Facebook: 1.5M SMBs Have Pages

Thanks to Eric Eldon on Inside Facebook for pointing this data out: “More than 1.5 million local businesses have active Pages on Facebook.”

This is not the same as having 1.5 million advertisers, and the SMBs are there in large part because pages are free. However, to put this in perspective, Facebook now has more SMB Pages than AT&T has SMB advertisers. Google has more than a million SMBs (though no specific number is available) that have claimed listings or added content at the LBC.

Most impressively, this number is roughly double what was previously reported (700k) only a few months ago. The implications of this are fairly clear:

• Facebook has a “captive” audience of SMBs to sell stuff to
• It will probably be only a year or so before Facebook has an equal number of SMBs on its platform (with pages) as the US YP industry has advertisers (3 or so million)

(Intuit claims 6 million “SMB relationships” and Amex says it has 8 million SMB cardholders.)

SMBs don’t know how to “work” social media for the most part or how to measure ROI. How often are these pages updated or news feeds used for example? In other words, they have a presence but that presence may not be a particularly effective marketing vehicle for them — just as a static website without more doesn’t do much for an SMB these days. However these SMBs are showing up (again because it’s free) and have a general sense that it’s important for them to be on Facebook.

Facebook, if it introduces some compelling products for SMB advertisers (beyond Facebook Ads), could become a threat to companies like Yelp (not consumer usage but advertiser acquisition).

Believe you me Facebook understands these trends and their potential implications. Now let’s see what happens.

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Update: Another way to look at this the following: 1.5M represents roughly 15% of what might be considered the addressable SMB market (10M). I’ve previously asserted that self-service would work for 10% to maybe 20% of the market if the products were compelling and/or simple enough.

Yelp Now at 29 Million Uniques

Yelp now says it has 29 million monthly uniques and 9 million reviews. A majority of users (54%) are over 35; however the largest single group is 18-34.

Yelp is one of the few sites now only selling its own traffic. The major search engines also do but Citysearch and yellow pages publishers all sell a network.

Do you think this approach is sustainable for Yelp or do you believe the company will need to adopt a similar “network” approach for advertisers?

Search Grows Globally by 46% YoY

This comScore data was put out a couple hours ago:

Globally the search market increased its query volume by 46% from a year ago. The US saw query/volume growth of 22%. Russia, France, Brazil and Japan were the top growing markets where volume increases ranged from 48% to 92%. 

Roughly 53% of Google’s revenues come from outside the US; however, those numbers should climb because most markets outside the US are less mature (save the UK) from an advertising perspective. Ad dollars will follow consumer growth.

Bloomberg on Yelp’s Funding Round

Bloomberg writes about the potential $50MM Elevation Partners investment in Yelp:

Yelp is in talks with Elevation Partners LP, the biggest investor in Palm Inc., to raise another funding round, the person said. The deal, which isn’t yet certain, may include an option for employees and investors to sell shares, said the person, who requested anonymity because the talks are private.

The move mirrors agreements struck in the past year by Facebook Inc. and Zynga Game Network Inc., which took investments from Russia’s Digital Sky Technologies. The deals helped fund the companies’ growth while giving investors and employees a way to sell their stock without the scrutiny and distraction of an initial public offering.

Also:

Yelp has so far raised $31 million in funding and was valued at $215 million after a $15 million investment by DAG Ventures in 2008 . . .

And this was interesting:

Yelp was profitable for part of last year before deciding to re-invest its earnings to fuel more growth, the company has said.

Yelp has had tremendous success on the consumer side of things. Notwithstanding the above remark about being profitable it has had less success among SMB advertisers. And the fact that it only sells its own traffic is another potential challenge over time as the Internet fractures and fragments further. Most local sales channels sell a network of sorts that includes O&O properties as well as third party traffic. In this way Yelp and Google are more similar than Yelp and IYPs like Superpages or Yellowbook.

Finally there’s the (remote) possibility that another site/company or collection of sites could become more interesting, sexy, cool, etc. to a core of Yelp users. While FourSquare was unlikely to unseat Yelp or materially threaten it (the way say a Facebook potentially could) Yelp isn’t taking chances, adopting a mobile “check in” feature in its iPhone app upgrade. That feature is also one of the central aspects of FourSquare; however it in fact pre-dates FourSquare.

Like Google but on a smaller scale, Yelp has had great success in making the leap into mobile, which presented an opening for other companies to siphon away users. But that hasn’t happened.

Some investment is coming; some employees may cash out but the question becomes where does Yelp go from here?

ComScore: AOL the Top Ad Network

AOL has long owned the greatest ad network reach online. But people forget that because they treat AOL as though it’s “over.” But the recent comScore report (which is essentially monthly) on the top US ad networks reminds us that AOL is still formidable in the display ad segment:

These networks are where 99% of the roughly $7.5B in annual online display ad revenue is concentrated. There may also be other revenues in here, not formally counted by the IAB in the display category.

Polluting the Social Graph

Many people have been thinking and working for some time to find a way to get friends and so-called influencers to advertise on behalf of companies or promote corporate messages to their followers or networks. The idea is to find a mechanism or system to mimic word of mouth at scale, using existing social networks for distribution.

The NY Times covers two such startups: Likes.com and Ad.ly. The idea of bloggers getting paid by sponsors or advertisers is fine. Blogging takes lots of time and I support the idea of people being able to pursue it. Problems start when surreptitious affiliate sales or advertising start to “infect” the social graph. The article points out that disclosure is the key to all this:

Ted Murphy, the C.E.O. of Izea, now a 30-person business backed by $10 million in venture capital, said the company initially “made a big mistake” by not setting disclosure standards for publishers and advertisers. Today, ad networks promote their standards; Izea’s ads on Twitter are typically demarcated with signifiers like “#ad” or “#sponsor.”

There are ways, along the lines above, to manage all this. But there’s a larger “philosophical” objection here about ads starting to “cannibalize” the social interactions among people on these networks.

If someone I don’t really know makes a pitch (directly or indirectly) for a product or service it’s something like a celebrity endorsement. (Indeed, Ad.ly appears to be substantially about inserting ads into celebrity tweets.) I don’t care so much, although it may be annoying. But if professional contacts, acquaintances and even friends start sneaking commercial messages — even if they’re disclosed — into my stream of updates and feeds I’m going to start blocking or “unfriending” those people pretty quickly. They will start losing credibility with me and in general.

Wouldn’t you similarly be annoyed or find this pretty objectionable? Or would it simply be a matter of disclosure for you?

Images in Ads: Do You Like It?

More and more it appears Google is showing images for products in AdWords. It certainly is effective in that it gets your attention. But do you like it? Does it negatively affect the Google search “experience”?

This is the fruit of the introduction of “universal search” on Google.

New MSN’s Local Edition Trumps Papers

I wrote about the MSN homepage relaunch at SEL last week. There I mentioned that there was extensive local content as part of a “Local Edition” section. Circling back now, I have to say Microsoft has done a very nice job integrating a broad and useful range of local information here into a relatively deep content area. Although it surfaces local newspaper stories, it’s essentially a replacement for a local paper (with the exception of newspaper features content):

Notice the contextually and geographically targeted ad inventory on these pages. Eventually this all will make it into mobile.

None of Microsoft’s immediate competitors has something comparable. You can get news, sports, movies and traffic information — the same content — from all of them. However the experience is disconnected or verticalized. AOL’s MapQuest Local is probably only thing that’s comparable in terms of its “horizontal” nature and maybe iGoogle; however these pages require (or permit) users to set up the various content modules they’re interested in. (I’m a fan of MapQuest Local.)

Local is one of the “four strategic verticals” that Microsoft is emphasizing with Bing. Along those lines, I had an interesting conversation with Microsoft’s Kevin Hagwell the other day about local and it was apparent that they’re doing some very interesting thinking about it at Microsoft.

Take a look and let me know whether you think MSN has created a winner.

Marchex Becomes YPG Ad-Platform Partner

Many of you probably saw the release yesterday:

Yellow Pages Group, Canada’s leading local advertising company, and Marchex, Inc., a leading local search and performance advertising company, today announced a partnership to provide simple, local online performance-based advertising products and services to Canada’s small and medium-sized business (SMB) customers.

Under this agreement, Yellow Pages Group (YPG) will use the award-winning Marchex Connect product suite to power its performance-based advertising services. These new services include search- and call-based marketing and analytics, and are designed to drive new customers for Canadian businesses with a focus on measurable performance. The services will be in market on a national basis in January 2010.

Marchex’s VoiceStar can be used for PPCall online, in mobile or in the traditional print directory. Marchex’s major directory publisher partner in the US is AT&T/Yellowpages.com.

We’ll see more and more PPCall marketing being offered via the print directory (especially as a back up to “save the account” if the advertiser wants to cancel or reduce its YP spend). Telmetrics President Bill Dinan previously made a big pitch for print to move more aggressively into a performance-based/PPCall business model.

Online Newspapers Benefitting from Local Ads

The NY Times features a lengthy article on how newspapers may not equally benefit as online display advertising returns to health:

When Mercedes advertises its more basic models next year, it will largely avoid newspaper Web sites and rely on networks. That lets Mercedes “be very targeted and efficient with our dollars,” said Beth Lange, digital media specialist for Mercedes-Benz USA.

But that also explains why newspaper sites are not holding on to ad dollars, even while overall Internet advertising is creeping back. Newspaper sites are the patent-leather stilettos of the online world: they get used for special occasions, but other shoes get much more daily wear.

Yet local may be the strategic differentiator for newspapers that defies this prediction:

At McClatchy, while classified advertising also declined, revenue from online display ads rose. Retail ads rose 58 percent, to $17.7 million, and national ads from marketers like Staples and Wal-Mart rose 36 percent, to $5.4 million. Christian A. Hendricks, vice president of interactive media at McClatchy, attributed the rise to the company’s focus on online-only ads and its selling of local ads, rather than national brand campaigns.

“There’s so much inventory,” or places to put ads, “at the national level, and so fewer advertisers compared to the local marketplace,” Mr. Hendricks said.

(Emphasis added.)

Local thus continues to be a premium product, in both display and search.

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Related: 40% of US Internet users visit online newspaper sites (per Nielsen/NAA). Medipost has the story.

ShopCity Staunchly Focused on Mom & Pops

A new site or network of sites, ShopCity, aims to be a comprehensive platform for consumers and businesses at the local-local level, but on a potentially global basis. The Canada-based site quietly launched over the weekend: 

While the above image reflects the global front door the company is more focused on building out hundreds and hundreds of independent local destinations, such as ShopMidland.com or ShopCorona:

There’s a broad suite of tools and marketing services for local businesses available through the site, but they don’t involve distribution to third party sites or networks for the time being. 

I spoke last week with Colin Pape, one of the founders of ShopCity. Though the site and the platform is polished, the question arises: “how will you compete with more familiar local online brands and get traffic?” He said that they’ll get traffic through SEO but also through outreach and partnerships with local organizations and cited some examples of those relationships in different markets. He added that the local stores and shops will promote their profiles and offerings on the site. 

As part of its pitch to local businesses, ShopCity does not accept ads from franchises or national-local businesses; it’s all about the “mom and pop” and independents (though sometimes moms and pops operate franchises; think Hallmark, Hardware stores). This “political” or policy stance will help create an identity in the market and win ShopCity some adherents among consumers and gratitude among local businesses.

This sort of Cityname.X.com strategy has been tried in the past — HelloMetro immediately comes to mind — without huge success, but ShopCity is being smart by taking a “political” position on behalf of local businesses and may generate a lot of good will as a result.

Google’s ‘Local Extensions’ Redux

When Google introduced “local extensions” in July I wasn’t paying close attention I suppose. But upon revisitation it’s very interesting, especially for nationals, franchise businesses or small businesses with several locations. It also represents the future of local targeting, in particular for mobile advertising, in some respects. Here’s the Google blog post explaining how it works:

If you’re a business owner, you can set up extensions by linking an AdWords campaign to your Local Business Center (LBC) account. If you’re not the primary business owner of the locations you’re advertising, you can manually enter addresses directly into AdWords. For example, a clothing brand that distributes to a number of different stores might want to associate their ads with various store locations through extensions, even though their official business address doesn’t correspond to those addresses.

Once extensions are set up, we’ll dynamically match your business locations to a user’s location or search terms and show the address with your text ads. If we’re unable to determine a user’s location or if there are no relevant addresses to show, we’ll simply show your ad without an address. If you prefer not to dynamically match addresses to your ads and would rather show a specific address in one particular ad, you can do so by setting up specific location extensions for individual ads. Your ads can show with their relevant extensions on Google and Google Maps and as regular text ads without the extensions on partner sites in the Search and Content Networks.

With the introduction of location extensions, local business ads will no longer be a separate ad format. Instead, you can simply create new local ads with extensions from scratch or add extensions to your existing text ads.

The idea here is that the system dynamically automates the injection of location into the ad when the user’s location can be determined and there’s a nearby store. Everyone likes the idea of geotargeting, though not all marketers fully understand its benefits. But one of the challenges is managing lots of campaigns for lots of stores or locations. This system addresses that. 

ShopLocal is doing something conceptually similar, creating search ads/ad copy dynamically for its retailer customers. Yahoo also can create display ads dynamically based on targeting parameters. 

These dynamic systems are a key to one version of location’s future. In mobile dynamic ad creation is also a key concept. Some version of the oft-repeated fantasy of 1:1 marketing will never be realized unless ads can be customized “on the fly” as it were. 

Surojit Chatterjee, Google Product Manager, Mobile Ads spoke at the Metaplaces event last week in San Jose. He said that he has seen increasing adoption of “local extensions” by marketers, especially larger marketers and franchisors.

In a mobile context I can well imagine systems of the very near future where marketers input a master list of locations, an offer or deal (of the week or month) and then check off the locations that are participating. All of that information will get mashed up and served to users dynamically either in a search context or banners.

Meteor Solutions: A Company to Watch

I got briefed a few weeks ago by a company called Meteor Solutions. It’s based in Seattle and being run by Ben Straley, who was with Judy’s Book. The company measures so-called “earned media” and social media ROI. I was impressed with what I heard.

The company was founded earlier this year and already has a fair amount of traction with marketers and publishers. The company groups media into three categories: paid media (ads), owned media (publisher and marketer sites) and “earned media” (passed links and social media conversations). Here’s the company’s chart:

Directed at the third category, Meteor tracks online word of mouth and identifies “influencers” and “where they share content.” Unlike many “buzz tracking” applications and platforms that are based on inferences, Meteor’s is based on actually tracking who passes links and what happens thereafter. The system has the ability to track a shared link from its originator to a conversion of some sort and see who was most influential in that process.

The company uses javascript code and unique IDs for each person its tools encounter. Another slide from the company’s deck:

In other words: I pass an offer link to you (50% off NY Hotel X) and you send it to others, who in turn send it to others. Some people click; some people “convert.” All that is tracked. Within that melee of passed links, the system can determine who’s having the biggest effect on conversions: me, you or somebody else. In this way it can identify the biggest influencers, which opens the door to do targeted promotions to those individuals. It’s very interesting because you’re actually seeing what’s happening as people disseminate links to one another.

Much of this activity would be totally invisible to marketers and publishers otherwise. In a different way AgendiZe has the ability to do something similar and is doing that with local directory publishers.

Meteor is also helping to power Microsoft’s new experimental “Looking Glass” social media monitoring and tracking tool.

Because it’s analytics are real and it “fills in the blanks” in many ways, Meteor is likely to be a near-term acquisition candidate by an analytics provider or by one of the big ad platforms/search engines.

Outside.in Adds NY Post to Publishers

Outside.in has added the NY Post to its publisher roster. The Post recently expanded its local news coverage as part of a site redesign. It covers all the NY boroughs. Within those sections you can drill into neighborhoods:

The particular placement of the Outside.in material varies from section to section. The following is from the “financial district” neighborhood page:

Eventually, as this strategy plays out, Outside.in will have built an ad network.

Nielsen: 1H Ad Numbers Off 15%

Here’s Nielsen data on US ad spending in the first half of 2009:

According to the blog post that exposed these figures:

Cable Television ad spending was the only medium to show growth through the first six months of the year (+1.5%). The increase is especially significant since Nielsen reported Cable TV ad spending was down 2.7% through the first quarter this year. Spanish Language Cable TV also saw ad spending tick up 0.6%.

It’s important to note that the Internet figure in the table above is only online display and does not include:

[P]aid search advertising, text only, paid fee services, performance-based campaigns, sponsorships, barters, in-stream (‘pre-rolls’) players, messenger applications, partnership advertising, promotions and email campaigns, compound image/text ad or house advertising activity.

Here are Nielsen’s top product categories by ad spend:

In all but “direct response products” in the table immediately above the overwhelming number of purchases will happen in stores or specific locations, offline. Most of the ad spending however is “brand” spending targeting a national or perhaps regional audience.

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Related: see MediaPost analysis: Internet Grows 37.5%, Traditional Media Declines 30%, 2006-2009

Centro Hires MySpace Sales Exec.

Centro just announced that it has hired Bryce Emo as Senior VP of National Sales. He was previously SVP of Monetization at Photobucket (which is owned by MySpace). Before that he was at agency Digitas.

Centro is ranked 41st on comScore’s Ad Focus rankings.

TurnHere Hits Video Milestone

TurnHere announced that it had produced its 20,000^th video. In honor of that the company is running a promotion that gives away free video and other prizes to SMBs throughout September:

Enter for the chance to win a professionally produced custom video profile of your business and $1000. You could be one of 400 to receive a high-quality video that can be used on the Web. Plus four Grand Prize winners will also receive a $1000 gift card.

Every week in September 2009, one winner will be randomly selected to receive a $1000 gift card for Costco, Best Buy, Staples or FedEx Office, winner’s choice. Grand Prize winners will also receive a custom Business Profile Video valued at $599, produced by TurnHere Internet Video.

Metrics firm comScore recently reported “158 million U.S. Internet users watched online video during the month [of July], the largest audience ever recorded.” YouTube remains the largest video destination online.

There’s no question that video is helpful for advertisers and SMBs. Eventually it will simply be part of a list of things one must have: website, check; Facebook page, check, video, check . . . and so on.

Google Taps SpotMixer Tools for Online Video Ads

SpotMixer, for those who don’t know it, is a DIY video creation platform. I first wrote about the company and competitor Mixpo in March, 2008.

In January of this year Google announced a partnership with SpotMixer (a unit of One True Media), integrating the latter’s DIY ad creation tools and content into the TV Ads marketplace (SpotMixer is the only DIY platform Google has autorized so far). And just as Google TV Ads has expanded to online video sites and the Google Content Network, SpotMixer is now available on that side of the house to, so to speak.

In other words, SpotMixer DIY tools can be used to create online video ads or repurpose and edit existing TV assets. Here’s a succinct description of the deal from an advance copy of tomorrow’s press release:

Following Google TV Ads’ successful partnership with SpotMixer announced in January 2009, SpotMixer’s technology is now being integrated into another Google advertising offering. SpotMixer’s innovative DIY ad creation platform – the only one to be integrated into both Google TV Ads and the Google Content Network – automatically converts an advertiser’s existing AdWords text ad into a tailored video ad within the advertiser’s AdWords account. The solution dynamically changes templates and content to ensure that each video is different. Customers can further customize their ads by adding their own photos and video and incorporating a voiceover. The result is a professional-quality, high-performing video ad at a fraction of the cost of traditional video production.

Here are some example ads from SpotMixer:

SpotMixer came somewhat later to the online video ad market and competes with a range of providers: Jivox, Mixpo, Spotzer, Turn Here, Spot Runner, FourSpots and several others. But the site has distinguished itself through this Google relationship.

One of the striking things about SpotMixer that it uses templates to convert existing AdWords campaign text copy into a video ads automatically, although this capability is not entirely unique to SpotMixer. The marketer can then customize and change the ad if it/he/she wants to.

SpotMixer VP Kathleen Farley told me that on the Google TV Ads side about “95%” of advertisers using the SpotMixer platform did actually customize their campaigns with new images, audio and/or ad copy. In some cases they used audio from existing radio campaigns. This high rate of customization is interesting in the context of the ongoing “push vs. pull” debate around sales and self-service in the small business market. AdWords marketers are a motivated group, however, so I’m not entirely surprised that the numbers are this high.

Advertisers could simply create a single campaign for online and TV. But there are differences between the mediums that implicate audience attention, ad length and tolerance of ads (depending on the context). Accordingly, I asked Farley and CEO John Love about creative “best practices.” After all it’s one thing to simply create a video (the automated creative is a slide show with audio) and another thing to run an effective TV or online video campaign. They said that the templates were being regularly optimized to incorporate best practices and learnings (sorry) from campaigns in the market.

SpotMixer has also partnered with Google on an SMB video ad contest that runs through mid-October. It offers a $25k prize (credits toward national TV ads) for  the best video ad created with the SpotMixer tools.

Here’s a video explanation of the original SpotMixer-Google TV Ads deal and how the tools work:

Advance Seeing Success with SMB Ad Sales

Yesterday I was able to speak to Advance Internet President Peter Weinberger about the just announced ads deal Microsoft. The company operates 37 newspaper sites and the deal concerns only Advance Internet and those newspaper sites, not its Conde Nast Digital division or its other publications and media properties.

As part of the deal Microsoft will provide the contextual ads (and replace Google’s AdSense) for the Advance newspaper sites. But it’s a holistic arrangement: Advance reps will be selling search marketing and display ads across Microsoft’s network. Weinberger said the company was especially excited about retargeting (behavioral targeting) and reach into the broad network of Microsoft sites. He said the deal had been in process well before the Microsoft-Yahoo! search deal was announced and that didn’t factor into Advance’s decision in any way.

My principal reason for speaking with Advance was to gain insight into the rationale behind the decision; why did the company go with Microsoft rather than Yahoo!? Weinberger said that the company wanted to keep its own platform. He added that from his point of view there’s a good deal of uncertainty in the ad serving market and the company didn’t want to commit to moving onto the Yahoo! APT platform at this point, as newspaper consortium members have had to do.

We then got into a discussion of Advance’s sales efforts at the local level. I asked who the target advertisers were: SMBs rather than traditional newspaper advertisers (e.g., retailers). I assumed they were using telephone sales, but I was told the company has feet on the street reps who sell search and display ads, now to include Microsoft’s reach. Advance said that it was working with “several vendors” to fulfill ad/search campaigns.

I raised the issue of SEM churn in the local space and Weinberger said that Advance was not seeing the same problem. He explained that the sales process for Advance focuses on building a relationship and on retaining the customer and drew a contrast with what he described as the “YP approach.”  ”It’s very high touch,” said Weinberger. The sales process is highly consultative he explained. The reps aren’t only selling SEM; they sell display as well both on and off the newspaper sites. All the creative is handled by Advance.

I didn’t challenge any of these statements and accepted them as accurate. Assuming so, Advance would seem to succeeding where others are struggling in the local space. Weinberger said that these ad products and the company’s consultative sales approach were helping it expand beyond its traditional advertiser base.

Advance Goes with Microsoft, Not Yahoo!

Advance Publications, which owns 20 newspapers and a range of other publications, including Condé Nast, Parade Publications, Fairchild, Am City Biz Journals, and other media properties, has thrown its hat in with Microsoft, rather than the Yahoo! Newspaper Consortium.

According to the press release that went out this morning its Internet group will sell Microsoft’s network to its local advertisers:

Through its relationship with Microsoft, Advance Internet’s sales force will be able to offer Behavioral Targeting and Audience Extension capabilities to its local advertisers on the Microsoft Media Network.

“We have the number one local news and information sites in each of our markets,” said Peter Weinberger, president of Advance Internet.  “According to Media Audit, five of our sites rank in the top 10 of newspaper affiliated sites based on local penetration of adults 18+.  Now through our agreement with Microsoft, we will be able to serve our advertisers with even better online marketing solutions.”

Advance Internet will become a certified reseller of the Microsoft Media Network, offering local advertisers access to 76% of the online adult population. The alliance with Microsoft allows Advance Internet to significantly increase its reach in all of its local markets.

Advance Internet will also be implementing Microsoft Advertising’s Content Ads and Search Ads. Content Ads and Search Ads serve contextually relevant advertisements within articles and other content pages.

The pitch is almost identical to what Yahoo! consortium members are promoting to local advertisers in their various markets. The irony now is that Microsoft’s search reach will include Yahoo!

This deal will probably not please Yahoo!, which otherwise “owns” the newspaper industry. To some degree it may also bump up against the Yahoo!-Microsoft paid search deal – to the extent it implicates “premium search” sales (read: larger advertisers). It won’t if this is all about SMBs however.

The network claims 8.5 million monthly unique users.