How do Google changes affect businesses?

[akirk]

Internet marketers - I suspect most on this forum live in a bubble protected from most of this harsh reality.

I think that you have a false impression of many on here - yes, the topic of this forum means you will have some who wish to just make a quick buck on the internet with no understanding of how business works / runs... but there will be many on here as well who have run traditional / still run traditional companies - with all levels of size / success / etc. so I suspect you are wrong

One thing real business does not need is unnecessary disturbances caused by geeks disconnected from reality playing games with demand - turning on and off traffic like taps like google does on a regular basis. For the present Google has taken over from the directories and yellow pages as the custodian of "people searching" for things. I only hope their tenure is short - I already have the embryo of an idea for something that might replace them. At very least they should programme changes to kick in slowly so demand drops and changes over months not days to allow businesses to adapt.

ahh the polemic approach to discussion unfortunately it is not very accurate...
- Google is not run by Geeks - it is a very successful business run by business bods...
- Google is not disconnected from reality - if there is a criticisim it is that they are establishing / formulating the reality!
- Google is a business in its own right - not a service to society - there is no 'should' about what they do - they can do what they like - if it is not meeting with approval from those using it then they will change - regimes / companies / concepts all change... The fact that they are used so widely might just be because they are quite good at what they do...
- if you have something better (and know enough about how to gain traction) then start it... but I would suggest a more open-minded view of the world if you want the investment you will need to compete...

Alasdair

[mikeb]

I thought it went without saying when I made that point that there are degrees of things that are beyond our control and when it comes to Google it's totally out of our control, as opposed to the diesel/banking/employees examples that you listed which are much more inherently reliable.

Let me be more explicit: Anyone who relies on something totally beyond their control and which is known to be unreliable, prone to extreme change, has a reputation for putting their own services first and which is constantly in a war with people trying to spam them which often causes serious collateral damage, is an idiot.

How's that?



Clever enough to opt out of tough business? lol.

JJ - I am probably different from most here in the sense I have seen both sides of the fence.

I have owned or owned options in , or been instrumental in operating, several manufacturing businesses, hardcore service businesses with high employee cost base, retail and/or wholesale businesses with essential business stocks. That means I have a different (and perverse) view on things compared to pure internet and direct marketers.

The fundamental thing that makes business "difficult" is when you have to make big investments based on expectations of market demands several years hence. or high fixed costs that have to be met regardless of turnover that cannot be changed for years.

That is why most do not want to do that. They want get rich quick, no investment or effort.. They opt instead to take a cut of the earnings of people who do take the risk. From recruitment agents to financial services, solicitors accountants, estate agents and so on. Even the retailers squeeze the manufacturers too hard.

Internet marketing for the most part is a dream in comparison, because even if your demand turns off over night, your cost base and the fruition time from investment to income is generally so low that you can change horses quickly. ie even if you don't make any money , the capacity to lose it is far less, and the ability to do something else. Manufactuers for example, or transport companies don't have those choices.

In my view along with the opportunities that come with being the worlds biggest advertising agency for people searching ALSO comes responsibilites not to act precipitously and in a steady manner at the pace underlying businesses can cope and embrace with the change. In my view they abuse that, it is all too much of a game to them.

[akirk]

Internet marketing for the most part is a dream in comparison, because even if your demand turns off over night, your cost base and the fruition time from investment to income is generally so low that you can change horses quickly. ie even if you don't make any money , the capacity to lose it is far less, and the ability to do something else. Manufactuers for example, or transport companies don't have those choices.

In that case - surely we have come full circle back to the fact that Google changes should not be affecting a business... Your argument is that a Google change kills xx% of businesses - the counter argument is being put that a business which allows that is not being run well... You are now saying that online the ability to change fast is an advantage - granted, but therefore there is even less reason that Google changes should be affecting businesses...

The other issue that needs addressing is that I do not feel the same logic that you do... you are arguing that a Google change can kill xx% (maybe 10 - 100,000) businesses - in this bit above you are refering to Internet Marketing... The majority of websites belonging to a business are not Internet Marketing websites - that is a small (very small!) % of websites...
- yes an Internet Marketing website is most likely to be affected by a change in Google
- a 'normal business' one based online or offline but running a commercial business in the traditioanl sense is far less likely to be affected by Google and if the affect is that calamitous then they have not got their balance correct / they are running the business badly...
- an Internet Marketing business which is unaware of the potential for 'Google Change Impact' is again running the business badly - if their business is reliant on Google then they need contingency in place whether that might be the ability to act fast / a portfolio of sites based on different approaches / etc.

either way - I still hold to the fact that a business being made bankrupt by a Google change is a) unusual and b) the responsibility of the owners / directors, not Google.

Alasdair

[Clinton]

I am probably different from most here in the sense I have seen both sides of the fence.

The people you're talking to in this thread are people who run or have "real" businesses, have employed staff, had offices etc. They're aren't different to you and their experience of real-world and off-line business experience shows in their posts. In my time I've owned a school, a finance business, an IT business and others before I started making a living online.

I agree that to some extent the industry you're in determines what proportion of your costs are fixed costs. However, I would add to JJMcClure's comment that it's "not particularly bright" to invest large sums in a business that suffers from high fixed costs and low security of customer flow. That's simply bad strategic planning. You don't invest £10M in building a plant to manufacture tractors because you happen to have reached #1 in Google for the term.

Talking about the transport sector, I happen to have friends running businesses in what they like to refer to as logistics. I know one or two members here, like crabfoot, run/ran similar businesses. This is the kind of sector where you invest in storage premises, trucks, maintenance equipment, spare parts etc. Except that one of my friends has transitioned to an office from his home and almost zero fixed cost! He gradually sold off all the hard assets and kept sub-contracting out his work. Obviously with the sub contracting, his gross receipts are less ... but because of the lack of fixed costs his net profits are far more.

When someone is relying on free traffic and knows that traffic could disappear at any time on the whim of a search engine, don't you agree he should either move to a low fixed cost model or ... find a more reliable way of getting customers?

[mikeb]

T JJMcClure's comment that it's "not particularly bright" to invest large sums in a business that suffers from high fixed costs and low security of customer flow.

Someone has to.
They are the real entrepreneurs - people with vision

I did recently . Helped plan / set up a bio development facility.
It cost 10 million quid and five years to come on stream. Bought out by a US plc, going great guns now.
Someone has to take that risk.

We cannot all be desk based marketers. Great place to be - but not illustrative of the problems in the hard economy.

Not everyone can be "agents". That is "not very bright" or enterprising. It is the problem with our economy. Everyone wanting to take a cut of someone elses hard work It rewards everyone but those who take the essential risk.

You don't invest £10M in building a plant to manufacture tractors because you happen to have reached #1 in Google for the term.

Not what I said A total straw man., in fact totally Daft, I presume you meant to be facetious.

I have never said, despite how all here try to distort it so, that any business should use search marketing as more than a part of a mix: indeed I am an advocate of using prime traffic to listbuild in all its forms.

Does not alter the fact that Search marketing IS, WAS always, and WILL ALWAYS BE an essential part of the marketing mix - google are just the present custodians of it, and in many businesses it accounts for a proportion of consumer and BB purchases that feed right down the food chain, and also that feed creates longer term customers.

My comment was that many businesses are forced to have an inflexible model that cannot cope with the vagaries of 100% traffic swings. Even if it is only 10% of turnover, it can be crippling. The geeks at google have a disconnect with how businesses actually work.

Talking about the transport sector, I happen to have friends running businesses in what they like to refer to as logistics. I know one or two members here, like crabfoot, run/ran similar businesses.

This is the kind of sector where you invest in storage premises, trucks, maintenance equipment, spare parts etc. Except that one of my friends has transitioned to an office from his home and almost zero fixed cost! He gradually sold off all the hard assets and kept sub-contracting out his work.

As I keep saying everyone wants to be "agents" Your case proves my point perfectly.
He cannot exist without the underlying businesses he creams money from.
He has not created a "better business model for transport" he has simply changed to becoming yet one more middleman in a nation of middlemen.


That is not to say all secondary businesses without trucks are spongers. Those who find ways and clubs to keep lorries full in both directions are clearly improving the business model for everyone involved - take Hilary Devey . But the pure marketer subcontractor agent types who have no added value are parasites. Yet more middlemen.


The problem is we are now imbalanced with 20% real businesses that do things and 80% who are or want to be parasites on them. When the economy catches a cold, the real owners with assets catch pneumonia.

Anyway. Nough said.

I am very happy for people who do well out of desk based, home based, marketing or services like web development. It just annoys me when they imply they have some kind of "wisdom" that insulates them from economic forces, and that others are somehow "stupid" to do the essential useful primary functions, and the tough business models that underly them.

Somebody has to, or everyone starves. It is that simple.

They are the really clever ones, the ones prosper prosper or even survive in tough businesses, the ones who are willing to take that risk, not the ones who opt out like your friend who went from primary real business to being an "agent" in the secondary economy for transport. Yet another middleman, squeezing the poor wotsit who does the work. Going over to the dark side. Much less risky and more lucrative no doubt.

[akirk]

Mike, what bizarre arguments
- The clever ones are those who do x type of business... why does that make them 'clever'
- you state that search marketing is was always, and will always be an essential part of the marketing mix - nonsense - I know plenty of businesses where it is a total irrelevence - in fact one I know works hard to keep his business out of the search engines - it is a business where if you come through search you are the wrong client - very profitable / high-end clients / fantastic business but does not want to appear in the search engines...
- where do you get your figures from of 20% as 'real businesses' (presumably in your definition redneck, tree chopping, beer swigging tattooed businesses?!) and 80% as parasites? I don't see that balance at all...
- so working from a desk / home removes wisdom and intelligence? what is your evidence for that?
- an agent is taking a cut of someone else's hard work - great, I will set up 1000 agencies - obviously no work required... I should make a million by this afternoon!
- many businesses are forced to have an inflexible model... NO what nonsense - no business is forced to have any particular model the business owner chooses a model...

this is totally a 'head in sand' perspective on business - that there is only one approach / that businesses are forced into a particular model / that others can wreck your business and you have no choice - that is so out of date a view of business it is scary - there is a modern world and doing business in it means understanding it... working from home / flexible working is good not bad - you need flexibility in your business model - once established you must keep reviewing it... and in today's world the concept of manufacturing / moving items around / etc. while still necessary is changing... with rapid prototyping booming will engineering & manufacturing be moving into the house? If so - then the need for manufacturing / transport changes... we bought one of the first home friendly plastic printing machines some years ago - £30k but saved us £50k in a month... the world is changing - anyone with an ounce of business sense needs to move with it...

Alasdair

[mikeb]

Mike, what bizarre arguments
- The clever ones are those who do x type of business... why does that make them 'clever'
- you state that search marketing is was always, and will always be an essential part of the marketing mix - nonsense - I know plenty of businesses where it is a total irrelevence - in fact one I know works hard to keep his business out of the search engines - it is a business where if you come through search you are the wrong client - very profitable / high-end clients / fantastic business but does not want to appear in the search engines...
- where do you get your figures from of 20% as 'real businesses' (presumably in your definition redneck, tree chopping, beer swigging tattooed businesses?!) and 80% as parasites? I don't see that balance at all...
- so working from a desk / home removes wisdom and intelligence? what is your evidence for that?
- an agent is taking a cut of someone else's hard work - great, I will set up 1000 agencies - obviously no work required... I should make a million by this afternoon!
- many businesses are forced to have an inflexible model... NO what nonsense - no business is forced to have any particular model the business owner chooses a model...

this is totally a 'head in sand' perspective on business - that there is only one approach / that businesses are forced into a particular model / that others can wreck your business and you have no choice - that is so out of date a view of business it is scary - there is a modern world and doing business in it means understanding it... working from home / flexible working is good not bad - you need flexibility in your business model - once established you must keep reviewing it... and in today's world the concept of manufacturing / moving items around / etc. while still necessary is changing... with rapid prototyping booming will engineering & manufacturing be moving into the house? If so - then the need for manufacturing / transport changes... we bought one of the first home friendly plastic printing machines some years ago - £30k but saved us £50k in a month... the world is changing - anyone with an ounce of business sense needs to move with it...

Alasdair

Not going to carry on the discussion.


Suffice to say I have a serious worry about our economy - and what will happen when it collapses. There is just too little primary function. Too many "Middlemen". Too many advisers, not enough doers.

People are not reading what I write, one small example.
I said in respect of search marketing "many businesses" not "all businesses" so why did you interpret it that way?
I owned businesses that did not use any form of search. All proactive marketing methods. The problem is of course, at least some of my customers did have businesses driven on search and almost inevitably so.

Take a simple example. Nobody knows an emergency locksmith glass boarder up until the day they are broken into. The kneejerk reaction is to search for one. You can spam leaflets and brochures all you like. They will make not a jot of difference, since nobody will keep them. The day they need a boarder up, they will look in a directory,and probably on google.

Parts of the economy are dependant on search traffic, if not you some of your customers or their customers are.

The impact of the economy on a business can be one or two stages indirect. The overall impact of google on our economy is a multiplier on its earning here. Potentially huge. It has to act with restraint.


I see remarks This just shows naievity "no business is forced to have any particular model the business owner chooses a model..."

Countries need steel and therefore steel mills. If you want a competitive steel mill it costs a huge investment in plant and equipment and it takes years to come on stream.

You all personally rely on their being someone providing steel! - So to call those people stupid who engage in that business is at best hypocrisy.

They cannot by dint of being given "wisdom" by a desk based marketing consultant change the business model to avoid the need for capital investment and long intensive investment programmes or thousands of staff. The ones who make that business work are very clever indeed...proven by the fact they are still there!! THe margins are so thin, that any economic twitch causes them problems. They cannot change capacity quickly up or down.

I have manufacturing underpants. That is where my sympathies lie. The people who impress me are those who succeed there, Tough business indeed.

End of conversation for me.

[akirk]

Mike, folks are reading what you write - it is called discussion / debate but that doesn't mean that they have to agree with you - disagreeing doesn't mean that your comments were not read. If you feel that perhaps the only outcome you would like is where every one just simply agrees with you - you seem to think that had we read what you said we would all think the same - sorry, not so. In fact we are reading it - and asking you to clarify / explain / justify what you are saying - yet you just repeat it not going to convince us by that approach...

Of course there are businesses where we turn to search - but many where we do not... but you seem to be implying that a very high % of businesses are vanishing as a result of Google changes... yest I see no evidence of your claims...

I haven't seen anyone claiming that to be in the steel / transport / manufacturing industry is stupid - however to be in any of those industries in a belief that there is only one way of running them and that it will never change and therefore there is no need to be observant of how the world is developing - yes that would be stupid

you seem to have an aversion to desks - despite the fact that those financing / running your steel company may well also sit at a desk - as will their marketing people / accountants / strategists / etc. - in today's world it doesn't require quite as many people to physically make the steel - is that wrong?

so - sorry that you feel there is only one approach to business - unfortunately for your perspective that doesn't sit in with the way the world is...

and back to the original thread / debate - Meta Tags are of course still useful - and Google doesn't rule the world / affect businesses that dramatically - and if it does then the business should be managing that... that is what business is about!

Alasdair

[mikeb]

Mike, folks are reading what you write - it is called discussion / debate but that doesn't mean that they have to agree with you - disagreeing doesn't mean that your comments were not read. If you feel that perhaps the only outcome you would like is where every one just simply agrees with you - you seem to think that had we read what you said we would all think the same - sorry, not so. In fact we are reading it - and asking you to clarify / explain / justify what you are saying - yet you just repeat it not going to convince us by that approach...

Of course there are businesses where we turn to search - but many where we do not... but you seem to be implying that a very high % of businesses are vanishing as a result of Google changes... yest I see no evidence of your claims...

I haven't seen anyone claiming that to be in the steel / transport / manufacturing industry is stupid - however to be in any of those industries in a belief that there is only one way of running them and that it will never change and therefore there is no need to be observant of how the world is developing - yes that would be stupid

you seem to have an aversion to desks - despite the fact that those financing / running your steel company may well also sit at a desk - as will their marketing people / accountants / strategists / etc. - in today's world it doesn't require quite as many people to physically make the steel - is that wrong?

so - sorry that you feel there is only one approach to business - unfortunately for your perspective that doesn't sit in with the way the world is...

and back to the original thread / debate - Meta Tags are of course still useful - and Google doesn't rule the world / affect businesses that dramatically - and if it does then the business should be managing that... that is what business is about!

Alasdair

Alasdair - I think positions have been aired.

I do not expect people to agree, indeed the lamentable state of the economy and increasng reliance on non essential "services" that are lucrative for the provider,meaningless in terms of society proves I am a minority in thinking this way.

Until the day it falls over of course.

People can choose what business they are in. No problem with that. It is when those who take the "easy options" slate those who take the harder but more necessary ones: then I have a problem.

You continue to take words out of context. My point is "desk at home with no asset base" you cannot make steel on a desk at home (spare me facetious answers) . You need a capital intensive plant to do it.

The final point somebody asked...for those who actually look at economic performance (with increasing horror I might add)
The numbers are established our GDP comprises 2% agriculture 22% industry and 77% services or there abouts. Not all services are secondary.

But those who charge commission without adding value (take recruitment consultants) are a great example of parasites who certainly are damaging the companies they feed off, indeed damaging such as NHS too - ask Duncan Bannatyne about that! Charging too much for far too little and no evident expertise, like bankers. Not that they would care of course. Hopefully they will be first against the wall when the economy falls and revolution comes. Good riddance. I volunteer for that particular firing squad!

[akirk]

But those who charge commission without adding value (take recruitment consultants) are a great example of parasites who certainly are damaging the companies they feed off, indeed damaging such as NHS too - ask Duncan Bannatyne about that! Charging too much for far too little and no evident expertise, like bankers. Not that they would care of course. Hopefully they will be first against the wall when the economy falls and revolution comes. Good riddance.

A recruitment consultant is a useful step in employment for both sides - they can provide advice and expertise to businesses without HR departments who can be lost in the whole world of HR / law / how to find people / etc. They are also useful for those looking for work - providing insight on the industry / openings / advice / etc. If they did nothing more than facilitate a deal AND both parties could have done it equally easily otherwise - then yes, you might be right - but then they wouldn't exist - companies and individuals wouldn't use them - no they add value to the process - allowing a better match for staff to business making businesses more profitable and making the whole process smoother... They also employ staff - are you wanting them all to be made redundant?

I wouldn't suggest that we have the best model / economy / scenario - and yes greed is too wide-spread... but... your vision of a world having removed the service industry would put this country into a deep recession faster than anything else...

Alasdair