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Is Google Biased Against Small Businesses?

The black and white animal updates (Panda, Penguin, my bet for the next one: “Orca”) and blocked referrer data have many in our industry crying “Foul.” The narrative goes that Google is making life hard for SEOs with the intent of biasing results in favor of big businesses (read: big advertisers) at the expense of small businesses.

Is this valid criticism?

By itself, the fact that big advertisers often outrank smaller companies proves nothing. We have to distinguish between bias and merit.

First, “small businesses” come in a range of flavors. On one end of the spectrum there are “Mom and Pop” operations, and niche businesses.

On the other end of the spectrum of small businesses are these folks:


“Diamond Jim”

Without question, Google’s actions are intended to make life difficult for Diamond Jim, and I say: more power to them! There are inherent challenges in determining whether businesses that are somewhere in the middle should be classified one way or the other — a “grey wolf” update trying to parse shades of grey is a more accurate metaphor than separating black from white. It is also true that making these determinations algorithmically based on measurable signals is fraught with peril and will result in some businesses being flagged incorrectly.

Nevertheless, I think the answer to today’s question is minimally: “Yes, Google is absolutely biasing results against what they believe to be BAD small businesses. In doing so, they’ve inadvertently hammered some good ones, too.”

But is Google also targeting the other end of the spectrum? Is Google making it more difficult for the honest small businesses to win against the big guys?

Let’s split honest small businesses into two classes and look at this first from the perspective of the Mom and Pop generalist, and second from the niche business’s point of view.

The Mom and Pop Generalist

If Google devalues and even punishes low quality links and unnatural link and link text profiles, forcing competition towards quality content that generates links and social shares naturally, does that disadvantage Mom and Pop?

Absolutely! If by Mom and Pop generalist we mean businesses that provide thin coverage over a relatively broad array of services (the general store, a small staffed news organization trying to compete in the general news business), then clearly the larger competitors have far more resources to bring to bear on content creation. With fewer resources to cover the same scope the overstretched business has no chance. Mom and Pop cannot hope to compete on quality or quantity of content.

But can’t Google legitimately claim that for those very reason’s Mom and Pop search results probably aren’t what most users seek? Mom and Pop don’t spend much on advertising compared to the big players, but that’s generally because they can’t. They can’t compete effectively because they don’t monetize traffic as well as their bigger, broader, deeper, less expensive competitors. They lose the online battle for the same reason they’re losing the brick and mortar battle: consumers of their services prefer more choices, more content and better prices.

The barriers for Mom and Pop aren’t evidence of Google’s bias towards big advertisers, it’s evidence of Google’s bias towards providing the results that users prefer. It is, by extension, evidence of consumer bias against Mom and Pop.

The Niche Small Business

What about the second category of quality small businesses: the niche player? Do the changes in Google’s algorithms make competing impossible for them?

The answer has to be “no!” Suppose Joe has a website devoted to fly-fishing in the Ozarks. Why would ESPN enjoy any advantage over Joe in content creation about that subject? If Joe is a good writer, and knows his stuff, he should be able to bury the occasional ESPN sport-fishing coverage of the Ozarks. If Joe can’t attract quality links from relevant pages, nor generate followers in the world of social media, maybe the reason Google doesn’t rank his site as well as the more generic fishing sites is that Joe isn’t very good at it, not that he doesn’t spend as much in advertising. Joe should be more like Brian.

Similarly, if Sheila sells fly-fishing gear, why should Bass Pro Shops have a wider, or deeper selection than her? Why should they have better service or more knowledgeable salespeople than Sheila when they have to carry and sell a much wider array of products? The answer is: they shouldn’t. Sheila ought to be able to provide a better customer experience in her niche than the generalist, and if she can’t then maybe that’s a referendum on her business execution, not evidence of Google bias! Maybe Sheila doesn’t deserve to outrank the big guys.

Ability to Spend as a Proxy for Quality

What’s interesting here is that in many respects the ability to advertise effectively against the big guns is really a pretty decent proxy for having a high quality, relevant website. Bubba’s business offering guided Ozark fishing tours, can’t spend as much cost effectively as a national fishing tour company overall, but he ought to be able to compete very effectively on the more targeted regional searches, and if he can compete in the paid search arena, he should. If he can’t compete in paid search on targeted keywords, that suggests that what he’s offering or the way he’s offering it isn’t what people want.

If advertisers all behaved rationally, and Google’s organic algorithms were perfect, we should expect to see the organic rankings match the paid ad rankings perfectly. The best at monetizing traffic should be able to win the auction, and Google should also recognize that they offer the best user experience as evidenced by behavioral data. Google claims not to use analytics information on user behavior in their algorithm, but maybe they should!

The point of this is: there are plenty of reasons Google might favor bigger companies over smaller companies that have nothing to do with relative advertising spend and everything to do with user preferences. Walmart beat Mom and Pop offline and for the very same reason, make it difficult for Mom and Pop online.

In our experience, quality niche companies seem to do just fine using quality white hat approaches to SEO. They also do just fine in PPC. Niche companies that do well in PPC and stink in organic ranking generally stink for identifiable and correctable reasons that have nothing to do with spending even more in PPC.

Verdict

I would be convinced that something nefarious was at work if there was a clear pattern of quality niche companies ranking better or worse depending on their spend levels with Google. I haven’t seen that pattern. Until compelling evidence is presented of Google cooking the organic results based on ad spend rather than crawlability, quality content, and general usability, the verdict has to be “Not Guilty.”

No doubt there are some examples of screwy organic results, but I haven’t seen a pattern that suggests a bias against anything but poor quality sites.

Have you?

Comments
14 Responses to “Is Google Biased Against Small Businesses?”
  1. Adam Audette Adam Audette says:

    Good, rational argument George.

    Related but different: small businesses should be watching over their backs for both Google and Amazon. Note this on the latter: http://www.slate.com/articles/business/small_business/2012/07/amazon_same_day

    Amazon may be looking to deliver on same-day orders in local markets, effectively squeezing out brick and mortar small businesses much like they’ve successfully taken out online small businesses.

    Interesting times in the evolution of the Web! It’s beginning to look a lot more like the “real world.” What’s good for consumers is not always good for the Mom and Pops.

  2. Thanks Adam,

    I’m working on a post on that very theme. I do think not just small businesses, but ALL resellers of goods and services face a real problem in Amazon. Their size and operational efficiency make competing SKU for SKU exceptionally difficult.

    I’ll also say for the record that I’m not at all happy to see Mom and Pop’s struggle. I still go to our locally owned grocery, hardware store and pharmacy anytime I can find what I want there, just because I hate to see the little guys squeezed out. However, online I think there is a degree of inevitability to it.

  3. Todd Bowman Todd Bowman says:

    Small businesses are also crying foul about the PLA/Google Shopping changes. There are a lot of businesses that feel they will not be able to compete with Amazon or the big box stores with bidding being a factor. Google has said that the relevancy of the feed is still a key factor in the results, so the big stores won’t necessarily be able to just “buy” their way to the top. They will instead have to continue to provide an optimized feed. Amazon dominates a lot of Google Shopping results already because they can provide a feed with more relevant product information than some small businesses. If they continue to dominate the PLA space on the searches, it will probably have a lot to do with their feed and not so much with the bidding. The addition of the bidding to Google Shopping might give the small businesses more of a fighting chance on PLAs because they will have a way to influence their positioning with the bids as opposed to only competing based on relevancy.

  4. Great point, Todd. The argument on the small business front might be that sophisticated bidding in PLAs puts at a disadvantage beyond just paying for traffic they used to get for free: sophisticated bidding isn’t cheap, itself, and while bigger firms can hire folks like RKG, Mom and Pop can’t afford to.

    I’ve heard larger business managers talk about this as a significant benefit to them in that many of the shady players will drop out if forced to pay for traffic, so there will be fewer “Diamond Jim’s” cluttering up the listings.

  5. Yes, I have seen screwy results. One of my client is a home inspection service affiliated with a national chain. Last year, his office was the top producer in North America.

    However, on the local Google search results, he was outranked by a fake company running a fake Web site. The company never existed. It was tied to a home address. And the Web page that came up in the search results led to one of those generic pages with industry-related links. If I hadn’t reported it, it could still be out there, outranking a bunch of REAL companies.

    I had to report this page 4 times in 10 weeks before Google took it down. If this is a site that can outrank a major Web site with +50 pages of top quality content, then yes, the results are screwy.

  6. Thanks for your comment. No question that there are some screwy results, I’m sure Google would acknowledge that the algorithm is neither perfect nor perfectable. My argument is simply that it doesn’t appear to me that the algorithm changes have anything to do with advertising spend level as some folks seem to suggest.

  7. I’m constantly doing the “Google dance” with my online men’s magazine in terms of trying to gain lost rankings, without spending a fortune in ads. It does seem that Google rewards those who spend a ton of money with them and utilize their Google+ platform.

  8. PH says:

    In fact running a small business is becoming a nightmare because your ROI is getting smaller & smaller. For instance you have to pay much more for SEO services or Adwords. Google is clearly saying that he doesn’t need SEO anymore and try everything to push people to Adwords even if paying 8€ CPC for “charge woman” is insane for a small business.

  9. Guy, thanks for your comment. I’m skeptical about the ad $ connection, but there is no question that it pays to have an active Google+ presence!

    PH, from the very beginning Google’s vision has been that users expressing commercial intent should use the ads and those looking for information should use the organic links. They’re continuing on a long path to make that so. Thanks for your comment!

  10. Often when thinking politics, I analyze based on effect determining cause rather than the other way around. I come to much more sensible conclusions that way. That eliminates the fud around cause. “I am doing this to better serve you,” said the Wolf to Little Red Riding Hood! The trend seems to be that SMBs are being pushed out of what was once a great place to spend marketing and advertising dollars: Google Search.
    I think the objective is to have a higher revenu stream from more stable businesses, and that means big brands. I think there is still plenty of wiggle room for small business, but that is diminishing.
    The main objection to this for me is that I don’t want to live in a community where the only businesses standing are giant chain stores and warehouses for giant Internet stores like Amazon. Yuk.

  11. Kristinn, thanks for your comment. I agree, the slow march to victory of chains and giants like Amazon over small businesses online and off is a cultural loss. I still go to our local hardware store and grocery store any time I can even though the prices are higher and the selection isn’t as good. I do believe that capitalism’s ruthless efficiency also presents opportunities in the sense that necessity is the mother of invention. Faced with losing their businesses, people will discover new ways to offer unique experiences to customers and remain relevant and afloat. Carping about what Google is doing to them won’t get them there, businesses will have to make fundamental changes to compete in the new world of retail.

  12. Gary Piscopo says:

    When the small or niche businesses disappear from Google searches and only large ones are left why would they even bother to advertise on Google? Unsustainable is what best describes Google’s decision to favor large stores over small ones. Eventually when only a few large stores are left on Google organic searches why will they need to advertise on Google? After all everybody already knows about Amazon and Walmart anyway.

    BTW I import shipping containers full of product, I can go head to head against any big box store anytime and win. If you are looking for the types of products I sell, you come to my site you find what you need for the best price. Google not listing my store in any rankings at all is just as bad for Google as it is for me, I just happen to feel it first. Bing, Yahoo and others will benefit the most in the long run.

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