Google, Amazon, EBay Offer New Digital Marketing Options
But remember. 53 percent of all U.S. searches for consumer goods start on Amazon.
Good morning! .
Here are today’s highlights:
The Fed concedes that the higher inflation rate will continue into next year.
Guess what. Not everything at Dollar Tree costs a dollar any more!
A startup makes it easier for flexible employers to hire people with chronic health issues.
Google is updating its search pages to try to win back advertisers lost to Amazon: “In its latest strategy shift, the Alphabet Inc. unit said Wednesday that it is updating the look and format of product search pages to feature images of apparel, accessories and other items to better resemble a digital store rather than a long list of links and text. The change is part of a broader overhaul Google has undertaken during the pandemic to enliven its foundering e-commerce operation. Over the past year, Google has stopped requiring merchants to advertise to have their products listed in shopping searches. It also ceased collecting commissions on purchases and joined with Shopify to simplify search listings for 1.7 million merchants.”
“The Shopify-Google partnership introduced technology that automatically imports product information from Shopify and made it possible to create Google ads quickly.”
“While Google broadly dominates in search and digital advertising, Amazon’s commanding lead in e-commerce has made it the starting point for an estimated 53 percent of U.S. searches for consumer goods.”
“Through the first half of this year, Amazon reported $14.82 billion in ad sales, an 82 percent increase from the same period a year ago. Google’s total ad revenue is more than six times as large but grew just under 50 percent over the same period.”
“‘Google is almost like the living dead’ in e-commerce, said Guru Hariharan, chief executive of CommerceIQ, an online-retail service provider. ‘No one goes there for shopping.’” READ MORE
EBay, meanwhile, is trying to overhaul its advertising business to compete with Amazon and Walmart: “Most of the revenue from eBay's ad business comes from a unit called Promoted Listings where sellers pay eBay a percentage of sales if someone clicks and buys a product from an ad — typically between 2 percent to 12 percent depending on the category, according to ad buyer sources. But advertisers buying inventory on retailers' websites and apps aren't used to transacting based on rev share. Promoted Listings drove $224 million in revenue during the second-quarter of 2021, up 8 percent year-over-year. But that rate is down significantly from a 64 percent year-over-year increase during the first quarter.”
So last month, eBay quietly unveiled the first part of its pitch to make itself more attractive to retail media ad buyers, with search ads on the website and app that charge advertisers on a cost-per-click basis.”
“Cost-per-click ads are standard on e-commerce sites like Amazon and Walmart, and are particularly popular with small and midsize businesses with modest ad budgets.” READ MORE
Rich Barton, who co-founded Zillow in 2005 (after co-founding Expedia, Glassdoor, and Nextdoor.com) sees big changes coming to the real estate industry: “Virtual 3-D tours and remote, digital closings will be the norm. No more driving downtown to sign a mountain of closing documents. Also, a large number of people will sell their homes through an app, without making big changes--like updating kitchens, painting, and other fixes--to prepare it for sale. Buying a house will be as easy as trading in your car.”
“It will be transparent, with no information gatekeepers and no surprises. And it will move faster, thanks to the stress-reducing benefits of tech.”
“Real estate agents will still play a key role, connecting with high-impact, qualified buyers who have already looked around and narrowed the field, and are ready to make an offer.” READ MORE
THE COVID ECONOMY
The Fed says supply-chain issues will carry inflation into next year: “Federal Reserve Chairman Jerome Powell said that a recent spell of higher inflation might last longer than central bank officials had anticipated, but he repeated his expectation that the price surge should eventually fade during a panel discussion on Wednesday. Rising vaccination rates and nearly $2.8 trillion in federal spending approved since December have produced a recovery like none in recent memory. Inflation has soared this year, with so-called core prices that exclude volatile food and energy categories up 3.6 percent in July from a year earlier, using the Fed’s preferred gauge. The gains largely reflect disrupted supply chains and shortages associated with the reopening of the economy.”
“Mr. Powell said the Fed sees a current surge in prices due primarily to supply-chain bottlenecks continuing into next year before fading.”
“He said the Fed doesn’t expect the current inflation spike to “lead to a new inflation regime, in which inflation remains high year after year.” READ MORE
Dollar Tree is re-thinking that everything’s-a-dollar idea: “Dollar Tree said it would start selling products at $1.25 and $1.50 or other prices slightly above $1 in some of its stores, expanding current tests selling items at higher price points as supply-chain snarls, a tight labor market and inflation push costs higher. The discounter has experimented with selling items for $3 and $5 since 2019 in a shelf section labeled Dollar Tree Plus. Those tests continue in a few hundred of its roughly 7,900 Dollar Tree stores.”
“The addition of more above-$1 items is a response to rising costs and positive consumer feedback on tests so far, Michael Witynski, chief executive of Dollar Tree, said in an interview.”
“With the above-$1 price point, the company can offer new products such as more frozen meat or seasonal items, which could encourage shoppers to spend more per trip, he said.”
“While Dollar Tree is in an unusual position because of its pricing model, it is navigating a nearly universal problem for businesses around the world.” READ MORE
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Tyson Foods says that 91 percent of its employees are now vaccinated: “When Tyson Foods announced on Aug. 3 that it would require coronavirus vaccines for all 120,000 of its U.S. employees, it was notable because it included frontline workers at a time when corporate mandates applied primarily to office workers. At the time, less than half of its work force was inoculated. Nearly two months later, 91 percent of Tyson’s U.S. work force is fully vaccinated, said Dr. Claudia Coplein, Tyson’s chief medical officer, who spoke to the DealBook newsletter about the results of its policy.”
“The United Food and Commercial Workers union, which represents several thousand Tyson workers, endorsed the mandate in return for more benefits, like paid sick leave.”
“Frontline workers have until Nov. 1 to get vaccinated (or request an exemption), while the company’s roughly 6,000 office workers have until Friday to do so.” READ MORE
Frackers say they fear the vaccine mandate will exacerbate their labor shortage: “American frackers, already struggling to hire enough workers, are concerned that the coming U.S. vaccine mandate will worsen the situation at a time of rising oil and gas prices. Many of the truckers, rig hands and roustabouts who used to work in Texas and other oil patch regions found other jobs after crude prices crashed last year during the onset of the pandemic. Oil-field service companies, which employ most of the ground-level workers who drill and finish wells, say many remaining employees are skeptical about Covid-19 vaccination, and some have warned they would quit before getting shots.”
“The proposed mandate doesn’t require companies to terminate employees who don’t comply, but those workers would be subject to frequent testing.”
“Ann Fox, chief executive of Nine Energy Service Inc., an oil-field service company active across the U.S., said she is worried that it could lose a portion of its workforce of 818, most of which are field-level employees.”
“The company is already dealing with rapid turnover—roughly two out of every three recent new hires tend to leave after a short period, she said.”
“‘It places all of us in leadership positions in tremendously complex situations,’ Ms. Fox said, estimating that less than 15 percent of the company’s field-level workers are vaccinated.’” READ MORE
Walmart plans to hire 150,000 ahead of the holidays: “Most of the positions will be offered as long-term store jobs, not seasonal jobs, Ms. Murphy said. Earlier in September the retailer said it aimed to hire 20,000 warehouse staff to keep products flowing to stores and shoppers’ homes. It has also raised pay for most roles, increasing its minimum wage to $12 an hour. The company says its average U.S. hourly wage is $16.40.” READ MORE
A startup helps people with chronic health issues connect with employers: “In 2018, [Hannah] Olson, with co-founder Kai Keane, launched Chronically Capable, a platform that connects chronically ill and disabled professionals to employers prepared to offer flexibility to employees. Its users now include more than 50,000 job seekers and more than 50 employers. Companies such as Whatsapp, Postmates, Google, and Levi Strauss post full- and part-time jobs, as well as contract and freelance work. While the service is free to job hunters and individuals, employers pay the Austin, Texas-based company a recruiting fee, which depends on the size of the employer.”
“Startups and small companies can pay on a per job basis, while midsize organizations usually pay $5,000 to $15,000 a year on average and larger companies $30,000 to $100,000.”
“In her sophomore year, [Olson] was diagnosed with chronic Lyme disease, which required numerous doctors visits, medications, and antibiotic treatments through an arm catheter.”
“At one point, she was on an IV for up to six hours a day. She was forced to quit her design agency job due to the treatment.” READ MORE
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THE 21 HATS PODCAST
I’m a Freak About the Numbers: This week, on episode 78, Jay Goltz, Diana Lee, and Dana White talk about how they manage their financials—what reports they get, what KPIs they track, and how they make sure the sales team isn’t going rogue. Here are just a few of the this week’s gems:
Short of cash? Check your inventory. It might be hiding there.
Or maybe it's your receivables. The longer they go uncollected, the less likely you will ever collect.
Outsourcing software development? Keep in mind it’s easier to protect your IP if your developers are in the U.S.
And don't forget to budget for maintenance. The software spend doesn't end when the project goes live.
“Even with the new digital marketing privacy controls, there will still be ways for businesses to target and re-target customers.
Subscribe to The 21 Hats Podcast wherever you get podcasts.
If you see a story that business owners should know about, hit reply and send me the link. If you got something out of this email, you can click the heart symbol, you can click the comment icon below, and you can share it with a friend. Thanks for reading, everyone. — Loren