Are user reviews important in local search? Data from the latest Kelsey Group/comScore survey presented today by Brian Jurutka from comScore seems to indicate it is critical from a user point of view as 24% of online consumers have used an online review site prior to buying an offline service in the last 3 months. In addition, more than 75% of those review-informed purchasers cited online reviews as influential in their purchase decision process.
Why are consumer reviews influential?
- They are seen as unbiased 3rd party feedback
- They are efficient
- They provide an opportunity for feedback
Who writes reviews?
- Broadband users, young professionals, 25-49. 46% of review users have contributed a review as well.
Why do consumers write reviews?
- Helps other consumers (62%)
- Gives me “consumer power” (44%)
- It’s a fun activity (33%)
- It helps me “get back” at a provider after experiencing poor service (24%)
- I was compensated to do it. (19%)
Other highlights:
- Better reviews drive higher revenues. Consumers were willing to pay 20% more for services that were rated 5 stars vs. 4 stars.
- In addition, a significant portion of people were not willing to purchase from a 1-star place.
- 97% believed the review was accurate post-sale.
Update: the official press release.
In his keynote address, Jake Winebaum also told the crowd how he thinks directory publishers can succeed in local search.
Here are those 10 things:
- Keep it simple
- Be on the offensive
- Invest in talent
- Invest in technology and acquisitions
- Become a metrics-driven organization
- Focus on user experience
- Ubiquitous distribution
- Leverage sales force and advertiser base
- Transparency of pricing and results to advertisers
- Enjoy the ride
Jake Winebaum, President, RHDi, CEO, Business.com, took the stage yesterday afternoon with a very interesting keynote address at the Kelsey ILM 07 Conference in Los Angeles. Winebaum joined RHD three months ago following the acquisition of Business.com by RHD in July and he offered his first observations on the local search market and the blessings/curses of being an incumbent publisher.
On the blessings and curses of being a media incumbent, he listed “brand”, “scale” and ”business model” as both blessings and curses with the only differentiator being strategy and execution. RHD has a great brand with Dex but that brand does not necessarily mean local search. Scale (especially in sales) can make you very successful but at the same time can be very bureaucratic. The yellow pages business model is an amazing one as it is an pure advertising model with great cash flow and margins but it’s tempting not to question it and protect its large margins. He added that incumbents usually start with a defensive strategy when competitors attack and that they need to attack their own business in order to be win in the long run. He concluded that the strategy needs to be focused on offense, that it needs to take into account the needs of both advertisers AND users and finally that execution has to be efficient and crisp.
On his first observations about local search, he listed the following challenges:
- Local search is fragmented from both a user and advertiser point of view. To compete effectively in local search, companies have to aggregate a critical mass of local queries and local advertisers to create a true performance-based ad marketplace.
- The IYP user experience is compromised by selling rules as it is built on print model and rules. It needs to become relevancy-based. Companies that create a better match between users and sellers will create more loyal users and generate better ROI for the advertisers.
He also listed the following opportunities:
- The yellow pages advertiser base and sales force offers unmatched market coverage and advertiser penetration. Companies that effectively leverage their existing sales force and advertiser base will be winners in local search.
- Ad dollars follow usage. As the local search market is in its early stage of development, local usage currently exceeds local advertiser adoption. Companies that make it simple and easy for SMEs to harness the Internet efficiently and effectively will be winners.
- Vertical user experience. Current local search user experience is generic. Companies that can aggregate deep vertical local content and create unique vertical user experiences will be winners.
What it means: again a very honest look at the local search market from one of the top executives in the US directory industry. I had the same feeling when I listened to Scott Pomeroy at the last Kelsey conference in September. I think Winebaum is right when he says it’s now time for clear strategy and crisp execution.
My friend Heri “twittered” me this picture of a Google print ad published in the San Jose Mercury News that uses a trackable barcode (so-called QR codes). These codes come from a Google open source project called ZXing attached to their Android mobile platform. From what I understand, you basically take a picture of the code with your camera phone and it loads up a web page with more information.
(Flickr photo by Chika)
According to Wubbahed.com, “Google is going to trial QR codes with print advertisers. This shows that Google is going to start actively pushing bar codes, but more importantly, it shows that they’re moving more into the print area, even if it is just to link people to online services.” Wubbahed.com also had a slide from MobileCampNYC showing what Google is thinking of doing with those barcodes.
What it means: as most of you know, Google is on a quest to make all advertising trackable (therefore proving ROI to advertisers). Barcodes are one of the way (along with trackable phone numbers and URLs) to directly measure offline advertising success. Multiple companies have tried to build a business around barcodes in the past with not much success (among them Digital Convergence and NeoMedia). Going open source might be the way to create a de facto standard. Big question: I wonder if Google will be able to track the traffic going through open source deployments.
Update: Sean Owen from Google provides some additional information in the comments: “One teensy clarification — the codes are not generated by the zxing project; it’s just a decoder. And so far it is not part of Android, though we hope to release our Android client pretty soon here.”
While the blogosphere is slowly discovering what Facebook Beacon does, MoveOn.org, a US advocacy group, has launched a campaign against the new advertising system. They’re asking users to sign a petition and join a Facebook group to protest what they call a “huge invasion of privacy”.
With the help of this blog post from Charlene Li (Forrester Research), I’m starting to understand more what the Beacon ad product does. Charline explains that her husband bought a coffee table on OverStock.com and that when she next logged in to Facebook, she saw this mention at the top of her newsfeed.
She explains that “Facebook Beacon is merely a small piece of script that allows the partner site to put a cookie on your browser. So when I bought the table, an Overstock cookie was created, which then transferred the information to Facebook. Facebook then checks to see that the same browse
