
Positional Scarcity - jger15
https://alexdanco.com/2019/09/07/positional-scarcity/
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bko
> 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

~~~
tomp
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
> _Apple barely needs to advertise_

Apple has a $2B marketing budget and has advertising everywhere, all the time.

~~~
ncmncm
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.

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snidane
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
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
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
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.

~~~
lotsofpulp
Hence snidane's comment about location location location is accurate.

Google owns a coveted location, and now they can charge rent for it. Apple
owns a coveted location, and charges Google rent for it.

But it could not be simpler or easier to bypass Google.

~~~
yabadabadoes
> But it could not be simpler or easier to bypass Google.

Really? Unless you pay Apple considerably more, you will have a google search
bar prominently on your phone that you can gimp but cant hide or change to
another search provider.

~~~
mokus
I have been racking my brain for several minutes now trying to figure out what
you’re taking about. I never paid Apple anything to switch my Safari search
bar to DuckDuckGo, and I can’t imagine 3rd party browsers are restricted from
using a plain address bar or any search provider they want

~~~
yabadabadoes
I meant 80% of the market runs Android primarily on hardware price..

If you are using a newer Android, the manufacturer has been coerced to make a
google search bar not only prominent but impossible to hide, even manually by
the user.

~~~
mokus
Ah, that makes sense. I was afraid maybe you were referring to something
horrible coming in iOS 13

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2T1Qka0rEiPr
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?

~~~
ch33z3
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.

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dmix
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.

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

~~~
whoopdedo
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.

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dontletmeup
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
in my opinion it is scarcity all the same: attention scarcity.

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mlanghoff
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?).

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nitwit005
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.

