SpotMixer’s ‘Pre-population’ Strategy

One of the things that I neglected to discuss in my earlier post was something that I didn’t realize was “public” about SpotMixer. The company discussed with me its capability to create prefabricated “videos” for any or all listings out of metadata, stock images and music. (However I didn’t see what one of these looked like.)

This is like the strategy of pre-populating local listings and asking businesses to show up and “claim” them. Similarly SpotMixer is intending to roll this out with a partner (someone you know), which has thousands of SMB relationships. The partner then sends out an email notification: “come see the video we’ve created for you.” This will likely drive a large number of responses with SMBs curious to see what’s there.

It will then probably also drive many to want to customize the videos/slideshows and/or purchase upgrades.

It’s a very interesting approach to generating online video sales. It’s also impressive that these slideshows can be automatically generated.

Mixpo, SpotMixer Join the SMB Video Club

As it turned out I had two conversations with two new SMB-oriented video startups back to back yesterday: SpotMixer and Mixpo. In a way, this is a metaphor for how crowded the segment is becoming. And, in fact, both were impressive to me.

SpotMixer

SpotMixer has a spectrum of offerings from slideshows to full video (and several hybrid modes in between) that it hopes to sell to the SMB market largely through partner relationships.

SpotMixer is from One True Media, an online consumer video editing platform, which the company claims is the number one such entity online with millions of users. One True Media co-founder and COO John Love told me that SpotMixer, which is being formally launched tomorrow, emerged from the fact that SMBs were using One True Media to create commercials themselves. He also said that SpotMixer was part of a “bake off” featuring other, undisclosed companies in the segment (at the behest of a company in the directory space) and won.

Love took me through a real-time demo creating a commercial from a combination of video elements and still photographs. All those elements could be reordered via a drag and drop interface. Here are some sample ads that showcase the spectrum of ad types (slideshows to video).

Two of SpotMixer’s senior executives, Brett Gardner and Kathleen Farley, are from Yahoo with backgrounds in marketing and product management.

One the back end the company says it’s able to track “views and clicks from any partner that chooses to use our player for their sites. And, for any end user that embeds our player, we’ll be able to do the same.” The company also has a nascent distribution capability.

Mixpo

Mixpo didn’t offer the same templated approach as SpotMixer but it had a similar, easy-to-use drag and drop editing interface that made it simple to change or customize ad elements on the fly. I spoke with CEO Anupam Gupta, who spent many years at Microsoft prior to Mixpo.

What was also impressive about Mixpo was the quality of the imagery and resolution of the ads I saw. (Here are sample ads.) In addition the back-end tracking and analytics capability is superlative:

We spoke at some length about the possibilities for A-B testing and local versioning. In addition, Mixpo offers an “interact” icon at the top left of ads, which opens menus or forms in the ads and allows for lead capture, potential real-time chat and a range of other valuable and interesting possibilities. All these consumer interactions can be tracked, well beyond the click. This feature appears to be unique to Mixpo in this SMB video ad creation/distribution context.

Mixpo is also announcing a deal with ActiveRain, which says it’s “the nation’s largest social networking site for real estate professionals.” Accordingly, Mixpo sees itself as a platform that can work in a variety of ways with partners from video creation to distribution. Gupta doesn’t see Mixpo as a direct SMB play and recognizes the need to work with channel partners, hence the ActiveRain deal.

The platform and capabilities here struck me as offering much more sophistication than SMBs in general are capable of utilizing (even through sales channel partners that do much of the work).

Mixpo has raised $6.5 million from Seattle’s Madrona Venture Group, wich also invested in AdReady, a templated display ad-creation platform for SMBs. The irony of the dual investment is that Mixpo is a successor technology and platform to AdReady. Display ads and so-called rich media will be merged with or almost entirely replaced by video in the next couple of years. AdReady will thus be compelled to incorporate video (perhaps from Mixpo) very soon.

We’re in the very earliest stages of video advertising online (forget about the forecasts for now). Online video advertising will penetrate at the national and local level — rest assured.

The SMB video segment now has perhaps 10 or more companies that in one way or another are competing for sales channel partners and SMB advertisers. Mixpo and SpotMixer are both impressive platforms, with some similarities but different strengths. However like the Local SEM segment, which is its paralell in many ways, the SMB video market has room for several winners but not a dozen.

Kudzu Integrates Video from TurnHere

Kudzu has become the latest local site to strike a deal to offer video ads to SMB customers. The provider is TurnHere.

I’m starting to lose count but those selling/offering video ads to SMBs now include:

• SpotRunner
• Superpages
• Yellowpages.com
• Yellowbook
• Dex/RH Donnelley (the first of the majors to offer it)
• Citysearch
• Kudzu
• eLocalListing (SEM firm)
• Google (allows them to be uploaded to profiles on Maps)

Those video ads are now becoming an important part of an SEO strategy (see iProspect study results).

I have often neglected to speak about Kudzu when I talk about the local landscape. But it was one of the early sites to add ratings/reviews and was ahead of the curve in many ways.

Kudzu has watched as the market has become crowded and has seen several companies come and go, with more to follow. However the company has staying power and is patient.  Kudzu is owned by Cox, Inc. and is currently in Atlanta, Phoeniz, Las Vegas and San Diego — all Cox Cable markets.

BusinessWeek on Yelp

BusinessWeek’s Sarah Lacy, of SWSX-Mark Zuckerberg interview infamy, profiles Yelp: “Yelp is one of the few companies that has tried to tap the elusive local market and actually succeeded.” What she means is startups, of course.

An excerpt:

Another contrast between Yelp and other consumer-Web startups: Stoppelman insisted on building his own ad sales force from day one. That lifted Yelp’s costs dramatically, compared with peers that outsource ad sales to the likes of Google, Microsoft, or Federated Media. But Stoppelman knew he couldn’t sell to local businesses using computers and mathematical models à la Google. He’d have to do it the old-fashioned way, manning the phones, calling one local business at a time.

This is the kind of “patience” that’s required to succeed in local, although it requires enormous “heavy lifting.” Yelp’s ad sales success is driven by its consumer success. And that success is a mixture of intuition, careful thinking, hard work and luck.

Yelp is now regarded as the model in local by many. It didn’t invent community or the combination of reviews and local by any means but it has mixed those elements very successfully — obviously. There are skeptics who believe — I get these comments from time to time — that the site only has appeal in a few top DMAs and in limited numbers of categories.

Now that Yelp has grown to this point, one thing that the site might want to do is develop the ability to sort by “network.” This is something that Loladex has done on Facebook and it’s potentially valuable as a way to filter in markets where there are too many listings or reviews. Of course it only works if there’s a critical mass of participation on the site.

On a somewhat controversial note, Google recently added a “search within” search box for site search. Here’s what it looks like for Yelp:

Do you think Yelp (or any site owner) benefits, is harmed in some way or should care at all?

‘Noise’ in the Market for Local SEM

Here’s a verbatim comment that was offered by someone responding to my WebVisible post yesterday:

I am a small (tiny) business owner in Florida. I’ve done a little adwords on my own, but all of these search providers who call (and there are A LOT OF THEM), tell me I’m wasting my time, they can do it better. I’m just trying to make some sense of what the differences are, since NONE of them can provide me with any real details on the one true value proposition that separates each of them from the pack. It’s getting to the point where the most time wasted, is time answering all of these marketers calling for my search business.

I thought it was worth highlighting because I suspect her comments are representative of an emerging and very real problem: how to distinguish among the competing channels that want to sell SEM services to SMBs? And we’re still relatively early in the rollout of these products in the market.

Citysearch and AOL in Reciprocal Deal

Citysearch will be distributing content and local advertising (including video) via AOL local properties (i.e, Mapquest, AOL Local, AOL CityGuide). From the release:

Under the agreement, Citysearch, a leading online local guide and an operating business of IAC, will provide its local content, including editorial reviews, user reviews, merchant videos, photos and offers for distribution across AOL properties, such as AOL CityGuide, AOL Local Search and MapQuest. AOL will integrate local advertising and content from Citysearch’s broad base of local advertisers into AOL’s leading local properties, offering advertisers access to more than 57 million unique users per month (comScore Media Metrix, January 2008).

Citysearch has arisen from the slumber that characterized it a couple of years ago and allowed Yelp to overtake the site in terms of brand recognition. (Citysearch would not doubt disagree with that statement.) After a redesign and the addition of video, Citysearch has undertaken a number of distribution and biz dev deals that give its “local ad network” broader reach.Aggregating local traffic and providing broader online reach and scale is one of the keys to making local work economically for publishers. This is true for everyone: pure-play or traditional media company with online assets. Consequently we should see these kinds of deals increasingly.

One thing that many people forget about Citysearch is that the company has a local sales force, both outside reps and call centers.

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Here’s more from my SEL post, MediaPost and Reuters.

In a somewhat parallel move, Local.com broadens its syndication and ad opportunities. Heath Clarke ran an ad network before founding Local.com and appears to be putting renewed emphasis on that concept with Local.com as a channel or entry point.

TurnHere Raises $7.5 Million for Expansion

Here’s the press release:

[TurnHere] today announced that it has secured $7.5M in funding from Venrock and Hearst Interactive Media, a division of the Hearst Corporation. The funding will enable the development of new, innovative online video products and services for TurnHere customers, as well as enhanced tools for the growth and expansion of the TurnHere filmmaker network and in-house production team.

TurnHere has relationships with YellowPages.com, Citysearch and Superpages, among others and has emerged as the premier production company for the local market. When the company started it was doing direct sales to SMBs and was syndicating that content to third party video sites. When it decided to become a “production house” and leave the selling to existing channels the local part of its business started taking off.

SpotRunner recently acquired GlobeShooter, a local videographer and production network to be able to match TurnHere’s distributed custom production capability. Denver Multimedia and others offer similar services but aren’t quite as well known. As mentioned, Howcast is building this as well, as a supporting feature of its primary consumer business. There’s never been a better time to be a film student or independent filmmaker.

In the risk-adverse world of VC investing, this is one of the “lowest hanging fruit” opportunities imaginable. The interesting question is what “enhancements” or new products will TurnHere be developing? It already has reach into the UK and Europe.

Matchpoint Makes a Play for Local Lead-Gen

Lead generation has been around in the local space for years, in particular in the real estate (HomeGain, HouseValues) and autos segments. ServiceMagic has also built a fairly successful business around it. Respond.com, years, ago promised to transform yellow pages. However it hasn’t exactly caught fire with consumers. And somewhat counter-intuitively, lead-gen has also been slow to catch on with local businesses as well.

For example, in the second quarter of 2007 real-estate news site Inman News conducted an online survey of 770 U.S. local realtors. This population of Inman News readers/subscribers is typically more “Web-savvy” than the overall U.S. realtor population. Yet the survey found the following:

“While 64% of respondents overall said they planned to spend at least some money on keyword [PPC] advertising in the next year, only 17% percent said they would buy online leads, though another 17 percent said they hadn’t decided yet whether they would buy online leads.”

One would expect the entire local market to be moving toward CPA or some form of lead-gen (PPCall) for almost self-evident reasons. However, the uneven quality of leads, the reselling of leads and the generally questionable reputation of the larger lead-gen sector have stymied growth in many respects.

At last year’s SMX Local-Mobile conference I ran a panel that addressed the question of whether CPA could become the dominant model in the local space:

The Ultimate Local Ad Model
Local businesses want leads and customers, not clicks. Although pay-per-click and pay-per-call are the two prevalent ad models to reach local searchers, will other models like CPA/PPA ultimately be more effective?

It was one of the most interesting panels of the show but the consensus among the speakers was “no.”

Now Matchpoint (great URL) has emerged to take another crack at local lead-gen. I spoke with president Peter Adams last week about the new site (which reportedly acquired a similar service GetVendors), the outlook for local lead-gen and Matchpoint in particular.

Adams knows the local space well (having been CTO at Looksmart) and lead-gen (having been CTO at NetBlue). He’s very familiar with the myriad challenges. He’s got an aggressive syndication/widget plan to push the site’s brand and content out beyond the confines of the destination as well as other thoughtful approaches to long-standing local challenges.

For example, the site attempts to solve the vendor/provider side of the local “chicken and egg problem” by using a local commercial database (to ensure critical mass) and reaching out to any relevant businesses, not just advertisers. Leads are free (to start). The company is also “cleaning” the database by verifying and keeping track of local businesses that respond to inquiries (like FastCall411).

From a consumer standpoint the service is fairly simple and straightforward – and less onerous than the ServiceMagic questionnaire. Search or browse for a category, fill out a form and receive an email notifying you of five relevant providers. Here are a few screens:

Email response (received in less than a minute):

Provider list (via email):

You get to see the five on the site and in email before receiving calls, which Adams believes is important (I agree). Currently, however, the data surrounding those providers is fairly thin and doesn’t convey much. Reviews and other “context” will need to be integrated.

Adams believes not enough content is precisely the problem with most local sites today, even sites such as Yelp that have lots of reviews. Adams argues they don’t provide consumers with enough relevant information to help them make a decision, which may be very specific in a given case. Adams also doesn’t believe that businesses and consumers will provide this level of detailed information to conventional local sites, in the form of reviews or enhanced profiles.

To address this perceived problem, Matchpoint leverages the phone, both by notifying local merchants that they have prospects/leads and then allowing them to provide detailed responses to the specific requests of consumers, which will theoretically elicit much more information from the local business and lead to a better decision-making process for consumers. Matchpoint initially mediates the contact between the merchant and consumer, shielding the consumer with anonymity.

Leads are free for local businesses, which helps with merchant awareness and sales channel issues (the leads do the prospecting; calls are automated with human follow-up if necessary). Advertisers get more complete profiles, priority in results and additional services. They bid for leads at the category level, to simplify the process and to create more competition for Matchpoint inventory.

The approach that Matchpoint has taken is smart and reflective of a deep understanding of the local market. The out-of-the-gate syndication strategy is also smart. One version of that strategy seeks to match vertical slices of the database with third-party sites that offer related content (e.g., home improvement site offers contractor leads form/directory).

Despite my praise, Matchpoint has a tough road ahead to build consumer awareness and usage. On the sales side it’s perhaps a bit easier and the site will potentially also be able to tap into all the local SEM firms out there now bundling clicks and calls. But Respond has been toiling in the space for at least eight years and was largely unknown to the Matchpoint folks themselves. That illustrates the problem they face.

____

Peter Krasilovsky and SiliconValleyWatcher have some additional factual background and information.

The YPA Joins the Conversation

The Yellow Pages Association is now part of the local search conversation over at Search Engine Land as a new contributor to the “Locals Only” column. Today’s first column is called “Welcome to the Local Search Jungle.“

Many online professionals are critical and skeptical of yellow pages and their outlook. And I have certainly been critical of particular players in the past. The yellow pages industry, however, is a central part of what I’ve called “the local search ecosystem.” Unlike offline, the Internet needs a range of companies to complete the value chain from buyer to seller and back.

Google has always said as much but placed new emphasis on partnerships with yellow pages (among others) in its Local Markets Symposium held in December.

Local is one of the most challenging and dynamic markets online or off — and the yellow pages have a critical role to play in bringing SMBs into the online marketing conversation.

Everyscape Launches ‘HarvardSquare’

Everyscape has released “Harvard Square,” which showcases businesses and landmarks in the area. This stuff is definitely cool and engaging for users:

But selling ads to local businesses is tough slogging. I haven’t caught up with the company in some time and I’d be curious to know how it’s going. Merchant associations, malls and other “aggregator channels” represent a more effective sales strategy than trying to attract “one-off” sales from SMBs.

Here’s my past coverage of Everyscape.

Google Buyout of UK’s Yell Rumor Returns

There are some obvious reasons that Google won’t buy a traditional yellow pages company:

• Culture conflict
• Overhead
• Inefficient as a means of accomplishing Google objectives

Yet the persistent rumor that Google would buy UK yellow pages publisher Yell has surfaced again. This is probably a reaction to the decline of Yell’s market value. I suppose if the company were cheap enough Google (or someone else) might be tempted.

Yell, among other assets, owns publisher Yellow Book in the US, which has an estimated 400K advertisers and almost 6K sales reps. The reps and the SMB relationships would be nice but the cost and ongoing overhead would not be worth it from Google’s point of view — in my opinion.

Yahoo! Does Channel Deal with AMEX

Yahoo! has partnered with American Express’ OPEN Savings program for small business (SMBs), offering 5% off on search marketing and other SMB services (e.g., webhosting) from Yahoo!:

Through this partnership, business owners can use their Small Business ard to automatically reduce their costs of doing business with Yahoo! Search Marketing and Yahoo! Small Business services. Small business Card members will receive a 5% discount on Yahoo! Search Marketing’s online advertising and promotion services in addition to Yahoo! Small Business’s comprehensive, easy o use services, including Web site hosting, e-commerce, business e-mail, and domain name registration.

Amex is a great potential channel partner — Amex is underutilized as a channel to SMBs for online marketing services in general — but Yahoo! isn’t offering the right product for this market. Interestingly, it doesn’t seem to be promoting its simplified “local listings” product here. (I can’t remember if this is being phased out or otherwise integrated with Panama.) Instead, Yahoo! is promoting straightforward SEM.

Self-service search marketing is still too complicated for most SMBs, unless it’s three fields:

• what category?
• how much do you want to spend per month?
• where are you located/what is your service area?

Yahoo! should either promote Local Listings, establish a simplified “DIFM” product internally or partner with a local SEM that can deliver something along those lines for the company.

Yodle Opens New Office, Reach Sells AdWords

Local SEM firm Yodle announced that it just opened a North Carolina office, bringing the number of regional offices it operates to six. Yodle competitor ReachLocal just gained official Google reseller status.

Here’s an amusing set of dueling ads from the two companies on Google (query: “reachlocal“):

Facebook Buying ‘Local’ Keywords

I did a search on Google for “local advertising solutions” this morning in another context and discovered that Facebook was there among the paid listings. I found it very interesting that they’re presenting themselves as a geotargeted or local ad platform. Of course, location was central to Facebook’s origins. (Click any of the images to enlarge.)

If you click the ad, you go to this landing page:

If you click the button in the lower right (”create Facebook page”), you go here:

Then, selected a category:

That sends you to a blank Facebook profile page, which is quite simple to set up. I would imagine that lots of small businesses would take advantage of this if they were aware of its existence.

GohooLo Becomes ‘Local G’

No relation to Sasha Baron Cohen’s Ali G character . . .

Tim Tevlin has rebranded and relaunched his local SEM firm. Formerly it was “gohoolo” and now it has reemerged as Local G Advertising, focusing exclusively on Google and trying to be as simple as possible for local businesses.

The pitch is impressively simple but sales are not . . .

Spotzer Raises Money, Comes to US

Spotzer was literally an imitation of Spot Runner for Europe. The pre-packaged video ads provider recently raised almost $15 million in a new funding round for US expansion. It now becomes a competitor for the more heavily funded Spot Runner, which has yet to really offer online video advertising and distribution (but it’s coming). That has been part of Spotzer’s model from the beginning.

What’s also interesting is that European Directories is one of the Spotzer funders and will be selling video ads in Europe through its sales force to SMBs. Spotzer will presumably be trying to do some of the same deals here in the US, where all the major YP publishers are either already selling video ads or about to ramp up in earnest.

The B2B online video space is now fairly crowded:

• TurnHere
• Spot Runner
• Spotzer
• EZShow
• Visible World
• ImageSpan Curbstream
• Denver Multimedia

These companies are like the SEM companies that yellow pages publishers started buying to bring those marketing capabilities in house. I would fully expect some acquisitions in 2008 as video advertising (online and on cable) becomes an essential offering.

___

I was just talking with TurnHere’s Brad Inman and it occurred to me that video is one way for SMBs to exercise more control over their “online reputation.” SMBs can’t really control what people say about them online — although they can try and offer the best product or service to yield good reviews — but they can make a strong and emotionally powerful statement with video that either will enhance or potentially overshadow other messages about the business that are purely text based. So, as a consequence, I could see businesses that understand this seeking to make a “louder” or bigger impression with video.

Hearst-Argyle TV Stations to Sell AdWords

MediaPost is reporting that Hearst-Argyle TV stations‘ sales forces (in 29 local markets) will be selling AdWords to local businesses. The proposition is similar to what’s going on with newspapers and yellow pages publishers doing the same thing: we’ll sell you our distribution and theirs.

It’s another sales channel move by Google to increase and diversify the number of partners selling SMBs into AdWords.

Citysearch and MerchantCircle in Repicrocal Deal

IAC was a strategic investor in MerchantCircle’s recent B round. The first fruit of that investment is a reciprocal deal where each company is cross promoting the other’s services. Citysearch merchants will gain access to MerchantCircle tools and services and MerchantCircle will gain access to Citysearch and Insiderpages distribution and video advertising opportunities.

From the press release:

Through the deal, Citysearch will accelerate its growth by leveraging MerchantCircle’s scalable and fully automated platform for acquiring and engaging local merchants and distributing local content. MerchantCircle has successfully engaged over 300,000 proactive merchants to build out their profile page, upload photos, create coupons, and interact with millions of local customers online. Citysearch has the opportunity to tap into this large community of registered local merchants and paying customers.

Additional key details of the strategic partnership include:

Co-Branded Sales Packages: As part of its automated marketing programs, MerchantCircle will offer three Citysearch-specific sales packages to merchants.

Joint Membership for Merchants: Existing Citysearch members will have the opportunity to participate in the MerchantCircle community.

Citysearch Advertising Sales Force: MerchantCircle will tap into Citysearch’s local sales staff and national advertising team.

IAC Seat on MerchantCircle Board of Directors: As part of IAC investment, Peter Horan, CEO of IAC Media and Advertising, will join MerchantCircle’s Board of Directors.

MerchantCircle will become a potentially powerful sales channel for Citysearch, while the Citysearch association gives MerchantCircle additional prestige and credibility that it wouldn’t have had otherwise. The partnership appears to be quite complementary. While Citysearch is very strong in certain categories and major metros, MerchantCircle has strengths outside top metro markets. Here are some facts provided by MerchantCircle about its customer base:

• Over 85% of MerchantCircle merchants are outside the major metros in the US.
• Nearly 25% of MerchantCircle merchants are not found in the print Yellow Pages.
• Over half of our merchants do not have a website of their own

With its new, higher profile and this strategic relationship it won’t be that long before MerchantCircle becomes a takeover target.

Here’s a partial screenshot of one of the hybrid pages on the MerchantCircle site (click to enlarge):

Yodle Raises a $12 Million B Round

Yodle just closed a large B Round and is building out local sales offices like ReachLocal and Weblistic. Here’s the company’s release:

Yodle, Inc., a leader in local online advertising and lead generation, announced today that it has raised $12 million in a round of financing led by Draper Fisher Jurvetson, with existing investor Bessemer Venture Partners also participating in the round. The new funding is the second round of successful financing for the quickly growing New York based start-up.

Beyond the local sales office strategy, the thing that’s relatively novel about Yodle is that the company is selling calls but not PPCall. It does so with a formula that estimates the number of clicks/hits/visits to generate a call and then prices its ad programs accordingly.

Yahoo! Internet Cafes in Vietnam

Loren Baker at Search Engine Journal reports on the opening of several Yahoo! branded Internet cafes in Vietnam. Asia is a region of particular strength for Yahoo! And this is unlikely to be replicated in the US. Still, I think it would be very interesting if Yahoo! or Google or Microsoft were to do something like this or partner for this in the U.S. or Europe.

Think about the Apple Store and how people go in to check email and browse the Internet — and also look at the products. While neither Google nor Yahoo! sell things per se (unlike Microsoft, which sells software and some hardware) I think either could build something interesting in the real world. But the cost of doing so makes it extremely unlikely. But also think about how real-world stores would offer a direct sales channel to local advertisers.