Archive for September, 2011

Notes from Dublin: EADP Should Take Necessary Steps to Transform

Thursday, September 29, 2011

Last week, my colleague Amy Healy and I had the exciting opportunity to attend the European Association of Directory and Database Publishers’ (EADP) 2011 Congress, which took place across the pond in beautiful Dublin, Ireland. EADP is largest annual event for the European database, search and directory publishing industry.

In my keynote address at the conference, I talked about our organization’s rebranding earlier this year from the Yellow Pages Association to the Local Search Association, and how it reflected a major transformation in our industry’s business model. I challenged our counterparts at EADP to take a look at the lessons we’ve learned over the past year and see how they might apply them to their own organization.

To help shape that conversation, I started by looking at two companies in different industries that faced similar challenges to our members and leveraged their strengths to overcome those obstacles: Nike and UPS. In doing so, these companies changed the way people thought of them:

  • In 1980, Nike had 50% market share and had grown into one of the most popular and recognized brands for quality shoes. But over the years, it faced increased competition from Adidas, Reebok and New Balance. So in 2009, Nike partnered with an unlikely match, Apple, to launch Nike Plus, which effectively turned its sneakers into personal trainers. This gave Nike a leg up on its competitors.
  • UPS is one of the world’s largest shipping companies – it delivered some 4 billion packages in 2010 alone. But UPS recognized that it faced stiff competition from FedEx and others, and that to stay ahead, it needed to find new ways of delivering new value to customers. So UPS began a campaign to highlight not its ability to deliver packages, but its expertise in handling logistics. The company highlighted its third-party fulfillment facilities and services that enabled businesses to use UPS to house their products, accept orders and ship them. In doing so, UPS changed its business model and the way people perceived them.

For years, we and our members have focused on connecting local businesses and consumers via the print Yellow Pages. But changes in the media environment have altered the equation so that local businesses and consumers are finding each other in a variety of new ways, whether it’s through online and mobile directories, social media, or daily deals.

As our members adapt to these changes – and new companies enter the space – we have redefined the mission of our organization. Our new effort is to support the industry focused on generating high-quality leads for local businesses and creating options for consumers who are trying to determine with whom to do business, no matter what avenue is used.

By broadening our scope, we have signed up or started discussions with a number of new members, including Microsoft, CityGrid, Yelp, and MerchEngines, among others. We’ve also launched a new industry job site, JobJolt, which offers a central location for local search job postings.

European publishers are further along than our American members in terms of the percent of revenue derived from digital products, so EADP has a unique role to play in helping encourage that continued evolution. It’s a hard task, but I encouraged the EADP to make the transition now in order to maintain its relevancy in our changing industry.

I look forward to seeing how EADP adapts over the next year as it explores its own transformation and works to attract a new set of members in the local search space. As always, we’ll be here offer our support along the way.

#DMS2011: New Models for Customer Acquisition

Thursday, September 22, 2011

A telling stat this week out of the DMS meeting is that business owners are approached around 40 times each month by sales reps. The local business advertising space is becoming more crowded so this figure is only going to increase. For sales reps, it’s going to be even harder to cut through the clutter and get the ear of a business owner who wants to focus on their work. Indeed, in one of the advertiser videos shown during the conference, a business owner was given a pie by a marketing company trying to get her attention – and it worked!

Mike Centorani, VP of sales training and development, MatchCraft and Paul Plant, founder and principal, Radicle Consulting, hosted a panel to share their insights on effective models for acquiring new small business advertisers in today’s media environment.

Both Mike and Paul advocated a similar model for customer growth where sales reps are closer to their customers, more educated on their potential clients’ businesses, and can offer a diverse portfolio so they become a trusted mini ad agency. To gain credibility with small business owners and to cut through the noise, Paul and Mike offered tips for sales reps to acquire new customers:

  • Focus on the customer and their customers — not on you and your products
  • Keep in touch, offer flexibility, and prove the ROI you deliver before you deliver a bill
  • Investing the time to learn about the verticals you’re calling and visiting, to be able to ask the specific, significant questions that will engage them early on. Business owners want someone who understands their industry and if reps can explain how their solution will help drive leads, the perceived value of the advertising package will be greater than the amount you’re asking them to invest.
  • Offer creative incentives and offers..  Plant mentioned some sales reps he works with offer a “try before you buy” approach for customers where it makes sense
  • Shorter-term contracts and/or big entry-level packages

All great suggestions for reps looking to up their game.

#DMS2011: Interview with Tom Higley, Local Matters

Thursday, September 22, 2011

Tom Higley, CEO at Local Matters, a longtime player in the business of building local search platforms for publishers, provided his perspective on what’s necessary for his company – and the industry as a whole – to continue to compete in an increasingly more complicated marketplace.

Higley, who believes that Yellow Pages companies were the first develop compelling local search technology for consumers, said the industry needs to ensure that its search offerings place consumers are at the center of the innovation universe. He said that today, the Googles of the world have captured the innovation momentum in the space, and that his company and others must determine how to deal with the radically changed reality.

The key to future success, Higley said, will be to deliver something new of value to consumers that captures their attention, fosters their engagement and closes the loop between offline and online activities among consumers and businesses alike. He said an important step will be ensuring that search tools provide consumers with effective results, or they will be “almost worthless” and a failure.

Higley made clear that taking a start-up approach to innovation can and needs to be done in a way that does not put the entire company at risk. We’ll be keeping a close eye on Local Matters and its unique approach to tackling the new realities of the local search arena.

Social Media Roundup: Latest from Google+, Facebook, Twitter

Thursday, September 22, 2011

Here’s a roundup of major social media headlines that have caught my eye recently:

Google+ Opens to Public

Google+, which launched in June by invitation-only and has approximately 25 million unique visitors per month, announced its public debut this week. The news included a new mobile push: Google+’s popular video chat service, Hangouts, will now work on mobile, and mobile users will also be able to give +mentions or +1 votes on comments (so far, these services are limited to Android users; iPhone functionality to come soon). Google+ also added a photo sharing capability to its Messenger service, which allows users to exchange instant messages and location information. The big test now will be Google+’s ability to attract new users in the face of Facebook’s established footing in the social networking space.

Facebook Redesigns News Feed

In advance of its much-anticipated f8 Developer Conference this week, Facebook introduced a revamped News Feed that highlights important stories in a format intended to serve as user’s own personal newspaper. The feed will feature the “top photos and statuses” in a single feed that will be compiled based in part on how frequently users visit Facebook. Additionally, Facebook introduced a Ticker – a feed in the top right-hand corner of the homepage that provides real-time updates similar to the old News Feed. Rumors are abound that Facebook will introduce additional, more significant updates to its site at the f8 conference.  The buzz from users hasn’t been very positive, but the transition to new services isn’t always smooth.

Facebook Wants Small Businesses

In an interview with USA Today, Facebook COO Sheryl Sandberg discussed a new plan to attract small businesses onto the popular social network: free $50 starting advertising credit for up to 200,000 small businesses. Sandberg said that of the nation’s 30 million small businesses, 9 million have established Facebook pages – which she believes are easier for small businesses to setup than websites. She stressed that Facebook provides an opportunity for small businesses to reach a wide audience and target advertising to specific demographics most likely to be interested in their products or services.

Twitter Gaining Users – And Attracting Strong Mobile Use

Earlier this month, Twitter CEO Dick Costolo held a business briefing to highlight the company’s ongoing success.. Highlights include:

  • Twitter now has more than 100 million active users – up about 82% since January alone – and anticipates adding 26 million more active users this quarter alone.
  • Of its current active users, about 55% are accessing the social network via their mobile device, up 40% since last quarter.
  • Twitter receives 400 million unique visitors a month
  • 40% of monthly active users do not tweet
  • 84% of state governors post on their Twitter accounts, two-thirds of NBA players, all major league sports, 99% of top 200 non-profits, 87% of Billboard’s top 100 musicians, and all top 50 TV programs

All this shows demonstrates the frenetic pace in social media. I anticipate much more to come.

#DMS2011: Interview with Brett Truka, Groupon

Thursday, September 22, 2011

Brett Truka, regional sales manager at Groupon, provided a behind-the-scenes view of life inside the originator and largest daily deals provider. According to BIA/Kelsey, Groupon represents 58-60% of the daily deals space, which currently comprises more than 600 daily-deals providers.

Truka said that Groupon’s sales team, made up of reps ranging from backgrounds in newspapers and Yellow Pages to recent college grads, generally goes by a model ensuring 70% of reps time is spent inside the office contacting local businesses by phone, and 30% outside in the field.

Every day, Groupon needs to put out a deal in each of its markets. Truka talked about daily pipeline meetings in each regional office where Groupon managers and reps take a look at their specific market needs, and listen to where reps are in the process of securing deals with local businesses that fit those categories. Following the meeting, reps reach out to CRMs to finalize lists of businesses in those categories and then reach out to strike a deal.

BIA/Kelsey estimates that 54% of Groupon’s deals are for restaurants, something that Truka doesn’t see changing since consumers love to dine out. But he did say that Groupon is moving beyond its initial deals focused just on fun things to do locally, and branching out to local services that people need and get excited about.

Truka said that while many local businesses have heard of Groupon, most don’t know how the process works. Groupon’s reps work with business owners to structure the right kind of deal for their business, one that takes into account the volume of business and dollar discount that they can handle. Truka said that Groupon also helps manage redemption. Recentlly, the company launched iPhone and Android apps that allow merchants to scan Groupon barcodes and track redemption in an online merchant center.

BIA/Kelsey estimates that daily deals revenue will grow from $873 million in 2010 to $4.2 billion in 2015, so there is enormous opportunity for Groupon to continue to grow. But with so many competitors entering the space, it will be interesting how its future plays out.

#DMS2011: The Social-Driven SMB

Thursday, September 22, 2011

This afternoon’s social media forum at DMS ’11 provided some important insights into how companies are empowering and enabling small businesses to take advantage of this increasingly popular space.

Rita Fabi, head of market solutions, global customer marketing and communications at Facebook, kicked off the forum by talking about the various ways local businesses can leverage the world’s largest social network to engage with new and existing customers.

Fabi, who is part of a three-person team at Facebook dedicated to small businesses education and outreach, said that she is focused on bringing the offline small business experience online in meaningful ways. She outlined the progression of small business’ marketing strategies: in the past, small businesses were set on generating positive word-of-mouth, and then worked to develop a website, improve their standing in search and eventually enhance their presence on local search sites.

Today, local businesses are increasingly working to build out their Facebook Pages, which Fabi said can serve as online communities for small businesses and their customers. She outlined Facebook’s advertising offerings – including Facebook ads, check-in deals and sponsored stories – which can be used to promote these pages among small business’ target demographics.

Fabi said that although a strong number of small businesses now have Facebook Pages, many are not active and “don’t know the power” of what can be gained through effective use of the site. She highlighted several meaningful examples of small businesses that have effectively leveraged their Facebook presence to build meaningful communities and generate significant revenue – making clear that opportunities do exist for those who do it right.

Another interesting session during forum included David Lifson, CEO, Postling and Mike Nabasny, regional sales manager, Wildfire, who discussed how their companies are making it easier for small businesses to create and manage their presence on social networks like Facebook.

Lifson outlined about how Postling, which he described as a “five minute daily social management solution,” allows users to easily control their presence on 16 individual sites ranging from Facebook to Twitter. He noted that Postling’s online dashboard has been complemented by an e-mail functionality that allows users to receive updates on the latest Yelp reviews or Facebook comments about their business, and then reply to those messages via e-mail.

Nabasny described how Wildfire assists local business in creating content in order to grow their fan bases, engage those fans and then drive in-store and online retail. He reiterated the need among small businesses for an easy and flexible one-stop-shop that helps them do things like create Facebook welcome pages and launch polls.

It’s clear that small businesses have opportunities available to them to grow their social media presence in ways that can directly influence sales – and a variety of partners are standing by to help them. The real question seems to be, what is necessary to convince many small business owners who aren’t actively involved to get on the bandwagon and take advantage of this new platform?  Based on today’s panel, it seems like this field is wide open.

#DMS2011: Is Local Display The New Search?

Wednesday, September 21, 2011

Matt Booth from BIA/Kelsey led a spirited discussion with Tyler Bosmeny, vice president of products for PaperG and Warrne Kay, CEO of iPromote about the growing demand for local display advertising.

According to BIA/Kelsey, the display ad market was $10.2 billion in 2010.  Social media is going to serve 34 percent of display ads by end of year, up from 11% last year.

Both panelists believe that display represents the most significant growth opportunity for the local search market, but agree that search and display aren’t necessarily mutually exclusive.  Some of the best success has been in cases where both search and display are bundled for the local advertiser, according to the panel.

When asked if small businesses understand online display ads, Kay said he tries to help businesses owners think about a display ad like they think about their outdoor sign. Every small business considers about how big their sign is, where to place it, etc., and if they’re a service-based business, they paint their truck with their brand.  So Kay believes they clearly understand the benefits of brand, the industry just has to articulate more clearly the digital side.

Tyler says selling a display ad to a small business is easier than selling search.  Taking mocked up ad to a sales pitch is tangible and captures the imagination of the advertiser, where keywords and other search strategies are less captivating.  Tyler said that many sales reps have said that going in with an ad pre-built ad doubles their pitch rate.  Both panelists believe that directory companies have improved their ability to sell online display ads to their small business advertisers.

When considering where future growth lies, Kay cited stats that find 95 percent of a user’s Internet behavior is browsing, which speaks to value of display and banner ads, and only 5 percent of their time is spent on search.

“I find it hard to believe we’ll be successful as an industry if we only focus on the 5 percent,” Kay said.

Bosmeny said that there is display has momentum now, with the increase in inventory, the opportunity in mobile, and more accessible prices for small businesses.

“All the interesting innovation I see right now is in display,” said Bosmeny.  “We’ve gotten to the point that this is a very compelling value for small businesses, and I think you’re going to see it really take off.”

#DMS2011: Interview with Nir Lempert, Golden Pages

Wednesday, September 21, 2011

Nir Lempert, CEO of Golden Pages, the main directory publisher in Israel, discussed the innovative approach he is taking to bring his company into digital.

In 2004, 91% of Golden Pages’ revenue came from print. Last year, print accounted for just 30% of revenue. The company’s online business listings, as well as its 12 owned verticals, have grown to account for 70% of revenue. Lempert credited verticals with saving Golden Pages as print declines at a rapid pace.

Lempert said Golden Pages’ digital offerings need a larger audience, which will only come by creating rich and advanced content that empowers consumers. In the past six months, Lempert has divided his company into categories that reflect on the consumer experience – including reliability, necessity, affordability and experience – and placed service-specific verticals (e.g., a vertical for finding doctors) under these categories. He said that each vertical is responsible for its related headings in Golden Pages’ print edition.

Lempert highlighted the success of Zap, a price comparison website for electronics, computers and other consumer goods, which he said has fundamentally changed the way Israelis search and purchase products.

Moving forward, Lempert said Golden Pages will need to further specialize its work force, deliver a richer content experience and continue to empower consumers. He also said the company will also rebrand with a younger, digital brand name in the near future.

#DMS2011: Mobile Tools for SMBs: The Starting Line

Wednesday, September 21, 2011

Michael Boland, the program director for BIA/Kelsey’s Mobile Local Media Practice, moderated a conversation today on mobile tools for local businesses, focusing on the benefits of mobile optimized websites. As we tweeted earlier today, mobile Internet users will surpass desktop users by 2015, led in large part by Smartphone penetration. Even so, it turns out only 1.25% of websites are fully mobile optimized so there’s a lot of room for sales reps to guide their clients through this space.

Small business owners, recognizing the growing importance of mobile, now have to decide if they’re going to focus their marketing dollars on mobile apps, developing mobile-friendly websites — or both.

Today’s panel all prioritized the development of a functional mobile website for small businesses. Apps are often easier for consumers to discover through sorted stores, but tend to work better for brands with a built-in audience. Most small businesses, on the other hand, are almost always found through search and mobile websites can offer them the tools that are sometimes too complex for apps.

Itai Sadan, cofounder and CEO of DudaMobile, said his company’s call widget is behind the 18% conversion across verticals because it makes it simpler for people browsing the site to connect with the local businesses. Sadan said that when consumers are searching from their mobile device, they’re not in research mode, but want to buy and connect with a business in real-time.

When it comes to apps and mobile websites, it’s clear that businesses found through mobile experience a lower bounce rate and higher client conversion than traditional websites.

#DMS2011: SMBs and Deals: The Next Wave

Wednesday, September 21, 2011

This afternoon the BIA/Kelsey team gave an update on the daily deals forecast, which Peter Krasilovsky, VP and program director, projected will reach up to $6 billion in annual deal revenues by 2015.

Despite some media scrutiny of the daily deal space, BIA/Kelsey remains confident that the biggest successes are yet to come, stating in today’s presentation “the deal a day industry is poised for strong growth.” Mark Fratrik, VP and chief economist, attributes this to 1) an increasing focus on providing consumers with more personalized and geo-targeted opportunities, 2) businesses’ likelihood to move resources from other advertising vehicles toward this as a marketing option; and 3) the expansion and subdivision of sites, which will also help to combat consumer fatigue some providers are experiencing.

Yipit estimates there are around 600 companies in this space today. With the barriers to entry so low, we’re probably going to see this figure continue to rise for a number of reasons:

  • The huge mailing lists daily deals providers maintain. Did you know Groupon’s email count in Chicago is bigger than the combined circulation of Chicago Tribune and Chicago Sun-Times?
  • The “no money down” model makes entry simple and low-risk to local businesses
  • The deals model reinforces SMB advertising value
  • A new ability to target local customers on vertical and national basis
  • The space continues to become more credible to consumers. Where consumers wouldn’t have accepted or acted upon an expensive travel deal a year ago, they may do so today.

As we’ve regularly blogged this year, traditional Yellow Pages companies are already embracing this model to reinforce existing advertising relationships. Sales representatives can use group buying as a point of entry to a local business advertiser, and advise on a strategy behind it that will continue to deliver results long after the deal has passed.