More raps for Google on the “fake reviews” front.

Google’s trying to not have its local search initiative devolve into charges and counter-charges of “fake news” à la the most recent U.S. presidential election campaign – but is it trying hard enough?

It’s becoming harder for the reviews that show up on Google’s local search function to be considered anything other than “suspect.”

The latest salvo comes from search expert and author Mike Blumenthal, whose recent blog posts on the subject question Google’s willingness to level with its customers.

Mr. Blumenthal could be considered one of the premiere experts on local search, and he’s been studying the phenomenon of fake information online for nearly a decade.

The gist of Blumenthal’s argument is that Google isn’t taking sufficient action to clean up fake reviews (and related service industry and affiliate spam) that appear on Google Maps search results, which is one of the most important utilities for local businesses and their customers.

Not only that, but Blumenthal also contends that Google is publishing reports which represent “weak research” that “misleads the public” about the extent of the fake reviews problem.

Mike Blumenthal

Google contends that the problem isn’t a large one. Blumenthal feels differently – in fact, he claims the problem as growing worse, not getting better.

In a blog article published this week, Blumenthal outlines how he’s built out spreadsheets of reviewers and the businesses on which they have commented.

From this exercise, he sees a pattern of fake reviews being written for overlapping businesses, and that somehow these telltale signs have been missed by Google’s algorithms.

A case in point: three “reviewers” — “Charlz Alexon,” “Ginger Karime” and “Jen Mathieu” — have all “reviewed” three very different businesses in completely different areas of the United States:  Bedoy Brothers Lawn & Maintenance (Nevada), Texas Car Mechanics (Texas), and The Joint Chiropractic (Arizona, California, Colorado, Florida, Minnesota, North Carolina).

They’re all 5-star reviews, of course.

It doesn’t take a genius to figure out that “Charlz Alexon,” “Ginger Karime” and “Jen Mathieu” won’t be found in the local telephone directories where these businesses are located. That’s because they’re figments of some spammer-for-hire’s imagination.

The question is, why doesn’t Google develop procedures to figure out the same obvious answers Blumenthal can see plain as day?

And the follow-up question: How soon will Google get serious about banning reviewers who post fake reviews on local search results?  (And not just targeting the “usual suspect” types of businesses, but also professional sites such as physicians and attorneys.)

“If their advanced verification [technology] is what it takes to solve the problem, then stop testing it and start using it,” Blumenthal concludes.

To my mind, it would be in Google’s own interest to get to the bottom of these nefarious practices. If the general public comes to view reviews as “fake, faux and phony,” that’s just one step before ceasing to use local search results at all – which would hurt Google in the pocketbook.

Might it get Google’s attention then?

When people think “search,” they still think “Google.”

… And they might say it, too — thanks to the rise of voice search.

Over the years, many things have changed in the world of cyberspace. But one thing seems to be pretty much a constant:  When people are in “search” mode online, most of them are playing in Google’s ballpark.

This behavior has been underscored yet again in a new survey of ~800 consumers conducted by Fivesight Research.

Take a look at these two statistics that show how strong Google’s search popularity remains today:

  • Desktop users: ~79% of searches are on Google
  • Smartphone users: ~86% use Google

The smartphone figure above is even more telling in that the percentage is that high whether users are on an iPhone or an Android system.

But here’s another very interesting finding from the Fivesight survey: Google’s biggest competition isn’t other search engines like Bing or Yahoo.  Instead, it’s Siri, which now accounts for ~6% of mobile search market share.

So what we’re seeing in search isn’t a shift to other providers, but rather a shift into new technologies. To illustrate, nearly three in four consumers are using voice technologies such as Siri, Google Now and Microsoft Cortana to supplement their traditional search activities.

Some marketing specialists contend that “voice search is the new search” – and it’s hard not to agree with them. Certainly, voice search has become easier in the past year or so as more mobile devices as well as personal home assistants like Amazon Alexa have been adopted by the marketplace.

It also helps that voice recognition technology continues to improve in quality, dramatically reducing the incidences of “machine mistakes” in understanding the meaning of voice search queries.

But whether it’s traditional or voice-activated, I suspect Google will continue to dominate the search segment for years to come.

That may or may not be a good thing for consumers. But it’s certainly a good thing for Google – seeing as how woefully ineffective the company has been in coming up with any other business endeavor even remotely as financially lucrative as its search business.

United Airlines’ four miscalculations — and the $200 million impact.

Just how many mistakes did United Airlines make in “re-accommodating” four of its booked passengers recently? Oh, let us count the ways …

Miscalculation #1

Despite some reports to the contrary, technically United Airlines wasn’t in an overbooking or oversold situation. The flight boarded full; then some crew assigned to a future flight from the destination city turned up suddenly.

The airline’s first mistake was failure by its managers or staff to correctly anticipate the crew that needed to travel on this flight.

 Miscalculation #2

Their second mistake was to implement an operating procedure which gives crew higher priority than paying customers.

Because all customers had already taken their seats on the airplane, and no more seats were available, this meant that the airline’s staff had to ask — or coerce — some seated customers to leave.

Miscalculation #3

United’s third mistake was management’s failure to empower the airline’s gate agents to offer higher compensation in order to entice customers to leave voluntarily.

This miscalculation guaranteed that the victims would be “paying customers” who had done nothing wrong, rather than the airline’s managers and staff who had made all the mistakes.

Miscalculation #4

When choosing its victims, everything else being equal apparently, United Airlines and its regional partners like United Express go after the lowest-paying customers first. That too is a miscalculation.

Let’s explore this a bit further. According to the latest published data I could find, on average around 40% of passengers on the typical flight are traveling using heavily-discounted tickets.  Most of those tickets are non-refundable, and prepaid.  They can be changed ahead of time, but only if the customer pays change fees which can be very costly.

This means:

  • If the passenger doesn’t change his or her booking early enough, and doesn’t show up for the flight, the airline keeps all the revenue – and has the possibility of re-selling the seat to a different passenger.
  • Otherwise, the airline keeps the original revenue, plus the change fee. For United, this amounted to $800 million of additional revenue in the year 2015 alone.

Phony Risk?

Airlines justify their overbooking and overselling tactics as a way of reducing the risk of revenue lost from no-shows. Published data indicates that approximately 15% of confirmed reservations are no-shows. Assuming that the airline bears the full risk of revenue lost from no-shows, overbooking mitigates that risk by allowing other passengers to claim and pay for seats that would otherwise fly empty.

Airlines typically overbook about 12% of their seats, counting on no-shows to match load-to-seats, or later cancellations to reduce bookings. (Failure to correctly anticipate the number of no-shows would also qualify as a mistake by the airline’s management or staff.)

All that being said, however, in most discounting situations there is no “risk” to reduce, because most customers who buy discounted tickets already bear all the financial risks from a failure to show up for flights. If passengers are unable to fly when originally planned, they must either pay steep change fees … or they forfeit the entire fare paid.

The Real Risk

In fact, the airlines’ biggest risk of revenue loss from no-shows arises from passengers paying first class, business class or full-fare economy.

These types of tickets account for approximately 25% of passengers and 50% of ticket revenues.  Yet those passengers typically incur few if any cancellation fees or penalties if or when they don’t show up.

When enterprises like United try to have it both ways – by putting themselves ahead of their customers and gaming the system to maximize revenues without incurring any apparent financial risks – is it any wonder the end result is ghastly spectacles like passengers being forcibly dragged off airplanes?

Scenes like that are the predictable consequences of greed overtaking sound business management and ethics. You don’t have to think too hard to come up with other examples of precisely the same thing — Wells Fargo’s “faux” bank account setups being another recent corporate black-eye.

I’m sure if United Airlines had it to do all over again, it would have cheerfully offered up to $10,000 per ticketed passenger to get its four flight crew members off to Louisville, rather than suffer more than a $200 million net loss in share value of its company stock over the past week.

But instead, United Airlines decided on a pennywise/pound-foolish approach.

How wonderful that turned out to be for everyone.

Limp Fries: Restaurants Join Brick-and-Mortar Retailing in Facing Economic Challenges

Press reports about the state of the retail industry have focused quite naturally on the travails of the retail segment, chronicling high-profile bankruptcies (most recently hhgregg) along with store closings by such big names as Macy’s, Sears, and even Target.

Less covered, but just as challenging, is the restaurant environment, where a number of high-profile chains have suffered over the past year, along with a general malaise experienced by the industry across-the-board.

This has now been quantified in a benchmarking report issued last month by accounting and business consulting firm BDO USA covering the operating results of publicly traded restaurants in 2016.

The BDO report found that same-store sales were flat overall, with many restaurants facing lower traffic counts.

The “fast casual” segment, which had experienced robust growth in 2015, experienced the largest loss of any restaurant segment in same-store sales in 2016 (nearly 1.5%), along with the highest cost of sales (nearly 31%).

Chipotle’s poor showing, thanks to persistent food contamination problems, didn’t help the category at all, but those results were counterbalanced by several other establishments which beat the category averages significantly (Shake Shack, Wingstop and Panera Bread).

The “casual dining” segment didn’t perform much better, with same-store sales declining nearly 1% over the year. By contrast, “upscale casual” restaurants reported an ever-so-slight same-store sales gain of 0.2%.

Better sales increases were charted at quick serve (fast food) restaurants, with same-store increases of nearly 1%. Even better results were experienced at pizza restaurants, where same-store sales were up nearly 5%.  This category was led by Domino’s with over 10% same-store sales growth, thanks in part to its Tweet-To-Order rollout and other digital innovations.  Well more than half of the Domino’s orders now come through digital channels.

What are some of the broader currents contributing to the mediocre performance of restaurant chains? Unlike retailing, where it’s easy to see how purchasing practices are migrating online from physical stores, people can hardly eat digitally.  And with “time” at an all-time premium in an economy that’s no longer in recession, it would seem that preparing meals at home hasn’t suddenly becoming easier.

The BDO analysis contends that the convenience economy and the continued attractive savings offered by dining at home combine to slow restaurant foot traffic: “To remain afloat, restaurants will need to drive sales by leveraging the very trends that are shaping this evolving consumer behaviors.”

Tactics cited by BDO as lucrative steps for restaurants include expanding delivery options, and embracing digital channels in a major way.  BDO reports that in 2016, digital food ordering accounted for nearly 2 billion restaurant transactions, and this figure is expected to continue to rise significantly.

Speaking personally, I think there is a glut of dining options presented to consumers across the various segments of the restaurant trade. One local example:  In one stretch of highway on the outskirts of a county seat just 20 miles from where I live (population ~20,000), no fewer than six national chain restaurant locations have opened up in the past 24 months strung out along the main highway, joining several others in a string of options like exhibit booths at a trade show

There’s no way that market demand can satisfy the new restaurant capacity in that town.  Something’s gotta give.

What are your thoughts about which chains are doing things right in the highly competitive restaurant environment today – and which ones are stumbling?

Downtown turnaround? In these places, yes.

Downtown Minneapolis (Photo: Dan Anderson)

For decades, “going downtown” meant something special – probably from its very first use as a term to describe the lower tip of Manhattan, which was then New York City’s heart of business, commercial and residential life.

Downtown was literally “where it was at” – jobs, shopping, cultural attractions and all.

But then, beginning in post-World War II America, many downtowns lost their luster, as people were drawn to the suburbs thanks to cheap land and easy means to traveling to and fro.

In some places, downtowns and the areas immediately adjoining them became places of high crime, industrial decay, shopworn appearances and various socio-economic pathologies.

Things hit rock bottom in the late 1970s, as personified by the Times Square area of New York City. But since then, many downtowns have slowly come back from those near-death experiences, spurred by new types of residents with new and different priorities.

Dan Cort, author of the book Downtown Turnaround, describes it this way:  “People – young ones especially – love historical buildings that reintroduce them to the past.  They want to live where they can walk out of the house, work out, go to a café, and still walk to work.”

There are a number of cities where the downtown areas have come back in the big way over the past several decades. Everyone knows which ones they are:  New York, Seattle, San Francisco, Minneapolis …

But what about the latest success stories? Which downtowns are those?

Recently, Realtor.com analyzed the 200 largest cities in the United States to determine which ones have the made the biggest turnaround since 2012. To determine the biggest successes, it studied the following factors:

  • Downtown residential population growth
  • Growth in the number of restaurants, bars, grocery stores and food trucks per capita
  • Growth in the number of independent realtors per capita
  • Growth in the number of jobs per capita
  • Home price appreciation since 2012 (limited to cities where the 2012 median home price was $400,000 or lower)
  • Price premium of purchasing a home in the downtown district compared with the median home price of the whole city
  • Residential and commercial vacancy rates

Based on these criteria, Realtor.com’s list of the Top 10 cities where downtown is making a comeback are these:

  • #1 Pittsburgh, PA
  • #2 Indianapolis, IN
  • #3 Oakland, CA
  • #4 Detroit, MI
  • #5 Columbus, OH
  • #6 Austin, TX
  • #7 Los Angeles, CA
  • #8 Dallas, TX
  • #9 Chicago, IL
  • #10 Providence, RI

Some of these may surprise you. But it’s interesting to see some of the stats that are behind the rankings.  For instance, look at what’s happened to median home prices in some of these downtown districts since 2012:

  • Detroit: +150%
  • Oakland: +111%
  • Los Angeles: +63%
  • Pittsburgh: +31%

And residential population growth has been particularly strong here:

  • Pittsburgh: +32%
  • Austin: +25%
  • Dallas: +25%
  • Chicago: +21%

In the coming years, it will be interesting to see if the downtown revitalization trend continues – and spreads to more large cities.

And what about America’s medium-sized cities, where downtown zones continue to struggle. If you’ve been to Midwestern cities like Kokomo, IN, Flint, MI or Lima, OH, those downtowns look particularly bleak.  Can the sort of revitalization we see in the major urban centers be replicated there?

I have my doubts … but what is your opinion? Feel free to share your thoughts below.

PR Practices: WOM Still Wins in the End

These days, there are more ways than ever to publicize a product or service so as to increase its popularity and its sales.

And yet … the type of thing most likely to convince someone to try a new product – or to change a brand – is a reference or endorsement from someone they know and trust.

Omnichannel marketing promotions firm YA conducted research in 2016 with ~1,000 American adults (age 18+) that quantifies what many have long suspected: ~85% of respondents reported that they are more likely to purchase a product or service if it is recommended by someone they know.

A similarly high percentage — 76% — reported that an endorsement from such a person would cause them to choose one brand over another.

Most important of all, ~38% of respondents reported that when researching product or services, a referral from a friend is the source of information they trust the most.  No other source comes close.

This means that online reviews, news reports and advertising – all of which have some impact – aren’t nearly as important as the opinions of friends, colleagues or family members.

… Even if those friends aren’t experts in the topic!

It boils down to this:  The level of trust between people has a greater bearing on purchase decisions because consumers value the opinion of people they know.

Likewise, the survey respondents exhibited a willingness to make referrals of products and services, with more than 90% reporting that they give referrals when they like a product. But a far lower percentage — ~22% — have actually participated in formal refer-a-friend programs.

This seems like it could be an opportunity for brands to create dedicated referral programs, wherein those who participate are rewarded for their involvement.

The key here is harnessing the referrers as “troops” in the campaign, so as to attract a larger share of referral business and where the opportunities are strongest — and tracking the results carefully, of course.

In copywriting, it’s the KISS approach on steroids today.

… and it means “Keep It Short, Stupid” as much as it does “Keep It Simple, Stupid.”

Regardless of the era, most successful copywriters and ad specialists have always known that short copy is generally better-read than long.

And now, as smaller screens essentially take over the digital world, the days of copious copy flowing across a generous preview pane area are gone.

More fundamentally, people don’t have the screen size – let along the patience – to wade through long copy. These days, the “sweet spot” in copy runs between 50 and 150 words.

Speaking of which … when it comes to e-mail subject lines, the ideal length keeps getting shorter and shorter. Research performed by SendGrid suggests that it’s now down to an average length of about seven words for the subject line.

And the subject lines that get the best engagement levels are a mere three or four words.

So it’s KISS on steroids: keeping it short as well as simple.

Note: The article copy above comes in at under 150 words …!