No online marketplace founder or entrepreneur set out to fail. The world loves a romantic success story, where a disruptive idea changes how we look at an entire industry. Two examples that immediately come to mind are Airbnb and Uber.
Yet, 90% of startups fail and that is something we don’t talk about enough.
Failure in itself may not be something glorious, but it’s an important ingredient for success. From failure comes learnings, and hearing the mistakes of other marketplaces can be very useful to followers looking to avoid the same pitfalls.
Learnings from a failed online marketplace
Anton Koval is the founder of Brainjobs.pl – a failed online marketplace. Today he’s moved on and is helping founders and companies build and grow their own online marketplaces, through his agency Braincode.
We caught up with him to hear the story of his failed online marketplace, what went wrong, and the lessons he learned from the experience.
In the first part of the interview, Anton shares the business idea, USP, and operational setup.
In part two, Anton shares what went wrong, the actions they took to turn it around, and the main lessons learned he took with him from the experience.
Anton Koval is a founder of Braincode an agency that works with founders and companies to help them build their own online marketplaces. Previously Anton bootstrapped his own marketplace in HR- Tech area. Anton is a big advocate of the platform economy and remote work.
Is your site suffering from ‘marketplace leakage’? If so it’s because your customers are sharing their personal details with each other – to avoid paying site fees. But by doing so they also put themselves at risk. Here’s how to make sure your business protects itself from marketplace leakage and those that use it.
Marketplace leakage (also referred to as ‘breakage’) is a real problem for many online businesses. According to Venture Capitalists, Samaipata, the term can be defined as ‘what happens when a buyer and seller agree to circumvent the marketplace and continue transacting outside the platform.’
Broadly speaking, there are several ways in which personal details are shared – via listings, embedded in images, and within one-to-one chats. Information shared typically includes phone numbers, email addresses, WhatsApp details, and money transfer account details.
From a user perspective, it might make sense to try and do so. However, many don’t realize the wider ramifications of marketplace leakage and the negative impact it can have on the platforms they transact on – and on their own businesses.
Let’s look more closely at the impact of sharing personal details online via marketplaces and what can be done to prevent it.
How personal details do damage
As we see it, there are 3 key ways in which sharing personal details can have a negative impact.
From eBay to Airbnb; Amazon to Fiverr – the vast majority of marketplaces facilitate the trade of goods and services. As a result, a core part of each platform is its payment infrastructure.
But not only do these solutions offer a trusted way for users to transact, they can also be used to collect fees – a percentage paid for using the platform.
In the early days of a platform’s existence, many sites may be available to both buyers and sellers for free – whilst the marketplace is trying to scale and get as many users as possible. However, once it’s reached a certain threshold and networks effects are visible, it’s common for them to begin charging, often through the transaction.
This is often when users – primarily those selling on these sites – will try to circumvent the platform and include their contact details in each post. It might be that they paste their email address in the product description itself, or create an image that has details included within it.
When this occurs, your marketplace loses out on conversions. It’s something that’s easy to overlook and – on the odd occasion – let slide. But in the long-term, activities like this will seriously dent your revenue generation.
One of the major differentiating factors between online marketplaces is whether they’re commoditized or non-commoditized – particularly where service-focused platforms are concerned.
While commoditized service providers are more about getting something specific fixed, delivered, or completed (think Uber or TaskRabbit); non-commoditized providers (eg Airbnb) take into account a number of determining factors – such as location, quality, and available amenities.
Due to the nature of these sorts of services, they are more likely to encourage personal interactions – particularly when repeat transactions with the same vendor are involved. Once trust and reliability are established, there’s little incentive for either party to remain loyal to the platform – meaning conversions are more likely to be forfeited.
Leakage of this nature was partly to blame for the demise of Homejoy – an on-demand home services recruitment platform. The nature of the work involved increased the likelihood of recurring transactions. However, it transpired that the features facilitated by the site – in-person contact, location proximity, and reliable workmanship – were of greater value than the incentives offered by using the site itself in many cases.
As a result, more and more transactions began happening outside of the marketplace; meaning that the site lost out on recurring revenues.
3. User safety
Losing control of the conversation and having users operate outside of your marketplace, increases the risk of them being scammed.
This is particularly prevalent in online dating, where even experienced site users can be duped into providing their personal details to another ‘lonely heart’ in order to take the conversation in a ‘different direction’.
eHarmony offers some great advice on what users should be wary of, but the general rule of thumb is to never disclose personal details of any kind until a significant level of trust between users has been established.
While similar rules apply to online marketplace users too, some telltale signs of a scammer are requests for alternative payment methods – such as bank or money transfers, or even checks.
An urgency to trade outside of the marketplace itself is also a sign to be aware of. So it’s important to advise your users to be cautious of traders that share their personal details. Also, make a point of telling them to be wary of vendors who are ‘unable’ to speak directly to them – those who request funds before any arrangements have been made.
In all cases, marketplaces that don’t monitor and prevent this kind of activity put their customers at risk. And if their transaction is taken away from your site, they forfeit the protection and assurances your online marketplace provides.
But unless your users understand the value and security of your platform, they’ll continue to pursue conversations off your site and expose themselves to potential scammers.
Preventing marketplace leakage
The best way to overcome these issues and prevent marketplace leakage is to do all you can as a marketplace owner to keep buyer-seller conversations on your site and reinforce why it’s in their (and to some extent your) interest not to share personal details and remain on your platform.
There are several ways to do this.
The stronger the communication channels are within your platform, the less incentive there is for customers to navigate away from your site.
From eBay and Airbnb’s messaging functionality (which look and feel like email servers) to one-to-one chat platforms (similar to Facebook Messenger or WhatsApp), or even on-site reviews and ratings; the more user-friendly and transparent you make conversations between different parties, the greater the likelihood they’ll remain on your site. A point we also highlighted and covered in our webinar about trust building through UX design.
In addition, it’s always worth reinforcing exactly what your marketplace offers users – and reminding them of their place within it. For example, telling them they’re helping build a trust-based peer-to-peer network is a powerful message – one that speaks to each user’s role as part of a like-minded online community.
Provide added value services
If users feel as though there’s no real value to using your site – other than to generate leads or make an occasional purchase – there’s very little chance that you’ll establish any meaningful connection.
The best way to foster user loyalty is to make the experience of using your marketplace a better experience to the alternative. In short, you need to give them a reason to remain on your site.
In addition to safety and security measurements – consider incentives, benefits, and loyalty programs for both vendors and buyers.
Turo, the peer-to-peer car rental site is an example of a company that does this very well – by offering insurance to lenders and travelers: both a perk and a security feature.
In a similar way, eBay’s money-back guarantee and Shieldpay’s ‘escrow’ payment service – which ensures all credible parties get paid; regardless of whether they’re buying or selling – demonstrate marketplaces acting in both customers and their own interests.
Another way in which marketplaces offer better value is through the inclusion of back-end tools, which can help vendors optimize their sales. Consider OpenTable’s booking solution for example. The restaurant reservation platform doesn’t just record bookings and show instant availability; it also helps its customer fill empty seats during quieter services.
Platforms that can see past their initial purpose and focus on their customers’ needs are those that thrive. They offer a holistic, integrated solution that addresses a wider range of pain points. Which is a great way of ensuring they’ll remain loyal to your business; ultimately reducing leakage.
Filter and remove personal details
A relatively straightforward way to prevent marketplace leakages is to monitor and remove any personal details that are posted on your site.
However, this can turn out to become quite the task, especially when the amount of user-generated content increases.
The next logical step here would be to direct efforts towards improving your content moderation. Either improve your manual moderation and expand your team or look at setting up an automated moderation solution.
An automated filter is a great solution to help prevent personal details to be shared, and although the filter creation process can be complex, it’s definitely possible to create highly accurate filters to automatically detect and remove personal details in moderation tools like Implio.
Machine learning AI is another great automated moderation solution that will help with preventing personal details, and much more. Built on your platform-specific data, a tailored AI moderation setup is developed to meet your marketplace’s unique needs. This solution is a great option for online marketplaces that look for a complete customized solution.
Added value and moderation – a mutual benefit
Trust, security, and accountability are the most valuable features that any marketplace or classifieds sites can offer its users. However, they’re not always the most visible components.
But when they’re parts of a broader benefit – such as optimized user experience or a suite of useful features – the need to share personal details and transact way from a site is mitigated.
That said, shared personal details will always contribute to marketplace leakage. And without the right monitoring and moderation processes in place, it’s impossible for marketplace owners to overcome the challenge of marketplace leakage.
At Besedo, we work with online marketplace and classified sites to help them make the right choices when it comes to safeguarding their businesses and users by removing personal details.
To learn more about how you can prevent personal details form your marketplace, specifically through automated filters, check out our Filter Creation Masterclass on June 25th at 4:00 pm CEST.
Wondering whether the technical side or the business side is harder when building marketplaces?
Well, they are equally difficult.
However, if you’re competent with technology or have a good web development team, the technical side will be much easier.
It will also help to be aware of common technical pitfalls and challenges. At Sloboda Studio we’ve identified the top 4 technical challenges in software development of marketplaces that founders may face:
#1: Multiple user roles
There are three common user roles in marketplaces: customers, suppliers and administrators. Customers and suppliers affect the construction of the marketplace in particular, whereas administrators can be found on almost any project. Marketplace development begins with a clear definition of user roles, their permissions and access level, and ways to interact with each other.
Challenge: Different interfaces
The difficulty here is to create three different interfaces that work perfectly on the same platform but can function differently according to the role of its user.
User roles should have personalized interfaces, and tools for interacting with the platform, registration forms, personal accounts and, most importantly, different permissions. Each query must either be allowed access to only one of the user types or return different results.
#2: Marketplace security
While building an online marketplace, you need to make sure you’ve eliminated all the gaps and security issues, starting with GDPR compliance and ending with data leakage and hacking proofing. This can be accomplished by following the best practices of development.
Data privacy and identity verification are the top priorities for marketplace security. The security issue has especially intensified after the introduction of GDPR.
Challenge: Data Privacy
Data should be collected with the user’s consent; otherwise, you’ll be in violation of data protection regulations. There is no data privacy without data security.
To protect against hacking, Sloboda Studio uses the latest versions of all user libraries to avoid possible security breaches. You can also use Github or Snyk to prevent any vulnerabilities in your marketplace platform.
Challenge: Identity verification
Verifying a user’s identity is a big part of marketplace security. One common way to verify identity is to ask for a passport, driver’s license or other types of ID.
In addition to asking for ID, your marketplace can also request phone number verification.
The authentication process comes after a user’s identity has been validated. Unfortunately, traditional methods of online authentication, such as the use of simple passwords, don’t work now since many frauds have appeared in the last several years.
There are many options available for secure authentication:
The system may authenticate users with a special token generated on the basis of his/her password during login. The passwords themselves are not stored in the database and are encrypted with special algorithms. The front end sends the user’s token to the back end, and the token is validated.
The authentication process can also be simplified by signing up using a social network login, for instance, by using and connecting a Facebook account.
You may also wish to use two-factor authentication, for instance, a one-time password or code that is sent to the user via email or SMS. This method drastically improves security.
You can also use a variety of solutions like OAuth and OpenID. If your app features an API, you can use JWT tokens. The advantage here is that JSON Web Tokens can store additional useful information about users, resulting in higher performance. In the case of cookies, it is sometimes necessary to make requests for more information. With JWT, this information can be transmitted in the token itself.
Every marketplace has its own website monetization system. There are a few available online payment solutions that can be implemented. However, you need to think of all possible scenarios in order to avoid payment failures.
Challenge: Payment method
Having the right payment method is key to building to trust and encourage transactions through your platform. It’s important to find a payment method that works smoohtly both for your business and for your users. (sellers and buyers alike)
Using payment gateways like Stripe or Braintree as a payment solution would be a great choice for service marketplaces. Stripe has a powerful API that is integrated directly into your marketplace. The most important advantage of this payment integration is its transparency and stability.
#4 Multiple time zones
Challenge: Different time zones
It is no secret that when you use a global rather than a local marketplace, there is a good chance that your supplier and customer will have different time zones. Say you want to book an interpreter for your meeting. Which time zone are you going to choose?
In order to avoid giving your customers a headache, and to make life easier for everyone, you need to have a universal time zone. We save user time zones in IANA format, which is the time zone database (a.k.a. TZ or Olson database). It’s a universal database of information on global time zones used with computer programs and operating systems. For convenience, our team of developers keep time in UTC and then convert it to the user’s time zone.
Challenge: Day-light saving time
Another difficulty can be a recurrent order or service that is repeated at a previously scheduled time. Let’s say a customer sets an appointment for a cleaning service, by the same company, on Thursdays at 9 a.m. During daylight savings time, the customer’s service time changes.
The solution here is to create a special service that verifies whether the current time is in the same period (i.e. daylight savings time) and whether or not the time has changed for that period, then adjusts it according to the desired time.
To sum it all up, there are a number of technical challenges facing marketplace owners, including security, payments, time zones, price adaptability, user diversity, and the necessity for a user-friendly interface.
Top recommendations for founders:
- Start by creating three different user roles, with individual registration forms and separate accounts.
- In order to protect your marketplace, use the latest version of libraries and always double-check authentication.
- Think of all possible scenarios in order to avoid payment failures and use Stripe or Braintree to give both sides a seamless payment experience.
- If you have a global marketplace, ensure that your suppliers and customers have the same time zone and don’t forget about time changes, such as daylight savings time.
- Don’t forget that your customers are people, and as much as you want, the platform can’t eliminate the human factor of the marketplace. So make sure to think through each case when you need to notify others about possible issues or delays. Notifications should be sent not only to service providers but also to customers.
Pavel Obod, Founder of Sloboda Studio, Top Ruby on Rails company in the world according to Clutch. Sloboda Studio has been providing high-end web development services for almost 10 years. Pavel is also a Payoneer’s ambassador in Ukraine.
Trust is a key component of a successful marketplace and there are many small parts that help achieve it. One element that plays a major role in trust-building is of course how you present your platform to your users and the experience they have while using it. But how can you use UX design to build trust in your marketplace?
UX design is often described as the process of enhancing user satisfaction by improving the usability, efficiency, and accessibility of a website.
This definition is true when designing for online marketplace too. A marketplace’s UX design should be viewed and function as the spine of the platform. Its task is to efficiently guide users through the site to the desired end destination (oftentimes transaction completion).
What’s different for online marketplaces, is that most of them rely heavily on user-generated content. This dependency limits the level of control you have over a vast majority of the user experience. Since you are not the one choosing the images and creating the text, it’s harder to ensure that it aligns with your brand, tone of voice and messaging. A marketplace’s role is to help strangers find and transact with each other. Without the important physical clues, we’d normally use to establish trust and the added challenge of limited content control it can be a struggle to achieve high enough trust levels for strangers to engage.
That’s why it’s vital for online marketplaces to include trust-building elements in their UX design. It’s also imperative that this is combined with a highly selective content curation and reviewing strategy since low quality and irrelevant content can quickly destroy any trust gained from trust-inducing UX design.
Keep in mind that trust building isn’t a one-off effort. In order to achieve a truly trustworthy marketplace, your trust-building elements need to become an integral part of your marketplace’s UX design, from pre-acquisition and throughout the entire user journey. On top of that, you need to continuously deliver on the trust promise you make with your UX design. This means following through and actually making your users safe for instance by offering great and timely customer support, curating and reviewing content diligently and providing secure payment channels.
How do I build trust through UX design?
Make sure to design and develop the user journey for trust. Whether it’s keeping your top listings on the home page, ensuring quality suppliers, presenting honest reviews, or offer easy support, UX elements like these will help build trust in both your platform and users.
Want more detailed info on how you can build trust into your UX design? We invited Bec Faye, Marketplace Optimization & Growth Specialist, for a webinar to share her knowledge and expertise. Watch the full webinar recording here.
User content is the lifeblood of marketplaces. It can feel counterproductive to remove listings, posts or profiles, but the reality is that some content just isn’t good for your site or users. Whether it be spam, scam or just low quality that makes it undesirable, you need to curate what users post. However, while you need to manage and remove inappropriate content to protect your users and maintain a high-quality inventory, the goal should always be to limit the volumes you reject.
What’s the main purpose of refusal reasons?
Refusal reasons play a huge role in decreasing the number of items you must reject, by giving you better insights into where and why issues arise on your site and what policies users generally clash with when publishing content.
If properly implemented, refusal reasons are also very helpful in providing on-point feedback to your users that help educate them, increasing the chance of them getting their content approved next time they post. An example of feedback could be an email stating “We do not accept the publication of ads referring to counterfeited items or piracy, streaming app, etc.”
The success of marketplaces relies on good quality content and good user experiences. This cannot be achieved without proper feedback via refusal reasons.
Is there a template for the best refusal reason implementation?
The ideal refusal reason setup varies from marketplace to marketplace depending on the audience, location, and inventory. This means that each setup will be unique, however, there are some elements that marketplaces universally must consider when it comes to refusal reasons. Having worked with players of all sizes across the globe for more than 15 years, we’ve been able to build a framework of best practices that work as a guideline for solid refusal reason management.
To help you implement best practices for refusal reasons, we spoke to our head of filters Kevin Martinez. He’s worked with most of our clients advising them on how to best manage and implement their refusal reasons. Here are his 4 tips for better refusal reasons.
What should you think about when deciding a refusal reason?
A refusal reason must be easy to understand for the user attempting to post his ad, but also by the agents doing manual moderation. If the refusal reason is too convoluted, the user will not understand the feedback they receive, and you run the risk of them repeating the offense and getting their content rejected again. This obviously causes a very negative user experience most likely resulting in increased churn.
If the refusal reason isn’t clear to the agents doing manual moderation it will both impact the quality of feedback your users receive and decrease the value of the insights you’re generating through refusal reason analysis. Furthermore, if your refusal reasons aren’t clear it will likely cause confusion and reduce the efficiency of your agents by preventing them from taking fast decisions.
Another advice for building good refusal reasons is to approach it from a content quality view rather than focus on item categories or services.
Create refusal reasons that can be applied broadly while still representing the same issue and where the educational email sent to users makes sense regardless of what item they were trying to post.
For instance, a modified PS4 that can run illegally downloaded games, fake Nike shoes and a cloned smartphone, could be refused with the same refusal reason: counterfeits and piracy. The feedback email sent to users who get their ad refused, for this reason, will need to be general enough to cover all cases included in the refusal reason category, but also informative enough to educate the user properly. It can take a bit of tweaking before you get it right, but it’s an important exercise if you want to have an efficient refusal reason setup.
How many refusal reasons should you have?
The fewer the better.
A high-performing and well-trained agent working in an optimized content moderation tool can handle about 600+ ads per hour. Even the best agent, however, will be significantly slowed down by a bad refusal reason setup. Too many, or vague, refusal reasons will cause confusion and efficiency loss. For example, if you expect Cannabis to be refused as drugs, paracetamol as medicines and that fat-burners should be refused for pharmaceutical products, you create confusion for the agents to use the proper refusal reason per items.
Grouping items, representing the same content issue, decrease the seconds an agent need to spend when deciding the action for each content piece.
On the other hand, it’s also important to do not have too few refusal reasons. Otherwise, the data you get will be too broad giving you no actual meaningful insights. For instance, if all bad items are refused for forbidden items without any distinction (weapons, drugs, profanity, etc.) you cannot take proper action to improve/maintain the quality of your site as you will be unable to pinpoint the main issues to focus on.
Any refusal reasons that are universal to all marketplaces?
In general, refusal reasons are unique and tailored to the specific marketplace or community, however, there’s one refusal reason that’s sadly universal to all marketplaces: SCAM. The refusal reason setup for scams can be replicated across marketplaces because it should, practically, always follow the same structure. Anything refused as scam should not result in an educational feedback email to the user, and the content piece should not go live.
Scam should also always be the top priority refusal reason to use in cases where a content piece breaks the rules in multiple ways. For instance, a scammer trying to sell something illegal, should not be refused with the illegal refusal reason, but always with the scam category. Using the wrong category for scam content helps educate the scammers in how they can circumvent your system and get their content published next time.
One other example of universal refusal reasons is duplication, we have yet to see a marketplace where there’s been any reason to have duplicate content, and the educational email is always straight forward and easy to understand.
What is an example of a good or bad refusal reason?
A bad refusal reason is too generic, an example could be a refusal reason called forbidden items/services. A refusal reason like that isn’t giving the user detailed feedback on why their content wasn’t approved and as such doesn’t allow them to improve.
Good refusal reasons, on the other hand, target specific bad content and group them by family. For instance (drugs with medicines or weapons with fireworks). The title of each refusal reason should also be very explicit and consequently logical to use for the agents and easy to understand from an end-user perspective.
This is the approach we use in the Besedo Layers. Apart from helping agents to be more efficient, and improve the user experience for those adding content to your site, it also makes it easy to narrow down your site’s biggest content threats when analyzing the refusal reason data.
Getting more out of your refusal reasons
Whether you are looking to improve your refusal reasons, or need to build the framework from scratch, your first step should be listing your overall needs. Look at what you want to get out of the data, what information your users need, and then balance that with what your agents realistically can handle while maintaining high efficiency.
Once you’ve pinpointed these needs, you can start building the framework. List all the refusal reasons you believe you’ll need, then start trimming it by grouping similar ones.
Finally, test the new structure with all involved stakeholders, agents, end-users and those who are going to use the data gathered from the refusal reasons. As with most things in content moderation, refusal reasons need to be tweaked from time to time, but it’s important that they don’t change too often. Otherwise, you risk reducing agent efficiency, confusing end-users and collecting data that can’t be compared with previous samples, making long-term data comparison and content moderation strategy near impossible.
If you need help or advice with your refusal reason setup or content moderation strategy in general feel free to reach out for an informal chat about how Besedo can help solve your needs.
If user generated content is the lifeblood, then the portal is the spine of any successful marketplace. Without a quality portal your entire business will quickly collapse.
Developing and maintaining the framework of your marketplace can be hard and expensive work, that takes away focus from other critical business areas like monetization strategies and product evolution.
Luckily there are a lot of great partners out there providing platform solutions. Russmedia Solutions is one of the most experienced companies in the business, having completed more than 100 successful projects.
We had a chat with their CRO Adrian Daniels about common challenges, pitfalls and tips for marketplace owners setting up their portal.
What does Russmedia do?
RussMedia Solutions is an international company that offers software services for online businesses. Our solutions include Job Board Software and other specific solutions for Real Estate Platforms, Car Portals and other online classifieds. We apply a structured approach to development, supported by dedicated project managers and product owners. Today our expertise includes digital marketing, user experience, SEO and conversion rate optimization.
Some of our key features include semantic search, matching, and classification based on machine learning, artificial intelligence, great filtering capabilities, user alerts plus very powerful analytics.
We began as an internal software development department of the Russmedia group, but soon after that, we started to develop online portal solutions not only for our internal products, as we started having requests for our solutions from external partners. We also took on the development and maintenance of news, job, car and real estate portals. Since then it’s been 15 years and more than 100 successful projects.
Why should marketplace founders partner with Russmedia to build their marketplace instead of using an in-house team?
We’ve built many projects from scratch. First our own portals and then many for our partners. When you have an in-house team the cumulated experience of your team is rarely that rich and diverse. Finding a solution outside your company might very often prove to be more effective not only cost wise but also from the human resources management perspective. You do not have a handful of people that are specialized in very specific technologies, but an entire company at your disposal with a lot of experience and with expertise in multiple areas. You have support around the clock and you also get to be part of a community.
Having a company that offers software as a service also saves the cost in developing new features or functionalities, many times we develop these and then offer it to our clients either as part of their subscription or at a better cost than if they would have developed it in-house.
You’ve recently joined us in a webinar around migrating from one marketplace tech to another, could you give us one example of pitfalls you’ve seen marketplace owners fall into when going through this process?
For sure, we assisted and conducted many migrating processes. some very successful, some that had many challenges. From my experience, there is a huge risk if planning has not been done thoroughly. Transparency and setting up clear goals is crucial and unfortunately, it happens that some of these checkpoints are not completed.
If you’d like here is a very short list:
- Schedule proper training for all users of the new tool
- Make a test migration with live data – It’s Important to test with live data, to measure migration timings and find out possible data issues with live data before the actual migration. Once data is there, more complete tests can be performed.
- Make sure all involved parties are present on migration date
What are some of the most common challenges marketplaces have when reaching out to Russmedia?
There are multiple situations, but 3 of the most common are:
- Undersized infrastructure – companies that did not plan their growth in advance and went for a lower budget solution which is not scalable, and then they end up in the situation where they need to migrate to a different solution for this very reason.
- The platform they currently use is not flexible enough – We often have prospects that tell us their current solution does not support multiple languages or cannot be integrated with certain apps or simply some desired design upgrades are not possible on the current platform
- Start-up in need of a solution
There are many vendors out there that can help build a marketplace. What sets Russmedia apart?
Indeed, many great companies and many good solutions are out there. I believe our key differentiator is the fact that our platforms are highly customizable. We are very flexible when it comes to integration or any other custom requests. We developed various projects for our clients from classic real-estate portals or general job portals to jobs in aviation or a marketplace for horses. We can adapt our platforms to nearly any language.
Last, but not least our partners become part of a community. We take on the innovation of new features, so the client no longer has to worry about this. Sometimes we give them new features that they did not even consider developing, but which end up being a great revenue stream for them.
Any examples of past projects that you’re really proud of? What made that project, in particular, a success?
We are proud of all our projects. Vol.at, CVOnline.hu, Laendleimmo.at, Simplysalesjobs.co.uk, Laendlejob.at, Immo.tt.com, Jobs.tt.com, just to name a few. If we’d have to pick one of them maybe laendlejob.at. It is also part of our group and it looks great; it works great and it is highly profitable.
You’ve just recently partnered with Besedo. How does that fit into your strategy? Does it allow you to provide an even better or more complete offering?
Absolutely. Besedo has great tools. AI-powered moderation tools are something that every marketplace should have. This partnership allows us to give more to our clients and it takes the pressure off our team as we no longer need to invest in research to develop something like this.
Last but not least Besedo’s solutions, like ours, are tailor-made so every client gets their own customized solution.
If you could give one piece of advice to those setting up a marketplace portal what would it be?
Plan. Make some plans and when you are done revise those plans. You also need to make sure you plan for the long term. Make sure you take into consideration at least the first three years of your existence and make sure that when you build your business it will be scalable.
This should also reflect on the infrastructure you are setting up. It might seem cheaper to get an off the shelf solution at first, but after a few months you might realize this was not a great idea higher costs are involved and more effort: migration, scouting for a different platform all the back and forth…you lose time and money.
About Adrian Daniel
Adrian is Chief Revenue Officer at Russmedia Solutions. he’s worked his way up in the company, so he knows the business inside-out. Started as a junior programmer in Russmedia more than 9 years ago and believes that technology is here to help us.
He mostly enjoys the fact that technology can create endless possibilities to help businesses thrive. Classifieds portals and their growth have been his focus for nearly a decade and now as a CRO he is am looking at all the potential that Russmedia’s solutions can offer potential partners.
He is highly motivated and believes that any problem has a solution.
We recently had the pleasure to interview the former CEO of dubizzle, and founder of Working in Digital, Arto Joensuu. Throughout the interview, Arto shares his knowledge, experiences, and advice on how to establish a successful online marketplace, as we explore numerous key areas vital to marketplace success including lead generation, monetization, expansion, trust building and much more.
Q: Hi Arto, thank you for taking the time from your busy schedule to talk with us. Can you begin by sharing some insights about your career so far?
Arto Joensuu: Hi Emil and thanks for getting in touch. Sure. I’ve been working in the digital side or marketing throughout the past 20 years. It all started in the late ’90s with a startup in the mobile services space (we’re talking ringtones, SMS groups, mobile wallpapers, and WAP-based games back then). Iobox was doing some pioneering work in this space and I was happy to be a part of it until it got sold off to Terra Mobile. I then went on to do a “quick” visit at Nokia, which spanned across 12 years and included pretty much the “A-Z” across the digital customer journey. After Nokia, I spent 6 years in Dubai, UAE, where I had the opportunity of being involved in one of the early stage success startup stories: dubizzle.com. After the company was sold off to Naspers, I’ve been involved as an investor and advisor with multiple startups, ranging from job finding solutions for the emerging markets, cryptocurrencies for classifieds and once in a lifetime golf trips across the world. Time flies…
Q: Your first steps into the world of marketplaces were as Head of Marketing at dubizzle in the UAE. How did you strategically align the business and expanded the growth?
Arto Joensuu: Dubizzle was at an interesting stage of development when I joined. It had become a success in Dubai (one of the emirates within the UAE) and was looking to expand further within the country, as well as across the MENA region. The company was led by 2 smart and driven entrepreneurs who wanted to spread the concept across the region and simultaneously increase the revenue streams within the UAE.
In order to prepare ourselves for growth expansion, we needed to ensure we had a common understanding of WHY we exist as a company as well as how we could go about driving this vision forward across markets that we had little personal understanding on. This sparked an internal workstream to define our overall purpose/vision (WHY), our common values (WHO), our operational strategy (HOW) as well as the expected outcomes (WHAT). Some would label this as a brand exercise, I would call it the formation of our manifesto and overall red thread for the years to come. The end result of this exercise is best summarized on Mark’s website. (http://emmarkjames.com/#/)
Q: What were the most important components in your marketing strategy at the time?
Arto Joensuu: On a broad level, we used to talk a lot about 2 types of marketing functions/skillsets: makers and spreaders. Makers were fundamentally responsible for bringing our brand purpose to life through content. Spreaders mastered distribution and optimization. Our content at large was divided into stock and flow content, signifying larger “stock” content pieces centered around wider themes, whilst the “flow” content was more reactive or trigger based.
Another important dimension to the strategy was a holistic understanding of the customer journey and user segments. The customer journey had to be looked at holistically, spanning across overall awareness generation, to engagement, conversion, retention, and monetization. The user segments themselves focused on finding the equilibrium between sellers and buyers as well as b2c vs b2b segments. This, in returned, ensured proper equilibrium between both entities, resulting in a vibrant marketplace where demand and supply met “eye to eye”.
This is where your analytics can play an important role in helping you navigate the waters across both, the acquisition and retention funnels. In addition to our own online metrics tools, I always found it extremely useful to map out our overall communication efforts across all channels. If we were doing PR or other on-ground activations, we could suddenly go back and start seeing patterns between overall awareness generation as well as actual engagement through organic visits and non-paid media.
It’s by no means rocket science, as long as you’ve established clear end action goals that you are monitoring. Is the registration process simple enough? What is our 30-day retention rate? Are the listers able to list their items at ease but with high quality? Do the items get sold? How often are they coming back?
At dubizzle, one of the key metrics we used to look at was what we called “ruffians” (another way of pronouncing RFNS, which meant returning, free, non SEO traffic). This metric was particularly important to us, as it signified a “quality returning visit” and was a good indication for true organic, non-prompted retention. For individual transactions, it was pretty clear that you had to ensure (and reward) for the quality for the listing (to get more views and leads) and simultaneously, ensure that the listing to sales cycle was as rapid as possible. If an item has been listed for several days and isn’t getting leads, we could trigger automated emails to our users, where we prompted an edit/enhancement to the listing (ad a better description/copy text or insert additional images, etc. If the quality score of the listing was good, then perhaps the price was wrong and we educated the seller with average sales prices for similar items he or she was trying to sell.
Q: Do you think your strategy can be replicated today?
Arto Joensuu: I believe that these fundamentals continue to remain relevant in today’s time and age. Organizations that are purpose driven and have their minds set across the entire value chain tend to find their way. I guess the important thing is to stay true to your “why” and not let that get diluted along the way.
When it comes to horizontal marketplaces, I think the same rules still apply in terms of getting the critical mass onto your platform and later monetizing and expanding into b2b verticals. Of course, in today’s time and age, we are seeing the emergence of more and more niche driven marketplaces, where volumes of users are not necessarily large but the engagement and the volume of transactions/retention are extremely high. A big enabler for this has been companies like Sharetribe, that in a similar manner to Automattic (the creators of WordPress) enable marketplaces around niche interests to become mainstream. We can see how social media is constantly evolving from niche players emerging and later getting acquired by larger players and becoming mainstream medias. The same early adopter audiences move on to new niche communities while the masses flock to the services orchestrated by the big internet players. The evolution is constant, and the overall classifieds industry is not immune to this disruption revolution around the corner. Big players need to find new ways to evolve the classifieds marketplace and overall core loop involved.
Q: One of your key responsibilities was to expand dubizzle geographically, can you share how you succeeded with the geographical expansions?
Arto Joensuu: Our regional expansion was a combination of sleepless nights, insane turnaround times, 2 political revolutions, a lot of Red Bull and an end result which sparked a nationwide movement. In other words, welcome to Egypt, basha!
In retrospect, (it’s always easy to be the Monday morning quarterback) there were a lot of elements that made our Egypt expansion a success. Here are a few things I personally felt that made a true difference for us.
1. Decide to win.
We knew that another large classifieds player was also entering the Egyptian market and we had very little time to turn things around. This meant that we needed to put our full weight behind this initiative and our previously crafted brand work really served us well in this context. A highly aligned team can make all the difference in the world when things get tough.
2. Acquire the sellers.
I guess we all know that classifieds marketplaces stride on large volumes of high-quality content. Content attracts buyers and buyers means successful re-distribution if items that people have fallen out of love with. We focused quite strongly on the general items for sale segment, meaning everyday household items that people no longer needed. A great way to do this is to introduce an element of lifestyle-driven marketing into the mix, where the seller represents an aspirational target group that in return attracts buyers into the marketplace. For example, a young family that is selling a baby carriage that their child either outgrew or was originally given as a “double gift” brings people in similar life stages together and can even result in new friendships being formed.
3. Become the talk of the town.
As dubizzle entered the Egyptian market, we wanted to create and engage in an overall society-wide conversation about the second-hand economy. In Egypt alone, the value of unused items people had in their homes was equivalent to the entire GDP of Sweden. If people would take action and sell the items they have fallen out of love with, more money is re-fueled into the economy hence improving the overall economy in the country. This meant an overall paradigm shift in the definitions of ownership as well as the new vs second hand thought process. By tapping into a universal topic that had an impact on the whole society, our dubizzle GM was a frequent visitor to talk shows where larger Egypt wide topics were discussed. Becoming the talk of the town isn’t about creating a clever marketing campaign, it’s really about creating a movement.
Q: How do you think marketplaces need to approach geographical expansions today?
Arto Joensuu: There’s always been active dialogue around the need to localize vs. going to market with a more globally led brand identity. This topic goes beyond brand identity, however. At dubizzle, we soon realized that our mainly desktop driven English site for the UAE would not cut it as we planned to enter mainly Arabic speaking markets. We needed to build our MENA sites from scratch, taking a mobile and Arabic first approach to the whole process. At the time, we realized that for example, Arabic font libraries that were mobile (or even desktop) optimized were scarce and in many instances illegible on mobile devices. Before thinking about a localized marketing campaign, we need to fix the basics and develop a user experience that didn’t get in the way of our core loop. We also noted things like email vs mobile number penetration across emerging markets. It was basically useless to have an email sign up and we went directly to mobile number-based registration methods as these were the common standard across the region. We were fortunate that these changes were made before we entered the Egyptian market with a bang. By having the fundamentals in place, we could shift our focus towards overall activation and awareness building.
Q: In marketing, it’s important to have a consistent tone and imagery. With a marketplace, you heavily rely on user-generated content. How do you ensure that the content submitted by users adheres to, or at least doesn’t break, your tone of voice?
Arto Joensuu: Content quality is a common theme/struggle for any classifieds business. The overall listing process is an obvious area where good content can be encouraged (and incentivized by for example giving the listing higher visibility within the marketplace). The move to mobile/app-based solutions allows for easier image uploading, but also the potential addition of other metadata that can make the discoverability and look & feel of the listing more attractive. I think that also the tone of voice across the overall category structure and content fields can have a big impact on the overall end quality of the listing itself. In recent years, we’ve seen market entrants into the classifieds space (such as Soma), who have taken the individual listing into a more shareable/interactive product card format. What this does, is that the product starts having a life of its own and can be embedded and promoted, liked and shared across multiple venues. This forces the content to be good if it wants to have legs to spread (and live beyond one-off transactions).
Q: How do you make sure that your front page, or first search page, is in line with the brand you want to portray?
Arto Joensuu: This is quite a large topic in itself but obviously, one dimension that differentiates a classifieds marketplace from a more traditional e-commerce marketplace is the overall transaction category structure. For ex. when you enter an e-commerce site, you’re pretty much already certainly looking for a specific item (or category of items in that segment). The overall search process is more structured, and the items displayed usually start from that user-generated search pattern. With classifieds, the process can be similar to an e-commerce play (you go in and search specifically) but there’s also a profound layer of random discovery. For example, you didn’t necessarily know that a 1979 Darth Vader helmet was for sale but you discover it by chance. The home page can serve this endless treasure hunt of discoveries by bringing high-quality content to the home page instead of immediately driving your users down the traditional search path. A lot of the mobile/app driven classifieds spin-offs are leveraging this in quite smart ways and the discoverability along with smart geo and metadata can make the overall user experience a unique one. The brand is the experience and this touches every aspect of the service.
Q: You’ve also helped marketplaces improve their lead generation. Is SEO still important? and do you have any tips on how marketplaces can improve their lead generation?
Arto Joensuu: I think SEO and SMO both continue to play an important role in overall lead generation. If you think of giants like YouTube, a big part of their content gets consumed outside of their own site/app via embedded links on other social channels and websites. This speaks to the fact that lead generation needs to evolve beyond optimizing what’s on your site and thinking about ways in which your user-generated content gets extra mileage through social recognition and distribution.
Q: Do you know of any new creative ways to improve SEO and lead generation?
Arto Joensuu: With reference to Soma’s interactive product card, if an item has a wider lifespan than an individual interaction, it starts accumulating equity throughout its entire lifespan. Here’s where I think the next big thing in classifieds and e-commerce could potentially reside in. Picture this scenario:
When an e-commerce player sells a new mobile phone, they have the transactional data of the one-off sale, after which the item pretty much disappears off the digital grid until the owner decides to sell it on a classifieds site. When the item is posted online, the classifieds player gets a small piece of the item lifetime, as they know when the item was sold and for what price. Then again, it goes off the grid until it’s maybe sold for the 3rd time or disposed for recycling.
What if these items had a digital identity (aka an interactive product card) from the get-go? This would fundamentally bridge the gap between e-commerce and classifieds and could even extend into the whole sustainability piece at the end of life stages of the manufactured device. Along the way, item sale and resale value would be tracked, the item would form “link bait” of its own, as the IIC could be liked, shared or promoted by man and machine alike. Manufacturers would get valuable information on their product resale value, quality, “life expectancy” and distribution. Classified players would basically have multiple touchpoints to the value chain as technically the item is never deleted once sold. This is something I believe has immense potential in the future.
Q: When is it important to optimize monetization? and what are the ‘must have components’ in a successful monetization strategy?
Arto Joensuu: Monetization basically contains two dimensions, the b2b, and b2c sides. I guess that with any of the 2, it really comes down to a healthy equilibrium of buyers vs sellers. Traditionally it was about getting the needed b2c sellers and buyers onto the platform, which in return would bring the b2b players onboard and this would be the first segment that you monetize. Once you’ve become the clear market leader, the b2c monetization kicks in towards the later stage of monetization. The industry has obviously evolved from this and you start seeing rapid verticalization of certain segments (ex. property, cars, jobs) instead of pursuing with a unified horizontal classifieds approach only. You can also start seeing early stage monetization happening with more niche classifieds players where highly specialized b2c groups start forming around specific interest areas like fashion, watches, collectibles, etc.
Perhaps one of the toughest transitions in the abovementioned monetization streams is related to going from b2b monetization to b2c side monetization. There’s always an element of fear that by putting up a paywall to a b2c category, you will lose traffic and users to a competitor. When dubizzle decided to monetize its cars section on the b2c side, the team spent a lot of time evaluating the overall transition and ultimately, the overall used car ecosystem/landscape within the UAE. What we discovered quickly is that b2c users listing their cars on the marketplace received substantially more leads than the other platforms and that the end user was (on average) able to sell their car at a higher price than by going through a 3rd party. We also ran a series of A/B tests to identify the right price point for the listing fee and mapped out the various payment solution providers that would fit our user needs. In the end, the launch was successful and paved the road towards monetizing across other categories as well. In the end, I think it’s really about perceived value for your offering and if the marketplace works, people are ready to pay a small fee to the marketplace enabler.
Q: Trust is key for a successful marketplace, what’s your view on trust and how do you think marketplaces can build a safe platform?
Arto Joensuu: Trust is important. Of course, the definition of trust is probably universal to a degree but the ways in which you address this can vary greatly from country to country. There’s always been a debate about whether buyer profiles should also be registered/verified profiles to avoid fraud. Should the facilitator act as an escrow that holds onto the money until the transaction is completed and validated by both parties. Can we increase trust by having seller reviews and ratings etc. etc. Customer support and overall communication obviously play an important role here and educating the user based on potential pitfalls is very important. Companies such as the one you represent play an important role in preventing fraudulent or bad listings to the marketplace. I don’t personally have a silver bullet answer to the whole equation, to be honest. Maybe you should answer this question instead 😉
Q: How can you differentiate yourself as a marketplace in 2019, when there are a ton of new marketplaces popping up?
Arto Joensuu: I think this comes back to the “WHY” your company exists and what’s the deeper substance behind what you are trying to achieve. People don’t buy what you do, they buy why you do it and having this clear vision filter across everything you do creates differentiation. This might also mean that you need to be willing to sacrifice your current cash cows (and create new ones in the long run) by continuously innovating and finding ways to disrupt existing business models. Perhaps a point to make here is that it’s not about disruption “for the sake of disruption” but instead, finding new ways of bringing your “WHY” to life. Think about Kodak. If their true purpose was to enable people to capture their most precious moments in life and re-live them through pictures, they should have been all over the digital camera (which they actually invented). Instead of embracing this new way of bringing their purpose to life, they never capitalized on this new innovation because (at least in the short run) it would cannibalize their film business.
Arto Joensuu is a digital change agent with over 20 years of professional experience across startups as well as large multinational corporations. His professional expertise lies within a profound understanding of the digital landscape and its impact on companies both small and large. Whether it’s about leading a large corporation into the digital era, or helping startups cross the tipping point, Joensuu has been there in the trenches and has the battle scars to prove it. Throughout his career, he has held several leadership positions, ranging from pioneering in digital/mobile marketing at iobox/Terra Mobile during the late 90’s to spearheading the company-wide digital strategy and execution at Nokia. At dubizzle.com, Joensuu spearheaded a transformational re-branding initiative, which had profoundly positive implications across the entire company. This initiative led to a streamlined vision, common set of values and a cultural transformation that could serve as a platform for growth across the organization. He later continued as dubizzle’s CEO, leading the company’s monetization efforts, regional expansion, operational alignment with majority owner Naspers, as well as facilitating the early stage growth of classifieds spin-off Shedd. Today, Arto Joensuu is the founder and CEO of Working in Digital, a network of digital change agents that invest in early stage startups and actively support these organizations as non-executive directors. Current portfolio consists of:
Think the big tech players don’t tackle content moderation in the same way as your classifieds business? Think again! At a recent European Parliament conference, leading lights from some of the world’s best-known technology companies gathered to share their ideas, and challenges. But exactly what are they up against and how do they resolve issues?
No doubt about it: content moderation is a big issue – for classifieds sites, as well as content and social platforms. In fact, anywhere that users generate content online, actions must be taken to ensure compliance.
This applies to both small businesses as well as to the likes of Facebook, Medium, Wikipedia, Vimeo, Snapchat, and Google – which became quite clear back in February when these tech giants (and a host of others) attended the Digital Agenda Intergroup’s ‘Content Moderation & Removal At Scale’ conference, held at the European Parliament in Brussels on 5 February 2019.
What came out of the meeting was a frank and insightful discussion of free speech, the need to prevent discrimination and abuse, and the need to balance copyright infringement with business sensibilities – discussions that any online platform can easily relate to.
Balancing free speech with best practice
The conference, chaired by Dutch MEP, Marietje Schaake of the Digital Agenda Intergroup, was an opportunity to explore how internet companies develop and implement internal content moderation rules and policies.
Key issues included the challenges of moderating and removing illegal and controversial user-generated content – including hate speech, terrorist content, disinformation, and copyright infringing material – whilst ensuring that people’s rights and freedoms are protected and respected.
Or, as Eric Goldman, Professor of Law at the High-Tech Law Institute, Santa Clara University, put it ‘addressing the culture of silence on the operational consequences of content moderation’.
Addressing the status quo
Given the diverse array of speakers invited, and the sheer difference in the types of platforms they represented, it’s fair to say that their challenges, while inherently similar, manifest in different ways.
For example, Snapchat offers two main modes on its platform. The first is a person-to-person message service, and the other – Discover mode – allows content to be broadcast more widely. Both types of content need to be moderated in very different ways. And even though Snapchat content is ephemeral and the vast majority of it disappears within a 24-hour period, the team aims to remove anything that contravenes its policies within two hours.
By contrast, Medium – an exclusively editorial platform – relies on professional, commissioned, and user-generated content. But though the latter only needs to be moderated – that doesn’t necessarily make the task of doing so any easier. Medium relies on community participation as well as its own intelligence to moderate.
A massive resource like Wikipedia, which relies on community efforts to contribute information – rely on the same communities to create the policies by which they abide. And given that the vast wealth of information is available in 300 different language versions, there’s also some local flexibility in how these policies are upheld.
Given the 2 billion users it serves, Facebook offers a well-organized approach to content moderation; tasking several teams with different trust and safety responsibilities. Firstly, there’s the Content Policy team, who develop global policies – the community standards, which outline what is and is not allowed on Facebook. Secondly, the Community Operations team is charged with enforcing community standards. Thirdly, the Engineering & Product Team build the tools needed to identify and remove content quickly.
In a similar way, Google’s moderation efforts are equally as wide-reaching as Facebook. As you’d expect, Google has a diverse and multilingual team of product and policy specialists – over 10,000 people who work around the clock, tackling everything from malware, financial fraud and spam, to violent extremism, child safety, harassment, and hate speech.
What was interesting here were the very different approaches taken by companies experiencing the same problems. In a similar way that smaller sites would address user-generated content, the way in which each larger platform assumes responsibility for UGC differs, which has an impact on the stances and actions each one takes.
Agenda item 1: Illegal content – Inc. terrorist content & hate speech
One of the key topics the event addressed was the role content moderation plays in deterring and removing illegal and terrorist content, as well as hate speech – issues that are starting to impact classifieds businesses too. However, as discussions unfolded it seemed that often what should be removed is not as clear cut as many might imagine.
All of the representatives spoke of wanting to offer freedom of speech and expression – taking into account the fact that things like irony and satire can mimic something harmful in a subversive way.
Snapchat’s Global Head of Trust, Agatha Baldwin, reinforced this idea by stating that ‘context matters’ where legal content and hate speech are concerned. “Taking into account the context of a situation, when it’s reported and how it’s reported, help you determine what the right action is.”
Interestingly, she also admitted that Snapchat doesn’t tend to be affected greatly by terrorist content – unlike Google which, in one quarter of 2017 alone, removed 160,000 pieces of violent extremist content.
In discussing the many ways in which the internet giant curbs extremist activity, Google’s EMEA Head of Trust & Safety, Jim Gray, referred to Google’s Redirect program – which uses Adwords targeting tools and curated YouTube videos to confront online radicalization by redirecting those looking for this type of content.
Facebook’s stance on hate speech is, again, to exercise caution and interpret context. However, one of the other reasons they’ve gone to such efforts to engage a range of individual country and language experts in their content moderation efforts – by recruiting them to their Content Policy and Community Operations teams – is to ensure they uphold the rule of law within each nation they operate in.
However, as Thomas Myrup Kristensen – Managing Director at Facebook’s Brussels office – explained the proactive removal of content is another key priority; citing that in 99% of cases, given the size and expertise of Facebook’s moderation teams, they’re now able to remove content uploaded by groups such as Al-Qaeda and ISIS before it’s even published.
Agenda item 2: Copyright & trademark infringement
The second topic of discussion was the issue of copyright, and again it was particularly interesting to understand how large tech businesses curating very different types of content tackle the inherent challenges in similar ways – as each other and smaller sites.
Despite being a leading software developer community and code repository, the vast majority of copyrighted content on GitHub poses no infringement issues, according to Tal Niv, GitHub’s Vice President, Law and Policy. This is largely down to the work developers do to make sure that they have the appropriate permissions to do build software together.
However, when copyright infringement is identified, a ‘notice and takedown system’ comes into play – meaning the source needs to be verified, which is often a back-and-forth process involving several individuals, mostly developers, who review content. But, as a lot of projects are multilayered, the main difficulty lies in unraveling and understanding each contribution’s individual legal status.
Dimitar Dimitrov, EU Representative, at Wikimedia (Wikipedia’s parent company) outlined a similar way in which his organization relies on its volunteer community to moderate copyright infringement. Giving the example of Wikimedia’s media archive, he explained how the service provides public domain and freely licensed images to Wikipedia and other services.
About a million images are uploaded every six weeks, and they’re moderated by volunteers – patrollers – who can nominate files for deletion if they believe there’s any copyright violation. They can then put it forward for ‘Speedy Deletion’ for very obvious copyright infringement, or ‘Regular Deletion’ which begins a seven-day open discussion period (which anyone can participate in) after which a decision to delete or keep it takes place.
Citing further examples, Mr. Dimitrov recalled a drawing used on the site that was taken from a public domain book, published in 1926. While the book’s author had died some time ago, it turned out the drawing was made by someone else, who’d died in 1980 – meaning that the specific asset was still under copyright and had to be removed from the site.
Vimeo’s Sean McGilvray – the video platform’s Director of Legal Affairs in its Trust & Safety team – addressed trademark infringement complaints, noting that these often took a lot of time to resolve because there’s no real structured notice and takedown regime for these complaints, and so a lot of analysis is often needed to determine if a claim is valid.
On the subject of copyright specifically, Mr. McGilvray referenced Vimeo’s professional user base – musicians, video editors, film directors, choreographers, and more.
As an ad-free platform, Vimeo’s reliant on premium subscriptions, and one of the major issues is that users often upload their work for brands and artists as part of their showreel or portfolio; without obtaining the necessary licenses allowing them to do so.
He noted how to help resolve these issues, Vimeo supports users when their content is taken down – explaining to them how the copyright issues work, and walking them through Vimeo’s responsibilities as a user-generated content platform; whilst giving them all the information they need to ensure the content remains visible and compliant.
Looking ahead to sustainable moderation solutions
There can be no doubt that moderation challenges manifest in different ways and are tackled in numerous ways by tech giants. But the common factor these massively influential businesses share is that they take moderation very seriously and dedicate a lot of time and resources to getting it right for their users.
Ultimately, there continues to be a lack of clarity between what is illegal – according to the law of the land – and what constitutes controversial content. That’s why trying to maintain a balance between free speech, controversial content, and removing anything that’s hateful, radical, or indecent is an ongoing battle.
However, as these discussions demonstrate, no single solution can win in isolation. More and more companies are looking to a combination of machine and human moderation to address their content moderation challenges. And this combined effort is crucial. Machines work quickly and at scale, and people can make decisions based on context and culture.
Whatever size of business you are – from a niche classified site covering a local market to a multinational content platform – no-one knows your users better than you. That’s why it’s so critical that companies of all shapes and sizes continue to work towards best practice goals.
As Kristie Canegallo, Vice President, Trust and Safety, Google said “We’ll never claim to have all the answers to these issues. But we are committed to doing our part.”
Want to learn more about liability and the main takeaways from the content moderation at scale conference? Check out our interview with Eric Goldman.
We all know that each individual marketplace is unique and comes with its own set of requirements and challenges. However, from our 17 years of experience, we’ve also found that some challenges are universal for most online marketplaces. The vast majority of marketplaces struggle with or wants to increase monetization, acquisition, conversion, and retention and often these challenges are closely tied to the user experience.
This means that if you are having issues in one of the areas mentioned UX is often a good place to start when you are looking for a culprit and a solution.
If you struggle with monetization, acquisition, conversion or retention it is highly likely that you are not meeting user expectations.
If you were, they’d be staying on your site and happy to pay for the service, right?
The reason you are not meeting their expectation could be due to several issues. Low-quality inventory, poor customer support, hosting an unsafe platform, for instance, are all very common issues that severely damage the user experience.
Analyzing and pinpointing where the issue lie is the first step, the next is finding a good solution to fix it.
How to turn around decreasing user experience
We get it, user experience is a broad area and improving it can be approached in many ways as such it can sometimes be hard to know where to even start. Seeing how others go about it can be inspiring and help you find the solution that fits your specific site.
Let’s look at a real-life example of diminishing UX. Kaidee, Thailand’s largest C2C marketplace, saw their UX drop significantly when not living up to their users’ expectations of short time-to-site. Their users turned to public forums, including Facebook and The AppStore, to actively complain about it. This was, obviously, not good for Kaidee as it hurt their retention and acquisition nor was it good for their users, who clearly was unhappy with the product at the time.
Kaidee had to act. They looked internally, at their own platform, to find ways to shorten the time-to-site for their users and improve their UX.
We invited the CEO of Kaidee, Tiwa York, for a webinar, where he openly shared how they managed to overcome the negative trend of diminishing UX, how they approached an aging core platform and how they managed to save 6 months of development time while achieving 85% automation of their total moderation processes.
Here’s the full transcript of our webinar “Kaidee’s journey to improved UX using automation”
OK, first of all, I may apologize that there is a slight delay from my slides as they come through, so we may have to wait for the visuals to come up on your site.
It has to do with we’re operating out of Thailand. So quite a long way away from Sweden at the moment. So just a little bit about Thailand. We got a sixty-nine million person population, GDP per capita about $17.000, and Internet users are quite a healthy penetration, 57 million. It’s keen to note that the growth in internet users are all smartphone base.
So Thailand’s a market that jumped from desktop straight into smartphones, and desktop is a minor part of the traffic today. Desktop represents about 20% of our traffic, mobile web is about 40%. And mobile apps are another 40%. So in terms of our social media landscape, Facebook users we’re ranked number eight globally in the number of Facebook users. I think still today Bangkok is the number one Facebook city in the world.
So there’s a little bit of background for the Internet landscape of Thailand and moving on for a time for Kaidee itself. As I mentioned we reached about 30 million Thais and that represents about 329 million visits. We do, roughly, about 27 million to 30 million visits per month. 7 million uniques and about 600 to 650.000 uniques per day, generating about 15 to 20 million page views. And we get about 30000 items listed per day.
Last year we had 8.7 million items listed for sale. And our top category is cars, it’s RodKaidee. So we have a sub-brand, it’s not a subsite just a sub-brand called RodKaidee, which means cars. And by the way, Kaidee translates into English as “sells well”.
Number two is motorcycles, number three is mobile and tablet, and number four is property. So BaanKaidee, which means ‘house sells well’, and number five is auto parts. Another key thing, in terms of our usage, how some people use Kaidee, is that we’ve got a large portion of our traffic that searches for items on the platform, and we do about two to three million keyword searches per day on the platform.
The top five things searched for was PCX, Honda PCX, MSX is another Honda motorcycle, Yamaha R15, so you see motorcycles are a huge category for us. And then speakers, and finally refrigerator. So that gives you a good idea of the business itself. Now, if we take a look at the moderation landscape. We don’t have too much freedom of press in Thailand to put it straight forward.
There are several different laws that we have to abide by. So one of the most strict law is Lese Majeste laws, which means you can’t criticize or be critical of the royal family. So that means, one thing gets public on my site that goes against the royal family. Basically, I’m in trouble with the law and it’s a very serious topic. In addition to that, there’s a lot of consumer protection board laws in Thailand that we have to abide by. In fact, the Consumer Protection Board hired a full-time person to just watch Kaidee.
That’s it, that’s their job.
And then we’ve got, for example, no selling cigarettes. E-cigarettes are illegal in Thailand. Alcohol, so you can sell a bottle, let’s say a Johnnie Walker. As long as there’s no alcohol in the bottle. If there’s alcohol in the bottle, that’s illegal to be placed online and advertised. We also have FDA laws that are very strict. For example, in Thailand the best breast pumps, among the babies category. Breast pumps are considered a medical device and medical devices are not allowed to be advertised unless you have a distributor license for it. So technically by law, if it’s a secondhand item I can trade it. I’m just not allowed to advertise it. Down to the fact, that it’s illegal to print it out like A4 and stick it in front of the grocery store. That’s illegal in Thailand for medical devices. So it kind of gives you an idea of the landscape that we deal with. We also abide by all World Wildlife Fund trading laws for pets.
So we try to make sure that illegally traded animals, ivory, things like that, are blocked off the site and we have people tried to sell elephants, monkeys, birds, that are illegally tried. Yes, they have tried and we have to block all that content. So, kind of gives you a landscape of why we’ve been very serious about moderation, and the landscape that we deal with. And now for us to tell a little bit about our story and our journey with moderation.
When we launched the site we were 100% post moderated, so we would check on whatever got posted but let it go live first. But with the landscape that we have, we realized we need to be pre-moderated. And so we went to 100% pre-moderation. We had to build a tool of our own. We started building that tool in early 2012 and developed it over time and our ad moderators were human. So it was manual and they were moderating about 350 to 400 ads an hour, each.
That tool was developed in-house and built on our back end that we built from 2011. And we were quite serious, but it was also slow. We had always aspired to try to get to 95% of ads moderated within five minutes. We never, at the time with our manual moderation, were trying to block fraud and spam. We were doing about, less than 20% would go live in less than five minutes.
And people were complaining, they would complain on all the message boards, on Facebook, on the App Store and saying why does it take so long for my ad to get approved. They wanted instant gratification, so along this journey of moderation I guess is another thing that, for those of you who aren’t doing in moderation at the moment, it’s also a key differentiator in our strategy. So we believe that moderation and our ad quality team is the heart of our business. And the reason they’re important is because they keep the quality of my marketplace going.
And the idea is that if I don’t have a quality marketplace, nobody wants to walk around in my marketplace, nobody wants to visit me. So we try to keep high control over the quality of listings that go on the site. If you look at the site today, for those of you who are checking it out right, now you’re going to see that we still have struggles with this. In fact, with image quality and all the policies that we have in place, we still can’t capture everything. But we do our best to try to keep a quality marketplace. No spam, quality of images, quality of products, no fake goods, things like that. So it gives you an idea of where we started from.
Now the critical piece in the storyline happens at the end of 2016. I was sitting around having coffee with my CTO and we’re looking at our core platform that we had been built in 2011. And we realized we needed to update the core platform. In the core platform, we had updated everything else to be a services architecture.
We built everything we could in the services, but we had this monolithic core which was our ad posting and members system. We looked at it, and we said, look if we’re going to drive this business for the next 5 to 10 years, we need to fix this. Now, we decided to take the hard yards of fixing that. Part of that, to fix that, meant we would have to rebuild our moderation tool, and rebuilding that moderation tool was a massive undertaking. Because we looked at it saying OK we can rebuild our core system, and what we went to was a services architecture with a messaging platform behind Kafka. We brought in things like Cassandra for real-time tracking of analytics. We switched from a MySQL database to a ProQuest database and really tried to up our technology game. But that also meant I had to rebuild our tool and we looked at and we said, oh my gosh if we have to rebuild the tool, that’s going to be 6 months worth of development and it’s going to take up, basically, my full team of developers.
So today we have a product and dev team with about 30 people. We’re currently growing that. So if anybody listening, that’s interested in working in Thailand, let me know. But we said that’s going to take most of our team to rebuild. At the same time, Besedo came knocking on our door. So Besedo would come to talk to us about their solutions all the time. But for us, we were looking for just the moderation tool. And it happened to be at that point they had just purchased, or just joined forces with the AI company. Is that correct Emil?
Yes, we acquired IoSquare back in 2016. That’s correct. Yeah. And they had this new moderation tool that they were building with machine learning behind it.
So when we talked to William at Besedo, we said, actually now is the right time and we’re keen on just your tool, Implio. We’re not looking to outsource the moderation, because that’s very close to our heart. But could you build the tool that you have, can we integrate it and use that as our moderation tool?
So that’s kind of where we started and started the conversation. And if, correct me if I’m wrong, but I think we were the first integration that was purely a tech platform pure play for Besedo at that time. Is that correct?
You were most likely, at least one of the first. I’m not entirely sure, that you’re the first, but definitely one of them for sure.
Now with that, there were some challenges, and we faced some challenges. One of the challenges we faced was understanding the lifecycle of an ad and how passing that from our core system into Implio, and then receiving that back and how to manage that ad. So it’s not like you just turn on Implio and you’re done. You actually have to think about the whole UX for your customer service team, your internal moderation team and how it passes between our core platform over into Implio.
The other challenges we had was, we had to feed them a lot of learning data. So we worked, I think a total of four months continuously, with Implio’s data science team to try to increase the accuracy of the system.
We also discovered a lot of garbage in our own dataset, and we had to do a lot of data cleaning. We had to figure out how, you know, where is the garbage and how do we get that cleaned up so that we’re passing good quality data so that Implio can learn from our data and understand it in order to bring up the accuracy of the system. I think those are most of the challenges covered. What else do we have? There was another one.
Another challenge, in terms of implementation, was the policies that we have. In setting the policies within Implio to match our policies, that we have to abide by, or by the law. It took our team quite a bit of time to understand how it worked with Implio, and we had to spend time on that and take effort to understand how the policies affect your moderation rules, what gets rejected, what gets accepted, and what has to go to manual moderation.
Another challenge we had, was that the rejection cases (refusal reasons) that we had. We had a lot more rejection use cases than Implio did on their side. So we had to go figure out how we could map ‘this ad is rejected because of X, Y and Z’, but that doesn’t reflect the status with Implio. So these are kind of the challenges that we had to overcome.
I think the total time, from the day that we decided to go forward with Implio to the day we launched, was right around 6 months and that was because we had to work on our side, on how to integrate Implio and also Implio doing all the data learning and data cleanup for us. Yeah. Emil, did I cover pretty much all the topics that we discussed? I’m not looking at my notes at the moment.
Absolutely, and I mean a lot of the reasons why this was a time-consuming part as well, is because Implio was incredibly young at the time. And like you mentioned with the quality data. In order to build a quality AI model, that is able to catch a high number of bad content at high accuracy, you need to have quality data to train. So, if you train an AI model with poor data, that’s the result you will get as well.
So the next slide is the results. How did this turn out for us? By leveraging this tool, today we have greater than 95% accuracy in moderation. We are now reaching upwards of 94% within five minutes from moderation to go live, and 85% of all ads are automatically, or auto-moderated, as we call it. Auto-moderated, which means it’s all machine learning that does it for us today.
When we launched, we were at about 65% automation, and as we gained confidence and understood how to work with the policies and rules within Implio, we grew that to 70%. Then the Implio team themselves worked really closely with us to push that up into the 75, then 80 percentile and now 85% today. So that means about 15% of all our ads come back to the moderation team and we have to manually look through them. Trying to identify all the other rules, is it spam, is it fraud, is it real, is it fake? All the other things that Implio is not sure of when it sends it back to our team.
Yeah. So from our perspective with Implio as a partner, our team has said they’ve found it great as our partner. We work with a lot of different vendors and a lot of partners, Besedo has been really proactive and responsive to our team in how to make adjustments and improve.
Some of the other challenges. Here’s another key detail. Back when we launched with Implio, the UX needed a lot of improvement, in order to do the workflow so we could do it at speed. Implio worked really closely with us and understanding our team’s needs. We showed them our old tool and they really worked to improve that front-end experience and the UX experience for the moderators. In terms of choosing Implio, I honestly don’t know of other platforms that can answer our marketplace needs like they do, and we’re happy to have them as a partner.
I don’t mean that just as a sales gig, but I actually mean it, as it’s been a key part and a key partnership for us in moving our business forward. The other result that we got from this, is it allows my tech team to not have to build this whole tool and actually maintain it. So we get a lot of cost savings in terms of our tech time because that’s offloaded to Implio. Now I don’t know how to measure that in terms of ROI on the budgeting costs, but I can tell you on the different side of what about our moderation team.
So pre Implio, we had 40 moderators working. Today we’re down to 18. If you look at the total cost, it’s about break-even, maybe a little bit more expensive because of technology. But once you put in the cost savings of my team, of our dev time behind it, it’s definitely much more efficient and effective for us. So that kind of brings me to the end of my story, or my journey as Kaidee.
In the increasingly competitive landscape of online marketplaces, utilizing data to fuel growth has become a necessity. In 2016, Manish Gupta, a mentor for entrepreneurs, even started calling data ‘the new dollar’, referring to its true value in terms of growth and value adding.
Due to its nature as platforms for user-generated content, online marketplaces are a treasure trove of data. But not all data is created equal and spending time tracking and chasing the wrong signals can easily cause you valuable time and kill your competitive edge rather than induce the much-coveted growth you were after.
The sheer volume of data available to a marketplace might feel overwhelming, and deciding which data to track can even be considered scary for some. In these scenarios, marketplaces risk becoming paralyzed and simply choose to go on with their business without accurately measuring their success or failures.
How do you go about tracking data that can be used in an actionable way then? The most important thing is to have a clear-cut purpose for the parameters you decide to actively monitor.
Tracking data is important, but don’t track data just for the sake of it.
To best apply a data-driven approach for your marketplace success, first, define which lifecycle stage your platform is in; are you getting started and focusing heavily on growing? Have you gained traction and are now winning market shares from competitors? Or are you an established player looking to expand your current market or offering?
We call these three stages for Grow, Defend and Expand.
Knowing your lifecycle stage, it’s time to determine your goals. Set tangible and achievable goals unique to your situation. Stay true to your site’s current lifecycle stage and set goals within your reach, you will redefine them once you’ve excelled and your marketplace moves to the next stage.
A few examples of goals can be to increase gross merchandise value (GMV), establish reliable customer support protocols, retain buyer and sellers etc.
The last step is to finalize which parameter to monitor. Investigate which data you have easy and sustainable access to, and make sure they are relevant to measure the success of your goals.
The key to tracking your success is to have an accurate and true overview of the direction your online marketplace is moving. In our marketplace health cheatsheet, we look further into the goals and which kind of parameters you should consider tracking, given the lifecycle stage you’re in.
You can also learn more about actionable data-tracking from our webinar “Put your data at work: 3 steps to achieving a healthy digital marketplace.”