What Percent of SMBs Are Willing to Pay Yext’s $500 Annual Fee?

Yext has a range of business listings management plans — from $200 to $1,000 per year. At the top level you get reputation management as well. The “best value” package is $499 per year.

Some local SEOs have expressed skepticism about whether local businesses would pay that much. David Mihm and I were having a debate about this on Twitter last week. So I did an online survey and asked 500 SMBs the following question:

Would you be willing to pay $500 per year to ensure your business is correctly listed on important sites across the internet?

  • Yes — 34%
  • No — 61%
  • Other — 5%

Most of the “other” category comments were requests for more specific information. Here are several representative responses:

  • depends on if it’s guaranteed and on what sites
  • depends on what the important sites are
  • I can do that myself
  • would depend on the specifics
  • depends on the company listing
  • need more details
  • depends on the guarantee

If a couple of percentage points from the “other” category migrate after specifics, let’s say that 36% would be willing to pay the $500 per year. And if there are 25+ million small businesses in the US and the “addressable market” is half of that (for argument), then the annual opportunity is $2 billion at least.

What’s your perspective on this? Do you find this persuasive or remain unconvinced?

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Majority of Homes Now Don’t Have a Landline, 71% Under 35 Are Mobile Only

Another mobile milestone has been reached.

In 2015 mobile search passed desktop search volumes. Last year mobile advertising reached 51% of total digital ad spending. And now the majority of US homes are mobile only. For younger users the numbers are more dramatic: 71% of adults under 35 live in mobile only households.

According to the US Center for Disease Control:

The second 6 months of 2016 was the first time that a majority of American homes had only wireless telephones. Preliminary results from the July– December 2016 National Health Interview Survey (NHIS) indicate that 50.8% of American homes did not have a landline telephone but did have at least one wireless telephone (also known as cellular telephones, cell phones, or mobile phones) —an increase of 2.5 percentage points since the second 6 months of 2015.

Demographic insights:

  • More than 71% of adults under 35 live in mobile only households.
  • More than 83% of unmarried adults in shared housing live in households with only wireless telephones
  • More than 71% of renters live in mobile only households
  • Among ethnic groups, Hispanic adults were more likely (64.8%) than non-Hispanic whites (46.6%) or African Americans (52.1%) or Asians (47.4%) to be in mobile only homes.
  • People in the Midwest (53.0%), South (55.5%) and West (53.4%) were most likely to be living in wireless-only households

Among other implications, it’s going to be much harder for telemarketers and telephone sales reps to reach people at home.

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United Airlines — or Brands Behaving Badly

By now you’re probably aware of the situation: United airlines asked people to volunteer to take another flight Sunday because one from Chicago to Louisville, Kentucky was over-booked and some United employees “needed to get to Louisville.”

When not enough people volunteered, United personnel started involuntarily choosing people. And when one man “selected” to deplane refused to give up his seat, they called security and physically dragged him off the plane. (The footage is shocking.)

How STUPID was that? It’s another example, albeit an extreme one, of brands’ shortsighted thinking in dealing with customers.

The damage to the brand will be significant and potentially be in the millions of dollars, in terms of negative PR and lost bookings. There will also likely be a lawsuit by the guy dragged off the plane and a settlement resulting in a payout and creating another opportunity for more bad press — reminding people of bad United customer service. It will take years to correct this perception.

Even though United, from a technical-legal standpoint, may have been within its rights to do this — what a colossally stupid idea. It resulted from lower-level personnel not thinking about how customer service (the lack thereof in the extreme) or their own behaviors impact the entire organization and the brand.

With more foresight and thought, United could have compensated these people or created incentives that would have resulted in a sufficient number of volunteers getting off the plane, avoiding the incident. Even if they had paid thousands of dollars it would have been a bargain compared to what they’ll incur now in:

  • Lost bookings
  • PR crisis management
  • Legal fees and settlement costs
  • Further negative press (and potential Congressional testimony)
  • Other compensation to the people on the flight who witnessed the incident

How does this continue to happen?

Graphic: Brad Petersen

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The ‘Influencer Marketing’ Scam

Considerable attention these days is directed toward “influencer marketing.” My (as yet) unproven theory is that it’s basically all bogus.

It’s certainly true that trusted “influencers” — a term I dislike — can impact buying decisions. There is a lot of data to support that assertion. For example, the following from the 2015 Nielsen Global Trust in Advertising study shows that friends, family and “people we know,” as well as the opinions of other consumers, are the most trusted referral sources:

But what agencies and brands have frequently sought to do is co-opt that trust in the form of product placement or undisclosed sponsored posts or endorsements. In the language of business ethics it’s called a conflict of interest.

Basically influencer marketing involves walking a tightrope, either by trying to get so-called influencers to promote your product without paying them directly or by paying them but typically without clear and explicit disclosure of that fact. That’s because proper disclosure destroys credibility and their capacity to deliver influence.

This is the same MO employed by many native ads, which try as much as possible to look and feel like “content.” Facebook News Feed ads are less “deceptive” while some of the ads in the Yahoo stream are more deceptive in this regard.

These paid but undisclosed conflicts have resulted in myriad problems for brands and influencers with the FTC. The problem is that clear and explicit disclosure, sufficient to alert people to the fact that something is an ad, potentially kills its influence. But being deceptive holds longer-term negative implications for a brand.

According to research from Reuters (2015), “a third or more say they have felt disappointed or deceived after reading an article they later found had been sponsored.” I suspect the numbers would be higher and the negative feelings more intense with individual celebrities and experts. It would feel something more like a betrayal of trust.

I also suspect that if we surveyed 1,000 consumers and asked them whether a paid post or paid endorsement by their favorite celebrity or expert would have influence over a pending purchase decision they would say either “little” or “none.”

Would love for someone to argue with me — the key point being influence after clear disclosure of the paid relationship.

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Facebook Jobs Won’t Kill Craig’s List but It Gives SMBs Another Reason to Engage

Craig’s List has survived numerous “Craig’s List killers” and will probably survive Facebook Jobs. The classifieds marketplace makes money primarily from fees for job listings and real estate in New York.

Consultancy the AIM Group estimated total Craig’s List revenue at $700 million in 2016. While I’m quite skeptical of that number, if it’s even half that amount it’s still amazing. (Facebook Jobs is mostly indifferent to Craig’s List, although it’s mentioned in the video below.)

The new Facebook local recruiting capability has its own Page, with aggregated postings. Specific openings also appear on company Pages. Users apply directly through Facebook in a streamlined application process that automatically includes information from the user’s public profile.

If it works — meaning there are lots of jobs and lots of applicants — it will further strengthen Facebook’s relationship with local businesses, giving them one more reason to use the site. And given the organic throttling that’s gone on, most companies looking to fill positions will also be compelled to advertise as a practical matter. How much revenue that will generate for Facebook is an open question.

It’s fascinating to watch Facebook evolve from a customer acquisition and marketing platform into a broader CRM/conversational/retention platform with a range of capabilities, including scheduling and booking. This is another non-acquisition tool that makes the site more useful for local businesses.

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Yelp Is Starting to Solicit Reviews for Business Owners — and That’s a Good Thing

Yelp is getting serious about transactions. That’s a very good thing for the company. This is what CEO Jeremy Stoppelman said about it on the recent Q4 earnings call:

We also made excellent progress in building our transactions capabilities. The number of Yelp Eat24 orders, Yelp Platform transactions and Yelp Reservations bookings grew 40% in 2016 and transactions per user increased by more than one-third. Across Yelp, we expanded the number of transaction-enabled businesses and categories and improved conversion through efforts such as streamlining the checkout process. With the integration of Nowait, we also added the ability for consumers to remotely join waitlists at approximately 3,600 restaurants. We were particularly excited to facilitate more than 4.5 million consumer inquiries through Request-A-Quote in its first full year.

I’ve argued several times in the past that emphasizing transactions can accomplish multiple things for Yelp:

  • It helps differentiate the platform and make it a tool for both businesses and consumers
  • It provides more data for Yelp itself and for business owners
  • It provides new revenue streams
  • Transactions can help Yelp capture verified reviews as a service to business owners

According to business networking site Alignable, Yelp has the worst NPS score of any of the SMB brands it tracks. Helping business owners get reviews will partly address the problem.

As with hotel booking sites or OpenTable, Yelp can follow up after a booking and solicit a review on behalf of the business owner. And it has apparently started doing just that:

The more categories that offer scheduling and booking, the more Yelp can seek reviews after the fact. That boosts Yelp’s overall review count. It also broadens the number of reviewers and gives Yelp greater confidence the review is legitimate — although it wouldn’t be 100% guaranteed — enabling Yelp to back away (at least partly) from its controversial “review filter.”

The review filter (“not recommended”) has fed the (fake news) perception that Yelp manipulates reviews to coerce business owners into advertising. This has been one of the major knocks against Yelp and partly the driver of the company’s negative NPS ratings on Alignable.

Transaction-driven review solicitation can help that.

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Super Bowl Ads: Are Politics the New Sex?

At $5 million for 30 seconds, you better hope your Super Bowl ad generates buzz. Past campaigns have used humor, sex, cute animals and sentiment to capture attention. Some have consciously sought to generate controversy — usually involving sex (e.g., the old GoDaddy, Carl’s Jr.).

This year politics took the place of sex as the engine of controversy, though most ads still avoided it.

Before the game I was curious to see how many advertisers would “be political” and how many would completely avoid it. Political commentary from brands is seen as extremely risky, in this polarized climate especially But “safe” ads (read: boring) are problematic too.

Some of the ads therefore tip-toed into a kind of gray area, where if you were inclined to see a political message you might be able to find one.

This was the case with the Budweiser commercial about the founding of Anheuser Busch by German immigrants. Even thought it dramatized the truthful company origin story, it sparked a call to boycott Budweiser. One could argue the depiction of modest hostility to immigrants in the ad is a comment on the current political climate but it’s also historically accurate.

Coke recycled its 2014 multi-lingual, multi-cultural “America the Beautiful” ad. It was controversial then but much more controversial now, given the immigration ban. A message of inclusion, it was read as partisan in this environment. (Think about how Apple’s classic “1984” Super Bowl ad would look to many in the current climate.)

There were other ads, such as Audi’s “Daughter/Drive Progress” ad about gender equality, AirBnB’s “We Accept” campaign, Melissa McCarthy’s Kia ad that had a light pro-environmental theme and Avocados from Mexico was seen as political by some, though only if the simple mention of “Mexico” now is political. A few spots had subtle and no-so-subtle pro-gay messages.

However the ad that won the night from a “buzz” perspective was one that went directly after controversy. It was a pro-immigration spot taking aim at the border wall, from building-materials supplier 84 Lumber. (It didn’t seem cynically produced.)

An initial version of the ad was rejected by Fox as too controversial because it depicted the proposed border wall. The agency cut a new spot, which was approved.

At the end of the abridged TV ad, viewers were prompted to visit company’s website to see the “entire journey.” It sparked massive traffic to the company’s website. Whether these were sympathetic or critical viewers, it got the job done.

Below are the two versions of the ad:

I love Super Bowl ads and their creativity. But it’s generally true hat they’re a big waste of money. They typically don’t “work” to boost brand metrics or deliver actual sales. The 84 Lumber ad by comparison will probably do both.

The company and its agency took a huge risk by being political — that’s not going to work much of the time. However, millions more people now have an awareness of 84 Lumber (including me) and some of those people will go on to spend money there. Beyond this, the ad is getting huge secondary coverage because of its controversial content and the initial Fox rejection.

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New LSA Digital Media Certification Program Seeks to Identify Ethical Sellers

How many small business owners have received telemarketing calls from marketing companies making spurious claims about a guaranteed ranking on Google? The SMB-digital marketing services arena is full of noise with almost limited transparency.

Business owners receive a barrage of calls per month soliciting their marketing dollars. The process of “vetting” these firms is very difficult; and finding a company that can be trusted is near the top of the list of challenges.

Top SMB challenges in finding a marketing service provider (multiple responses permitted)

Source: Thrive Analytics, November 2016. N=200 SMBs

LSA has decided to enter the market with a new certification program that seeks to point SMBs to ethical marketing firms. This isn’t a guarantee of performance. Rather it signifies that certified companies have agreed to abide by a set of guidelines and ethical business practices surrounding:

  • Sales practices and representations made to prospective clients
  • Service standards and accountability
  • Hiring and training practices
  • Service agreements and contracts
  • Transparency
  • Security and privacy of information

This program was developed over a roughly two-year period with a great deal of consultation with key constituencies. LSA also surveyed small business owners, which supported the idea: 80% said that such a certification would impact their choice of a marketing partner.

Our hope and belief is that over time the certified firms will rise above the noise and deliver genuinely better service to SMBs. Learn more or apply here.

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Are News and Politics Ruining Facebook?

News

On Friday, former NBC and CNN journalist, turned education activist, Campbell Brown announced that she was joining Facebook as a liaison to news organizations. She will lead the “News Partnerships” team at Facebook according to a post on her Facebook page:

This month I will be joining Facebook to lead its News Partnerships team. This is a different role for me, but one where I will be tapping my newsroom experience to help news organizations and journalists work more closely and more effectively with Facebook. I will be working directly with our partners to help them understand how Facebook can expand the reach of their journalism . . .

The announcement made me think about how big a part of the Facebook experience news and politics have become. This has been part of a very self-conscious plan, since roughly 2013, to turn Facebook into a “personalized [digital] newspaper.”

Some people now get the majority of their news (broadly defined) through their News Feeds. According to Pew survey data released last year, “A majority of U.S. adults – 62% – get news on social media. That’s up from 49% in 2012.

Six in Ten Get Their News from Social Media

Two-thirds of Facebook users get news on Facebook. It’s also the primary news source for Millennials. Though I don’t pay close attention to news in my feed, my wife and many others I know do get a substantial amount of news from Facebook.

At a holiday gathering recently one of our friends was saying she (40+) had completely shifted away from Facebook to Instagram because she was so tired of the political tirades from her connections, leading up to and following the election — I have been guilty of some of that myself (tirading). She complained about both Clinton and Trump supporters ranting in her feed.

There has been lots of unfriending on Facebook in the run up to and in the aftermath of the election. You’re also familiar with the whole fake news controversy and how bogus stories, some planted by Russia, may have influenced some voters. Facebook is now trying to address fake news in several ways.

Facebook’s tag line or mission is “to make the world more open and connected.” It has done that to varying degrees but with the emphasis on making it a news platform — and the inevitable political discussions/arguments that has inspired — Facebook has also inadvertently helped create echo chambers where any information that contradicts preferred positions is screened out. In this way it has arguably helped harden positions.

Any internet platform as large and successful as Facebook, which is driven by the logic of a public company, is under constant pressure to grow, evolve and innovate. News was a logical — even inevitable — place for Facebook to go. But it may well have been a mistake.

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Apple Maps Needs to Do a ‘Pepsi Challenge’ with Google Maps

Apple Maps 2

As an iPhone owner (I also have several Android phones) I use Apple Maps a great deal. However I’ve found myself using it less over the past several months. That declining usage revolves around routing and navigation.

In many ways I prefer Apple Maps to Google Maps. However I believe that Google offers more reliable navigation and is more likely to get me to my destination more quickly. When I’m at home I’m inclined to use Apple Maps because I’m familiar with the area and routes; so if there’s a mistake I can catch it. But when I’m traveling and in a rental car, I always choose Google Maps.

On a “visceral” level I have more confidence in Google’s navigation and routing. (Waze is separate conversation). I’m sure I’m not alone in this. And this is a problem that Apple will need to directly address; it can’t simply rely on being the “default map” for iPhone users.

At Apple’s 2015 developer event, CEO Tim Cook said that Apple Maps were being used 3.5x more than “the next leading mapping app” (Google Maps) on the iPhone. But in June 2016 a survey of just over 2,000 US adults from Fluent argued that Google Maps is the favorite mapping app for both Android and iPhone users.

Apple Maps preferences survey from Fluent

Maps and navigation (and local search) are critical functions and features for smartphone users — as everyone reading this knows. Apple will need to invest in its mapping product in perpetuity if it’s to remain competitive with Google. Apple knows this. (Siri improvements and third party developer integration into Apple Maps are key to competing as well.)

Apple needs to tackle the problem of my “intuitive perception” that Google Maps offers more reliable navigation head on. (I don’t actually know this as a fact; I haven’t systematically tested it.) I believe the company needs a version of a head-to-head match-up, or “Pepsi Challenge,” to show that Apple Maps features and routing are as good as its rival’s. At a minimum it needs to do more to promote Apple Maps and its capabilities.

But first it must make sure Apple Maps are in fact as good as Google Maps.

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