Google Home Services (GHS) is a newly-developed advertising functionality that alters how search results for home service companies appear to consumers. A Home Services beta launched in San Francisco last year, and was expanded to cover Los Angeles and Philadelphia. In all likelihood, Home Services will scale nationwide by the end of 2017. While the new program will work great for Google themselves, it’s bad news not only for digital advertising agencies, but for businesses and consumers, as well. Here’s why.
How Google Home Service Ads Work
In the past, when you searched for a home service, you’d see a handful of paid advertisements, and then a list of organic (unpaid) search results listed in order of relevance to your specific search keywords.
When you search for home services while GHS is active, however, the top of your search will be dominated by a large “sponsored” box. Inside this box will be a number of local home service companies, along with information pulled from Google My Business listings and a map showing these businesses’ locations. Google determines which companies receive top positions based on multiple factors, including customer reviews and offered services.
GHS includes a contact button and a little information about featured businesses. When a searcher clicks one of these buttons, they’re sending a request to Google (not the business directly), who sends the service request to the business themselves. Google charges the participating business $23 for the “pleasure” of getting a form fill this way. The theory is that GHS’ one-click system is more convenient than visiting a site and doing research. Consumers aren’t given the opportunity to read the company’s site or even judge the offer before charging the business.
Google also conducts their own “reputation assessment” before featuring companies. This assessment includes a background check and a review of customer feedback. Any business that meets Google’s standards is included in a preferred position on the page and marked with a green checkmark, indicating that the business is “Google Guaranteed.” Having this endorsement also indicates that the featured businesses are willing to pay google $23 for each inquiry. GHS is an optional, opt-in service for businesses. Home service businesses must request Google Guaranteed assessment themselves, and must pay Google for all business gained by their inclusion in the GHS program.
So why is Google fixing something that wasn’t broken?
Obviously, the business that appears at the top of a search for local home services will receive the most business. By implementing Google Home Services, Google more actively controls which businesses they allow to appear at the top of their site, and actually charges those businesses’ for the privilege. Whenever a prospective customer clicks on the contact button, they’re asked a couple questions about the service they need. Google sends the customer’s contact information and these details to the service on the customer’s behalf–and charges the business for them. It’s a system that failed miserably for an old Yellow Pages publisher when they felt Google stomping on their doorsteps years ago. Things are different now; Google is using their dominance to dip a little deeper into the pocketbook of less sophisticated home service companies.
According to a survey conducted by Yelp in 2012, 85% of consumers find local businesses through internet searches. As of February 2017, Google owns 80.52% of the market share of internet search engines worldwide. It may not be an exaggeration to say that Google searches are the most common way local home services get business. Google has a near-monopoly on internet searches, so their service is responsible for a lot of that business. Through Google Home Services, Google can capitalize on businesses’ reliance on their search engine as a middle man, knowing that premium space at the top of a search is too valuable not to pay for. Conventional paid search space is still available on GHS searches, but there’s significantly less of it. Usually, there will only be room for one paid ad between the GHS sponsored box and the conventional, organic search results. This causes the auction for ad space to rise to stratospheric rates.
Why It’s Bad For Everyone
While Google sells their Home Services functionality as a way to find reliable, high-quality service quickly and conveniently, there’s reason to believe its nationwide implementation will have significant negative consequences, for agencies, as well as home service businesses and the consumers themselves.
The cost of placement within the GHS box is steep enough that it may disqualify small businesses. The prioritization of paying businesses also disincentivizes home service companies from doing everything they can to facilitate transparent client communication online, since doing so will no longer convey as significant a benefit.
Google Home Services currently encourages the searcher to select several companies for consideration. Google contacts each company selected in-turn (after charging each of them $23), turning a prospective job into a race. The service that gets the job will probably be the one that responds the fastest or sends the lowest quote, not the most qualified service. The emphasis GHS places on response time may require businesses to hire more employees to “win” races. If businesses “lose” races, they still pay $23, and they spend time communicating with the prospecting client without getting business.
Google’s vetting procedures are bad news, too. Google’s current screening process may not match up with standards of quality assurance or laws. For instance, if Google finds out a service hired someone with a criminal record they won’t extend Google Guaranteed to them, and may not feature them in the GHS box at all. They can apparently do this despite the fact that California’s law stipulates employers may not inquire about any prior criminal history that did not result in a conviction or that has been judicially set aside.
Google Home Services could put these businesses at a significant competitive disadvantage, even though they legally couldn’t know about their employee’s record. Worse, this may encourage employers to look for ways to find out about criminal records and bar prospective hires with them from employment. California’s law was instituted to help people with a criminal history more easily find gainful employment, and Google’s vetting undermines that goal.
Though Google’s vetting and Guaranteed programs are intended to ensure the searching customer finds high-quality, reliable service, Home Services primarily prioritizes paying businesses, even over quality or relevance.
If, for example, a customer has a plumbing emergency at 3 in the morning, they might google “24/7 emergency plumbing repair.” Normally, this would probably result in a local plumber that’s equipped to help the customer immediately. Post-Google Home Services, however, the first several listed businesses would simply be local home service companies that passed Google’s vetting and paid for their placement. These services may not specialize in quick repair services, or may not even be open! All the information a customer could find via a Google search is still available, but it’s harder to find than it was before.
Google has been silent about how their voice search console Google Home will be effected. For a user-centered review on Google Home, check out this Bloom Times’ article.
Google has up to this point refused to work with any PPC providers on securing high placement on the Home Services box or the Google guaranteed checkmark for their clients. Typically, agencies work with the services they represent to ensure that their web presence is clear, accessible to the customer, and accurately reflective of the quality of their work and brand. If a digital agency does its job properly, all relevant information about the home service represented should be readily available, clear, and accessible to the customer via a quick internet search.
Google’s Home Services functionality circumvents the normal procedure agencies use to promote their clients. Instead of basing a search off of the quality, clarity, and accuracy of the information presented on the businesses’ website, Home Services prioritizes search order based on Google’s own internal vetting process–and, of course, whether or not the company decides to pay Google for their placement. This undermines the effectiveness of the work digital agencies have done for their clients up to this point, and disincentivizes businesses’ from working with digital agencies to build a robust, informative web presence.
It’s also concerning that through Google Home Services considerably obfuscates how searchers performed their searches and what marketers can do to improve the experience of searches. It’s a move that seems antithetical to Google’s historical policy of transparency.
Google became the dominant search engine because it did the best job of connecting searchers with relevant results. Google’s new Home Services sponsored content sacrifices this relevance and convenience, primarily so Google can capitalize off of the business they help facilitate. Google is selling Home Services as the latest innovation in a series meant to connect customers with better services faster, but as of now it looks like the main beneficiary of the new policy is Google themselves.