Podcast: “Walmart Providing Search Marketing Services & Sears.com Privacy Debacle”
(32 MINUTES)
The gang discusses the implications of Walmart (via Sam’s Club Online Services) extending its services to small business owners — by entering the search marketing support business. As well, Sears.com partners up with comScore to distribute its application in very sneaky ways (a la spyware) and exposes customer purchase data to anyone who wants it.
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– TRANSCRIPT –
Lorrie Thomas: …it’s all about results, and I would love to see what kind of results these small business people are getting by paying the Wal?Marts of the world $100 a month. I mean, what are they getting?
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Jeff Molander: Hello, I’m Jeff Molander, and this is Paying For Performance.
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Jeff Molander: Welcome to 2008. I’m Jeff Molander. I’m joined by everyone this week. Mr. Chris Finken of Orange Soda, Lorrie Thomas of Lorrie Thomas Marketing, Amanda Watlington of Searching For Profit, Lee the lead man Gientke of Leadpoint.com, and Michael Perham, of Acknowledge. Hey, everybody.
Everbody: Hello.
Jeff Molander: How do you like that new theme music, first of all?
Amanda Watlington: It works.
Jeff Molander: It’s powerful, OK…
Chris Finken: It’s powerful.
Jeff Molander: Gets your blood going… it’s all about the money, baby.
Lee Gientke: Exactly, exactly.
Jeff Molander: Let’s talk about Wal?Mart selling search engine marketing services. Hello? I’m thinking that search engine marketing has officially gone mainstream. I’m sure that all of us have something to say about this. I’m going to ask Amanda to give us reaction first, since you are the guru?ess of search. Not that other people aren’t involved in search, but you are probably the one with the deepest experience. What’s going on here?
Amanda Watlington: Well, you know, I thought about it, Jeff. I kind of saw all the comments on the Karl Rebas article on it. I thought, you know, Wal?Mart’s just simply following right on the law, like all of the other people who have been sending me “get your site found” information for a very long time. I’ve got notes since… as long as I’ve been in search marketing. Send me $50, and I’ll submit yours on the best list emails. I’ll submit your site to 2500 engines, all over the world. Oh, yawn. A real personal experience.
The only concern I have is that a lot of people will be taken in by it. What will be achieved, I’m not sure, because I found doing search marketing for years and years and years is that the kind of results you get depend a lot on… it’s marketing. And would you turn your marketing over to “I’ll give you $100 to do my marketing?” I don’t think very many of us would want to do that, and it is marketing.
So I look, and I think where will this go? What will they do? I saw some of the people thought it was very threatening. I don’t think it’s threatening at all. It’s fine if they play in that market, because all it will do is help mainstream what search is, and I look at it like free advertising for us.
Jeff Molander: This person, Karl Rebas, it’s K?A?R?L R?I?B?A?S, and he blogs at http://blog.karlribas.com/. He appears to have broken this… he got an email from Sam’s Club, and he says: “Move over Sam’s choice cola and Sam’s choice drinking water. There’s a brand new product offering hitting the shelves, introducing Sam’s choice Pay Per Click services.” And he literally shows an image of the actual email that he received, it was an HTML email.
The implications on Wal?Mart selling search engine marketing services, one person had said: “Wow, Jeffrey Moore, we’ve really crossed the chasm here.” What does this mean for small businesses? To your point, Amanda, who is going to perform, what is the qualifications of these folks and who is that?
Amanda Watlington: Good question. I have no clue. As I say I looked at it with the same eye as I look at the hundreds of them that I’ve gotten over the years. Where it says, for $2, I’ll do or $25… Because I don’t think that it takes much to realize that search marketing is one of those things that you get what you pay for in a lot of ways. Yes, you can also get taken to the cleaners by some but you get… It really is, and I think that a lot of people forget that it’s a reasonably intensive activity.
I’m always amazed at the misconceptions around what the work really looks like. The amount of time it takes to do it. I don’t know who they are paying to do that work but for $100 that doesn’t buy a lot of time or a lot of “clevers”.
Lorrie: It’s definitely that you get what you pay for and there is an art and a science to search engine marketing and I just don’t know that someone’s going to have the expertise or creativity to critically think about how to execute someone’s marketing campaign. When I teach courses, one of the big slights that comes up to my students is just because you are engaged in “marketing” doesn’t mean that you are engaged in good marketing.
If you are buying ads or Wal?Mart SEM services it doesn’t mean that it’s good.
Lee: What is good though?
Lorrie: Good a visibility pool for those of us in the Industry. It’s results. It’s all about results. I would love to see what kind of results some of these small business people are getting by paying the Walmarts of the world $100 a month. What are they getting?
Jeff: I think that a large percent of the small business owners and large business owners have already been taken in by these folks that are promising…They receive an email, they get a call and they see top listings then they pay a few hundred dollars or a few thousand dollars and they’ve already been burned.
They have said: ” I’m not going to do that again.” Here comes Wal?Mart though.
Lorrie: Wal?Mart has web design services. Don’t you think that they are just going to be hitting up the same people that they designed….It’s kind of like the “Go Daddy” template thing that Wal?Mart has. I think they are tapping the same people in that bucket and they’re just adding a new service to sell to them.
Lee: Yes, what’s going on is they’ve partnered with Leadconnect. That’s http://leadconnect.innuity.com, and see what they are up to. So it seems like it’s a good business deal so whoever at Leetconnect got together with some muckity mucks at Wal?Mart to brand their services with Wal?Mart and Sam’s club. At the end of the day I think that a lot of people that are going to get burn.
You have a lot of naive people that who, you know, need an online presence, want an online presence but don’t know how to execute upon it.
Amanda Watlington: I think that you are absolutely right Lee because I still talk to people that don’t understand why they have website businesses. They don’t understand why they have a website other than the fact that everyone else has one. There are still a fair number of those out there.
Lee: Right.
Lorrie: Back to my point. Oh, sorry. Go ahead Amanda.
Amanda Watlington: That’s the same crowd.
Lee: Right.
Amanda Watlington: And I’m glad to see it is there because ultimately it’s going to be better business for all of us. They will say, “Hey, I’m not real sure what I’m getting”, and the next thing you know they will be asking, “could we talk about this?” They will be asking people who actually do the work and can provide them a better…It may provide a lot of business for the company that owns the (I want to call it the Wal?Mart franchise, or whatever) but it’s a lot of low?dollar work.
Michael Perham: Listen, I want to jump in here if I can. I think that Wal?Mart has how many millions and millions of people shopping in their store over the world? And I think that they see that there is an opportunity here for them to invent or jump in the game here that other people are now controlling. And so I see this as a stepping?stone for them. If this is successful and they are able to get critical mass of small business customers that are selling things, or even just the consumers that are doing eBay, maybe they are part?time sellers on eBay and they want to do some search of the market or something I think that they see this as a stepping stone. I think that you are going to see them entering in this way.
I actually saw this about 18 months ago. I first thought about that. I said, “I think that Wal?Mart has an excellent social networking opportunity as a business and whether they get into it I don’t know, but I see this as a stepping stone.” If this is successful they could potentially leverage their relationships. I mean, this is no different than the other company that’s in a corp. business. They are corp. business and they decided to leverage their customer base to get into a new business channel.
Lorrie: How does it impact the business owner? Do you see stepping stone for the business owner that gets in and puts their trailers on with Wal?Mart and then eventually grows into a more robust search engine marketing solution? Or back to just plain as they did awhile back. Or are these folks going to get mediocre results and say, “I did SER, I’m never going to do it again”?
Michael: What is the penetration of small business market even using Search Engine Marketing? What are their expectations? Their expectations are they that they want to see if it is going to impact their business in a positive way. This is no different than a couple of years ago. Do you remember when you could buy these Search Engine Optimization keyword deals where for $100 they would get a listing in MSN or whatever? It’s no different than that. For $100 a month I don’t think the expectation for most small businesses is really that great.
Amanda: I beg to differ with you. I disagree with you totally on that. For so many small businesses, a $100 a month is their marketing budget.
Lee: Yes, yes.
Amanda: That’s why I disagree with you completely. I’ve talked to businesses where $100 a month is the marketing budget. Really small businesses and they expect results from that which I think will be interesting because they’ve heard such great things about it and its…
Jeff: Is that kind of company going to make that kind of investment, really?
Amanda: For their low?level packages of $50 a month or however many dollars, they will give it a whirl.
Jeff: Well, I think what we are talking about here now, and correct me if I’m wrong, is they are going up against people now who are spending a majority of their marketing dollars on yellow page ads.
Amanda: That’s true, right.
Jeff: What do you think they are going after? Or do you think they are going after wider, even larger clients?
Michael: I think they are testing the water. If this is successful, listen, if they are only getting a couple of hundred thousand, or fifty thousand or whatever…[end audio]
Michael: What do you think they are going after? Do you think they are going after wider, even larger clients?
Michael: I think they are testing the water. I f this is successful, listen. If they are only going to get a couple hundred thousand, or fifty thousand or whatever the number is, for the critical mass, they could set up a whole new business channel and offer a more in?depth, more detailed on a larger scale Search Engine Marketing opportunity. They have the relationships with those customers. That’s half the battle. If you out to any SCN company anywhere, half of their battle is they are doing a great job but they are trying to get customers. Wal?Mart already has relationships with these people. I could see them potentially buying a company. I’m not going to name names, but they could buy a company, an SCN company, and offer better services. They are testing the waters to see what’s going on because they see an opportunity to leverage the relationship that they currently have with customers that could eventually be interested.
It’s no different that a company that’s offering travel packages now or something. They are out sourcing that. It’s no different. And I do agree that a $100 a month for a lot of small business is a lot of money but I don’t know if we can necessarily say for sure that a $100 a month is not going to be successful. Understand something. They’re looking at whether or not something works for them from a profit standpoint, or not. They’re not necessarily analyzing the campaign the way most people that work for SCNs do. So is there is a need for customers out there that spend 10, 000 or more dollars a month on clicks than to have more of analytical perspective on where their dollars are spent? Of course, but the average guy out there with a $100 all he cares about is whether he made two new customers out of it.
Jeff: Chris, isn’t this your market though? You’re kind of marketing these same guys. This appears to be the contract made for you guys.
Chris: Yeah, the funny thing about it is the Sam’s Club offer isn’t new. Any small business aggregator, anybody that works with a group of small businesses that offers their core services is always looking for other things that they can tap into. What is just said was Sam’s Club is trying this, we’ll see what kind of response they get, if it equals enough revenue than we can look a little bit deeper into it.
It’s the same thing that American Express, Small Business Network, Discover Card. Through our merchant account we’ll get calls from somebody that’s working through Discover Card to sell us a web template system it’s exactly the same only this time they are saying “Everybody’s heard about showing up in Google. Let’s sell a service that will get them up on Google”.
The key difference here too is they are not talking… Yeah, a $100 a month?that’s going to be their starting point. Nobody’s going to go online if you click through the links or go to the Sam’s Club online services piece you cannot buy anything, you have to fill out a form and get contracted so that they can figure and try to up?sell you and try to get you to do things. At the end of the day, from a business owner’s standpoint, is $100 worth it for them? For some businesses for a $100 they need two clients. For others, 100 bucks is 100 bucks, that’s no big deal, “I’m even going to forget about this but now I feel good that I’m on Google.” And for others it’s going to be the stepping?stone that says, “Wow, the Internet can really do well!”
And then a more traditional search engine marketing company, big or small will be in a great position to be able to say, “We can do everything you need that Wal?Mart can’t offer now that you realize a search could be a smart way to go.” They just don’t have the infrastructure to do it because if you look at Innuity, who is the company who is doing it, and one of their releases about who they are, it’s a “software service company that design, acquire and integrate application to deliver solutions”. So obviously it’s all automated. It’s all rolling. It’s really just trying to figure out “Hey, how do we tap into this network?” For Sam’s Club it’s a great move to see if they can get 50, 000 or 100, 000 of their however many members to sign up. If it is a success for them than for us all it’s saying is more people have just heard about pay?per?click.
Amanda: I’ve got a question, since obviously you are much more familiar with this, what is the percentage ooh…I know Sam’s Club has long offered for example….
Chris: …that’s all its saying. More people have just heard about paper clip.
Amanda: …Now I’ve got a question since obviously you are much more familiar with this. I know Sam’s Club has long offered for example, Wal?Mart’s own ISP services. They’ve tried that twice. How is that done? Because I know people whom have Wal? Mart ISP and I thought that kind of bazaar initially? It came with a very quartered interface and a number of another of other things that sell it and I thought, “Oh, you get what you pay for!”
Chris: Well the thing that is so exact about what Michael was saying earlier in the fact that Wal?Mart is saying, “Hey, we’ve got tons of customers, let’s see what they buy.”
Amanda: So the expense. And why I asked the question was, in keeping with that…does anybody know (they’ve already given a world to doing ISP services) how successful that’s been? Does anybody on the call know?
Michael: I don’t know but I wouldn’t care whether I got my ISP from Wal?Mart or if I got it from Tin?Buck?Two as long as it worked and as long as the pricing was good. I don’t have a problem with that. And that’s why I think we’re missing the boat here…I worked in a small business. I worked for a start?up in 1988 called mycity.com and we were going after communities for small business. We saw that small businesses were going to be the future of the Internet. Finally either years later, nine years later, the local Internet thing is what everybody is buzzing about, how to make the local Internet work. No one has figured it out.
Wal?Mart has this great opportunity. They are in local markets. They have mom and pop businesses owners that shop at their stores, either as consumers or with their small business hat on buying bottles of water, or cokes or whatever for their store or whatever they are doing…
Woman 1: ..Toilet paper.
Michael: They are positioned perfectly to take advantage of the local advertising area, and I think that it is a brilliant move on their part. Listen, they have people approaching them with all different ideas to sell in private label or whatever and they chose this one. This is one of the ones that they chose. They did it for a reason. I think it is much bigger than just selling $100 a month ad packages.
Jeff: And Chris, I think you actually mentioned this. Is this a “loss leader” type of situation aimed at a larger…? Like you said, it’s a telemarketing thing. It’s email actually triggering telemarketing. You actually get to find out what the product is. It says, ” as low as $100 a month”, but is the product here something larger?
Chris: It can be with some of these. That’s what they don’t know. That’s what they are trying to figure out. The annuity is the one that seems to be… (with the technology with some of their applications) maybe they are saying, “Hey, we can offer this solution for small business, why don’t you just offer this and make it work?” Who do we work with? We work with the $100 a month to $500 a month clients. It helps open their eyes and figure out what’s best for them. But a lot of them are scared to death. All they know is it’s just like Wal?Mart ISP and going back to what you said? you know somebody that tried it and it didn’t really work out like they thought but at least it helped them realize there’s the Internet. Hopefully they signed up with somebody else who had a more reliable service. That first stepping stone was Sam’s club ISP or Wal?Mart ISP because: “oh, I’ll go to Wal?Mart, it’s cheap let’s try it.” It opens their eyes a little bit. Then for some people maybe they are still on the dial up. Sam’s club is trying stuff all the time. Wal?Mart’s trying stuff all the time, video downloads, movies, rentals. Now Netflix does it all.
They are going to try anything they can and for the online marketing piece?
I mean that $100 to $500 a month client can turn into a lot better client.
They can start spending $2000, $5000, $10, 000 but it just depends. A small business owner is a lot more in tune and I think this is what Lorie said in tune with: “what is my money doing? That $100 is coming out of my entire marketing budget.” But if they see that this made me $200 then the next month they will increase it and increase it as long as it makes sense.
And if they are a true local business, not an e?commerce business, not an online store, a true brick and mortar business that plans on staying there they don’t ship they don’t do anything, they just need more foot traffic, then a lot of them are going to see good results from this $100 to $200 a month package, if it’s executed properly and that’s the big question is. Is this going to be executed properly?
Amanda: We shall see that. We should all keep our minds open as well as our ears and eyes and see how it goes.
Jeff: Absolutely. I want to also touch this week on another story that is just kind of breaking with regard to the oldest advertisers and marketers in the country, Sears is under serious fire from a guy named Ben Edelman, who we all certainly know and if you don’t know of Ben just Google him as they say.
Michael: Is he still in law school?
Amanda: No, he’s in business school. He’s at the business school.
Michael: But he was in law school, wasn’t he?
Michael: Oh, he’s at the business school now.
Michael: I always wonder about these academics, what do they know about the real world? But go ahead.
Jeff: Well, he’s heavy duty into the research. He’s one of those academics that has cut his teeth on the research end of things. He is exposing, earlier this week, a partnership with comScore that essentially installs comScore software on users’ machines without any disclosure to a lot of the users He’s got it documented with videos and screen grabs and those kinds of stuff.
Today he just discovered, actually I think that this was overnight, that Sears was allowing anyone with a browser to look up purchase history of anyone on the planet. You can go to the Washington Post, they are breaking the story.
You can go to www.BenEdelman.org but essentially what you are able to do, with regard to this purchase history which sounds a lot like Facebook’s recent problem, is you are able to actually just put a name, address and phone number of anybody, your neighbor, what have you, and you can pull up a complete history of their purchases at Sears.
Amanda: Creepy.
Jeff: And Ben shows you how to do it. I guess that’s not the definition of an Open Brand If you haven’t read that book, check it out. Open Brands, that’s an interesting new book. Reactions to these wierd privacy and security breaches that are going on at Sears. What’s going on?
Lorrie: And to that I’m going to say: “Great Idea, poor execution.” The concept is like, oh yes, great visibility, great marketing ammo but like…oops. Could you have thought the whole process through before you executed?
Amanda: The word executed comes to mind in it’s other uses. I look at it and it’s clumsy at best. It really instills my excitement about shopping or doing business with somebody who is doing that. We continue to see this kind of thing over and over again. There’s got to b…At some point the consumers’s going to step back and say: “wait a minutes”. I saw something recently that here is the US, and I might to look it up before the call started. about how our privacy is less respect here in the US than almost anywhere else in the world And that our whole..
There’s a whole lot of concern over it that I keep seeing, it’s one of by big core issues that you are seeing more and more of these invasions of our privacy.
Lee: Isn’t it because, I would argue that the United States and your fellow Americans are the most privacy oriented people on the planet. You have the UK, you walk around downtown London and you are recorded every step you make.
Amanda: You are not here? Try on!
Lee: Yes?
Amanda: I guess you missed all the good stuff about Google Real Time.
Lee: Yes, sure, absolutely online you are tracked everywhere and that’s true.
Jeff: But let’s look at this from a capitalist’s perspective. We are the raging capitalists on the planet and we’re also willing to sacrifice everything in terms of privacy. We’re willing to sacrafice more, I should say, in terms of our privacy to be such raging capitalists. When it comes in particular to advertising.
Lee: To get a better deal. It’s always about getting the better deal?
Jeff: Well, that’s the promise. You’re going to have more targeted advertising, you’re going to get a better deal. I don’t know what the promise of whole, the second, part two, I’m going to set aside the whole spyware thing as just being kind o..everybody is getting their hand caught in the spy ware cookie jar. comScore, I don’t know, the value proposition to the consumer is faster Internet connection apparently?
In return for complete snooping on every place that you visit, everything that you type into your browser. Anything that you submit, charge card information. Literally everything that you do on the web is tracked and reported. Setting all of this aside, what is the benefit to allowing people t…. I guess Sears thought that everybody was going to look up their own purchase history and not look up the purchase history of neighbors?
By the way, Sears was alerted to this before Ben went live with it. They sent back a personal email he had said to me, that was essentially to the effect of: “thank you for doing that research, we’ll check it out.” And we’ll get back to you if there’s anything to worry about? Just seems a little…
Amanda: Cavalier.
Lorrie: Something that the audience is just really stupid is what I’m feeling.
Lee: Yes, well, when is the last time that you read someone privacy policy when you stepped onto somebody’s website?
Amanda: I do. I read them every day.
Lee: Every day?
Lorrie: I do. Well, I write them every other day. No, great point Lee. Yes, we’re not one to go and review someone’s privacy policy but if you are going through the purchase, there’s a lot of fine print. We’re a time crunched nation and we’re hurriedly buying that HDTV as we can because we got the wild hair to buy the thing and blah, blah, blah, but the risk involved just seemed far too great and, you know, I know there’s a lot of ask for forgiveness later when it comes to marketing, but in this case it just seems so severe, and you know there are certainly a lot of exposure components on the web but in this case it really makes a lot of people’s purchase vulnerable and it’s a brand issue. I mean this is really devastating for their brand and that was something that….
Jeff: Yeah.
Lorrie: …is now unfortunately being addressed now where it could have been thought of earlier. But…
Chris: Yeah. It’s not a small e?commerce company. It’s not some little site that did this, and it’s like “Oh, I can’t…”. It’s Sears.
[laughter]
Lorrie: huh.
Lee: Right.
Jeff: Yeah, I’ll read a short quote from Esther Dyson who says recently, “I was sure that people would rise to the challenge of protecting their on?line…their own on?line privacy and security much more effectively than they have done so far. That is, I’m surprised that people’s carelessness with their own personal information, their ineffective use of passwords and their general lack of concern for security, even though they say that the care about these issues intensely. It’s a weird combination of paranoia and obliviousness…”
Amanda: Yeah. It… They want someone else to do it for them, sort of the way we do consumer protection. One… And if you bought a toaster in the last ten years, the first thing you were tempted to do is buy a longer cord for it, because they all come with these little bitty short stupid cords. But because they don’t want us to burn ourselves in some peculiar way, because of…. or have the child pull it off the counter. Well, you know, what can we protect of ourselves. We have to… You kind of have to be somewhat your own keeper, I would hope.
Michael: Yeah, this reminds me of the guy who gained 300 pounds eating at McDonalds and he blames everyone else for eating the hamburgers.
[laughter]
Amanda: Yeah. It’s a little bit that, but you know what’s concerned me about it was that it looks as though from the write?up… I didn’t go look from my own purchase history at Sears. How scary. I have some Sears appliances.
To discover that…
Jeff: I know, Amanda, I know.
Amanda: Oh, of course, yeah.
Amanda: Or how long ago I bought them. Oh yeah.
Jeff: Right. And what you paid. Yeah.
Amanda: …is that that’s not just ones that were made on?line, was my sense, because some of those appliances were bought ten years or more ago…
Jeff: Right.
Amanda: …as one of the writers in the blog post made a comment that they bought their… They could now know how old the hot water heater is in the house. That’s a bit…a lot of data out there.
Jeff: I guess let’s learn from what…from our discussion and focus on what you think about what marketers should take away from… You know, small business marketers should take away from this whole Sears thing.
Chris: Change that one mighty password that’s for everything. That’s what I’m going to go do right now.
[laughter]
Amanda: To another one.
[laughter]
Chris: That’s what I’m going to do. Change them all over to the new mighty one.
Lee: You know what I would argue, is I would say mark….that we should be considerate marketers. Think of our users and the end in back. You know, don’t look to the end of the gun barrel and say “Oh that’s pretty, what does it do?” and then pull the trigger while looking at the end.
Lee: Yeah, I heard someone, Lee, actually use the term “honest persuasion”.
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Lee: Yes.
Jeff: Sorry, Mr. Finken, you can’t own that one. I went out and I actually purchased honestpersuasion.com. And someday I hope to actually do something with it. But I think that’s an interesting term, Lee, to your point is that if we can kind of get back to the whole honest persuasion thing. That’s really what marketing is all about is a little more honest….should be about a more honest persuasion.
Lee: Right.
Amanda: Less sophistry.
Jeff: Well, thank you all for your time and wisdom, and I hope that we may all connect again next week.
Amanda: Okey, doke. Take care.
Jeff: Hey, thanks guys and gals. Have a great weekend and we’ll talk to you again next week.
[crosstalk]
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