How Tech Companies Are Getting In-between Small Businesses and Customers
Major Australian tech companies, like MenuLog and HealthEngine, are using Google’s paid advertising platform as a way to profit from the goodwill of small businesses.
The tactic involves exploiting Google’s advertising platform. Allowing these tech giants to divert existing customers away from a local business’s website to their own platform, ‘refer’ them back to the business, and charge the business for the privilege.
Platforms like HealthEngine are, in theory, supposed to act as a conduit for customers to easily find relevant health service providers and make online bookings. Healthcare providers which sign up for HealthEngine’s service do so for its online booking functionality as well as a way to find new patients and grow their practice.
HealthEngine’s marketing services are paid for by way of a referral fee, on the assumption that patients booking online through the HealthEngine site are a new patient the business couldn’t have found otherwise with its own marketing efforts.
The problem, however, in this arrangement, is that HealthEngine is incentivised to send as many bookings as they can to the healthcare provider to maximise their referral commission.
When someone searches for the name of a specific practice, HealthEngine are able to display an ad at the top of the search results. In turn, when the patient books online, they do so on the HealthEngine website and not on the website owned by the small business.
Instead of marketing to customers who are unsure where to find a provider or which provider to use, they are able to simply claim existing customers as new referrals and profit.
Let’s take a look at the example below.
My local GP is St Francis Medical Centre. When I want to make an appointment with them, I do what most do and Google their name.
After all, who saves phone numbers anymore?
When I do this, the first search engine result shown is not the website of St Francis Medical, but HealthEngine. Not only that, but HealthEngine uses the name of the medical centre as the headline in the ad.
The average person would most likely assume the HealthEngine ad to be the practice’s own and would make a booking through that link.
This is not only the case with the search of a business, but of an individual practitioner as well.
Someone searching for a business name or healthcare professional’s name on Google, must already know the business. Most likely they are either an existing patient or have been referred to them by someone who is. In this situation, they would have booked with this business without the need of HealthEngine.
With over 11,000 practices on their books (by their own claims), this tactic is likely profiting them an sizable figure in referral commission.
HealthEngine is no orphan in this regard among similar customers. It’s a common practice for large tech ‘disruptor’ companies with similar models to use their scale and better knowledge of online marketing to place themselves between small businesses and their customers and profit during the process. All the while, providing no added value to the small business using their services.
Try this search yourself…find a local company you use, search their business name in Google and see if they too are being taken advantage of by one of these companies.
Pathfinder is a boutique performance marketing agency. Rather than selling you a package for SEO, Google Ads, Facebook Ads etc. We focus on what you do, how you do it better and develop a cross-channel approach to generate your business a consistent flow of business at the best return on ad spend as possible.