Archive for the ‘Media fragmentation’ Category

vFlyer Turns to Subscription Model

January 9, 2007

vflyerFree classifieds ad syndicator vFlyer announced that it would be introducing a subscription model. The company allows sellers to create better looking ads with templates (that act as landing pages or website substitutes) and then distribute those listings to a range of classifieds destination sites including Craiglist. It’s the cousin of simplified search marketing provided by yellow pages and selected newspapers.

The service is a good one and makes sense given the fragmentation of the online marketplace. The weak link for vFlyer was the ad supported model they were using.

The subscription model makes sense for company, which will still allow sellers who create up to 10 ads/fliers to use it for free. But those who wish to publish 25 or more fliers will have two packages to choose from, staring at $19.95 and going up to $34.95 for a premium subscription.

The company has a number of competitors, including Postlets and SubmitYourListings (in real estate). The ability of vFlyer to gain traction with its subscription service will be based on the degree to which it can successfully differentiate from these competitors’ free services.

I previously wrote about vFlyer here and at their launch here.

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WSJ: AT&T Multi-Platform Ad Sales No Cinch

January 7, 2007

There’s an interesting article in the WSJ (sub req’d) that discusses AT&T’s strategy to make ad sales across platforms a centerpiece of its new corporate strategy and to potentially leverage its yellow pages sales force to sell ads across those platforms. But the (rightly) skeptical article points out the challenges the telecom giant faces in a new, extremely competitive landscape:

AT&T says it has an edge over other media companies because of its ability to offer advertisers space on “three screens” — computers, TVs and mobile phones. Still, it faces plenty of hurdles. For one thing, its TV service, which serves only a few thousand customers in the 11 markets in which it’s currently available, doesn’t yet have the critical mass that advertisers look for. In contrast, AT&T’s cellphone service has 58.7 million customers, and the company serves 11.5 million high-speed Internet subscribers. AT&T executives say they don’t expect ad sales to gain momentum until next year at the earliest.

Others have “three screens” too: Google, Yahoo! (an AT&T partner) and Comcast. Online video counts as a screen, separate from the general Internet, in my mind. Certainly YouTube is as powerful as TV for users and potentially powerful as a brand advertising vehicle alternative to traditional TV.

More from the WSJ article:

The presence of Comcast and other big cable operators in the ad-sales market underlines the competitive challenge facing AT&T. “It took how long for cable to become effective at local ad sales?” asks Tom Wolzien, an independent media consultant.

“It remains to be seen whether [AT&T] can do very quickly what it has taken the other guys a long time to build,” adds Steve Calder, executive media director at Mediahub, a media-services unit of Interpublic’s Mullen agency.

It isn’t just cable operators that AT&T is going up against. The telecom titan is entering a very crowded field — one that is undergoing intense change, as marketers scale back spending on traditional media and put more emphasis on new media. Growth of spending on TV advertising has slowed dramatically in recent years, raising questions about AT&T’s ability to generate significant revenue from that area.

“Those pots of dollars are under duress,” Mr. Spangenberg says. He thinks AT&T will have a competitive advantage with its ability to package TV ads with spots on the Web and mobile devices. And he also expects AT&T to win ad dollars by making use of new interactive ad techniques, such as short four-minute films that audiences can choose to see with a click of their remote control.

In my “It’s Alive” post I said:

AT&T will have a $5.8 billion print directory business [source: Kelsey]) that employs more than 3,500 local sales people. It also owns YellowPages.com, which has the potential to be much more effective and user-friendly than it is today. And the company very recently launched 1-800-YellowPages, which could become a very competitive and effective mobile-local search service. (Cingular, soon to become AT&T wireless again, also offers mobile search, etc.) And all this content could equally be distributed via TV/IPTV too under the “YellowPages.com” brand.

This all looks very compelling “on paper.” But execution is the key. And we’ll see how much synergy there is and how effectively all these assets come together. In my mind that’s far from certain.

The WSJ article neglected to mention 1-800-YellowPages, which could develop into a significant asset and further solidify a “consolidated” advertiser value proposition. Having said that, I don’t think that AT&T will be successfully able to get the yellow pages sales force to sell all these products. I also don’t think the company will be able to adopt an “agency like” approach to selling media/advertising to Fortune 1000 clients. It will be too difficult to transform the culture of the company given its size and history.

The Forrester survey mentioned in the WSJ article, citing consumers’ resistance to mobile advertising confirms other data in the market and shows that mobile, CPM-based (display) ads may not experience success in mobile, unless they’re very targeted. Search ads are another story and much more likely to succeed because of their relevance to the user query. (I would also include directory assistance in this because the behavior is search behavior.)

In other words, size does not automatically equal success.

Newspapers and the Star Tribune

January 2, 2007

When McClatchy bought substantially all of KnightRidder last year it was initially a surprise that the company immediately turned around and sold two of its flagships: the San Jose Mercury News and the Philadelphia Inquirer. But even more surprising was last week’s sale to a private equity group of one of McClatchy’s “marquee” publications: the Minneapolis Star Tribune. (The Star Tibune’s “Shop Minnesota” has been recognized by the newspaper industry as an exemplar of how to integrate online shopping into a newspaper site. My view is that it’s pretty good but not great.)

Here’s a NY Times piece that does a nice, anecdotal job of highlighting the generational problems confronting the newspaper industry right now. If you want more data than you know what to do with on online newspapers, you’ll find it here (NAA database).

We’re likely to see more upheavals this year as newspaper print growth is totally flat or down slightly and online newspaper growth is much stronger (in the mid 20% range). Online newspapers continue to experiment with community, feeds, video and content aggregation. Eventually a model will emerge that others can emulate. My belief now is that major metro dailies will build local content and ad networks with different or subsidiary brands in their markets.

In contrast to my former argument that newspaper brands were a great strength, the newspaper brand emerges as a mixed blessing according to newspaper insiders — trusted and resonant with some audiences, flat among others. I however tend to believe it’s less about the brand than the overall user experience.

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Related: Susan Mernit points to an interesting site, Placeblogger, which seeks to aggregate local content/blogs. McClatchy just acquired local, community blog sites FresnoFamous and ModestoFamous. Watch for more such acquisitions and the blurring of editorially produced content and local user-generated content.

NY Times Adds ‘Sharing’ for News 2.0 Sites

December 11, 2006

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I’m a regular reader of the NY Times online and didn’t notice it myself. It had to be pointed out by TechCrunch and the Seattle PI:

ScreenshotIt marks the first time that the country’s third-largest newspaper has added a news-sharing tool to its Web site, allowing readers to develop conversations and post comments about specific stories. Readers will be able to add headlines and a small portion of text to the social media sites by clicking on the logos of Digg, Facebook and Newsvine. Those logos began appearing next to The Times’ stories this morning in the same box as the print and e-mail tools, although they’re initially hidden until users click the “Share” link.

The sharing feature will not be used on TimesSelect stories, the newspaper’s premium content offering, nor will it be available on staff blogs or wire stories.

While this move may be somewhat inconsistent with the Times’ demographic it’s a smart one for the paper, to expand distribution and win plaudits from bloggers and tech-savvy readers.

These days you can’t survive with only a “destination” strategy. You have to have some sort of viral and/or other distribution strategies to get your content in front of users.

Yahoo Close to Newspaper Deal

November 18, 2006

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Rumored for some time, Yahoo! is apparently close to closing a deal with six newspaper groups. According the WSJ:

Yahoo Inc. is close to a deal with six major newspaper groups representing more than a hundred newspapers that would allow them to sell listings on Yahoo’s HotJobs online classified service, according to people familiar with the matter.

The pact, which could be announced as early as Monday, comes on the heels of an announcement from Google Inc. that it was linking up with more than 50 daily newspapers to sell ads in those papers through its Web site.

The Yahoo deal is designed to bolster HotJobs’ position in local markets around the country by using the newspapers’ local reach. Publishers teaming up with Yahoo are MediaNews Group Inc., Hearst Corp., Belo Corp., E.W. Scripps Co., Lee Enterprises Inc. and Cox Enterprises Inc., say people familiar with the matter.

Here’s more re the Google-Newspapers deal.

 

Waking Up to ‘Integrated’ Campaigns

November 15, 2006

Here’s an article from today’s MediaPost that discusses the need to coordinate search, online display and (gasp) traditional, offline media. For too long search has been seen as a DM/DR island; and now many folks are waking up to the ways in which “integrated” or coordinated campaigns can be extremely effective. (Search is neither entirely DR, nor a true branding medium — it’s both to varying degrees.)

From the MediaPost article:

Yahoo’s Kelly Graziadei, director of channel strategy and development, added that the company is working to coordinate search, display and offline advertising.

I wrote yesterday (scroll to the bottom) about the fact that now, as a marketer, you need a mix of traditional and online coverage to reach desired audiences.

Of those I’ve spoken to, NY-based interactive agency MakeBuzz has been way out in front in thinking about and implementing these issues for brands and marketers (including geotargeted campaigns).

vFlyer Adds New Features for Realtors

November 15, 2006

vFlyer

Sell-side classifieds ad platform and content syndicator vFlyer has announced the launch of some new tools for real estate professionals:

Building on the strength and flexibility of its existing platform, vFlyer’s newly integrated functionality provides agents and brokers with enhanced ways to distribute their ads, sell a broader set of property categories and promote agent background and profiles to more readily sell or rent residential and commercial properties through online classified ad marketplaces. vFlyer is also announcing its FeedExpress™ service that enables large real estate companies with over 1,000 listings to automatically submit, publish and distribute flyers through dynamic feed-based syndication.

Here’s the full press release. I previously wrote about vFlyer in this post (scroll):

Basically the company helps sellers (private parties or professionals) create a better looking ad with graphical templates and then pumps that listing out to numerous sites including Craigslist. There’s been “aggregation” on the buy side; this is a version of that on the sell side. It’s free and ultimately ad-supported. That may be a tough one, however. I think there’s a premium version that vFlyer could easily charge for given the convenience factor. (Less rich templates, fewer sites for free; more sites for a fee.) They’re also doing SEO for these pages so this becomes a microsite as well.

The service is very nice and certainly it helps address fragmentation on the sell side. But their current business model is the weak link in an otherwise strong service.

Who Will Solve the Local Mess?

November 14, 2006

How are we going to make sense of the local mess? Or better yet, who is going to make sense of it? What local mess you ask?

The Internet is now the best and richest source of local information; it’s just a Tower of Babel (my favorite metaphor here). News sites, entertainment and event sites, verticals, shopping sites, classifieds sites, directories, restaurants, blogs, online communities, local video and so on, all now compete for attention from local consumers. The “Local Internet” is only getting more crowded by the week it seems. (I’m now receiving more releases, emails and requests for briefings daily than I can handle.)

There are now 100 million operating websites. That’s only going to continue to grow, with local shadowing the larger trends.

In an August, 2006 MarketingSherpa survey almost 4,000 online marketers were asked to rate emerging trends in search. Local search was the top trend identified (60%) that excited them. In its summary of those results, MarketingSherpa said the following:

For local search to become part of many marketers’ search portfolios local needs to become the “go to” for information like the yellow pages, and to do so, users will have to feel completely confident that listings are pertinent and complete. Most of the savvy local search marketers we spoke to felt that “comprehensive” local search was a high priority for the top search engines, but was probably a year or two away in terms of functionality and perhaps as many as five years away in user uptake.

I don’t agree with the user-uptake time frame and I would frame the problem in a slightly different way. The issue is critical mass. Marketers want reach or critical mass; publishers want audience critical mass. (That definition may depend on your cost structure.) But that’s what they’ve always received from traditional local media such as YP, radio and newspapers. The challenge online is all the local fragmentation – both for marketers and publishers. There are various efforts underway on the publisher/advertiser side to address that problem, with syndication/distribution, simplified search, do-it-yourself ad networks (e.g., Adify) and emerging exchanges (e.g., RightMedia).

The net effect of these efforts is to try and create a system whereby marketers (large or small) can get their offerings in front of consumers wherever they may be online. That system hasn’t been perfected, but it’s well underway.

On the consumer side, every new site that launches potentially splinters the local audience. I’m not arguing that these sites shouldn’t launch; I’m saying the practical effect of so many local sites is lots of noise and confusion in the market. What too much choice does is reinforce current behavior. That means the centrality of search engines — unless you have a very strong brand (newspapers take note) — and established search behaviors (i.e., G,Y,M; putting aside mobile-local search).

To address the consumer fragmentation problem, I fully expect a crop of aggregators to arise; some like Oodle, Indeed, SideStep, Zvents and OpenList, to name only a few, already exist. Their consumer value proposition is or will be to combine all the relevant local information (or vertically specific local information) in one place and thus simplify the world for users.

We may well see a pyramid of aggregators develop: level one aggregating content sites; level two aggregating content aggregators into local “meta” sites. Then there are the unresolved legal issues (See, Feist v. Rural) about who can aggregate and repurpose data and build a business on top of that.

Until very recently, television was able to command advertising premiums even as its audiences were declining. That’s because it was the last mass medium and even though it was shrinking there was nothing comparable to replace it. In local, that logic probably also applies to print YP and print newspapers. Even though readers/audiences are flat-to-declining, there’s no single source online to replace them quite yet.

Signal to Noise: 100 Million Sites

November 1, 2006

Forget “500 channels and nothing on,” CNN reports that the Internet has now crossed a significant milestone; there are 100 million operating websites. Not only that, the growth of the website population has been growing like human population growth: “There were just 18,000 Web sites when Netcraft, based in Bath, England, began keeping track in August of 1995. It took until May of 2004 to reach the 50 million milestone; then only 30 more months to hit 100 million, late in the month of October 2006.”

This all means that there’s more and more noise online and it’s only getting “worse.” I’ve been talking about that in the limited context of local. But the general cacophony of new and me-too sites and services only means that brands and habitual behavior become more powerful; people will fall back on what they like, know and trust rather than try new things.

The idea that “our competition is only a click away” only really means something if you’re a no-name site. It’s very different if you’re Google or Yahoo (or even MySpace now).

People talk about “the Internet” in the same way they discuss “the small business market.” There is no “small business market,” there are only 10 or 14 or 17 or 20 million small businesses, with some shared characteristics. Similarly, “the Internet” is not a monolith, but 100 million websites.

Thus those would would “aggregate the tail” (whether eyeballs, publishers/site or marketers) are thus increasingly important to the online ecosystem.

Smalltown: A ‘Flashy’ New Local Destination

October 10, 2006

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Smalltown, a new local-search destination with a snappy, flash-based interface announced that it had received $3 million in funding from Formative Ventures. The site also formally launched in Burlingame and San Mateo, CA, two communities south of San Francisco.

Smalltown has licensed one of the major databases to jump start its content but intends for users and local businesses to add content to the site. In some respects it might be described as kind of mix of Backfence (hyper-local orientation + a mix of service and classified listings), MerchantCircle (merchants linking/pointing to one another) and InsiderPages (ratings/reviews). The site is right now banking on two things to differentiate it: its local-local presence and its interface.

CEO Hal Rucker has created an interface, which you’ll either find appealing or challenging, that has a range of dynamic “drag and drop” features. But at the core of the user experience are “Webcards.” Here’s how the press release describes them:

Webcards are similar to an index card that you might post at your local grocery store, yet they are enhanced by rich content and functionality and can be linked together to form discussions. Through the use of Webcards, Smalltown encourages an interactive local exchange where people can easily post, search, update and share information on everything from the most reliable handyman to Saturday afternoon activities. Users can also access information found on Smalltown Webcards through popular search engines on the World Wide Web.

Rucker intends for Smalltown to be a kind of local dashboard for community residents to return to repeatedly. He also intends for the Webcards to be an online presence for local businesses that don’t have websites or whose websites are awkward or ineffective.

Rucker told me that Smalltown intends to have someone in each community to ensure the local integrity of the site and the quality of the listings — these were the folks who told me they found a 47% error rate in the database listings when they checked “door to door.” They’ve also taken pictures of every storefront in the two communities they’re launching with.

Rucker would take exception to my characterization of this as “local search.” What Rucker and Smalltown are seeking to build in their minds is the “Local Web,” which they believe is something different and more self-contained.

TechCrunch’s Marshall Kirkpatrick has a negative assessment of the use of flash on the site. I agree with him that the interface is not 100% intuitive; consumers will have to explore and use the site to become comfortable with it. But it’s not all that complicated either.

On the positive side, the site is more dynamic and visually rich (partly because of the flash) than many local sites. But it sure is a crowded field these guys have entered.

The business model, as one might expect, is advertising. Local businesses can pay $40 per month for an enhanced Webcard. Otherwise, there’s no advertising on the site. They plan to use local events and the presence of a local rep. to build community awareness (among other now-standard viral techniques).

I don’t have any predictions regarding how users and local businesses will respond to the site. Given how crowded and competitive the local space is right now it’s a major uphill climb for Smalltown. But Yelp’s success has taught me to hold my tongue and that late entrants can succeed in a crowded market.

Lifting the Veil on Local

October 4, 2006

With all the recent writing about local search I was prompted to reflect on what are the “real” local numbers? What do you mean “real”?

I’ve consistently argued that the Internet – from a commercial standpoint – is ultimately more about local than almost anything else. For example, the US Commerce Dept. data reflect that ecommerce is about 3% of total US retail (about $3.6 trillion), but almost $400 billion in offline spending is Internet influenced.

The recent comScore data (July 06) asserted that 13% of overall web search is local, or approximately 849 million monthly searches vs. 6.5 billion in general web search. When I was at The Kelsey Group we developed an empirically based estimate that roughly 20% of web search manifested a local intent.

comScore also says that 63% of the US online population (roughly 109 million people) conducted a local search in July. Those are clearly huge numbers. But as I’ve said, the definition of “local search” (IYP + search) that comScore uses doesn’t tell the whole local Internet story very well. So I want to lay out some of the numbers to offer a better sense of how many users are looking for local information (broadly defined) online.

  • Total US Internet audience: 172 million (comScore, May 2006)
  • “Local Search” (search + IYP sites): 109 million uniques (comScore, July 2006)
  • Jobs: 49.8 million uniques (comScore, February 2006)
  • Cars: 42 million uniques (excludes OEM sites; comscore, April 2006)
  • Real Estate: 42 million monthly uniques (comScore, April 2006)
  • “Classifieds” sites: 37.4 million uniques (e.g., comScore, July 2006)
  • Newspaper sites: 55 million uniques (Nielsen//NetRatings, February 2006)
  • Mapping sites: 65.1 million uniques (comScore, March 2006)
  • Travel: 41 million uniques (top 10 sites only; Nielsen//NetRatings, August 2006)
  • Personals/Dating: 31.6 million uniques (comScore, January 2006)
  • Shopping (shop online, buy offline): 80.8 million uniques (Dieringer Research Group, 2005)

The first thing you might feel the impulse to do is dispute some of these traffic numbers as “local.” For example, Travel is a heavy ecommerce segment and thus is potentially controversial as a “local” category. But fundamentally travel is about place and drives related local spending. (comScore has pointed out related site visits before and after visits to travel sites that are inherently local.) Dating is also often not local, but typically is. Visits to car sites may or may not be local (but transactions overwhelmingly are).

In addition, there’s clearly overlapping usage in these categories so the numbers are not additive. I don’t have any way to provide unduplicated uniques. But all of these categories and some not mentioned (e.g., social networks/social directories with a local element or emphasis) have “local intent” traffic not captured by the narrow comScore local search definition above.

Some people might also be inclined to argue that the traffic data above underestimate actual usage in certain categories and some might argue the opposite. Putting aside the precise accuracy of the traffic data in any given category, these are extremely large numbers of users. And in the overwhelming majority of cases the transactions that result from the user behavior are local.

Some of the behavior seen on these sites is not going to be like that of search, where a user is actively seeking information that will ultimately result in a transaction. For example, people might be on newspaper sites reading news stories that are not inherently local and won’t drive any consumer purchase behavior.

But lots of behavior that is “directional” is happening on these non-search sites and thus should be considered in thinking about the “local search” marketplace. In one way of thinking about it, “local search” is ultimately about actively seeking information online and buying something or engaging a service-provider offline.

And that’s a much bigger deal than the “niche” or “vertical” that most people assume local to be.

Tom Mohr’s ‘Digital Switzerland’

September 6, 2006

Earlier this year I ran into Tom Mohr at an Editor & Publisher conference. Tom was then the outgoing president of Knight Ridder Digital. At the event he pitched me on the idea of a common platform for online newspapers hosted by a third party. He has now elaborated that thinking into a full-blown strategy document or “manifesto,” as he’s calling it, for the industry:

To win, industry leaders must adopt a Marshall Plan embodying two key objectives: the migration to common platforms, and the acquisition of the ability to sell top-quality online product to our advertisers. To fulfill these objectives, the independent companies of a proud industry must aggregate into an industry-wide network. In this network, each company must cede some control over its digital future into a “Switzerland” organization that manages the network.

This will require a degree of cooperation and trust rarely seen before in the newspaper business, and therefore will only be achieved through the active, visionary leadership of the industry’s captains. But, if they pursue this path and plug into the power of network economics, they will tap into $4 billion of revenue upside for the industry by 2010.

I agree with Tom that newspapers need to be competitive online to survive and that newspaper survival is tied to the US remaining an open, democratic society. As overblown as that sounds, I genuinely believe that.

Here is the full list of Mohr’s recommendations:

— Local newspapers will not be the innovation source for top online products.

— “Local” is not, in itself, defensible online.

— The big money is not in newspaper websites, but in gaining access to top-tier product via partnerships with vertical online leaders.

— Moving newspaper websites onto common platforms will deliver improvements in quality, cost reduction, traffic and revenue.

— When networked, newspapers bring critical assets to the table that strengthen their competitive position vs. online-only players.

— The window of opportunity is closing; failure to act will compromise the future of the business.

— Ultimately, the key is leadership at the highest levels.

He elaborates on each one in the article. While I don’t agree with 100% of his recommendations and the practical challenges involved in bringing together the newspaper industry are huge (maybe insurmountable), there is a good deal I do agree with. For those interested, it’s provocative and a big vision and worth reading.

The Grateful Dead, Burning Man and the ‘Culture of Generosity’

September 4, 2006

Lurking somewhere in this post are some more coherent and maybe even profound thoughts than I’m capable of putting together at the moment. Nonetheless I’ve been wanting to get this cluster of thoughts out of my head so I’ll dispense with trying to formulate them more elegantly.

I was struck at Yahoo! Analyst Day several months ago by Jeff Weiner’s remark (attributed to Flickr co-founder Katarina Fake) about the Web, social media and the “culture of generosity.” I don’t know and can’t find the origin of the phrase, but I could attribute it to Burning Man (just concluded). For those unfamiliar with it, Burning Man is the largest gathering on public land in the US (labeled a “counter-culture” event).

With two isolated exceptions (coffee drinks and ice), no money changes hands during the week. People “gift” things to one another. Some people dismiss the festival as a gathering of freaks and geeks. But it’s much more complex, serious and interesting as a social phenomenon. Some of the people and the values on display at Burning Man are driving the current generation of web applications and startups.

But now turn the clock back to the Grateful Dead era (1965-1995). The Grateful Deal predated the advent of Burning Man by 30 years, but there was a brief overlap. The year Grateful Dead lead singer and guitarist Jerry Garcia died was the year Burning Man began on the beach in San Francisco.

The Grateful Dead did something very interesting and contrary to conventional wisdom: they allowed people at their concerts to freely tape the performance and trade those tapes without seeking to regulate that marketplace. This is something that most musicians and record companies then and now would shun because they would anticipate that it would “cannibalize” revenues. But exactly the opposite happened.

Among other practices, this free recording opportunity helped build loyalty and made “The Dead” one of the most successful concert acts of its generation.

So how does this relate to anything?

My late-night thinking in trying to awkwardly tie all this together, without getting Utopian, is that people will ultimately pay for or otherwise reward value and making that value apparent and accessible to them will, in the long term, create revenue opportunities. The circuitous pathway to success that Craigslist has traveled is a distant cousin of all this.

Right now fear and a corresponding conservatism pervades much of the traditional media world. But new thinking – and unconventional thinking – is required to make the leap from where we are to where the market is going.

Traditional media, especially newspapers, must take risks and think in very different ways than they’re used to if they’re to really be competitive online. But the same is true of yellow pages publishers. For example, I mentioned Viacom’s ParentsConnect in my earlier post. Is this a yellow pages site? No. Is it a competitor to yellow pages? Quite possibly.

Publishers must rise to the challenge of new consumer behaviors and attitudes, new competitors and new thinking. And community, a very traditional value that permeated the “culture” of The Grateful Dead and is central to Burning Man, is manifesting in many fascinating ways online. Community is also something that most traditional media companies and publishers have been very slow to cultivate.

For now, I’ll leave these thoughts here . . . and incomplete. But that’s the beauty of blogging.

Local Realtors Buy Print — Reluctantly

August 30, 2006

Peter Zollman’s research firm Classified Intelligence just conducted an in-depth survey of realtors about their advertising spending and attitudes toward print and online media. The findings are reported in some depth in this article. Here are some of the highlights:

Realtor newspaper advertising

  • 36% of surveyed realtors spent 10% or less of their total budgets in their local newspapers. 19% spent less than 20% of their total budgets on newspaper print ads. And 17% didn’t advertise at all in print newspapers
  • 52% of survey respondents reported promoting their services on free classified sites such as Craigslist (67%) Google Base (45%) and MSN/Windows Live Expo (33%)
  • 61% of respondents said the weren’t spending any marketing dollars on newspaper websites

Realtor ad budgets

  • 58% of agents surveyed said they were spending more on advertising in 2006 than in 2005, while 34% were spending about the same and only 8% said they were spending less
  • The majority of realtors were spending $1,000 to $10,000 annually on advertising: yard signs, billboards, flyers, print, the Internet and websites
  • 33% said they spend more than $10,000, while 26% spend between $5,000 and $10,000; 33% spent between $1,000 and $5,000 and 9% spent less than $1,000

Most spending on websites

According to the survey findings, 67% of realtors spent up to 30% of their ad budgets on maintaining their websites.

Local search lags

Only 26% of realtors spent anything on local PPC. 58% reported spending nothing on local search advertising (one question is how is that defined in the survey?). This finding appears to contradict earlier Borrell findings that local realtors were some of the most aggressive of local search advertisers. (The findings may not in fact be contradictory but it’s hard to tell at this level.)

Classified Intelligence’s Jim Townsend reported, according to the article, that “realtors are spending more money on advertising, but they’re not particularly satisfied with any advertising options.”

Marketing ‘purgatory’

Townsend’s remark is a perfect statement of the “purgatory” that now grips the local market. Local businesses cannot abandon expensive traditional media – because they’re still working but also because the alternative is a kind of confusing mess. The same situation confronts print yellow pages advertisers. Indeed, there’s plenty of anecdotal evidence that many local advertisers are eager to find alternatives to print yellow pages. But it still works and clear, easy-to-adopt alternatives have yet to emerge.

MediaNews Group Taps WebVisible for Local SEM

August 10, 2006

MediaNews Group, which bought some of the KnightRidder assets from McClatchy, becomes the third newspaper group to employ a “guaranteed clicks” geotargeted search program for the local market. Powered by WebVisible, which McClatchy is also using, the product is the essentially the same as what the yellow pages publishers have been selling for the past year or so. 

Adoption rates and demand have been very good to excellent according to those whom I’ve spoken to.

Hearst (The Houston Chronicle) was the first newspaper to adopt such a program in the newspaper market, working with Marchex’s TrafficLeader.  

Expect all the major newspapers to eventually do the same. Then you’ll have yellow pages and newspapers in all the major local markets competing with essentially the same product.

While these “guaranteed clicks” products — a simplified version of SEM, where campaign set up and fulfillment is managed by the third party vendor — have been easy to sell and easy for the local business to buy, delivering those clicks can be a challenge. Consumers looking for local information online is a huge phenomenon, but that traffic is fragmented across hundreds of sites – not always on search engines.

A more mature version of the “guaranteed clicks” product will be a budget-based sale (X dollars will get you Y clicks in this market; if you want more, pay Z). That will account for pricing variability by vertical category and geographic market. This budget based product already exists but is not a dominant as the “guaranteed clicks” product.

For more information, here’s the press release.

Foster’s Looking for Young Men Online

August 3, 2006

Another interesting piece from today’s WSJ (sub. req’d): Austrialian brewer Foster’s Lager is abandoning American TV and will shift its entire ad budget to the Internet:

Its new online campaign begins Aug. 16 with ads on Heavy.com, a music-and-video Web site targeted at young men. The site’s slogan: “Because TV sucks.” Foster’s ad agency, WPP Group’s Ogilvy & Mather, will also produce and post on various Web sites a series of comedic videos aimed at promoting Foster’s.

Many marketers, increasingly uncertain about the value of TV advertising, are looking at other media. That shift is particularly marked for advertisers such as Foster’s that target young men, a group that is watching less TV and playing computer games or spending time on the Internet instead…

Separately, Ogilvy & Mather will run a “viral” campaign, aimed at sparking word-of-mouth buzz about Foster’s, by posting videos on Heavy.com and other Web sites. The videos will look homemade to disguise the fact that they’re actually commercials.

As we read on we discover that Foster’s TV ad budget is only $5 million and thus cannot buy the reach to reach a dwindling audience of young men watching TV. Nonetheless this is a dramatic statement and I think a first, where a national advertiser has abandoned TV for the Internet.

LiveDeal to Cross Sell Print, Online Ads

July 27, 2006

                             LiveDeal - Online Local Free Classifieds – Buy and Sell Cars, Pets, Furniture, Real Estate, and More

I ran into a couple of people form LiveDeal at Inman’s Real Estate Connect yesterday and they told me they had a big announcement coming. Here’s the release:

AdStar, Inc. and LiveDeal.com announced a strategic partnership to integrate AdStar’s functionality into LiveDeal.com. The combined capabilities of AdStar and LiveDeal will enable LiveDeal.com classified advertisers to effortlessly broaden their online classifieds listings to local newspapers and offer the newspaper industry a lucrative new revenue-generating opportunity.

What it basically means is that online newspaper advertisers will be able to buy print as an “upsell.” Conversely, print publishers will be able to effectively offer syndication of their ads into LiveDeal:

Participating newspapers will also have the opportunity to upsell online classified advertising opportunities on LiveDeal.com to their print classified advertisers. The LiveDeal.com classifieds platform enables newspapers to effortlessly provide their print classified advertisers with a sophisticated and rewarding online classifieds experience, which includes photos, listing enhancements, e-commerce, fraud protection, community-building, identity protection, storefronts and advanced local search capabilities.

There will be more such deals seeking to syndicate or extend the reach of print and online classifieds to third party networks (and these deals will start to come fast and furiously soon). But it reaffirms the value of print, which continues to be effective – albeit less than in the past – as an advertising proposition. Print without a strong online option is much weaker than print plus meaningful online distribution.

Finally, it affirms the importance and value of “the network” – the idea of a “one-stop shop” for advertisers, whomever that may be, to get both traditional and online media distribution for greater coverage in a fragmented media environment.

See, from yesterday, my post “Panel: Don’t Give Up on Print.”

The Long Tail: The Book

July 11, 2006

While I was planning conferences at The Kelsey Group, I invited Wired Editor Chris Anderson to keynote twice. He declined twice citing his ongoing work on his book, The Long Tail, based on his seminal Wired article of the same name, and publisher pressure to get the work done.

Indeed, Anderson was racing against the clock — to get his book into the market before the concept lost its buzz value and immediacy. And in the accelerated and hype-inflated world of the Internet “the long tail” is now something of a cliche, overly cited by executives trying to describe the “big opportunity” for marketing to niche audiences online.

But there’s something very real that Anderson identified in that original article; I would describe it as the Internet’s ability to aggregate mass audiences and the simultaneous ability to precision target within that mass audience. While on the treadmill at the gym (something of a metaphor these days) I saw a full-page ad in the NY Times for the book, with lots of glowing quotes from Internet CEOs.

I’m sure the book is good and I bought it today on Amazon, which is ground zero for the long tail (note: traditional media driving online buying). But the CEO quotes are entirely self serving because only the Internet (although one could potentially argue cable TV) has the power to deliver mass-niche audiences.

I now eagerly await the movie . . .

Newspapers and the User Experience

June 6, 2006

Let's put aside yellow pages' claims to local shopping supremacy for the moment, by all accounts the newspapers should "own" Local online. They should, but they don't.

The Kelsey Group in a recent blog posting by my successor Matt Booth cites consumer data that paints a cautiously upbeat picture for newspaper websites in the local online space. The data show the apparent staying power of the print product, but not the ascendancy of the online version. The post has a sanguine view of the revenue side of the equation and touts the synergy of combined online and offline advertising opportunities. But this operates at a generally theoretical level and generally ignores that the holistic user experience on most newspapers sites today is badly lagging consumer expectations.

Echoing and to some degree amplifying the Kelsey data are 2005 data from the Dieringer Research Group that show print newspapers exercising more influence over local shopping than any other medium (considerably more than print YP in fact, which goes to usage frequency). Newspaper sites, by contrast, are at the opposite end of the spectrum in terms of their influence over local shopping behavior.

The simple answer here is that the user experience on most newspaper sites still leaves a great deal to be desired. All the hypothetical synergies of the print and online products and the benefits of a local sales force (this goes for YP too) will evaporate if the online user experience stinks. And on newspaper sites it mostly stinks I'm sorry to say.

This is "tough love" on my part because I'm rooting for newspapers (as I've said many times in the past). I want newspapers to succeed and think the health of U.S. democracy all but requires it. But that doesn't stop me from saying that unless newspaper sites much get better — and soon – they will miss what opportunities they may have as usage segments and partly shifts online.

The loyalty to print newspapers is about Sunday circulars and weekday advertising by retailers (which is down slightly). It's also about the lack of known, reliable local product and sales data online. That will all change within two years at most.

What initially prompted this rant this evening was my research in trying to determine how I'm going to vote in some difficult local elections tomorrow. Trying to look at the California statewide endorsements on the Sacramento Bee and San Jose Mercury News sites forced me to register before viewing that content.

Showing users the links to desired content and then throwing up registration barriers to viewing that content is incredibly ill conceived. It creates frustration and alienates potential users. I actually might use/read the Mercury News site a great deal more but for the registration requirement. Indeed, there's considerable empirical data in the e-commerce context (and some in the newspaper context) that reflect registration sends people away. And the loss of potential users outweighs any purported benefits of registration.

In addition to the above two newspaper sites, I was on Hearst's San Francisco Chronicle website and sought to review their endorsements as well. I was able to navigate to the endorsements via several clicks from the homepage. But when I used the search box (query: "endorsements") I got garbage results. There should at least be an effort to "disambiguate" the query to get me to relevant content, rather than just serving bad, irrelevant results.

It's a testament to the good will and loyalty of local users that newspaper sites are doing as well as they are. It is by no means a foregone conclusion that newspapers will get their acts together. Undoubtedly there will be some standouts and success stories (and there are some today), but there are a host of challenges that conspire against newspaper success online. These challenges (cultural, cost structure, resources) must be squarely addressed. Otherwise, many of the dire predictions of financial analysts will come true.

Imagine if newspaper sites worked as well or as intuitively as some of the leading search sites and web startups. Then we could say "game over." Newspapers would truly "own" Local. Once again, they should . . . but they don't.

The Long and Winding ‘Online’ Purchase Process

May 12, 2006

Yesterday Yahoo! released yet another very interesting piece of research about the increasingly complex "purchase funnel" — or maybe it's not increasingly complex; perhaps they're just making the process more transparent. The report says there is no “funnel,” there’s a complex segmentation of consumers and Internet usage, tied to consideration around the particular product. Here's the iMedia write up of the report's top-level findings and here's ClickZ's.

From the iMedia summary:

Consumers say the internet is the most trusted shopping information source (54 percent), followed by magazines (34 percent) and TV (23 percent), according to the study. The study also found that communal shopping online helped consumers learn more about a product. Findings showed that 25 percent of people have posted reviews of products or services online, providing a service to other shoppers.

As mentioned, the study segmented purchases and purchasers by consideration level and suggests the Internet can potentially have the greatest influence over the highest consideration purchases. From the ClickZ article:

The study breaks purchase paths into four categories: quick paths, winding paths, long paths and long and winding paths. Quick paths are characterized by little research and are used for impulse buys or routine consumer packaged goods purchases. A winding path indicates cross-channel comparison shopping, such as for retail goods. The long path often takes place in just one channel, but is lengthy because the consumer is waiting for an event such as a price drop or the availability of a new model.

The most involved path, and the one where marketers have the most room to convert in-market consumers, is called the long and winding path. Shoppers' paths usually fall into this category when they're seeking big-ticket items like automobiles and financial services. "Consumers of these products are the hungriest for information," the study said.

Here's more on the study from the press release.