I was talking yesterday to a very entrepreneurial CTO, who has run his own startup (which was acquired). He’s got another very interesting startup idea but is also open to working with an existing company.
I don’t get anything out of promoting him; I’m just doing a bit of a favor. Let me know if you’d like an introduction.
In the Locals Only column today, Andrew Shotland asks the question “Where Is The Competitor To AdSense In Local Search?“:
Google has created a great thing with AdSense. I work with several sites that generate thousands of dollars a month from of it and I have built an entire business that does nothing but help local search sites optimize their AdSense revenue. I love it and so do my clients. That said, it seems like the world is screaming out for a credible AdSense competitor that is not Microhoo and I think the local search world is the right place to start.
Because yellow pages-type search queries typically signal an intent to purchase locally, they have an extremely high value, particularly in relation to a lot of other types of ad inventory on the web. Local search directories that generate a decent amount of traffic can make anywhere from $15 to $100 eCPMs just by participating in the AdSense program. Perhaps this is why there are so many sites jumping into the local search game.
In the UK directory publisher Yell offers a version of “local AdSense” today. There’s also a local-mobile version in the US through V-Enable. Reach Local has a Local Xchange. And MediaTraks has an IYP exchange (don’t know if it’s still operating). Beyond this, I know of a couple of efforts to make something like this for the local PC Internet. We’ll see whether they in fact show up.
I’m unable to keep up with all the information and demands right now, which is why things have been a little light here. I’ve been blogging as normal on SEL and LocalMobileSearch but I’ll get back to my usual output here shortly.
Also I’ve not been very inspired of late.
While I was out the past few days the Kelsey Group put out new data from its online “Local Commerce Monitor” that said the following:
[P]enetration of digital and online media increased from 73% in August ‘08 to 77% in ‘09. Meanwhile, traditional media penetration lowered from 74% to 69%. (Penetration is defined as the percentage of SMBs using the given media, regardless of level of spend.)
In May, 2006 I asked “Will the Next Recession Drive Online Ads?”:
Assume we go into recession in the next couple years, my thesis here is that event will potentially accelerate the adoption of online marketing because of its relatively low cost compared with traditional media, its “accountability” and its perceived efficiency.
Of course there are now dozens of studies that confirm this has happened and that traditional media have suffered across the board.
Let’s come back now to the Kelsey data. This is a significant milestone to be sure. The Kelsey Group has done this survey over the past several years and the trend dimension is significant. However I would use some caution in generalizing to the entire US SMB population. Many articles will be tempted to do this.
The sample size was 302 SMBs. In fact there is no “representative sample” of small businesses. In an online survey I conducted a year ago (8/08, n=1084) among US SMBs (via LMS/Opus Research) 53.8% on average said they had a website (we didn’t define “website,” so it could have meant to them any online presence). When asked about “online marketing” they said the following:
Admittedly these data are now a year old. I’m not suggesting they contradict the Kelsey findings; I’m saying that people should use caution in generalizing too broadly from the Kelsey data. One much always be careful in doing this when discussing the “small business market” as a monolith.
The other interesting bit that came out in the Kelsey press release is this:
According to the study, SMBs decreased spending on advertising and promotion by 23.5 percent, from $2,734 (reported in August 2008) to $2,092 (reported in August 2009). As a percentage of total advertising for the SMBs surveyed, digital/online has increased from 22 percent to 36.8 percent over the past year. In spite of the overall decrease in spending on advertising and promotion over the past 12 months, on average, SMBs increased spending on Web sites and profile pages by 26.8 percent, from $608 in 2008 to $769 in 2009.
There are two “takeaways” here for me:
On the first point, we’ll have to see what happens after the recession ends. On the second — this is something I’ve discussed a number of times before — we’re seeing SMBs spend money on things that don’t count as “advertising” (e.g., sites, SEO) although they do constitute “marketing” expenditures. The overall $2,092 spend is off from the roughly $3,500 to $4,500 pre-recession average print yellow pages spend (which includes national advertiser spending).
Stepping back, the Kelsey data are no doubt accurately reflective of larger directional trends in the market and are symbolically and psychologically significant — akin to when consumer use of the Internet for local information surpassed print yellow pages.
However it’s important to point out that these findings still don’t change the fact that most SMBs remain confused and ill-equipped to manage their own online marketing.
There are many people who may never forgive MerchantCircle for its early “robocalling” customer acquisition strategy. I’m told by the company that’s not happening any longer. But let’s put that issue aside for the time being because MerchantCircle is doing some really interesting things that are worth discussing.
As background for the rest of this post, I was recently told by Darren Waddell, MerchantCircle’s marketing VP, that the company now has 750K small businesses that have claimed a listing or are engaged with the site’s services to some degree (this is obviously not an advertiser number). He said that “member” number would be over one million before the end of the year.
While many of these merchants aren’t doing a great deal on the site (or may have shown up only once), there are many thousands of SMBs that are very actively using it to market themselves. And that’s turning into spontaneous Twitter recommendations in some cases:
Another impressive statistic: Waddell said “We’re driving 35 million page views, 17 million uniques per month of local traffic.” All of this is coming through SEO/search traffic.
As a result of this traffic the site is making a fair amount of money off ads that are getting very attractive CPMs vs. the rest of the market. All the SEO-based traffic the company is receiving has, according to Waddell, brought its customer acquisition cost down to nearly zero.
There is a range of advertising products that the company is selling to SMBs, from fixed fee to performance-based PPCall and PPC (WebVisible is a partner). According to Waddell, while there are several ad programs and products, there’s an overall emphasis on simplicity and low cost. Most services utilized by merchants are free.
Now, in order to enhance the value proposition for SMBs, MerchantCircle quietly expanded into consumer content. The new program is called “Neighbors” and it offers consumer-users a profile and personal “dashboard” where they can connect with one another, collect coupons, track merchants, generate favorite lists and reviews.
The following image is a screenshot of a community page from MerchantCircle’s Tulsa OK site:
Here’s an image of the consumer dashboard:
The dashboard enables the consumer-user to track (tabs across the top):
On to following; users can “follow” merchants in the same way that one has Twitter followers. Note the follow link under the phone number in the profile below:
After I click to follow, I’m connected to that business and it can directly communicate with me:
In much the same way that MerchantCircle has sought to create a social network of merchants, it has now begun that same work on the consumer side. But the object here is not so much to link consumers to one another as generate more interaction between consumers and merchants and stimulate demand, further activity and content creation. The content and pages populated by consumer-users in turn become more fodder for Google and SEO as well. The company appears to have hit some sort of inflection point with traffic from SEO.
Currently the way that MerchantCircle prompts consumers to join the Neighbors program is through the reviews process. When consumers land on a page via organic search results, some number of those users wind up writing a review of a local business on one of MerchantCircle’s merchant pages. Those review writers are then targeted by MerchantCircle for the Neighbors program:
MerchantCircle is also part of Facebook Connect. And if users log in with their Facebook username and password, their actions and activities on MerchantCircle are broadcast back to through their news feeds on Facebook.
If MerchantCircle is successful in getting consumers to join, create reviews, clip coupons and follow businesses, it will build considerable additional value for its merchants at no cost to itself. Waddell says that the SMBs active with MerchantCircle (mostly in smaller markets) and consumers may not line up 1:1 at the start. But given that MerchantCircle is making money and has been so successful getting SMBs to join, at the rate of 20K per month, it can afford to take the long view.
Telmetrics released call and URL tracking data that show how print YP and online complement one another in some interesting ways. The company “measured consumer Web activity generated by more than 1,200 print Yellow Pages ads from November 2008 through April 2009. Each [display] ad included both a unique URL and phone number.” The URL redirected in most cases to a business website.
The story has always been print YP vs. online. But the more complex consumer reality is that print (traditional media) often drives online and search. Telmetrics data reveal that.
Here are the topline data:
I spoke with Telmetrics CEO Bill Dinan yesterday about these findings. He told me that they weren’t able to measure the overlap between people who visited a site and may have subsequently picked up the phone. He also told me that in anecdotal interviews with consumers following the collection of this data consumers often said they were less inclined to consider a business that didn’t offer a URL in its print YP ad. He was surprised by the degree to which consumers came to the print book expecting to be directed to an Internet site.
I also asked Dinan about his theories about why certain categories might generate more clicks than calls. He said he thought that circumstances in which people needed to consider inventory or get more information (especially to see an item or product) drove more URL visits.
There are lots of studies from among others Google and SEM firm iProspect that show how people use multiple media to get information. These same studies also show how traditional media stimulate or generate online search behavior or other lookups.
What’s interesting here is that people are coming to the print book as a starting point and going off to the Internet, consistent with those studies, to get more information in almost 50 percent of cases. So rather than an island separate from the Internet, print YP is being shown here to be a complement and even a driver of online activity.
I spent a bunch of time with ReachLocal co-founder Rob Wright on the Ad:Tech exhibit hall floor (in a blood-sugar deprived state) getting a demo of the new ReachLocal Xchange product. Rob took me through the sales/advertiser facing screens as well as the publisher side of the exchange. A few things are now much more clear than when I was just looking at an press release and exchanging emails with Reach.
Reach has built an impressive platform (from my lay perspective). It can accommodate virtually any type of ad unit on any publisher site (online or mobile), where publishers do their own ad serving. Reach doesn’t (yet) have ad serving capabilities for smaller publishers.
Reach is carefully managing who gets to plug into this. All publishers are approved on a case-by-case basis. By the same token, Reach is doing some outbound sales to selected publishers. On the advertiser side, Reach is not currently going to allow other sales channels to plug into this exchange. For example: a YP publisher could receive ads but not use the system for additional traffic for its advertisers. No other sales entity or channel (except the company’s reseller partners) can use the platform. That could change down the line but for the time being that’s the policy.
Here are Reach’s answers to the reader questions that arose in the wake of my previous post:
Q: Banner exchanges worked (right media) because there were standard ad units, ad tags and measurement. How will this work in local where you have search, display, and mobile? No one has figured this out for national why would local be first? The Xchange provides a standard way for local businesses to provide campaign information, including creative, to media publishers so that they may traffic these campaigns in their systems as they do today. Where necessary (for instance, where a media publisher is not set up to provision hundreds of IOs at smaller dollar values, as is typical for the SMB market), ReachLocal will be providing a standardized IOs to the publisher and, possibly, providing ad serving directly. The ReachLocal Xchange will support multiple ad types and pricing formats that can be integrated into 3rd party publishing systems.
Q: What is the point of the app exchange? If SMBs do not want to self serve, who will be using these apps?
The ReachLocal Xchange for Solutions is inclusive of products and services. As an example, web and banner design would be considered a service, while online chat and online scheduling would be considered a product. Products and services can be purchased by our sales force (Internet Marketing Consultants) in the ReachLocal Xchange on behalf of the SMBs, because it is our experience that small businesses will not self-service.
Q: Why is fox the anchor tenant. Social networking inventory is proven to be the lowest value ad inventory on the web?
Social networking is just a portion of the Fox Audience network (Fox News, Fox Sports, Fox local O&O sites and other premium local inventory) that is available through their network. In addition, we will be leveraging remarketing and other behavioral targeting capabilities afforded by the network. The Fox Audience Network is a great complement to the existing network of display publishers we are currently working with.
Q: Will the exchange be open to all buyers; e.g., can WebVisible advertisers buy ads through WebVisible on the exchange?
ReachLocal currently provides online marketing solutions to hundreds of partner resellers, including advertising agencies and vertically-focused online marketing companies. They will have access to the ReachLocal Xchange for their advertiser clients. WebVisible is not currently a ReachLocal partner reseller.
Q: How are all of the SEM campaigns set up if the advertiser comes from outside the reach network?
We’re not quite sure we understand this question, but if this is referring to the hundreds of partner resellers with whom we work today to provide SEM services, those partner resellers have access to the ReachLocal platform to provision and view reports on their SEM campaigns.
Q: What is the exchange fee?
There are no fees associated with joining the ReachLocal Xchange.
Citysearch has shown new energy and creativity in the recent past, with its redesign, new verticals and integration of Facebook Connect, which makes the site more “social.” Now it has teamed up with MySpace for “MySpace Local,” which puts Citysearch data into a local destination hosted on MySpace . . . that also integrates all the social contacts and features of MySpace.
TechCruch has a preview of the beta product. Beyond MySpace users, the intention is to have MySpace Local to be a destination that can be accessed and discovered through search as well.
As Michael Arrington points out in his post, this creates potentially huge amounts of new geotargeted ad inventory for MySpace, with a rev share to Citysearch one assumes. It also represents more distribution for Citysearch merchants and advertisers as part of the latter’s network strategy. All of this will of course translate into mobile, a big battle ground between MySpace and Facebook.
It’s one facet of a larger “local” strategy for MySpace, which includes SMB advertising. I spoke about all this with former Yahoo! search marketing exec. Warren Kay, who’s now at Fox and spearheadin local and SMB initiatives on the advertiser side.
In a way we could see this as analogous to the Oodle marketplace on MySpace or Facebook. And it will be interesting to see whether and how Facebook responds. Facebook also has a big opportunity in local that hasn’t been developed.
More after I get a “look under the hood.”
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More from PaidContent and Forbes (“MySpace’s Yelp Envy.”)
Off topic: I got hit by a spam email that came from someone I know asking me to sign in to see a video on a site called FastForward. I signed in using my Google username and password. Now all my Gmail contacts are getting the spam.
I’m sorry. But I’m hearing from a lot of people I haven’t spoken to in some time 
Verizon has introduced a device called the Verizon Hub in a bid to make the home phone more dynamic and prevent further declines of the wireline (wireless only households in the US are estimated to be at about 18% or so). It uses both a wireline and wireless broadband Internet connection.
According to the press release:
Information will be at a family’s fingertips, literally from an easy-to-navigate touch screen with clear icons on the Verizon Hub. Families will start and end their days with nuggets of customized information from the Verizon Hub:
The Hub is quite similar in intention and design (touch screen) to the AT&T Home Manager (a landline phone with a touch screen), which has received mixed reviews.
I haven’t used the Verizon Hub and it’s not clear how much the device costs — that will be a driver of success or failure. The “closed universe” of the AT&T Home Manager will be mostly unsatisfying. Beyond cost, the success or failure of these devices, will be the degree to which their screens offer real utility and something that approaches genuine Internet access.
In something of a “no-duh” moment, Google CEO Eric Schmidt told Fortune that Google wouldn’t be buying any newspapers to save them from financial ruin.
How about just buying them?
The good news is we could purchase them. We have the cash. But I don’t think our purchasing a newspaper would solve the business problems. It would help solidify the ownership structure, but it doesn’t solve the underlying problem in the business. Until we can answer that question we’re in this uncomfortable conversation.
I think the solution is tighter integration. In other words, we can do this without making an acquisition. The term I’ve been using is ‘merge without merging.’ The Web allows you to do that, where you can get the Web systems of both organizations fairly well integrated, and you don’t have to do it on exclusive basis.
This question, about Google buying a newspaper publisher or directory company, comes around every few months. Google won’t do it — despite Schmidt’s personal affinity for newspapers — because it makes no sense financially, technologically or culturally. The story’s “deck” or lead-in paragraph accuses Google of contributing to the decline of newspapers:
Metaphorically speaking, Google is killing the newspaper industry. Online news is quickly hollowing out the traditional paper – the Christian Science Monitor eliminates its print edition, Tribune Co. declares bankruptcy, Detroit’s two dailies slash home delivery to three days a week – while Google rakes in advertising profits.
Turns out that Google CEO Eric Schmidt professes a passionate desire to lend a hand.
I’m not sure what “metaphorically speaking . . .” means in this particular context. Google isn’t killing the newspapers. Google is merely the “personification” of the Internet era. The newspapers have failed to recognize what’s happening, overcome their own bureaucracy and ACT in sufficient time. Hopefully, they will survive this recession . . . hopefully.
Let’s hope 2009 brings a quick recovery and peace to the Middle East, India/Pakistan, Iraq and elsewhere.
Have fun. Be safe.
I’d like to start making some money off this blog. I haven’t put up ads because I don’t like them in general. But I’d like to ask you folks how I should make some money off the blog.
What should I do:
What do you think; any other ideas?
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Thanks to everyone who commented below and offered their suggestions. I’ll be following up on a number of them.
I hope everyone has a great holiday — as much as can be expected under the circumstances. I also want to thank everyone I worked with this year and all the readers of this blog. I’m truly lucky and grateful to you all.
I got a note last night from an entrepreneur in the local space (who had a very successful exit) that a relative of his, who was until this week sales executive at a major software company on the Peninsula, is now looking for another position after the latter individual’s entire group was dissolved.
The entrepreneur said to me that this individual had “consistently exceeded sales expectations.” If you’re interested in speaking to this person let me know and I’ll connect you. (There’s no money in it for me at all; just doing a favor.)
I’m behind and doing about 20 million things at once. Bear with me. I’ll be back at it shortly.
It’s been a crazy week of travel for me and pure physical fatigue has kept me from posting more. Got back from speaking at an event last night at 9pm and now (4:30am) I’m heading out to another series of meetings on the road.
My apologies for not getting to more stuff over the past few days.
Some time ago I asked people whether they thought it would be worthwhile for me to post jobs on this blog. The response was very mixed (with many people responding in email). A number of people liked the idea and said they thought it would be helpful if the information was there but not too prominent. But lots of people didn’t want job notices to clutter up the content.
Right now I’m holding off but think that eventually it would be valuable to do this if I can find a way that isn’t too obtrusive.
Google Trends has integrated some new metrics for websites, not just search queries. Traffic is estimated, based on several sources. Barry Schwartz has an extensive write up at SEL. Now with Trends you can compare sites and see relative traffic and traffic by country or city:
What it shows you is relative traffic (not uniques; though Compete will), as well sites that people who visited those sites also visited and other content that those users searched for. So there’s some interesting and helpful information here.
You can also see traffic by location (DMA) on Quantcast (under the media planner tool).
