The Near Memo, Episode 5

Greg: Okay. Here we are. Again, episode five of the near memo where we talk about a lot of stuff around search commerce, social media, what's going on in the internet. What's happened in the past week. Joined as always in these five weeks, we've been doing this by Mike and David and welcome you guys and let's get into it.

David: Awesome to be here as usual. I think we decided I'm going first, but even if we didn't, I'm going to jump in. So Greg, my, my news article for the week is something that I found, not particularly newsworthy given that Google had announced it months ago. Which is that there.

Greg: Effectively ending support for third party cookies.

David: And that the announcement is that they're not going to reintroduce a replacement.

And I think that this, again, it's not, it wasn't particularly newsworthy, but it was so funny because a friend of mine actually texted me the wall street journal article about yesterday's news and said, Whoa, clearly he hadn't been following what was happening previously. As we were talking offline, I think.

I only see this as strengthening Google's position. I think in the grand scheme of their overall revenues, the vast majority of their revenues got to come from first party ad serving. And that ad sense or anything that relies on third party cookies is a much smaller piece of the pie. So if anything, I think that they're going to come out of this just fine.

And to the detriment of some of the smaller players in that.

Mike: I would wonder how many Americans have at least one Google contact point; to Gmail, search, some photos. In other words, what they have or subscription, they have such vast reach that I have to believe that they have some information about an awful lot of people in there and can track them once they're on a Google property.

Greg: Absolutely. If you've got an Android phone, you have to have a Google account. You can't set up that phone without a Google account. Yeah,

Mike: Interestingly, I also got an inquiry from my CEO at ByTraject, wondering about small businesses’ ability to target. And it seems to me that firstly Google's ad network was never that great for targeting or generating leads, but within Google, driving ads through Google still should be fine, right? For any business.

Greg: If you're doing retargeting, I think it works pretty well, but most small businesses aren't doing that much retargeting, I think.

Mike: But should they be, their success is not going to be impacted by this. Is it?

Greg: And not if they're doing anything with search. No, absolutely not.

Mike: So it's basically good PR they're the champion of the price of privacy, but it doesn't seem like it's well--

Greg: Yeah. It's interesting because we've got Apple with their sort of IDFA opt in going on over here. And Facebook has just gone to war and said, “this is gonna ruin small businesses”.

And then Google on the other hand is taking the opposite position in a certain way, philosophically, “privacy issues have eroded trust and we need to restore trust. And so we're not going to do this”.

And, I think marketers are just feeling this kind of pinch on both sides, right?

They're not going to get at least in theory as much data from iPhone users. That'll be hard for them now, the disappearance of cookies and nobody's really come up with a good alternative. There's a bunch of companies out there live ramp and others that are trying to create these ad IDs or different identifiers that are replacements, but it, they're in there, they're in a bad position and Google and Facebook are in a very strong position.

David: Exactly. And I think the other thing, theoretically, this makes search ads, marginally more valuable. If you don't have the sort of audience tracking targeting capabilities, then you have to go more into search intent as opposed to, broader--

Greg: People. Yeah. People have some time.

And it also brings back contextual advertising to a degree too. And there are people working on that, the irony in my perspective is search was like this great early form of advertising that just was, really reliable because it relied on intent signals. And now we're back to that in a way, it's the ultimate sort of privacy safe.

Advertising, which at the same time, it's highly personalized because people are expressing their needs.

Mike: And then particularly when you add in location, it's increasingly personalized every 200 feet. It changes.

David: All right. Thank you for letting me get that in. I think I'll hand it off to you, Greg.

Greg: Yes. Two, two things come together and this kind of dovetails with what we were talking about a second ago around the notion of. Trust. So there was a SEL clarity survey about a consumer survey, who do you trust and different issues around advertising and a cluster of things.

Google was the most trusted trusted provider among the big tech companies, which was a little bit of a surprise coming ahead of Apple. And people were also really happy. It seemed, the majority of people said they were happy to give Google their home address and their email address and their browsing history and their location, all this stuff like 50, 60 plus percent of people said it was fine for Google to have all this information.

So that was interesting to see. And then. And then there was also a survey that I think you originally found Mike about reviews indicating that a substantial number. I think 40% of people now trust reviews much less than they did a few years ago, indicating some growing awareness of fake reviews and review fraud.

So those two come together in this theme of trust. They

Mike: One caution I would make is that the SEO clarity survey did not indicate the margin of error or the size of --

Greg: – a hundred percent. I think. The margin of error was a hundred percent...

Mike: But they didn't indicate the margin of error.

Obviously in a thousand, I can't remember, is it a thousand? The margin of error is likely three, 4%. Meaning that the differential between the people who trusted Google versus Facebook, Apple, Amazon was probably less than it was probably--

Greg: A very valid point.

Mike: The other side of it was the distrust factor was greater for Google than it was for some of the others. So there's some issues with the survey. And also we have to look at it, you've made this point in the past, that perhaps it's actions that are more important than what people say in a survey.

And the question is, I think with Google, are more people turning on more privacy settings. Are they searching more on DuckDuckGo? Are they expressing concern? My wife expressed a lot of concern and it unfortunately took me to help her get to the point where she was sharing a small amount of data with Google.

But, and so it was too complicated, but I wonder if there isn't that underlying bubbling of distrust that I found in my wife.

Greg: I think we'll start to see it

David: Correct me if I'm wrong, but I don't believe Google's apps have come out with their Apple privacy nutrition labels yet. Which is interesting that they're taking so long because they've had months to get these out. So it'll be interesting to see once those do formally roll out how many people opt in to sharing this stuff?

When they download the Google voice search app or YouTube or whatever.

Mike: Those health charts though, are buried pretty deep on. When you go to the app store, you have to scroll two screens to see them. So one, you have to know they're there and to want to look at them. So I--

Greg: --because the attrition--

David: The labels are very much an opening salvo from Apple, I would not be surprised to see that would become more prominent very soon.

Mike: Speaking of which I think that email's the next target, right? We've seen John Gruber at Daring Fireball be very vocal about it. And when you stop to think about it, emails are pretty invasive.

Greg: Yeah. And email is a, it's a place where people are trying to use it as an alternative to the cookie, right? There's tracking, coming in into email and email addresses as an alternative.

When one, one thing that I would say about those nutrition labels is that they're a surrogate for something else. I don't think people will read them carefully and make base decisions on the basis of which categories are checked or what?

David: No, but they might look at the sheer length of Facebook's label.

Greg: It'll raise a flag for them or reinforce some perception.

I think the simplicity of the opt-in screen, do you want to allow this. App to track you. Yes, no. Is so much more powerful. And I think, I'm really eager to see what the actual numbers are when that starts rolling out and see how many people opt in or don't opt in.

Because I think that is going to be much more telling about this issue of what people really think and want, because I don't think that people are changing their behavior despite. Their concerns. I think that people don't trust Facebook, they're very concerned about a lot of privacy things, but they're surrounded by other people who are using it.

And these tools are the stuff of our day-to-day lives. And we don't have that many options. You can turn the dials a little bit, but it's pretty tough. It's pretty complicated to really manage this.

Mike: When my kids were little, I had this big battle with them over sugar in their cereals, and we basically limited all the cereals in our household and the battle was getting bigger and bigger.

And finally we gave in and we said, okay, as long as you read the nutrition label and you buy cereal that doesn't have hydrogenated oil in it, you can buy any cereal.

So it took that level of opt out.

They had  to actually read the labels, make a decision.

Greg: How did you enforce that?

Mike:We read the labels with them or they read the labels and they were happy because now they could buy cereal. So I really took a fair bit of, it was an interesting result and they got a lifelong lesson.

And so I guess the moral of this story is you got kids make them read the damn product.

Greg: Did they find the cereal? Did they--did their behavior change based on the information on the label?

Mike: It did, they were, they had only bought cereals that didn't have hydrogenated oils in them. And we were, we accepted that as a reasonable path forward that allowed them to have judgment in their lives.

I think it's got to get to that level though, where people are forced to read this stuff, like with the opt-out that Apple puts in front of them. Here are the things that Google's tracking. You want to really opt into this.

Greg: It's a simplicity, which is--

David: --Where I see it going though. That's what I'm trying to say is that even if it's starting buried two panels down on the app store, I think it's going to get Apple's...it's clearly a, not only a sort of corporate ethos, but it's a competitive advantage for them to get people to opt out of this stuff. So I think that they'll continue to push this envelope.

Mike: I agree. So it's up to me. I think I thought. The story that I found interesting was the decision by Volvo to sell their new EV exclusively online.

This is a shot across the bow of every car deal. And then I just States and the world EVs by their nature require much less maintenance. Many fewer parts and maintenance has been a huge issue of how dealerships have made a profit. They sell a new car and then they get the maintenance out of that car.

David: Definitely Volvo dealerships, from what I understand.

Mike: Yeah. Yeah. Notoriously.

Yeah. I can't speak to that personally, but it is the reality of the current car industry. If you, if all cars go EV and GM is saying 2035, many others sooner. I think VW is sooner than that.

And there's much less maintenance than the need for a dealer network is less.

And I think that online with some sort of Bonobos type showroom for cars is the future of the car industry. Clearly, it's going to take a long time because there's a lot of cars on the road and people like me drive them forever.

But once I go through a car next, my next car will probably be an EV. And I wouldn't be surprised if the option to buy it online was there by that time. So it's a ten-year change, but it's going to dramatically impact a large sector of retail right now. I think you said that 1% of car sales have been online 10 years from now, it's going to be 50%.

Greg: Yeah. I, back in the early days of e-commerce people had a certain kind of notion about what you would buy online. You'd buy a book online, you might buy certain kinds of commodities online, but you're not going to buy a high consideration. You're not going to make a high consideration purchase online, or where you have to touch and feel something. And that's still true in a lot of categories.

But I now think that people have crossed some threshold of comfort. With buying stuff online and, Tesla has, I think paved the way to some degree for this. And people will just, there is the question of the test drive.

And so there has to be some. Either mechanism to give people like a mattress, you can sleep on it for some period of time and turn it, give it back if you don't like it, which is what a lot of these mattress in a box companies do. But I think this is totally viable. In complete agreement.

And I think people will be able to configure their cars and the tools will get better and better. And they'll just, they'll get some financing online and whatever consumer friendly lemon return policy. And they'll just buy these cars. I think it's going to help.

David: Volvo has also been pretty innovative where essentially they have a subscription program for a lease where you can sign up for however many months you want to sign up.

It basically becomes month to month and then trade the car in and get a new one totally through more and more like a SAAS subscription than than anything else.

So if you combine that with the online only purchasing, I think they're really pushing the envelope with us.

Greg: Super interesting that model, because I think that's like Apple's, you just can turn in your old iPhone and continue to pay.

I think that's going to be attractive to a lot of people, especially a younger generation of buyers,

Mike: but it's predicated on a super reliable vehicle though. And EV offers that possibility. If you need regular maintenance, then that model doesn't work as well. But I think if these things are as reliable as I read, they can be, then I think that whole combination of minimal service for 150,000 miles and subscription and buy online and maybe a showroom like Bonobos, where you see the two models that Apple has yeah.

Greg: In a mall or a pop-up store or something, one interesting corollary to this is what happens to the dealers. So historically auto dealers have been big local advertisers, right?

They're small businesses typically, but they have a lot of cash. And so they're local TV advertisers, and they've spent a lot of money on digital marketing.

David: So in the newspapers, at least when I go visit my parents, there are entire pages worth of cars coming up.

Greg: But it'll be interesting if they're, if more and more buying goes online, it's already a category where people are doing most of their shopping online.

How does that impact them as small business marketers? That's an interesting thing to contemplate.

Mike: Big changes for sure are coming in that market.

David: So I think we may have a future of retail analysis coming up, a little birdie told me at some point in this next quarter.

Greg: It's a super interesting subject.

There's a ton of stuff going on. We don't have time to talk about all of it today, but one of the, one of the stories that didn't make it into the discussion was the target results against the backdrop of some of the other stores that are closing stores, whereas Target is investing and did a huge business using their stores to fulfill e-commerce orders. Really interesting stuff.

So on that note. All right. So I think we're done for the week, so thanks again. Thanks for listening guys. All right. Thanks.