Merchant Circle has made a fine art out of leveraging the very long tail of local search by returning results in the main Google SERPs on virtually every U.S. business’ trade name. They have carefully optimized their pages and link structure so as to be frequently highlighted in Google on “business name + locale” type searches. They are so good at getting these pages indexed and ranked that it can be used as a tactic to help a new business that needs exposure show up quickly in Google’s index.
They have, over the years, developed a number of models to profit from this form of search arbitrage, some less savory than others, some not very savory at all.
Their newest “tactic” seems to fall into the less savory category. Merchant Circle has apparently replaced the primary display number for many of the hotels in their US business listing index with an #800 for HotelsByCity.net. HotelsbyCity.net is a affliate model hotel booking site that is a member of Priceline’s Partner Network. Rob Mauer, Partner Relations Manager at Priceline, confirmed that this relationship was initiated by MC (that was just before he ended our phone conversation, go figure).
One presumes that Merchant Circle is getting their share of the 20-30% of the hotel reservation that HotelsbyCity.net receives. It is not exactly clear, exactly on how many hotels MC has added this number, but it appears to be most of them, and that is a very large number. Google unfortunately, stops displaying results at a thousand but shows a total of 84,900 for a search on this particular phone number.
It is not clear, if once a listing is claimed, the number is still replaced. It is does appear that the Hotel category is the main recipient of this affiliate “strategy”. I did not see it in the floral industry but it could very well be on listings in other industries.
Do you think that MC has the right, legal, ethical or otherwise, to replace a business’s phone number in their business directory with a number that provides them with a commission on every booking at the expense of the hotel?
Regardless, if you are hotel or represent a hotel, I would suggest that you head right over to Merchant Circle and claim your record.
To your question ….Do you think that MC has the right, legal, ethical or otherwise, to replace a business’s phone number in their business directory with a number that provides them with a commission on every booking at the expense of the hotel? Absolutely not! Should this be allowed….absolutely not! Can we stop it….probably not. Most likely one of the big OG’s in the floral industry will surely be hit by something similar.
…. It is not clear, if once a listing is claimed, the number is still replaced. It is does appear that the Hotel category is the main recipient of this affiliate “strategy”. I did not see it in the floral industry but it could very well be on listings in other industries.
Comment by Teresa (3 comments) — October 27, 2009 @ 9:42 am
If this is going to be allowed the floral industry will surely be hit by something similar.
Comment by Teresa (3 comments) — October 27, 2009 @ 9:43 am
I’m going to play devil’s advocate on this one and disagree with you Teresa. It is their website and their business and every business is out there to make money in one way, shape or form. Merchant Circle is not a government organization, nor due they have any responsibility to show the information. This is their chosen business model though, so it does reduce their credibility when they do something like this – I am not disagreeing there. From a consumer standpoint though, is this as bad as you’re making it out to be? Consumer wants a hotel, they call, they book. The hotel is still getting paid and the amount is at least better than the name your own price option that the regular Priceline site has.
I’m surprised that MC would do this, but at the end of the day, it’s a smart way to make money and leverage the traffic that they are getting to businesses that have not taken the time to do their own work.
Comment by Taylor Cimala (13 comments) — October 27, 2009 @ 10:01 am
It is one thing for a business or industry to openly acknowledge and approve affiliate efforts. In this way, the hotel industry by example, openly acknowledges the spread of its information through a wide range of access points.
The point is that the business or industry acknowledges and approves access to its information.
Its another thing when a business such as Merchant Circle then takes that information, and essentially absconds with an enormous volume of access through tricky methods.
As a business person I would never approve that.
If I were the hotel industry I would clamp down on this practice. Business is bad enough. The last thing I need is for some business that is skimming my revenues by absconding with my contact information.
Meanwhile its easy money for Merchant Circle.
Comment by earlpearl (383 comments) — October 27, 2009 @ 11:23 am
And so to are the local flower shops across the country, this most certainly will be yet another blow. In the floral industry we call this Order Gathering (OG). OG has been allowed to practice this deception for years and they are at large in the industry. The order gatherer (after skimming off as much as 30 to 40%) will take the order and then pass it to the local florist who will then design and deliver at little to no profit.
Comment by Teresa (3 comments) — October 27, 2009 @ 11:48 am
Some big questions;
If every hotel listing is using the “same” 800 number, then how does the individual hotel, the web visitor thought they were calling, get differentiated by the affiliate handling and routing calls? If the affiliate is taking a call from someone looking to book a stay in whatever city and that affiliate then directs them to whichever hotel/motel is currently paying them the highest commission, instead of the hotel the person thought they might be calling, then there may be something illegal there.
With 80 some thousand hotel listings affected by this, what are the odds some of them may NOT already be in any kind of affiliate partnership through Priceline? If so, and those phone calls get sent instead to another hotel, then that is a class action lawsuit waiting to happen. However, Priceline may well have sent a master list of hotels they do cover and the numbers only show for those??
Comment by Stever (135 comments) — October 27, 2009 @ 11:56 am
Taylor: I’m fine with MC trying to make money off of their site and while it could be argued this is similar to what OTAs are doing by trying to monetize organic listings for hotel properties, there is one key difference: MC is not being transparent in letting people know they are not calling the hotel directly. Everything about the site and page makes it seem like a legitimate business listing and consumers are going to assume that is the actual property they are calling. This is completely misleading and, in my opinion, a very unsavory tactic.
Comment by Adam (8 comments) — October 27, 2009 @ 12:27 pm
At a societal level, I am doubtful that allowing free reign to use business names and addresses as other than protected material is in our best interest. That being said, that is the way that it is currently.
I would however agree with Adam that the totally decepetive lack of transparency on the part of MC is appalling. It misleads the end user into thinking that they are either dealing with the hotel or with MC, when in fact they are doing neither.
The other potential problem is if Google were to scrape this information and it were to cause multiple listings to appear at Google, thus diluting your record there.
Regardless, it is a fairly low life way of interjecting oneself into the sales process and is quite parasitic. They don’t really add any value to the chain.
Comment by Mike (1029 comments) — October 27, 2009 @ 1:00 pm
Mike:
The feature you are highlighting is the PPA platform we announced back in August (http://bit.ly/2PPd8M) with multiple partners. All businesses featured on the PPA platform have direct relationships with their advertising partners and we help generate targeted local leads.
Important to note:
1) Our advertising partners are focused to finding quality, targeted sources of leads for their advertisers.
2) Businesses who are part of the PPA program are more prominently featured on the MerchantCircle network — especially on our targeted city and category directory pages — which drives incremental phone calls to their businesses. We are compensated for generating incremental leads for local businesses.
3) Merchants who are part of the PPA platform are welcome to join the MerchantCircle network directly, if they so choose. When they do so, any call tracking information comes off the merchant listing and reverts back to the local number.
4) In most cases our partners are providing incremental content (e.g., pictures, business descriptions, etc) that we add to the unclaimed listing pages. This provides for a better user experience on MerchantCircle.
MerchantCircle is, and always has been, dedicated to helping local businesses grow whether they are part of our network or come a via partner relationships.
-Darren
Comment by Darren W. (2 comments) — October 27, 2009 @ 3:12 pm
@Darren
Hate to be dense but I do not see how sending a hotel’s potential client to an affiliate order gatherer is “helping local businesses grow”.
Please explain who the partner is that is benefiting from this affiliate relationship.
Mike
Comment by Mike (1029 comments) — October 27, 2009 @ 3:33 pm
Well, it’s very clever of MC to find this way to earn money…but it:
1) Doesn’t improve my opinion of their business ethics
2) Doesn’t help the user who is being given a generic number instead of the number of the hotel they’d like to contact
3) Certainly doesn’t appear to help local businesses
Mike, your screenshot of the SERPs with the repeated phone number says it all. Quality is totally lacking (as is diversity).
I will be interested to read Darren’s response to your astute question.
Comment by MiriamEllis (362 comments) — October 27, 2009 @ 4:28 pm
Darren:
I own/operate businesses. If I own the business…send the lead to me. That is how I grow.
If the leads go to you and then to me w/ you taking a percentage I shrink.
I don’t get it. You are taking a piece of a pie that is focused on my information. I didn’t okay that.
Please explain further. Please use simple language.
Comment by earlpearl (383 comments) — October 27, 2009 @ 6:35 pm
So what Darren is saying in his points 3 and 4 above is that the hotels who’ve had their primary phone numbers changed are not Merchant Circle members and … you can see this coming a mile away … when they join Merchant Circle they can get rid of the call tracking phone number and have their REAL phone number back where it belongs.
It’s all about inflating those member numbers, isn’t it, Darren?
Comment by Matt McGee (26 comments) — October 28, 2009 @ 12:40 am
Matt
Kudos to you for parsing 2 & 3 correctly….sort of the “beat me because it feels so good when you stop” methodology of gaining signups.
I was still somewhat confused (if you can’t dazzle em with brilliance baffle them with …) by point 1 and to a lesser extent 4.
1) Our advertising partners are focused to finding quality, targeted sources of leads for their advertisers.
What exactly does that mean as it relates to the affiliate numbers applied to all of those hotels? Who are the partners and how did they play in this?
Comment by Mike (1029 comments) — October 28, 2009 @ 5:50 am
Wow – Darren your silence is most certainly deafening.
Perhaps I’ve got the wrong end of the stick & please correct me if I’m wrong here, but after reading the press release about the PPA ( Pay Per Action) I’m getting a bit of a different view on items 2 & 3. Those on PPA are given the tracking tags to track leads. If you choose, as a merchant to join their club, at a cost I don’t doubt, the tag goes off and your number comes back on.
As for #1 – I’m not sure which adverstising partners WOULDN’T want quality leads. Rather a redunant and assinine comment. But okay. Sounds good at 10,000 ft.
#4 – is a bit of a hue??? Unclaimed pages? Unclaimed pages of listings? Unclaimed pages of listings from where, who, how and why. Hue?
But you know what they say, bull$h!t baffles brains.
I can’t tell you how many times MC has screwed up my listings with incorrect phone numbers. But if they are abitrarily adding their own tracking numbers to it for revenue generation, it would explain A LOT.
The online directory business is such a grey area – the regulations are so lax it’s up to the Search Engine to police, monitor and apprehend the culprits. All suspects are innocent until proven guilty in a court of law. Really? Not in these cases perhaps as there is no law really to govern them. Just perhaps a moral and ethical compass, which in this case seems to be pointing due south.
Oh don’t take it personally Darren. You’re an employee @ MC- suck it up – we’re bound to take shots at you. It’s what we do here. Get your big boy briefs on and come back into the sparring ring.
Comment by Joan van Hilten (100 comments) — October 28, 2009 @ 9:02 am
Mike, here’s how I read Darren’s comment. I’ll follow along with each of his bullet points.
1) The “advertising partners” he mentions are, in this case, HotelsbyCity.net. Not the hotels.
2) The “businesses” he refers to are, again, HotelsbyCity.net and others who’ve signed up for the PPA program. The hotels have not signed up for this program. Note the mention of “driving incremental phone calls to their businesses” — this drives calls to HotelsbyCity, not to the hotels.
3) Note that this refers to the “PPA platform”, not the “PPA program” as mentioned in item 2. There must be a difference. HotelsbyCity is part of the program, but these hotels are the “merchants” who — by virtue of being in the Priceline Network, I presume — get included in the platform. They can have the phone number changed back … if they join Merchant Circle.
4) The “partners” here is HotelsbyCity, not the hotels.
That’s how I unpack everything.
Comment by Matt McGee (26 comments) — October 28, 2009 @ 1:21 pm
@Matt
Your language is much clearer than Darren’s. Thanks. Reminds me of reading a patent.
I had to put yours and his side by side to fully understand it. So it appears that HotelsByCity is paying for the lead not the close? So a floral order gatherer could join their PPA platform, buy all the leads from them.
That would explain why there is only 1 800#. They get paid per call not per close.
Comment by Mike (1029 comments) — October 28, 2009 @ 1:53 pm
Mike, have you sent this piece to the East Bay Express? This strikes me as more sneaky than anything Yelp may or may not have done last Spring, given Matt’s conclusion that you have to be an MC member to get direct leads?
Comment by David Mihm (96 comments) — October 29, 2009 @ 5:23 pm
Completely untrue, David. Merchants only get into the ppa program via a pre-existing relationship with an advertising partner or an affiliate platform.
Comment by Darren W (2 comments) — October 29, 2009 @ 7:25 pm
Darren,
As far as I can tell, your “advertising partners” are cannibalizing what would otherwise be direct leads for the merchants…
Comment by David Mihm (96 comments) — October 29, 2009 @ 7:26 pm
You are incorrect. We are more prominently featuring PPA businesses on city and category pages to drive incremental pageviews and calls/leads versus what an unclaimed MerchantCircle listing otherwise receives. We are delivering incremental leads to merchants who want to pay for incremental leads.
Comment by Darren W. (2 comments) — October 29, 2009 @ 7:46 pm
Darren,
Forgive my confusion but I don’t see how that’s possible in the specific instance that Mike highlighted–the Country Inn & Suites in Olean NY. I have never been to Olean but Mike describes it as a pretty small town. I can’t imagine they are getting “incremental” page views since there can’t be more than 10 hotels in that town. In fact the top two results in Travel and Lodging aren’t even hotels.
Strangely, on the search results page for Olean travel and lodging you list the hotel’s actual number. You also list it in the URL. So it’s clear that you HAVE the number in your index.
So when someone clicks through the search page to the actual result to learn more about the business, why does the number change to the 866- hotelsbycity number? How is that an “incremental” page view for that business owner?
Amusingly, both the Best Western and the Hampton Inn appear as recommended businesses with the exact same phone number on the exact same page! How does HotelsByCity know which hotel the consumer is even calling about from that page alone?
Comment by David Mihm (96 comments) — October 29, 2009 @ 8:09 pm
I appreciate Darren coming here and attempting to answer the very important questions being asked about Merchant Circle’s present policy. I’m afraid, Darren, that you have yet to explain this policy in a way that has convinced this audience that it’s a good one.
As Local SEOs, our job is to shed light on the local sphere for local business owners. Policies like this make Local confusing and unfriendly for our current and future clients, and rather than this scenario ending with us promoting MC to our clients as a truly local-business-focused entity, we find ourselves having to warn them about the way your company has done business in the past and is doing business right now – a way that seems more strongly motivated by consideration of profits than civic enrichment. Yelp has also caused all of us to speak words of warning to our clients.
I would like to see Merchant Circle develop new policies that put business owners and users first. I think you would find that praise here would follow.
Comment by MiriamEllis (362 comments) — October 30, 2009 @ 5:55 pm
@Miriam
It seems to me that you can’t really criticize MC pursuits of profit in lieu of civic behavior. Self interest in chasing profits is the underlying organizational principal of capitalism. MC is no different than every other company in that regard. If they didn’t pursue profit their stock holders and investors would abandon them faster than you can say lickity-split. You can not hold MC to a different standard in that regard.
That being said, you most certainly can criticize them. Pursuit of profit without regard to the truth, is wildly inappropriate.
They are essentially marketing themselves as a business service that is “dedicated to helping local businesses grow”. They have put in place with their “platform” something that is the exact opposite of that stated “mission”.
Also, this technique of swapping out phone numbers for their benefit, is nontransparent and deceptive to both the end user and their stated client, the “local business”.
My take is that MC can be as greedy and self interested as they wish, they should just do so with transparency and honesty. Or even transparency and silence. At least then small business and end users could then make an informed decision about whether to do business with them or not.
MC on the other hand has always proclaimed their many virtues and benefits with little or no regard for those they profess to help.
As it is, you have to cut through multiple layers of technical and marketing obfuscation before one can get to the facts. That is criticizable and if I were an investor, I would look askance at any investment of mine that was predicated on this premise.
It is a weak business plan indeed that relies on such a tenuous foundation to build a business.
Comment by Mike Blumenthal (737 comments) — October 31, 2009 @ 7:58 am
“Self interest in chasing profits is the underlying organizational principal of capitalism.”
Mike, at the risk of distracting the debate over this specific instance of Merchant Circle’s deceptive practice, your quote has certainly been true in our society up until the last 10-15 years. But I do think there are new business philosophies emerging which attempt to contribute something that truly will benefit society while making a profit at the same time. I do not think the two are necessarily in diametric opposition.
Comment by David Mihm (96 comments) — October 31, 2009 @ 9:42 am
@David
capitalism |?kap?tl?iz?m|
noun
an economic and political system in which a country’s trade and industry are controlled by private owners for profit, rather than by the state.
I would agree that there are businesses that make a profit while producing things that help society, that is true. And it is true that some businesses run (although not very long) without regard for profit. Both are examples of capitalism.
There are those businesses that run on little profit and or return some of their profit to the community. But typically these are not large scale stock holder companies that define how society functions. They may define a yet, undefined future that is not capitalism.
But capitalism, is by definition, the accumulation of capital via profit. The general guideline I noted above and the accumulate or be accumulated rules are very much in affect now and for the foreseeable future.
It is naive to think that investors in general (not specific or individual investors) will invest for reasons other than return. And if they find higher returns or perceive that they may find higher returns elsewhere their capital will flow in that direction.
Capitalism has always produced companies that generate profit by technologic innovation (Singer Sewing Machine), by serving a public need (Johnson & Johnson) and by exploiting people and technology (The Robber Barons).
In my book, MC is definitely in the last category, their verbal trickery not withstanding.
Comment by Mike (1029 comments) — October 31, 2009 @ 10:08 am
Mike,
No, I have no problem with MC making a profit. They should be doing that…but my point is that Local = Civic Enrichment, in a rather unique way and that their self-proclaimed goal of helping local businesses is belied by the advertising practice which is being criticized here. Whether you have heart in local, to me, is based on genuine intent towards business owners and users. Go ahead and make all the money you want doing this, and if you improve life for these 2 groups, I’m all for you. But if your hunger for profit is what is obviously driving your policies, with disregard for the welfare of these 2 groups, then you may as well sell oil and not try to put a neighborly face on it. That’s the part that I don’t like.
Make sense?
Comment by MiriamEllis (362 comments) — October 31, 2009 @ 4:29 pm
I have been a new starter in Affiliate Program. I don’t think that MC has the right, legal, ethical or otherwise, to replace a business’s phone number in their business directory with a number that provides them with a commission on every booking at the expense of the hotel. It’s too much business and it violates the right of privacy.
Comment by Angela Paul (1 comments) — November 2, 2009 @ 6:15 pm
[...] Merchant Circle: How are they profiting from your business name this week? – Mike Blumenthal [...]
Pingback by Search geek weekly news update; Google social search leads the way | Search Engine Journal — November 3, 2009 @ 11:36 am
[...] there any difference between what Ms. Drinkwater did in New Zealand and what Merchant Circle is doing with hotel listings? I think [...]
Pingback by NZ Florist Facing 7 Years for Hijacking Local Listings of Competitors in GMaps | Understanding Google Maps & Local Search — December 11, 2009 @ 12:04 pm
Couple of months ago, City Search changed all my listings’ local phone #s to other local #s owned by them. no one ask us if it’s OK to do so.. After a conversation of yelling at each other- they agreed to change it back to my original phone #s.
the nerve this guys have!!..
Comment by PureSheer (63 comments) — December 13, 2009 @ 7:21 am
@PureSheer
What was their rationale? Were they providing “call tracking” without your permission?
Comment by Mike (1029 comments) — December 13, 2009 @ 11:08 am
@Mike,
they just did so…
they said it’s serving my purposes by them to send me a calls tracking report. We said to them- “call tracking?… what about a basic understandment of local SEO
Comment by PureSheer (63 comments) — December 13, 2009 @ 5:39 pm
It lacks transparency and because of that it will have huge back lash from Merchants. Merchants are consumers too and they become very vocal about this. Anytime something lacks transparency it will rarely ever last.
Comment by Matthew Hunt (9 comments) — January 3, 2010 @ 5:44 pm
Despite the notion that you must “claim” your listing on Merchantcircle, the original data that they bought or imported originated ultimately with the business owner – whether through the phone company, InfoUSA, or other data center.
If challenged, I think a court would find their practice to be illegal as representing yourself as any other type of entity and intentionally manipulating the representation is the definition of fraud.
MC should simply ad advertisements or create a hotel landing page if they want to leverage their traffic.
Comment by Paul Dumas (1 comments) — January 4, 2010 @ 1:40 am