Category — Local Search

Now everyone I know seems to have seen a Sonic commercial at least once in their life. But how many of those people have actually seen a Sonic Restaurant? Chances are you have seen a Sonic commercial and live no where near a Sonic. Now I’m not the media planner for Sonic and I don’t know who is, or why exactly they buy so much advertising in the Northeast, even though they don’t have any locations here, but I’m going to attempt to breakdown the Sonic Commercial and what its doing on my TV.

On hypothesis I have is that Sonic is using this as marketing hype. It gets people talking. “Man do I want to go to Sonic, just to try it!” I’ve heard this after seeing a Sonic ad, and it has a good point. Its positive spin, its an interesting angle. But is that really their plan?

It could be but I don’t believe so. I believe that Sonic is a victim of mass media, a lack of targeting and a 20th century mentality of media buying. 

This post is inspired by this post from Darren Herman, and from a question my mother asked me - “Are you going to have those dancing mortgage commercials on your websites now?” No Mom, websites with those commercials are dumb. And I didn’t mean dumb as in bad or in a colloquial manner, I meant they are not thinking about their audience and what people want to look at. 

In our most recent meeting with investors I used this line to focus a slide in my presentation:

Targeted Visitors are more Valuable to our Advertisers

This is a key focus of our business, the level of targeting we are able to provide to our advertisers. And its not just an ability to determine who is on a given page at a given time with some fancy algorithm, its just that the vast majority of our traffic comes through a search for the information on our page. Combined with very low bounce rates on our landing pages, our content keeps our visitors online and adds value to our advertisers. People come to our site searching for our advertisers - we just connect them.  Its not rocket science, but it seems to be missing elsewhere. 

Give people what they want, and they will respond positively to ads relating to what they want. Thats my motto online, and thats what we’ve been seeing happen.

* For more on the Sonic commercials see these links (don’t miss the comments)

http://adage.com/garfield/post?article_id=119271

http://aht.seriouseats.com/archives/2008/10/good-question-why-does-sonic-advertise-on-tv-when-theres-no-sonic-near-me.html

I’ve been extremely busy for the past 5 weeks. There has been so much going on in my life from polar ends of good and bad. Both of my parents were diagnosed with cancer this year, my Mother’s is very serious and out of left field. Just another thing to conquer in this game of life, which has become much more serious to me. Not to harp on the negative, but this economy isn’t exactly brightening my mood. At the same time, some of the best things have happened in the last 5 weeks. Our company is expanding quietly and well positioned to handle whatever new curveballs this economy is going to throw at us (im sure there will be some more between now and the end of the year).

I haven’t posted anything at all in some time, I feel rather guilty about that because it helps me get my thoughts out and I love to hear what other people are thinking about (especially in regard to my thoughts). My thoughts on the economy I feel are pretty clear, and its nice to see other people around the blogosphere agree and to see some people with like-minded thoughts on this ridiculous message being sent to many businesses. (I’m paraphrasing here) “If your business model isn’t good enough, there is always someone else to throw some money at the problem.” With the exception of Lehman, and hopefully the freaking auto industry, we need to stop bailing out companies - big and small.  And I think that attitude is over for now, at least for the time being.

Anyway, I’ll try to stop the politically motivated ranting in the future, and get back to my thoughts on local, sweet, sweet local. A place where everyone and there mother suddenly has to be. Well, keep throwing money at it and then tell everyone about how much money you threw at it.

One company I’m a huge fan of CitySquares, although my direct competition, they just got an investment from Marc Cuban (well 2 weeks ago). TechCrunch didn’t have a mention that I could find. That is sick. Mark Cuban invests in your company and no party, no flashy press release to every news org ever. Although I’m sure there was a veritable party going on at their office… Congrats to CitySquares and to the whole industry of Local Search. Cause that is a huge name in a very small space. Either the space has to get bigger or the  name has to get smaller. I’m putting my money on the space getting bigger.

Warren Buffet is the man.

Considering this is the end of August, last week was surprisingly full of news in the mobile arena. There were several market studies released in the past month, and they’ve got me excited about mobile again.

Jumptap just announced a very major Series D raise - $26 Million led by AllianceBernstein. They will be using the funds to build out and improve their growing mobile advertising platform, with the plan to capitalize on the growing mobile search and advertising market. In their release Dan Olshwang also points out that mobile devices now outnumber PC’s with over 3.3 billion devices in use worldwide.

“Internet advertising is currently growing at a compound annual rate of 18.3% and will reach $73 billion in 2011. What is really exciting about mobile advertising is its ability to eclipse Internet advertising,” said Dan Olschwang, President and Chief Executive Officer of JumpTap.

Those are some really smart people pouring huge amounts of money into Mobile search. Considering the overwhelmingly tight credit market right now, this is a really astonishing deal. And its really not getting any major press (at least that I’ve found). I had to dig all the way to JumpTap’s “News” page to find the release.

One of the reasons why there seems to be a recent resurgence of mobile is that there is data flowing out of  all the major research firms indicating significant growth in mobile use, both the volume and frequency. Gerg Sterling pointed out an interesting report from Nielsen Mobile that shows some intersting data on mobile search (and surpise - domination by Google of the market). According to the report about 89% of searches were in the three categories of “Information,” “Local Listings” “and Websites/Navigation.”

Most relevant to my local interests is that 29% of all mobile searches were for “local listings” and 33% were for “Information” (- thats a pretty broad term). In an August 12th report Neilsen Mobile noted that US and Eurpoean markets were “more mature” and mobile use was focused around email and search, compared to entertainment as the leading segment in Brazil, Russia, India and China. Entertainment doesn’t fall in the top 5 for US and EU - (But city guides/maps do!). This data goes along with a trend that JumpTap is reporting as well:

JumpTap notices a shift away from entertainment-centric searches, such as ring tones and downloads. It reports more navigational searches: Users looking for websites (such as specific social networking sites) and utilities (such as email) on their devices. (From msearchgroove)

This data points out that people are beginning to use their mobile devices for real life tasks, perhaps representing the beginning of the shift from computers to Mobile Devices. One of the frequent arguments against mobile advertising was that mostly people were going online to download wallpapers and ringtones for the phones (which is pretty uselss for any marketer not representing wallpapers or ringtones), but now a widespread adoption of mobile use is changing that argument.

The market is maturing and the huge investment by AB shows that the day when our phones replace our laptops is one day closer. I hadn’t put much thought into mobile until recently, but all this talk of Googles Android and their “Content Market“, iPhone and of course their apps, is hard to ignore. Will marketers begin to listen, or will old school execs continue their slow migration to online media one step at a time?

I was doing some late night number crunching and data research and I came across some interesting points. A few I touched on earlier in the week, but I’ve had some more time to address some of these and I wanted to talk about them. There are huge numbers involved here, and some interesting theories that I haven’t quite finalized in my head. Maybe these thoughts will help clear that up.

Check out this post form Conde Nast in February talking about the Yellow Pages. It is fairly amusing considering how just about anyone you ask in the Northeast will admit that they don’t care much for print advertising. (We hear this all the time) Note the comment:

If Nielsen can’t get TV viewership right after all of these years, how on earth can the Yellow Pages Association know how many times anyone “references” the Yellow Pages?

Thats exactly the point, you can’t track how people use the yellow pages, you can’t see which people read your ad, or how many times people read it and took action, or no action. There is no data to support their continued use.(or even to figure out why people aren’t using them anymore)

However, people still need to find stuff; restaurants, clothes, hotels, doctors, lawyers, whatever… simply now people are turning to the web for a quicker, easier search experience. And search is dominating the web these days. Google is raking it in, Yahoo and Microsoft are scrambling to get a bigger piece, and startups like Cuil and Mahalo are trying to get break into the scene. But however they’re gonna find it, people are going to use search, more specifically local search.

Local search will soon be the king of search, as the economy tightens, people are traveling less and are generally more concerned with whats happening in their community. (and thus more willing to spend their x dollars locally) A particularly powerful quote from A new report by Borrell Associates (which I referenced in an earlier post):

“Local online advertising,” defined as search, “local banners,” and video (classifieds are also in there), would reach $12.6 billion in 2008, with “local search” contributing roughly $5 billion to that total.

Those are big numbers, and there are big players already in and entering the local search market. But there are a lot of nuances in local, people are different, politics matter and most often they have no idea who Marc Andreesen is, they don’t care who backed your startup, they dont care about the fancy rails technology your site runs on. They want results and they want to talk to a person.

There is no concrete answer to the question of who will succeed in local search, there are many verticals and plenty of niches to tackle, but there is certainly going to be a battle over it in 2009. And I didn’t even touch on mobile, which Google’s Eric Schmidt thinks will one day be more profitable than anything else they do. Thats a scary thought.

Will the general population move towards mobile search, are we still two or three years away? Or will local search dominate 2009? I know there are other much hotter topics, but seriously if you are reading this you probably aren’t Joe Cleveland. (Ok, easy)

Local is good, and it is a significant part of the entire advertising market. Some estimates say that up to 54% of all adverterising is local, or locally based. In our increasingly localized and connected world, the power of local search, local content, and locally based interaction are unquestionably becoming key components of the advertising arena. Agencies and Local SMB’s are both very increasingly using local based targeting, or local search as an element of their campaigns. According to a new eMarketer Report, In 2008 Internet Yellow Page advertising is expected to reach $1.2 Billion in ad spending. Measurable to say the least.

Local content is largely becoming focused on user generated content; topix.com, outside.in, and others are focusing on creating a platform for people to share their reactions and feelings on locally relevant issues. The number of review sites (the likes of Yelp, BooRah, etc) seem to be doubling by the minute. While it is no question that people are extremely interestedin sharing their content locally, again how are these companies going to monetize this revenue?

Today, I saved $800 on a minor bumper repair to my car because I was researching some competition, checked out Topix, and found a video ad for a bumper repair place promising to save me hundreds. Well they did, and I had a long conversation with the owner of the business. He has totally abondoned anything in print, he created the video himself, and is advertising locally online to spread the word. Only purchasing a few text ads pointing to his website, he has designed his own viral campaign. Here’s the video:

This is how local advertising is going to be monetized. Simply, I was looking for something local, I found it and completely unintentionally I found something that I needed. Video can become a power tool in one’s local arsenal, and is quickly becoming sought after. I am now endeared to topix (they do have a ton of comments from nearly any city you visit), and I literally saved over 800 bucks to fix my rediculously expensive bumper. Local at its finest.

So listen up advertisers, agencies, publishers: here is the lesson - keep it local, keep it relevant and make the relationship meaningful. While there is no question in my mind (and many others’) that print YP’s and newspapers are no longer a useful advertising outlet and that online local search is the place to be, if you can make the ad meaningful, important, relevant - you can make money. This is nothing new, it seems rather simple, but to truly monetize a local site you can’t rely on CPM’s from exchanges or Honda, Verizon and others (a recent Borrell report estimates the relative CPMs for IYP is $3.65 vs. $9.29 for print YP) . It’s gotta be local, because that way I (the user) can convert that page view into a handshake. And isn’t that what local is really all about?

I think so, and I can’t imagine why any business out there will over look the power of a handshake and a friendly smile.

I have tons of fake internet money. And I’m planning to get a bunch more, my question is what is everyone going to do with all their fake internet money. Alot of businesses out there are converting thier giant audiences into real money, but what are the large sites doing to monetize their views and return their investors money. Rounds C and D are exciting and there were alot big numbers thrown around last year and earlier this year, but when is that all going to come around. I’ve got a hunch that it isn’t.

Youtube became so succesful because it was free to its users, no money and no interuption cost of advertising. Facebook continues to be successful with its users because it limits the interuption cost as much as possible, but I would consider Facebook to be the field-leader in monetization. There are alot of competitors in an increasingly crowded space launching new platforms after their second and third rounds of funding all going after the same ad dollars (Zvents, outside.in, and many more). I’m not the only one who warns of seeking the same ad dollars with similar audiences.

I’m just curious who will be funding these companies in 6-8 months, will the economy pick up, or will ad networks save the day. There is some data showing a slowing online advertising atmosphere, however there is much more optimism towards online ad growth. I can’t see all of these local search competitors succeeding down the road, but the ones that do will own large shares of local markets and have a palpable relationship with these local markets. I cringe when I see “People Love Us on Yelp!” stickers - for a reason, they’re there and they are good.

Ok, so the iPhone phrenzy has calmed down slightly and every major news outlet or blog has covered their view of the device. Now lets examine how the opportunities in mobile have evolved with this fancy new device.

The GPS capabilities have been upgraded so my iPhone friends will be able to easily figure out, not just who, but also where they are. This brings a variety of Location Based Services to the iPhone that are more readily available now. Local coupons, location aware information and a slew of soon to be spammy SMS services are sure to be around the corner.

I’d like to focus on an interesting new technology that is very popular in Japan, and I’ve mentioned before - 2D Barcodes. Google made these next generation bar codes available in their print ads. Heres an excerpt from their explanation:

Recently, you may have seen newspaper ads for ServiceMagic placed through the Google Print Ads platform. These particular ads include a Google Consumer Response Tag (CRT) with multiple response mechanisms: URL, search terms, phone number, coupon code, SMS code, and 2D barcode. This test is part of our efforts to make print advertising more useful for readers and more measurable for advertisers. 2D barcodes are an especially exciting part of this because they allow readers to “click” on interesting print ads with their cellphones and seamlessly connect to relevant online content.

Whats really exciting about these “Quick Response” codes, is that many features of these 2D bar codes will soon be reaching consumers and connecting them instantly with businesses. With their application to convert local search online to the real world (and vice versa) these QR codes could be extremely valuable to marketers and small businesses.

To the right is an example of a 2D Barcode from the website semapedia.org. Semapedia.org lets you take a link from wikipedia, wikimedia and several other wikis, create a 2D Barcode to link back to specific articles, then print it and place it where ever you wish. Their goal is to “connect the virtual and physical world by bringing the right information from the internet to the relevant place in physical space.” Now picture this applied to your favorite restaurant, or take out place.

You’re walking down the street, right around the corner and you see an ad for the deli. You whip out your phone and snap a picture of the code and bang, you just got a free beverage if you come into the deli and order a sandwich in the next 10 minutes. Just bring your phone.

This technology has applications across many mediums, business types and ad types. Use it to get more information on cars at the bus stop, movies on the subway, hotel rooms at rest areas or just about anything - on demand, on location, while the consumer is in purchase mode. Talk about ROI, send the coupon to a tracking URL and see how many coupons are redeemed from your coupon.

No Nigerian Spammers, no number harvesting, just on demand information. Brilliantly simple.

I see an opportunity in a tinyurl style “QR” generator. Although there are a couple companies doing it in Europe and Japan (Kaywa seems to be the most friendly). They currently offer personal QR codes free as well as enterprise and API use for a fee. Unfortunately there is little traction in the market here in America, as usual we are behind the mobile curve.

Here is an example of mobile marketing from Sweden: Crossmedia Avenue ran a MMS campaign for a pension insurance company that invited users to send in a picture of themselves and see their face transformed 70 years in the future. With over 262k photos sent via MMS in one month! That is a powerful response in a country of 9 million people. I can’t imagine that we are more than 9-12 months away from these sort of campaigns coming to the US.

With over 14 million BlackBerry’s sold last year in the US, iPhone sales expected to reach 10 million world wide by the end of this 2008 and analysts expecting the pie to keep growing, the proliferation of smartphones into our lives is close to reaching a critical mass.

Now if only I could grow a second set of thumbs…

The world of old media is degrading faster than ever. Newspapers have been suffering more than ever before, and are losing necessary traction in local markets. TV is beginning to embrace digital media as an alternative source of media, but as a new member of media is a step above print in the food chain.

So where does this lead us? How do the old guys (read newspapers, but include old TV guys), compete on a level playing field where consumers are more and more determining their place and time to consumer their media. (A great discussion of this topic can be found at Screenwerk)The rise of the internet, and mobile specifically should be seen by these players as bountiful opportunities. They have strong brand presence in their market, established goodwill and existing relationships in their respective communities. Except there is one thing missing from them: awareness of the opportunity vs rather than observation of the threat.

I had a meeting recently with some “old guys” interested in reaching a more engaged, younger audience via a partnership through with local search. They were smart, experienced and were using a pretty good model and having success with it. But 10 minutes into the meeting, I could tell they didn’t get it. They knew what I was talking about, but they didn’t get how the differentness of what we were discussing made it better. A classic “old way of doing something with new technology, vs new way of doing something” issue. And it wasn’t the first time I saw it.

Newspapers are still in trouble and now seem to be past “denial” of the threat the web poses to them, but they remain stubborn in embracing it. Local content should be celebrated and contributions should be encouraged, however the model of user generated content and social collaboration that has made so many online organizations successful continues to be rejected. Until Web 2.0 is embraced by old media, newspapers in particular, they will continue to falter.

Newspapers more than any other medium are most well positioned to capture value out of their local markets with the web. The lack of their expansion into other verticals is a prime example of their stubbornness. They would have to sack it up and realize that there is potential revenue through a different medium. Hundreds of other companies have realized this and have capitalized on these gaps. Yelp, every version of the yellow pages and all local directories are in existence today because the big players (newspapers) failed to act.

Now what is the next space that the new, big players will fail to act in?

We are working on developing an entirely new pricing structure, from the sales materials to the training to the handling of new and recent prospects to the web architecture that facilitates it. Whole new focus, which I’m very excited about. So far this month its taken on very well.

What I’m curious about is how other companies my size are handling the current economic climate. From a general downturn, to the burgeoning online economy. I’ve been hearing alot about some other startups in our field and laugh and wonder about some of their statements.

There’s alot going on in the local search market, and its only going to get more packed. Its a very exciting time to be involved in local, and we are getting after it.

Time will tell who will make it to the “next level”

Last night Ryan Seacrest was on Larry King, and was speaking on a variety of issues, including the usual useless gossip, but he also touched on his BlackBerry Addiction. Larry asked him about the several businesses he runs and how he manages to keep them all together and when he sleeps. His response was basically that he turns his BlackBerry to silent, but wakes up routinely to check it through the night. I was watching this with my girlfriend and she informed me that Ryan’ BlackBerry use sounded an awful lot like mine.

Took a fairly last minute trip to North Carolina to visit my Grandmother, and we crushed the BlackBerry on the way here. Same old stuff for me that I’ve written about before, but it emphasizes how relevant it truly is. AT&T has announced that it will subsidize the release of the 3G iPhone this summer by as much as $200. BlackBerry announced its new “Bold” device (with 3G). Overall, the market for mobile phones and web-rich devices is growing enourmously. If people are able to buy iPhones for 2 or 3 hundred dollars, imagine how many they will sell.

Once everyday people, not just the early adopters and business savvy customers, but everyday Jones is able to access rich, mobile internet - then we will see the explosive growth in mobile advertising. I’m very excited to see what happens in the 4th quarter this year…