Tuesday, June 21, 2011

Google's Anti-Competitive Strategy for Offers

While all eyes are on Groupon and its forthcoming IPO, Google is quietly pulling a fast one on everyone in the daily deals space.

Taking a page out of Microsoft's playbook, Google is using it's dominance in webmail to push its new daily deal service, Offers.  Here's how:

Google Offers, like the rest of the daily deal providers, relies on email as the primary means of reaching prospective customers.  If you're not one of the nearly 200 million Gmail users, or you don't have Gmail's Priority Inbox enabled, every daily deal comes in on equal footing - each is just another email swarming your inbox, enticing you to buy steep discounts on local businesses.  

For Gmail users with Priority Inbox enabled, you may start to notice that Google Offers emails are prioritized as 'Important' and placed at the top of your inbox, while other daily deal emails (such as Groupon and LivingSocial) are categorized as 'Unimportant' and relegated to the bottom pane of your inbox.

This gives Google Offers an unfair competitive advantage in acquiring email opens and conversions (see screenshots below)

According to Google, Priority Inbox works by using "a variety of signals to identify important email, including which messages you open and which you reply to."  I first noticed this phenomenon in my personal email, where I've opened and forwarded many different daily deal emails.  To show that Google was truly treating Offers emails differently than other daily deals, I needed to create a new Gmail account with no signal history of what I consider to be important or unimportant email.  

Here's what I did, which anyone can replicate to see the same effect.  I don't know if this is intentional or a bug, but Gmail is clearly giving preference to Offers.  

1.  I signed up for a new Gmail account at gmail.com 

2. I activated Priority Inbox under 'Mail Settings' -> 'Priority Inbox.'  You'll notice that as of 6/21, 'Important Markers' are now enabled by default, so Gmail may actually be favoring Google Offers for all of its users.  

3.  I signed up for a sampling of daily deal subscriptions.  My sampling included Groupon, LivingSocial, Yipit, HomeRun, Scoutmob, Tippr, and Google Offers (Portland is the only city currently emailing offers).

4.  I didn't open any of the resulting subscription confirmation emails.  Since Priority Inbox sorts emails based on your reading/replying history, I didn't want to give Priority Inbox any additional information about which daily deals emails to prioritize the next day.  

5.  I waited until the next morning for the slew of daily deal emails to come in.

6.  There you have it.  Observe below that the Google Offers email shows up at the top in the 'Important and Unread' section, while every other daily deal shows up below in the 'Everything Else' section.


  1. Did you try marking the google deals as unimportant and some of the other deals as important? All this shows it that google is promoting one product through another.

  2. Very interesting, but this isn't necessarily anti-competitive. Google's algorithms, without any signals to go off of, probably prioritize ALL Google emails to begin with. Try keeping that account for a few more days, opening all the daily deals aside from Google Offers and see what happens.

  3. It stands to reason that the gmail algorithm considers any google mail important, by default. It would be damming if you said they weren't important and they still got marked as if they were (or vice-versa).

  4. Have you ever sent yourself an email and marked it with the high importance flag? Because that will show up in the Priority Inbox.

    Google is just sending email with the High Importance flag set so it does what you would expect and appears in your Priority Inbox.

  5. Good gravy! Google, a for profit company, is using one of its products (GMail) to promote another of its products! Who would have thought!

    It can't possibly because email from Google is considered Important because you read the very first email from them, the welcome to GMail message.

  7. Uh.. Google doesn't know you find the emails important until you tell it so (or through emailing back and forth with an address or over time from what you read from an address) and it automatically marks Google email as important.

    Mark something as important and all future emails from that address will be in your priority email.

    So a better title for your blog post would be GMail Priority Inbox: Working As Intended.

  8. Google knows that you signed up for Google Offers because it's your own account.

    They don't know the same thing about other daily offer emails because they do not have access to those other site's subscription information, and all these emails look like spam. So without that additional information available, how can Google tell the difference between spam/semi-spam and things that you sign up for? It can't, until you tell it they are important.

  9. Cross selling or bundling is only an issue if there is a monopoly. Gmail is hardly a monopoly. Gmail is 3rd behind Microsoft and Yahoo for webmail market share.

  10. Here's another topic for you to report on: how many of the sites started sending you offers even though you didn't confirm your subscription...

  11. Eccy: not sure why blogger didn't post your comment. Here it is:

    Eccy has left a new comment on your post "Google's Anti-Competitive Strategy for Offers":

    Coming up next: Blogger discovers that Microsoft advertises their own services on their own site, more than competitors services!

    Really, there's nothing to see here. If you don't want mail from Google prioritized, then mark it as unimportant. Their mail is marked important by default - it's their ad-supported service after all. The priority emails regarding deals are advertisements. And you can stop them showing up. Or you can not use the free Gmail service and not get them at all.

    Phrases like "This gives Google Offers an unfair competitive advantage in acquiring email opens and conversions" are incorrect and potentially libelous. The competition don't run ad-supported free email services.

    It falls well within "fair" because you OPTED IN to a priority inbox service which TOLD YOU that Google mails would be prioritized - and that you can prevent them from being treated as such. It was an entirely voluntary action on your part.

    If you don't want mails from Google (including deals) to show up as priority mails, don't sign up for a service which says it will do precisely that when activated.. This is pretty much a no-brainer, like the article.

    Posted by Eccy to Kasey Moffat at June 26, 2011 5:25 PM

  12. Thanks for restoring that. Also someone pointed out to me I did mis-attribute the advertising clause in Google's service agreement. It's not specific to Priority Inbox, but rather that they will target you with relevant advertising messages in a multitude of forms and locations, across all their services. To me, priority inbox serves as a highly lucrative potential location for them to target advertisements as they said they would.

    What would perhaps be more interesting would be to see if the same occurred on a paid Google business account. If it did, this is likely an unintentional side-effect of them simply marking all Google mails as priority by default, and perhaps something they need to look at if they want to avoid anti-monopoly rulings later down the track - it's hardly likely it's intentional as all Google mails are prioritized until it's trained.

    On the other hand, if it doesn't occur on a paid business account, it's almost certainly being targetted and falls within their service agreement.

    Either scenario isn't particularly malicious. As someone said before, it doesn't know what's a priority to you until you start training it by reading. By default, any message from them starts out as a priority message. This means the deal mails are included, although it's a side-effect of the above. I've never received a Google deal mail because I don't sign up for it.

  13. Since Gmail is a free service, I would not be surprised if Google were doing something like this to recoup their expenses, and it's a fairly innocuous effort too. If they were sending those other offers to Spam on purpose or delaying their arrival, that would be something.

  14. My groupon alerts are default marked "important" with no specific intervention on my part. Sounds like FUD.

  15. Priority Inbox works uses 2 models:
    - a personal model, created with the data of your own interactions with email
    - a global model, created with the data of the interactions of all gmail users

    Then, there are all those signals that gmail uses to tune the models.

    So even by not touching anything on your gmail account, the Groupon deals could get relegated to 2nd place if enough people mark it as unimportant.

  16. complete fud. clueless post or maybe another "facebook-like" paid post to spread fud?

    you signed up for a FREE service w/c says you'll get priority mails from google by default then you're complaining that this is happening. what an idiot.

    p.s.: for sure this comment will be deleted since this blogpost is completely moronic at its best :))

  17. When people like Groupon send out emails, they set a flag on the email, something like
    "Precedence: Bulk", they do this so that they are admitting to being a bulk emailer and so that they don't get flagged as SPAM as quickly. Google by default doesn't flag anything which is a bulk email.

    Secondly, as part of their own infrastructure, any email you send within Google (From Google accounts / Google domains / Gmail) those messages won't get a bulk precedence and the communication between the servers is digitally signed, this therefore means that the message is more trusted, and will therefore get the importance flag.

    If you had worked over the years a lot with email and looked harder at some of the flags on your email, you can figure out a lot of this stuff.

    "Never attribute to malice that which is adequately explained by stupidity" -- Hanlon's razor

    I would suggest that this has happened automatically (Different product teams), and with nobody thinking about it. Someone will probably read your blog and add in a bulk precedence to make you happy, but I don't think Google as a whole is going out of it's way to be "evil" on this one.....

  18. Issac has a very good point, you should rule out his hypothesis with a test where you sign up for the gmail account on a completely unassociated computer and see if Google does any linking based on them knowing you authentically own that email account and signed up for Google offers.

  19. Interesting! If this is intentional, then I think google is abusing double morals a little bit. They make life harder for every seo agency company out there by launching all these panda updates, etc, when they cheat the system and make their own business a priority.. I have always liked google so I hope this is not the case.