Angie’s List is doing a huge PR push these days and this piece in the NY Times is no doubt part of the fruit of that labor. The article surveys the landscape of what I’m now calling “social directories” (next-gen YP + community content). It goes briefly into the different demographics of some of the sites, contrasting for example the same gym review on InsiderPages vs. Yelp. It also talks about the incentives that some of the sites use to get reviews. It further touches on the fact that these sites are replicating the function of offline word of mouth.
But it’s mostly a general overview of the competitors. The article covers:
Angie’s List was way ahead of its time and has been around for roughly a decade. The model is like Consumer Reports: consumer subscriptions to prevent the appearance of bias (however there is now some advertising at the margins). Now that the site is rolling out nationally it has lots of competition from the sites above and from Yahoo!, traditional YP sites and others.
In the Southeast, where Angie’s list began, it has a strong brand but that’s not as true in places like San Francisco, LA, New York or Seattle. The consumer-pays model will make it tougher for Angie’s List to gain traction when there are so many “free” alternatives. Yet an advantage of that model is that Angie’s List doesn’t have to deal with the sales channel issues and advertiser acquisition headache that the free sites confront.
But Angie’s List must now also contend with the Google juggernaut, which wasn’t around when the site launched in the mid ’90s. Because of the centrality of search it now must buy traffic, which represents something of a double barrier to adoption. Angie’s List needs to rank on searches like “painters San Francisco” (it’s 7 on the paid side, not visible in organic). Clicking on the paid link takes you to the Angie’s List homepage, where you’re hit with the sales proposition rather than the content you’re seeking. In a word: seeyalater!
Angie’s List, because of its consumer-pays model also cannot arbitrage the cost of that traffic or otherwise pass it on to advertisers. That’s another fundamental challenge unless the site’s revenues in other markets can subsidize its expansion.
Brand is something of an antidote to buying traffic. But it’s hard to build a brand and takes lots of time, money and effort. Angie’s List is going to need to do some different things in the near term in the more competitive markets where it’s trying to establish itself, whether that’s heavy traditional marketing (radio, newspapers, TV) or free trials or both.