Local Search, Usability and the Power of Brand

I’m going to circle back to some of Peter Horan’s comments at the Kelsey Group show. There was a lot that he said that was interesting to me, some of which is captured in this ClickZ article (emphasis below is mine):

“What I’m trying to do with integrating all these products is come at it like an average consumer and try to get things done. We will be bringing these brands together, as needed by the consumer. We will drive from the consumer perspective,” Horan said. “Where all these deals break down is when you’re pitching top down.”

Horan pointed out that users no longer use the Internet in such a way as to allow a branded site to show them information, but have instead shifted to using the Internet to search for things relevant to what they need. He also attributed branded search as the culprit for slower success in local search.

To date, we haven’t gotten as much traction in local as we all expected to, and I think there’s a fairly specific reason. The difference is that to date we’ve been operating in a world of brand driven media,” he said.

For the consumer a great experience is you give them a smooth click stream from the question to the answer. To get whatever it is they want done,” he said. “In this process brand aids the process, but they don’t drive the process anymore.”

To be successful, local search companies must provide actionable information and action-oriented information, especially after a “nuclear explosion of content” in the past five to 10 years, he said. He also admitted that the most successful local search companies are not Web-based at all, but are an “anathema to Web companies. It’s the Yellow Pages, and the daily news services, and they’ve got armies of people walking down the street and knocking on doors,” he said. “Ultimately those are the folks that have been actually able to get the deep coverage that we all want in local. But it’s a high cost model.”

Let’s assume this is all essentially verbatim and/or a correct paraphrase of Horan’s remarks. I didn’t take my own notes.

From my point of view, the most interesting things he said were about brand, its relationship to the consumer and role in the marketplace. I want to take and discuss these bolded comments in turn:

“We will be bringing these brands together, as needed by the consumer. We will drive from the consumer perspective.”

IAC needs to do this anyway to create more value for the company. As I understand Horan, he’s advocating the idea of providing information from multiple sources (IAC and/or third parties) in a single destination or click stream. In other words, Ask City contains Citysearch data but also links to Open Table (not an IAC property). A simplified view of this is that this is either just the Google model or a version of the “Web 2.0″ belief that everyone must be open to everyone else’s content – the “walled garden” no longer works. Alternatively Horan is simply acknowledging the now cliché statement that “the consumer is in control” and consumers don’t have to pay attention if they don’t like what they see (or don’t see as the case may be).

To date, we haven’t gotten as much traction in local as we all expected to, and I think there’s a fairly specific reason. The difference is that to date we’ve been operating in a world of brand driven media

This comment about “brand driven media” may again be about the notion of brands and media companies being able to dictate to consumers in prior eras. But the “traction” issue is about advertiser adoption more than any other single factor.

But who is the “we” here? Is this “the industry” (Internet) or IAC in particular? Either way, from a consumer perspective, local search is already a big mainstream phenomenon online (109 million users per comScore’s conservative definition of local search). The other thing Horan may be decrying is that nobody “owns” it; what we call “local search” is really distributed across many sites and vertical categories today. (The “Internet is the yellow pages,” to quote Marty Himmelstein.)

Indeed, from a leads or commerce perspective, local ultimately swallows the Internet. But again no single player “owns” it.

The media companies want to “own” local search so it can be better monetized by them for the benefit of their advertisers. This is the old “monopolistic” model that was possible when publishers owned the sales force, the content and the users. That’s gone. The online analog is the old AOL or “Web 1.0.” (Web 1.5 from this standpoint is MySpace.) Only a handful of companies with massive scale online have a shot at reproducing something like this today.

For the consumer a great experience is you give them a smooth click stream from the question to the answer. To get whatever it is they want done,” he said. “In this process brand aids the process, but they don’t drive the process anymore.”

This suggests that relevant parts of IAC will become more like Google (or Ask) or a true local search engine, linking to and partnering with desired content regardless of whether it’s “owned and operated” or from a third party. Ultimately Horan is talking about trying to provide the best content and user experience in local. But I wonder how far the company will go to realize that vision?

While Ask City has started to execute against that philosophy – offering content from several entities in search results – much of that content comes from IAC-owned properties, including InsiderPages one of the formerly independent content partners. I think there’s some ambivalence about owning all the assets vs. simply being focused on generating the best user experience.

Providing the best user experience also recognizes real-world behavior. For example, in contrast to the nice demos that one often sees at conferences, I’m unlikely to sit down and research restaurants for Saturday night, then see what movies are playing, buy tickets online, determine nearby theater parking and then make my Open Table reservation all in a single, seamless session.

In reality this will probably involve two or three (or more sessions) over 24 hours and I may equally call on friends and probably will phone the restaurant to make a reservation rather than use Open Table. I may and probably will use multiple sites and tools to conduct my research.

Why? Because either the data and content aren’t all there in one place or I can’t entirely trust what I’m looking at and need to confirm it via multiple sources. Think about the pain of online travel: more information than we ever needed but, paradoxically, very few trusted and efficient sources of that information.

He also admitted that the most successful local search companies are not Web-based at all, but are an “anathema to Web companies. It’s the Yellow Pages, and the daily news services, and they’ve got armies of people walking down the street and knocking on doors”

This statement is certainly not true from a consumer standpoint, only from a sales perspective. Yellow pages and print newspapers represent an old quasi-monopolistic media model with a relatively effective sales channel attached (in part because of the monopoly aspect). From an outsider’s perspective, the past 10 years at Citysearch have in one sense been about learning the painful lesson that most small businesses won’t show up and buy online advertising themselves. Companies like Google (and Judy’s Book, InsiderPages and others) have more recently learned that lesson.

Telephone sales can be quite effective in selling online media to small businesses, but here’s where brand comes back into the picture.

Even today, brand = trust and trust helps establish brand. All things being equal I’m going to go with a trusted source. Why, for example, do people keep paying for Norton Anti-Virus software when equally effective free versions exist? Mistrust of the no-name brands. Why do people flock to Starbucks Coffee? (Don’t say “quality.”)

There’s a difference if someone calls me as a SMB and says, “I’m calling from ‘Big Leads Online,’ buy some advertising” vs. someone calling from Citysearch or a similarly recognized site. If I don’t have a brand, I have to sell someone else’s brand: “We’ll put your ads on Google and Yahoo!”

In Act II of local search (as I like to call the period we’re now in) part of the task is refining the sales strategy, determining the optimal cost of customer acquisition and managing fulfillment to reduce churn.

On the consumer side, as my examples above suggest, brand continues to matter — perhaps more today than ever. I agree with Horan that brand may not automatically equal consumer trust or adoption. What helps create or destroy brand is the user experience, which implicates content.

For example, the TV show “The Sopranos” is both a brand and a user experience. The user experience is a quality show, which creates and reinforces the brand and usage. But the brand, once established, has a momentum that is self-sustaining unless quality visibly suffers.

The same is true for Google. Once an innovative product without a brand, it has become a brand that maintains consumers usage because it’s familiar and works fairly well. There are other sites out there that may perform certain functions or tasks better – sites in vertical and local search are good examples – but Google continues to maintain usage and momentum because it’s one of the top global brands and is trusted.

Another obvious brand powerhouse is Apple and the iPod in particular. It offered a better user experience and gained so much adoption and momentum that nothing else can touch it (at least for the immediate future). Indeed it has the only brand in portable music; most consumers don’t even consider other players. Perhaps that will change over time but it’s a remarkable accomplishment.

I would thus argue that brand remains a critical concept. But brand is more complex today than in older media paradigms. And maybe, ultimately, what Horan is impliedly arguing is that what makes a brand is changing somewhat. He may be saying that consumers are much more selective and independent, and when it comes to online media you can’t take anything for granted as you once might have.

You can’t buy consumers anymore and you can’t manipulate them as readily with expensive campaigns and marketing messages. These days, with a clever campaign, you might be able to get them to “look up” but you can’t get them to adopt unless you really understand what they want (even get ahead of that a little) — and find a better way to deliver.

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6 Responses to “Local Search, Usability and the Power of Brand”

  1. AhmedF Says:

    From what I gathered (I was there), Peter was emphasizing how companies are so stuck up on brand that they refuse to let users go anywhere else. His example was OpenTable, how, even though it is not an IAC property, they have it interested into AskCity.

    His other example he kept citing was integration coming ‘soon’ with Evite. Again, a non-IAC property, but the idea was simply to make as seamless a user experience as important (and thus letting go of the ‘importance’ in each individual brand).

    It is Google-like – their entire idea is to get you wherever you want fast, in the idea that you will come back when you want to ‘go’ somewhere else.

    I was going to ask what the uptake has been on AskCity, but alas (even after having the mic) I was unable to ask that question.

  2. Kris Says:

    Right now, only about 5% of small and medium-size businesses are using paid search. There is a need to reach out (educate) small businesses (by Yellow Pages — already have a relationship with small businesses). Also, location (LBS / GPS) technology is not accurate enough to a block-level to locate a user’s device with respect to the Point-of-Interest (POI).

  3. Here's Where I Agree... « Screenwerk Says:

    [...] fit in such a universe? Targeting is the perfunctory answer. As I’ve tried to argue, branding is as relevant today as it ever was to the consumer experience — and even more as information spirals out of [...]

  4. Is CPA/PPA the Right Local Ad Model? « Screenwerk Says:

    [...] CPA/PPA the Right Local Ad Model? IAC’s Peter Horan said at the Kelsey Group show that local search had failed so far to deliver on its promise. He was referring to several things, [...]

  5. links for 2007-03-27 « harbour 7 Says:

    [...] Local Search, Usability and the Power of Brand « Screenwerk (tags: local+search) [...]

  6. Maria Says:

    I have to agree with Kris on this one.

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