Google’s test of the their new Home Service Ads generated a fair bit of conversation yesterday on Twitter. The ads started appearing more widely throughout the day allowing folks to dig in and get a better look.
Locksmith & Licensing – The test is focusing on plumbers and locksmiths. Locksmiths are an interesting choice. The locksmith industry has long been a hotbed of spam and deceit. With the ascendancy of Google local search most of that deceit moved online to Google in the form of local and adwords. Google did little to really stop it and imposed barriers that made it hard for legit locksmiths but didn’t seem to slow down the bad guys. And Google was profiting from this deceit via Adwords.
The solution for this new home service product is that Google is requiring licensing AND background checks and not just for the business but “you and each of your Team must comply with the “Minimum Provider Requirements,” as described in the HSA Platform Policies at www.google.com/adwords/express/hsa/policies.html”.
That certainly seems preferable to the mosh pit that has been locksmiths at Google. Certainly begs the question: why hasn’t that been done before?
Third Party Verification– Google is using a third party to make sure that participants are compliant with the requirements. “Determination of compliance with Minimum Provider Requirements is made solely by third parties, and not by Google, and any issues you may have with third-party adjudication of Minimum Provider Requirements must be directed to the relevant third-party adjudicator. You must provide honest, complete, and accurate information in connection with the HSA platform, including to third parties. All third-party verification processes are conducted solely to confirm compliance with the Minimum Provider Requirements, and are not used for any other purpose.”.
This will impose a fair bit of additional burden on small businesses. It will be interesting to see how that goes.
Customer Satisfaction– Amazon has a long history of understanding and dealing with customer issues. They do so directly and quickly removing a huge pain point in any transaction done via Amazon. Google on the other hand seems to want to push that issue off on the business and rely on crowd sourcing quality information and reviews to keep things on an even keel.
“A customer’s satisfaction with your Services is solely your responsibility. Google may provide assistance to customers who are dissatisfied with their experience on the HSA platform, however ultimately it is up to you to resolve any disputes between you and your customers. You agree that you, and not Google, are responsible for all claims made by a customer or other person or entity against you or your Team in connection with your use of the HSA platform and your provision of Services.”
Google has never been good at high touch interactions. This seems to be no exception. It seems a competitive disadvantage vis a vis Amazon.
Reviews and Quality Control– The review system is independent of their local review system and seems to only be available to users who have actually used the services. Google will obviously be tracking tons of other metrics that they will be making available to consumers: “for example, how often and how soon you respond to customer messages, the number of repeat customers you have, the average duration of your Service, number of Services performed, and feedback ratings and reviews (both positive and negative) on your performance). This information may also be made available on third-party websites”.
This is a big change on the review front…verified reviews. And might portend the future of reviews…
Pricing of the Ad– Obviously the success of this “ad format” is the ROI. It isn’t at all clear to me whether its a fixed rate, a % of the job, lead based or some other pricing model. Google says: “You may be charged a fee to Use the HSA platform.” Are they paying during the trial?
Google is giving up 3 of the highest paying ad spaces for the product. This product might only work in fields where the average job is high enough to warrant a bid rate equal to or greater than those 3 ads.
Payments– It isn’t clear exactly how payments are going to work but it appears that the whole transaction might run through Google. “Google may make available to you various payment processing methods to facilitate the collection of fees for Services provided via the HSA platform.”
Google has long dominated local search but it isn’t clear exactly how profitable that has been given the high costs associated with Mapping and local listing management (probably on the order of several billions of dollars a year). For the first time in years there are at least the glimmers of existential threats to Google in the local space. Apple has carved away some not insignificant number of maps and search users and Amazon seems intent on going after the home services space.
Google is obviously answering Amazon very directly. The details are not totally clear but it appears that Google is not going to let Amazon have the space to themselves.
From the small business perspective, these moves foreshadow a near future where you are no longer a truly independent business. That you have effectively become partners with some very large players whether you want to or not.
Some additional screen shots:Google's Home Service Ads - Questions and Observations by Mike Blumenthal