Google Offers 2 – The Local Vantage Point

Not being well versed in the deals arena I wanted to better understand Google’s baby steps with their Offers product. I turned to a number of respected folks, that have more experience in the field than I to get their sense of Google’s progress in their newest local effort. Here is the discussion thread from earlier in the week where Greg Sterling, Jim Moran, Sebastien Provencher, David Mihm, Sol Orwell, Rocky Argawal and Andrew Shotland gave their impressions of Google’s efforts to date based on these sales numbers in Portland.

Google Offer’s Beta in Portland started on June 1 and there have been 12 deals through the first two weeks of June. Google seems to be serious in their committment to the market. They are putting feet on the ground in Portland and elsewhere, including NYC. They have started hiring sales staff for a direct sales team for Offers and other local endeavors. But it would seem that getting from here to there (wherever there is) is no small task.

Here is a summary of the deals to date and projected dollar amount generated for Google for the past 2 weeks:
 


 

Date Co./URL Deal % off Purchase

Window

 Avail. Sold % Sold Total Dollar Value Google’s Proj. Take @50%
6/1 Floyd’s Coffee $3 for $10 work of food 70% 15 hrs 2000 1709 85% $5127 $2563
6/2 Uptown Billiards $10 for $200 worth of Pool 50% 15 hrs 500 95 19% $950 $475
6/3 Karam Lebansese $8 for $16 of Lebanese Food 50% 15 hrs 500 500 100% $4000 $2000
6/4 Celebrity Tan $10 for $39 Spray Tan 74% 39 hrs NA 157 NA $1570 $785
6/6 Portland Pedicab $45 for a $90 3 brewery pub tour 50% 23 hrs 700 26 4% $1170 $585
6/7 Le Bistro Montage $4 for $10 of Cajun-style Brunch 60% 23 hrs 2000 706 39% $2824 $1412
6/8 Mt. Tabor Dental $59 for a $421 dental package 85% 23 hrs 300 51 17% $3009 $1504
6/9 Malu Day Spa $30 for a $75 spa package 60% 23 hrs 600 39 7% $1170 $585
6/10 Mississippi Studios & Bar Bar $7 for $20 towards food, drinks or an advance show ticket 65% 23 hrs 5000 1189 24% $8323 $4161
6/11 Fulcrum Fitness $45 for one month of unlimited boot camp sessions f($254 value) 82% 47 hrs 500 83 17% $3735 $1867
6/13 Ground Kontrol Classic Arcade $1 for admission to Free Play Night (a $5 value) plus a $5 food and drinks credit 90% 23 Hrs 750 750 100% $750 $375
6/14 il Piatto $15 for $30 worth of locally inspired Italian food and drinks (deal ends at 3 PM) 50% 33 Hrs 1500 504 50% $7650 $10175

3780
Totals 11350 5821 51% $40278 $20139 at 50%

$14097 at 35%
Avg 946 485 $3356 $1678

Is this first two weeks a success? Is it an abject failure? Does it just point out how far Google has to go before they are successful? Here’s what Greg Sterling, Jim Moran, Sebastien Provencher, David Mihm, Sol Orwell, Rocky Argawal and Andrew Shotland had to say:

Greg Sterling: My quick take is that most of these deals underperformed re the % sold. Maybe Jim has a sense of how these deals are performing relative to other competitive vendors.

It’s difficult to evaluate whether they were successful for the businesses themselves without talking to those involved.

It was probably a big failure for Portland Pedicab. But Malu day spa and Uptown Billiards might have seen some success if these are new customers who a) spent more than the face value of the deal or b) will return.

The Lebanese restaurant is the only one to completely sell out (note: the discussion occurred prior to 6/13). My guess is that a chunk of the buyers were existing customers who liked the place. But that’s speculation of course.

James Moran: – I don’t think Google is taking 50%. I’m not sure where, but I think I heard 35%. Could be wrong.
– Per Greg, one apples to apples comparison:

LivingSocial ran with Uptown Billiards Feb 2011 and sold $3,274 in Gross Revenue vs Google’s $950 [for the exact same business in Portland] IE LivingSocial sold 3.5X as much as Google Offers with the same vendor

– One big UI point of feedback is, many deal sites display a cap to the consumer to provide a sense of scarcity. However, I would disagree with Google’s implementation of showing caps in the high hundreds or thousands of deals.

Sebastien Provencherr: My two-cents: Except for a couple of merchants, sales results seem extremely low. I read somewhere that Google is taking a very small share of the total revenue, can’t find the source but I tweeted it a few weeks ago. Maybe 25%? Maybe less?

David Mihm: Initial reaction: why is Google even bothering to get into this space? Did someone say “Oh, daily deals are hot in SV right now & if we don’t get in our share price will suffer?”

It looks like their average cut is $1410. That seems shockingly low. Think of how much touch-and-feel they need to exhort the business owner to run a deal, coordinate the ad copy, etc. For a one-time shot.

Why not do a better job of marketing Boost to 14 businesses a day at $10/month? That would be the exact same revenue over the course of a year.

For all you non-Portlanders out there, today’s Offer–Ground Kontrol–is a very popular Portland business that I cannot imagine needed to drive any foot traffic. I wouldn’t be surprised if Google was eating 100% of today’s deal just to be associated with it. It’s kind of like Powell’s in terms of its iconic presence in the community.

Rocky Agrawal: Their sellthrough rates are so embarrassingly low that I’d stop publishing the cap — thought I wouldn’t be surprised if today’s sold out.

I agree with David that Google is likely eating the difference on the arcade.

I’ve been tracking since launch and Groupon is 5x Google revenue in PDX. (median/deal)

And I still strongly believe that for Floyd’s ~1500 were purchased by competitors/analysts willing to spend $3 to test it out. Footfalls first day couldn’t have been more than 20. (They had a notepad where they were writing down voucher numbers.)

Greg Sterling: Wonder if Google will turn around after a bunch of months and try to buy a smaller player but one with a sales force — an adility for example

Sol Orwelll: (formerly Ahmed Farooq) Hadn’t thought about competitors buying Floyd’s – makes sense.

Question is, how heavily is G promoting this (both on supply and demand site)? It took them a while to gear up on the constant promotion on Chrome, and it is doing well for them. HotPot (as Mike has documented) is exploding. Once they really turn it on in deals, I can see them solving the demand-side problem.

Then again, I can see them fixing the supply side by just buying out a B player for their sales process (as Greg mentioned).

Per Mike’s original question, while the numbers are far from impressive, with G’s reach and bank account, if they are willing to keep at it, I really don’t see why they would fail (consumers have no loyalty to Groupon or anyone else).

Lastly – isn’t this also a bit of a Trojan horse to promote Google Checkout?

David: Everywhere I turn these days is Google offers. They’re advertising the hell out of the internet based on IP geotargeting. I know it’s only been out a few weeks, but…

Greg: Good point about Checkout/Wallet. But I don’t believe Wallet is entirely dependent on Google Offers. There can be a range of offer types and third party offer ads that would create additional incentives to use Wallet.

Google can do the consumer side, they’re more challenged on the sales side. They would much rather outsource if they could.

I have difficulty imagining they’ve got the stomach to build a several thousand person sales force for this. Per Andrew Mason, 4K of 8K Groupon employees are in sales.

Rocky: I can’t avoid the IP geotargeted ads for Offers here.

There will be a TC post dropping within the next two hours that should spark a bit of discussion. :) (See Rocky’s deal series on TechCrunch here)

Sol: Ah – as a Canadian, I still only see Groupon/LS/DealFind backfilling the hell out of Adsense.

As for sales side – yep, makes more sense for them to acquire. But again, with their muscle + bank account + other benefits it gives them, I just see it as a matter of trying till they get it right.

David: Re Checkout:

As I wrote back in the fall towards the bottom of this post – http://www.davidmihm.com/blog/google/groupon/ …3% of $6 Billion is not a small number…even on existing transactions if the customers never use Checkout again.

Andrew Shotland: While their inability to sell these out fast is kind of embarrassing for the great GOOG and the economics look weak, given that these are early days for GOOG Offers, it’s hard to say how relevant these metrics are to the long term prospects for the service. I am kind of curious how the other players in the market have responded, or not responded, to GOOG’s entry?

James, are you seeing any data that suggests that GOOG’s entry has slowed or changed redemption for any other service? Did the others change their offers when GOOGOff (TM) came out to try to blunt its entry or did Groupon put up weak offers – kind of like scheduling a documentary on Local Search against American Idol?

I would expect their to be huge overlap between GOOGOFF subscribers and the other major services. How many deals can you deal with in your inbox every day? Did the entry of GOOGOFF create dealmail overload and change redemption rates for the other services?

Right now I think I get Facebook, Groupon & LivingSocial, and I barely look at them. If only there were a service that aggregated all of these in one place :)

Rocky: Google’s Offers have been remarkably weak. I expected more of them to be like today’s.

Pedicab rides? The contestants on The Apprentice generated more revenue from pedicab tours—$1,270 vs. $1,170.

Andrew: True, but I am guessing the Apprentice’s CPA was much higher than GOOG’s :)

Rocky: I’ve found it interesting that LivingSocial is competing aggressively for “portland offers” keyword, but groupon is not. wonder what that’s about.

David: it’s possible Groupon thinks they have gotten all the low-hanging deal fruit here in PDX. I hardly hear them on Pandora anymore either.

Greg: Agree. If they’re genuinely in this for the long haul and have multiple objectives tied to the success of Offers I suspect they’ll need to acquire a sales force.

Mike: You all did see their job postings for Offers? http://blumenthals.com/blog/2011/06/07/google-hiring-sales-staff-in-seattle-for-large-scale-smb-acquisition/ So at least some of this is occurring now in-house.

Greg: Had not. Will be interesting to see how far they go with this.

So what do you all think? Will Google build out their own sales force successfully? With enough time and money will they achieve the scale they need or will deal fatigue set in prior to their reaching their goals? What is your takeaway from the Portland efforts?

Google Places Upgrades Dashboard Analytics – Is Google Adding a Reservation System?

Thanks to e-mphasis Internet Marketing for pointing out the increased detail that Google Places is now including in the Dashboard Analytics.

Google is not only providing a breakout of desktop vs. mobile activity but is showing a great deal of additional detail in the mobile environment. Note the inclusion of “Add as Contact” and “Reservation”. Is Google planning a reservation service near term?

They have changed the layout, making QR codes and the event posting option more obvious by moving them to the left upper screen quadrant.

There are more date ranges for summary analysis including the ranges today, yesterday, this month, last month and different starts to the week. The implication of this is that this data will be in near real time, allowing for a much more timely view of the affects of promotions.

Most of the analytics also have an added +Show More Search Queries feature that allows the showing 10 results for each segment rather than 5.

In addition to showing where driving directions were requested from Google is also showing locations used in searches for your business which offers a more granular (if still not complete view) of the geo modifiers used in the search phrase. The map showing locations has added more visual detail as well

The new analytics is a welcome improvement over the old one. There are still things that could improve (why only show 10 keywords? why show keywords separate from geography?). Accuracy is still suspect as in my example Impressions and Actions were highest on the desktop but the numbers for terms used were shown as significantly higher on mobile.

Certainly having the granular mobile information, the apparent real time or near real time information, the more flexible date ranges and dramatically improved maps are significant upgrades. Not only do the changes provide an SMB with better understanding of the actions of her clients, they clearly point out the every increasing role of mobile and make its impact both numerically and visually obvious for all to see.

And just what does the word “Reservation” refer to?

The next Marketing Test Kitchen: celebrating customer success

Thanks to everyone who participated in the first Marketing Test Kitchen initiative: “Add to Apps” button. Overall, it was a huge success. The number of vendors using “Add to Apps” buttons grew significantly, causing a large increase in installs driven by button traffic. Before kicking off the second Apps Ecosystem Marketing Test Kitchen initiative, we want to recognize the winners of the first one.

Congratulations to the 6 winners, who will get additional exposure on the featured and notable section of the Marketplace front page:
Outright, Producteev, Insync, Mavenlink, Zoho and Manymoon

Established vendors such as Manymoon and Zoho improved performance of existing buttons and newer folks like Outright and Producteev added buttons to capture new business. If you didn’t get your button up for last week’s contest, that doesn’t mean you shouldn’t do it now! Adding a button helps improve your overall performance in the Marketplace and will prepare you for future initiatives.

Now let’s take a look at the next Marketing Test Kitchen…

The Next Challenge:
Publish your most compelling customer success stories by Thursday, Dec 2nd on your own blog and share it with us at marketing-test-kitchen@google.com. We will feature a few of the top stories on the Google Enterprise Blog (see examples here and here) and also rotate the winning vendors into the featured and notable sections on the Marketplace front page. Note we will feature every submission in the Marketplace Success Stories blog, so just by submitting a story you will end up on the front page of the Marketplace.

It’s easy to participate: Find a compelling customer, tell their story, publish it on your blog, share it with us, and track your performance.

What makes a compelling customer?
It is important to find a customer that demonstrates the value of your integrated features with Google Apps. Make sure that your customer gives explicit approval for using their story. Here are some qualities of a compelling customer.

  • Highlights the value of your app: For example, their use of your app in conjunction with various other web apps, such as other Marketplace apps.
  • Hard data to support success: Numbers that justify strong gains are important, ie: 50% productivity gains, 10% increase in revenue, 20% reduction in IT costs.
  • Passionate about Google Apps and the cloud: A genuinely passionate customer can explain the advantages of a cloud-based business and more easily help prospects understand and transition.

How can I make it easily consumable?
You can use the standard template from the developer site or find a more creative way to deliver it. You can create your own format that tells the story of the customer’s success. Here are some ideas to go beyond a typical blog post:

  • Be visual: Use tools such as Picnik and Aviary to tell your story with compelling visuals (or choose another creative tool).
  • Organize your presentation: You can use Google Presentations or SlideRocket to succinctly tell your story.
  • Use video: Shoot or animate a video of your customer telling their Apps Marketplace story.
  • Be creative: Combine the above ideas, write a story, or come up with something totally different.

To get a feel for different tones and stories, read some customer stories from various vendors on the Marketplace Success Stories blog. Also check out this example of a strong customer story that uses many of the above elements.

It’s easy to be a part of this new Marketing Test Kitchen. Just find a compelling customer, use a clever way to tell their story, publish it to your blog and share it by email. If you need more time, email us with your ideas as well! Make sure to track the performance of your blog post (and all other marketing efforts) through Google Analytics, learn how to code links and track traffic on the developer site.

Come up with the next Marketing Test Kitchen: Submit your idea via Buzz or email. We’ll evaluate the ideas and use the best ones for future initiatives. If we choose your initiative, we’ll give you a special prize.

Posted by Harrison Shih, Associate Product Marketing Manager, Google Apps Marketplace

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