The Praized Blog

As an interesting segue to my VoiceStar/Marchex blog post from last week, MediaPost offers an interview with Bill Day, their new Chief Media Officer in which he talks about the importance of local for Marchex. “Kaufman Brothers analyst Sameet Sinha questioned the company’s heavy investment in local search at this moment, after the announcement it would buy pay-per-call ad provider VoiceStar. It happened to be the first official day at work for new Chief Media Officer Bill Day, most recently at WhenU, but also a co-founder of About.com and one of the online pioneers of the ’80s at Prodigy. He was nothing but optimistic about the opportunity for local.”

Highlights:

Q: Why is the time right now for local? When we did it at About.com, it was too early. The interest area was the place to invest. Things have changed. First of all, many more people use the Internet. If you want to have a pro-sumer model, you need one that scales to be very comprehensive. Marchex is a leader. It already has thousands and thousands and thousands of sites. You also need a model that can get really really deep within those localities. I did a lot of diligence coming in and with the Yellow Pages advertisers now coming on, it suggests it really is a good time to invest in local. You have to invest to reap the rewards.

Q: What is the first thing you’ll do in your new job? The first thing is to focus on the continued rollout of our open list technology populating businesses down to the ZIP code level (editor’s note: e.g. 90210.com). I’m also talking to media companies in the local space. There’s a lot of business development I need to do to get the ball rolling.

Q: Who is doing local right? There are certainly sites that get parts of it right. I can’t point to one network that gets it right consistently. I don’t know anything countrywide. The sites that tend to do that are using very stale and automated generic content that is not good enough to get repeat visitation. I’ve looked at some of the WashingtonPost.com sites, what Sidewalk’s done for Digital Cities. We’re in a pretty open space for starting to do things that haven’t been done so far on the net–to truly create a broad, deep network of sites.

What it means: Marchex believes online revenue action in the future will happen on the local and hyperlocal front. They’ve acquired web real estate (local URLs) and local content. They have solid search engine optimization (SEO) expertise and they now want to introduce user-generated content. Using all of these tools, they’re building a large-scale local ad network. The only thing I would question is the quality of traffic coming from SEO, as not all clicks are born equal. Measuring ROI will become key when evaluating the quality of local search traffic but, as I believe a good chunk of the revenues in local will happen around pay-per-call in the next 5-10 years, the acquisition of VoiceStar makes complete sense strategically. That’s a great way to measure and prove local search ROI.

“According to a special release from The Media Audit, newspapers are increasing their market penetration beyond 60, 70 and even 80 percent with the help of their websites. Ten daily newspapers have achieved a net reach of more than 80 percent.(…) Bob Jordan, president of International Demographics, says “To improve the net, newspaper(s) are making impressive gains in attracting viewers to (their websites.) As recently as 2003 just 30 daily newspapers had attracted more than 20 percent of adults in their immediate market to their websites. Our current numbers show 49 dailies have attracted more than 25 percent of adults and 30 dailies have attracted 30 percent or more.” (via the MediaPost blog)

At the same time, as reported in Mediapost, Nicholas Ascheim, the New York Times’ director of entertainment, video and audio products declared that “the Times’ top priority at the moment is not money, but cultivating readers. “The strategy is to build an audience.”. “I think we’re only 5% down the road,” said Ascheim, speaking generally about the growth potential of “content and the audience around it.” He was speaking at the Software & Information Industry Association’s Information Industry Summit in New York. In addition, Times readers will get the opportunity to contribute their own content to NYTimes.com in the very near future, said Ascheim, noting the benefit of user-generated media to the bottom line. “Using consumer content is interesting, because it allows you to increase content without cost,” he said.”

What it means: I think I’ve told the same story to all my media customers in the last few months. From a strategic point of view, if you want to insure the long term perpetuation (or perennity) of your media business, your online reach will eventually have to be as high as your current offline reach. Even though monetization online is currently not equivalent today as offline (see “Is Google the Only Company Properly Monetizing its Online Traffic?“), I believe a pair of eyeballs is a pair of eyeballs. You have to build traffic all the time to increase your online reach (one of my Local 2.0 prediction for 2007). The New York Times, even though they have a great “hypernational” brand (see this post) understands this. It’s certainly why they bought the About.com Network two years ago.