Google, a lot like a corrupt SatNav!

Posted on by Billy Tucker

image

Google commands tens of millions of dollars each year (probably hundreds) through knowingly selling brand terms through AdWords (such as “cudo” for our business). Yet, users are increasingly using Google for everyday web navigation, so they knew where they wanted to go, they just wanted Google to help them get there.

This is a lot like punching a restaurant’s address into your satnav, but being taken to the highest bidding restaurant instead!

And as businesses grow their sophistication in SEO and they establish their listing at the top of the Organic pile for free. Allowing competitors to purchase a business’s brand term means the target business also has to buy their own
brand term else there is a fair chance an unsuspecting user will click on the competitor’s link, commanding unnecessary dollars from at least two businesses! This has lead to a Mexican Standoff between Group Buying sites, including the seven or so competitors currently spending their dollars on the term “Cudo” today.

In itself this is not necessarily evil of Google, it is opportunistic though.

However, once a business has been granted a trade mark they can then protect their brand from being bought on Google by law, yet Google seems to be oddly slow at applying any kind of block to AdWords, milking yet more dollars from a potentially struggling business over the 3 to 6 months it takes to limit the term in AdWords (Google may not block the term altogether!).

Why is it so hard to protect my mark on the world’s most sophisticated Search platform? Yahoo! and Bing seem to behave much less like a Corrupt SatNav with a clear policy on Trade Marks.

At Cudo we are spending over $50k each month buying our brand term on Google, that’s one expensive Mexican Standoff!

See below for an excerpt from a Trademark Case Study, found here

“Trademark Case Study

A Google Adwords client, who is a leader in the very competitive Network Marketing field, recently noticed a surge of infringements against their trademark which was being used in competitor ad copy on the Google Network.  Competition within the Network Marketing industry is extremely competitive and aggressive. The client became aware that their competitors were bidding on their trademarked search terms. This caused the cost to secure top positions for their ads to skyrocket from an initial $2.00 per click to $15.00 per click. Monthly expenditures increased from $1,200 to nearly $30,000. The estimated budget increased to $500,000+ for the year. Control of the top ad space in Google was their primary objective in order to dominate the ad-space for their branded trademarked term.

Given the level of aggression by the competitors and the extortionate cost been borne by the client, there was only one solution and that was to stop all advertisers from bidding on the terms.  Is it right that a business owner has to spend $500,000+ to buy their own branded name – a name that has already cost them millions of dollars to build?  This is $500,000+ the trademark owner has to spend because of a policy that disavows elementary business ethics.  Yahoo and MSN have recognized the injustice of such a slippery-slope policy and have taken steps to change it.  We filed trademark infringements with all three search egnines.  Yahoo and MSN results were clear within days.”

Group Buying enters the Trough of Disillusionment, will it recover?

Posted on by Billy Tucker

image

Gartner describes the adoption of Technology (where there has been clear market Hype) using the Hype Cycle diagram. The same diagram can be usefully adapted to describe the current challenges facing the Group Buying industry given it was built on a platform of extraordinary hype and has since suffered its own decline. Also, much like how the Technology Hype Cycle describes the organic adoption of the technology over time once the Hype has dissipated and the useful nature of the innovation emerges, Collective Buying does add real value to Merchants and Consumers, and beyond the hype and the noise of Group Buying, that value add still exists – which then begs an interesting question, what is required to ensure an enduring future for Group Buying?

The key phases of the Gartner Hype Cycle are on the left of the table, an equivalent stage in the Group Buying evolution is on the right:

image

I believe that to get through the Trough of Disillusionment and onto the Slope of Enlightenment, the players in the industry need to follow the 4 tenets of Effective Group Buying:

  1. Provide genuinely useful marketing services for Merchants, including valuable insights on their new customers and mechanisms to drive upsell and loyalty
  2. Minimise the promotion of irrelevant offers through investments in targeting technology
  3. Add Value to their members through genuine discounts on products and services
  4. Underwrite their offers with a suitable customer support policy and helpdesk

Profiting from the fundamentals of Group Buying: part 3… Scarcity

Posted on by Billy Tucker

image

A key tactic more often employed by Flash Sale sites than Group Buying sites is scarcity, but there is more to this tactic that meets the eye.image

Stock limitations can be a condition, i.e. we really only have 200 available in our warehouse, however setting a stock limit can be a very effective tactic to drive up sales, this is the Scarcity Game Mechanic. To set an appropriate limit, forecast the likely sell through of a particular item, then set a stock limit that is 10 – 15% higher than that forecast, the Scarcity Game Mechanic if played right will ensure the limit is reached and your forecast is exceeded. image

To illicit the right response, the shopper has to feel some sense of urgency due to the stress that comes from missing out, clearly this is less effective in the early phase of the sale but that’s ok given the forecast amount would have been reached on its own. Having a genuine countdown display is key, either literal or abstract, regardless though it has to be genuine, once the limit is reached the item is “Sold Out”, it’s tempting to find and release more stock however once this occurs, the scarcity mechanism will be discredited for good. imagePromoting the Stock Limit though display advertising or EDM is also good, however the level of promotion provided has to be proportionate to the Stock available. Lastly, if a Consumer comes to the site after the limit has been reached, this is a great time to reinforce the “don’t miss out next time, be first to know with our SMS program” or similar engagement/re-targeting program.