But the advent of digital information is in the process of changing this system. Now we can research purchases — and we do. Information is slowly replacing relationships. While we still rely heavily on the opinions of people we know, including distributors (this emerged as the single most influential factor in B2B purchasing in our BuyerSphere research), online research is not far behind, and it’s gaining ground quickly. Humans being humans, we don’t switch en masse from one behavior to the other. We transition over time —  typically, a lot of time — as in several years or even decades.

This, then, is the marketplace that the modern marketer is trying to straddle. In many marketplaces, particularly B2B, we’re seeing a decoupling of product research from the actual purchase. Buyers are quickly learning that distributors have very limited information on the average product they carry, so they’re turning directly to the manufacturer. But when it comes time to purchase, transactions often go through traditional channels. Hence the double paying for each lead the aforementioned marketer was complaining about.  You pay once to gain entry into the prospect’s consideration set while he’s researching, and you pay again to actually win the business.

This double paying isn’t some behavior that can be corrected in buyers. It’s the price we marketers are paying for our efforts to transform the marketplace. In the meantime, as we build new information networks, we have to hold on to our traditional distribution networks. In the long run, it will be a good thing for marketers, as the problem of geography is slowly being eliminated. But it will never be gone, as long as consumers’ trust in information provided by marketers is less than total. If there is a lack of trust, we will still rely on proximate relationships as a mitigating factor. The higher the degree of risk in a purchase, the more we will turn to those relationships.

Living a B-Rated Life

First published August 16, 2012 in Mediapost’s Search Insider

I love ratings and reviews — and I’m not alone.  4.7 people out of 5 people love reviews. We give them two thumbs up. They rate 96.5% on the Tomato-meter.  I find it hard to imagine what my life would be without those ubiquitous 5 stars to guide me.

This past weekend, I was in Banff, Alberta for my sister’s wedding. My family decided to find a place to go for breakfast. The first thing I did was check with Yelp, and soon we were stacking up the Eggs Benny at a passable breakfast buffet less than two miles from our hotel. I never knew said buffet existed before checking the reviews — but once I found it, I trusted the wisdom of crowds. It seldom steers me wrong.

Now, you do have to learn how to read between the lines of a typical review site. Just before heading to my sister’s wedding, I spent the day in Seattle at the Bazaar Voice user event and was fascinated to learn that their user research shows that the typical number of reviews scanned is generally about seven. Once people hit seven reviews, they feel they have a good handle on the overall tone, even if there are 1,000 reviews in total. This seems right to me. It’s about the number of reviews I scan if possible.

But we also rely on the average rating summaries that typically show above the individual reviews and comments. When I read a review, I tend to follow these rules of thumb:

  • Look for the entry with the most reviews.
  • Find one that has a high average, but be suspicious of ones that have absolutely no negative reviews (unusual if you follow Rule One).
  • Scan the top six or seven reviews to get an overall sense of what people like and dislike.
  • Sort by the most negative reviews and read at least one to see what people hate.
  • Decide whether the negative reviews are the result of a one-off bad experience, or possibly an impossible-to-please customer (you can usually pick them out by their comments).
  • Do the “sniff test” to see if there are planted reviews (again, they’re not that hard to pick out).

I’ve used the same approach for restaurants, hotels, consumer electronics, cars, movies, books, hot tubs – pretty much anything I’ve had to open my wallet for in the past five or six years. It’s made buying so much easier. Ratings and reviews are like the Cole’s notes of word of mouth. They condense the opinions of the marketplace down to the bare essentials.

It’s little wonder that Google is starting to invest heavily in this area, with recent acquisitions of Zagat and Frommer’s. These are companies that built entire businesses on eliminating risk through reviews. The aggregation and organization of opinion is a natural extension for search engines. Of course, we should give it a fancy name, like “social graph,”, so we can sound really smart at industry conferences, but the foundations are built on plain common sense. Our attraction to reviews is hardwired into our noggins. We are social animals and like to travel in packs.  Language evolved so we could point each other to the best cassava root patch and pass along the finer points of mastodon hunting.

As Google acquires more and more socially informed content, it will be integrated into Google’s algorithms. This is why Google had to launch its own social network. Unfortunately, Google+ hasn’t gained the critical mass needed to provide the signals Google is looking for. I personally haven’t had a Google+ invite in months. Despite Larry Page’s insistence that it’s a roaring success, others have pointed out that Google+ seems to be a network of tire kickers, with little in the way of ongoing engagement. Contrast that with Pinterest, which is all the various women in my life seem to talk about — and is outperforming even Twitter when it comes to driving referrals.

I personally love the proliferation of structured word-of-mouth. Some say it negates serendipity, but I actually believe I will be more apt to explore if there is some reassurance I won’t have a horrible experience. Otherwise, this weekend my family and I would have been having Egg McMuffins at the Banff McDonald’s — and really, is that the life you want?