7 ms·

Positional Scarcity

146 points by jger15 7y ago

dontletmeup 7y ago
I knew the concept but didn't knew the name of it it's positional scarcity So it's basically, like they say in the article "“pay to get a better place in line”" It's the most common behaviour in the marketing world and that's why I hate PPC and love SEO in PPC the more you pay, the more you will appear high in the ads when someone is look for search term related to your niche In SEO, you need to earn your place. Ofcourse companies often use a spend a lot of money on SEO but because the way google built their algorithm, if you write high quality content in the right way you can earn your place without paying a dime
- DoctorOetker 7y ago
  in my opinion it is scarcity all the same: attention scarcity.
deleted 7y ago
[deleted]
2T1Qka0rEiPr 7y ago
This sounds like a bit of a shakedown, and I'm not in marketing, but can someone confirm what I heard at last my last company - is it true that should at least pay less than anyone to advertise against "Basecamp", because they're deemed most relevant?
- alexslobodnik 7y ago
  Yes. The position in ads is determined by your bid times your google computed quality score. Brand terms tend to have higher quality score than competitors.
- ch33z3 7y ago
  Yes, this is true. The price you pay per click is based on a ton of factors loosely proxying to "customer satisfaction". F.ex. Do alot of users bounce? Does it have a high CTR? Considering the intent of users searching for "basecamp" they are pretty much guaranteed to get the best "customer satisfaction" metrics compared to competitors and therefor getting the best price. My experience with branded searches is the CPC being somewhere around 1-10% the price of non-branded searches.
ohduran 7y ago
Have you tried searching for Facebook in the App Store? The first result is...Amazon.
- whoopdedo 7y ago
  I get Google Maps. For a while if you typed "alexa app" you got an scam that tried to sell you a "echo subscription". I stumbled into it when an elderly man with poor vision got fooled because his screen magnification was so high the paid ad was the only thing shown on the screen when he searched. He would've had to scroll down to see the actual search results. Looks like Apple finally nerfed the imposter but now shows the Prime Video app before Alexa.
snidane 7y ago
This is simply a virtual form of real estate business. As real estate brokers say, the price depends mostly on 3 things: location, location and location. If you are on Manhattan you pay more for that land than far away in Brooklyn. Similarly with the Domain Name System - shorter domain like www.abc.com is more desirable than www.hdhfjenyrj.goobledygook. There is no scarcity of string combinations for domain names yet people fight for desirable ones by paying a lot of money. It's a form of congestion pricing around naturally formed monopoly in desirable locations or domains. These big tech platforms create their own land online - virtual estate. Limited human attention creates the scarcity of valuable locations where advertisers would like to show their ads. So they compete for being shown on Manhattan of the web - Google's top of the search results and Facebook's feed. The platforms can charge them huge monopoly, real estate like, prices for it.
- Mordisquitos 7y ago
  Where that analogy falls short is that if a given company pays for cheap and/or inferior real estate, you will still find that company if you explicitly go to their physical location – you don't have to walk past four competitors who paid extra for the right to stand in their driveway.
  - lotsofpulp 7y ago
    How is Google's website analogous to someone's driveway? "Explicitly going to their location" is typing their website into the address bar, and as far as I know, there is no interference by Google there.
    - batty_alex 7y ago
      This just isn't how a majority of people find sites, though. To your normal users, google may as well be the address bar. Hell, I've watched users go to google, type facebook.com (or wherever they're going) into google, and then click on the first ad link. So, you have this situation where typing basecamp.com into google may not bring basecamp as the first result and the people buying the ads know that.
bko 7y ago
> But recently, Google has started to use their power as the effectively sole search provider in a few really extortive ways. First, the Basecamp situation above: by making a design choice to stuff so many ads above organic searches for a company’s own name, businesses like Basecamp are effectively forced to pay up whatever Google wants in order to access search traffic for customers searching for them directly. That’s pretty extortive. On the flip side, if I were a competitor to Basecamp, I love the access I have by advertising on Google on Basecamp. If Basecamp's business suffers from users going to an alternative, perhaps their product offering isn't as unique or valuable as they would like to think. Also I would point out that people searching Basecamp on Google rather than going to Basecamp.com may look for Basecamp type products. It's like if I search band-aid. Maybe I mean band-aid branded products, but giving me access to similar offerings is great for me as well as competitors
- rypskar 7y ago
  And then you have all the users who goes to the address bar, type basecamp, hits enter before clicking on the first link in the search result without even looking at the link
- tomp 7y ago
  Too bad you're downvoted. I agree. For example, Apple barely needs to advertise, as (until recently at least) its products are a quality class above everyone else, so basically, every non-Apple laptop is an Apple advertisement. I haven't used Basecamp so I'm not so sure about them, but ... maybe they're just not that good?
  - navigatesol 7y ago
    >Apple barely needs to advertise Apple has a $2B marketing budget and has advertising everywhere, all the time.
    - ncmncm 7y ago
      Indeed, absent advertising, how would the previous poster, like so many others, have come to believe the fiction that Apple products have better quality than their competitors'? What they do have is higher prices. They could, in principle, deliver better quality, but Apple's record-breaking pile of cash demonstrates clearly that they are not spending it to give customers better quality, but rather pocketing it. So, what are customers getting for their extra money, instead? They are displaying an ability to spend wastefully, a social dominance signal. They feel like they benefit, and Apple actually does benefit. Everyone who thinks they attracted a more desirable mate via such a display has, instead, attracted a mate who was fooled by such a display. What is the correlation between quality and foolishness? It must surely be negative.
dmix 7y ago
This is probably a phenomenon of user tolerance which is game all companies try to balance with making money and delivering value to stakeholders and customers. This only really became a problem when it went from 1-2 ads at the top, to 3, and now 4 above the first organic results. Considering on mobile you’d have to scroll quite a bit to get to the first non ad one could argue Google as a service as a whole is worse off for consumers, not to mention for the whole internet which benefits from accurate rankings. I’m curious if people would be so outraged if it went back to 1-3 on average. Or whether this would improve the UX as a whole. But Google lately has given way less of a shit about putting the UX above monetization strategies. Which is as much as consequence of their market position where there’s no alternative.
mlanghoff 7y ago
There is a psychological component here that is very similar to the arms race mentality. An object in motion stays in motion with the same speed and in the same direction unless acted upon by an unbalanced force. It may be an undetermined distance away, but there will be a behavior bubble until the way we engage (in a linear format) will be disrupted. Then there will be another 'scatter', and we will re-form into different version of engagement (web 3.0?).
nitwit005 7y ago
At least they're decently well indicated as ads. Go to bing.com and search for some tech company. It does the same, but the ads are subtly labeled, making them seem like natural search results.
mipo5 7y ago
Google seems to be running out of money, that's why...

146 points by jger15 7y ago

I knew the concept but didn't knew the name of it it's positional scarcity So it's basically, like they say in the article "“pay to get a better place in line”" It's the most common behaviour in the marketing world and that's why I hate PPC and love SEO in PPC the more you pay, the more you will appear high in the ads when someone is look for search term related to your niche In SEO, you need to earn your place. Ofcourse companies often use a spend a lot of money on SEO but because the way google built their algorithm, if you write high quality content in the right way you can earn your place without paying a dime

DoctorOetker 7y ago
in my opinion it is scarcity all the same: attention scarcity.

deleted 7y ago

[deleted]

2T1Qka0rEiPr 7y ago

This sounds like a bit of a shakedown, and I'm not in marketing, but can someone confirm what I heard at last my last company - is it true that should at least pay less than anyone to advertise against "Basecamp", because they're deemed most relevant?

alexslobodnik 7y ago
Yes. The position in ads is determined by your bid times your google computed quality score. Brand terms tend to have higher quality score than competitors.
ch33z3 7y ago
Yes, this is true. The price you pay per click is based on a ton of factors loosely proxying to "customer satisfaction". F.ex. Do alot of users bounce? Does it have a high CTR? Considering the intent of users searching for "basecamp" they are pretty much guaranteed to get the best "customer satisfaction" metrics compared to competitors and therefor getting the best price. My experience with branded searches is the CPC being somewhere around 1-10% the price of non-branded searches.

ohduran 7y ago

Have you tried searching for Facebook in the App Store? The first result is...Amazon.

whoopdedo 7y ago
I get Google Maps. For a while if you typed "alexa app" you got an scam that tried to sell you a "echo subscription". I stumbled into it when an elderly man with poor vision got fooled because his screen magnification was so high the paid ad was the only thing shown on the screen when he searched. He would've had to scroll down to see the actual search results. Looks like Apple finally nerfed the imposter but now shows the Prime Video app before Alexa.

snidane 7y ago

This is simply a virtual form of real estate business. As real estate brokers say, the price depends mostly on 3 things: location, location and location. If you are on Manhattan you pay more for that land than far away in Brooklyn. Similarly with the Domain Name System - shorter domain like www.abc.com is more desirable than www.hdhfjenyrj.goobledygook. There is no scarcity of string combinations for domain names yet people fight for desirable ones by paying a lot of money. It's a form of congestion pricing around naturally formed monopoly in desirable locations or domains. These big tech platforms create their own land online - virtual estate. Limited human attention creates the scarcity of valuable locations where advertisers would like to show their ads. So they compete for being shown on Manhattan of the web - Google's top of the search results and Facebook's feed. The platforms can charge them huge monopoly, real estate like, prices for it.

Mordisquitos 7y ago
Where that analogy falls short is that if a given company pays for cheap and/or inferior real estate, you will still find that company if you explicitly go to their physical location – you don't have to walk past four competitors who paid extra for the right to stand in their driveway.
- lotsofpulp 7y ago
  How is Google's website analogous to someone's driveway? "Explicitly going to their location" is typing their website into the address bar, and as far as I know, there is no interference by Google there.
  - batty_alex 7y ago
    This just isn't how a majority of people find sites, though. To your normal users, google may as well be the address bar. Hell, I've watched users go to google, type facebook.com (or wherever they're going) into google, and then click on the first ad link. So, you have this situation where typing basecamp.com into google may not bring basecamp as the first result and the people buying the ads know that.

bko 7y ago

> But recently, Google has started to use their power as the effectively sole search provider in a few really extortive ways. First, the Basecamp situation above: by making a design choice to stuff so many ads above organic searches for a company’s own name, businesses like Basecamp are effectively forced to pay up whatever Google wants in order to access search traffic for customers searching for them directly. That’s pretty extortive. On the flip side, if I were a competitor to Basecamp, I love the access I have by advertising on Google on Basecamp. If Basecamp's business suffers from users going to an alternative, perhaps their product offering isn't as unique or valuable as they would like to think. Also I would point out that people searching Basecamp on Google rather than going to Basecamp.com may look for Basecamp type products. It's like if I search band-aid. Maybe I mean band-aid branded products, but giving me access to similar offerings is great for me as well as competitors

rypskar 7y ago
And then you have all the users who goes to the address bar, type basecamp, hits enter before clicking on the first link in the search result without even looking at the link
tomp 7y ago
Too bad you're downvoted. I agree. For example, Apple barely needs to advertise, as (until recently at least) its products are a quality class above everyone else, so basically, every non-Apple laptop is an Apple advertisement. I haven't used Basecamp so I'm not so sure about them, but ... maybe they're just not that good?
- navigatesol 7y ago
  >Apple barely needs to advertise Apple has a $2B marketing budget and has advertising everywhere, all the time.
  - ncmncm 7y ago
    Indeed, absent advertising, how would the previous poster, like so many others, have come to believe the fiction that Apple products have better quality than their competitors'? What they do have is higher prices. They could, in principle, deliver better quality, but Apple's record-breaking pile of cash demonstrates clearly that they are not spending it to give customers better quality, but rather pocketing it. So, what are customers getting for their extra money, instead? They are displaying an ability to spend wastefully, a social dominance signal. They feel like they benefit, and Apple actually does benefit. Everyone who thinks they attracted a more desirable mate via such a display has, instead, attracted a mate who was fooled by such a display. What is the correlation between quality and foolishness? It must surely be negative.

dmix 7y ago

This is probably a phenomenon of user tolerance which is game all companies try to balance with making money and delivering value to stakeholders and customers. This only really became a problem when it went from 1-2 ads at the top, to 3, and now 4 above the first organic results. Considering on mobile you’d have to scroll quite a bit to get to the first non ad one could argue Google as a service as a whole is worse off for consumers, not to mention for the whole internet which benefits from accurate rankings. I’m curious if people would be so outraged if it went back to 1-3 on average. Or whether this would improve the UX as a whole. But Google lately has given way less of a shit about putting the UX above monetization strategies. Which is as much as consequence of their market position where there’s no alternative.

mlanghoff 7y ago

There is a psychological component here that is very similar to the arms race mentality. An object in motion stays in motion with the same speed and in the same direction unless acted upon by an unbalanced force. It may be an undetermined distance away, but there will be a behavior bubble until the way we engage (in a linear format) will be disrupted. Then there will be another 'scatter', and we will re-form into different version of engagement (web 3.0?).

nitwit005 7y ago

At least they're decently well indicated as ads. Go to bing.com and search for some tech company. It does the same, but the ads are subtly labeled, making them seem like natural search results.

mipo5 7y ago

Google seems to be running out of money, that's why...