The Praized Blog

Praized Media’s CTO and co-founder Sylvain Carle is attending Where 2.0 conference this week in Burlingame. The conference is at the San Francisco Airport Marriott, right next door to SFO. If you’re attending and would like to connect, send him an e-mail at sylvain AT praized DOT com.

On the second day of the Kelsey Drilling Down 2008 Conference, we heard from Rich Barton, Chairman and CEO, Zillow. He exposed us to his thesis that lead to the various projects he’s been involved in in the last 10 years. Before founding Zillow, Barton founded Expedia when he was at Microsoft. His basic thesis is that transparency of information is power. This leads to a consumer revolution in various verticals, releasing things that were locked-up, especially around big financial decisions. He mentioned stockbroking, travel and real estate as three verticals that were forever altered by the arrival of the Web. He also mentioned three other companies he’s involved with in the following verticals: Legal (Avvo.com), Healthcare (Realself.com), and Employment (Glassdoor.com).

(picture: zillow.com)

He finished his presentation with a “Power to the people” manifesto that’s very telling in this user-generated content age:

• Consumer crave information and power
• If it can be known, it will be known by all (the web causes transparency)
• If it can be rated, it will be rated
• If it can be free, it will be free
• Professionals who are active players in the new vertical marketplaces win
• There can be no vertical marketplace without community
• The digital media model rules (local is giant)

Pat Marshall has been in the online directory industry basically since it was created. In fact, when introducing him, John Kelsey and Charles Laughlin (both from the Kelsey Group) called him “the father of Internet Yellow Pages”. According to the press release announcing his Yellow Book nomination, “ Marshall has spent more than 28 years in marketing leadership positions, including as a senior executive with Verizon, Frontier Corporation and R. H. Donnelley. At Verizon, Marshall led the launch and management of SuperPages.com.” So, it was with great pleasure I sat down to listen to this conversation between the Kelsey Group folks and Pat Marshall.

Q: Why did you get back into the Internet yellow pages (IYP) business?

A: I did not want to get back in IYP, I wanted to get back into local search. I also wanted to get back into action (as opposed to the consulting I had been doing in the last few years)

Q: So, is Yellow Book in the local search business?

A: Today we’re more IYP than local search, but the trajectory is going towards local search. IYPs are really good at finding who but not good at finding what.

Q: What are the areas you need to move into to to go into local search?

A: Three things: 1) Infrastructure. Business directories are yearly things and this does not work in the local search world. 2) Traffic. a key directory publisher axiom: advertisers advertise because users use. You need a qualified audience and we’ve done well with that (see this Comscore release). 3) Having inventory. Present a merchant in a context that’s appropriate for him. We don’t have enough inventory today.

Q: Where are you now on a scale of 1 to 5?

A: We’re at 3. We’ve made a lot of progress but I would like to move at twice the current speed. As a senior executive, I need to create the environment where that can happen. We need to focus on the collective IQ.

Q: What are you doing to develop a local search solution supported by research?

A: When people are using local search, they’re not shopping. They’re hiring. You don’t shop for a pool service, a lawyer. You hire these people. The process is three dimensional: urgency, risk, satisfaction.

Q: Let’s talk about verticals. Would the IYP product be further ahead if verticals had been developed earlier and deeper?

A: I don’t think we would have been better off. The industry has gone through enormous changes to get to 2008. In 1995, sales forces were unidimensional. The first year of Superpages.com, we generated $100K in revenues. We missed our target and it was the first time in my life I missed my target. Sales was afraid to bring Internet in conversations because they were afraid merchants would know more than them.

Q: Where is the value in Yellow Book’s online offers? Is it search engine marketing, is it YellowBook.com?

A: It really depends what the customer wants. In some situation, they only want what we called “Googlecaine”. So, you should sell what people are buying.

Q: What kind of partnerships are you looking for?

A: Anyone that can help me solve my three problems listed above. 1) Infrastructure products/services that reduce our costs (but bring a business case), 2) traffic (we’re always interested but talk about the quality of the traffic and how it fits with us), and 3) advertising/inventory products (talk to us about why it’s good for our customers, what skin are you willing to put in the game).

Q: Is it important for Yellow Book that Google, Yahoo!, MSN be successful in local search?

A: Yes, definitely. I doubt that they will invest into a local channel. So, they will come to us to resell their products.

Found some interesting SME data in (of all places!) an article about sandwich board signs in today’s USA Today.

Small business owners have been hit hard by the economic slowdown. More than 30% of businesses with 500 or fewer employees have seen a decrease in gross sales and nearly 40% have seen a decrease in net profits in the past 12 months, according to a National Small Business Association. As a result, the NSBA says 54% of merchants will turn to new marketing strategies. Sandwich boards are among those techniques, Molly Brogan, NSBA vice president of public affairs, said.

What it means: directory publishing has traditionally been more immune to slowdowns and recessions than other media. It’s going to be interesting to hear experts at the Kelsey conference talk about this topic (I hope it comes up!). Some experts are predicting that this slowdown in the US might the first one where print publishing is really hit hard. I’m not sure it will be the case. Print is very resilient and is a core element of small business owners’ marketing strategy. I think every directional media (whether print or online) will fare better than other media in this difficult economic situation in the US (and that includes search engine marketing).

After nine days in San Francisco for Web 2.0 Expo and a bunch of Praized Media partnership meetings, I’m now in Seattle for The Kelsey Group’s “Drilling Down on Local ‘08“.

If you’re interested in local search and you’re not here, you’re missing one of the most important North American conferences on the topic. I can only attend the first two days but I’m looking forward the following sessions:

Wednesday, April 30, 2008

• The Industry Overview with The Kelsey analysts
• The interview with Pat Marshall, VP New Media at Yellow Book
• The panel with Matthew Berk, Lead Search Architect, Marchex

Thursday, May 1st, 2008

• The keynote with Rich Barton, Chairman and CEO, Zillow
• The “The Revolution in Classifieds” panel
• The “Events: Gateways to City Guides” panel
• The “Localizing National Verticals” panel
• The “Leveraging Geodomains” conversation with Dan Pulcrano, CEO and Executive Editor, Boulevards/Metro Newspapers

If you’d like to meet, send me an e-mail at seb AT praized.com.

Google just announced that you can now embed YouTube videos in merchant profiles in Google Maps. Videos are displayed in the “Photos & Videos” tab in the extended listing bubble that appears when you click on a listing.

“Local business owners can easily add YouTube videos along with other content such as business details, photos, and descriptions to their listings. To do so, simply upload your videos to YouTube and ensure that the ‘embed’ option is turned on. Then, associate your video to your business listing through the Local Business Center.” A bit difficult for the average small merchant but fairly easy if you run a local SEO program.

The Google blog points to this example, I Dream of Cake in San Francisco.

What it means: most major North American directory publishers have launched their local video offer in the last 12 months (often powered by TurnHere or Weblistic). I think this will drastically increase the value proposition for those local videos, if publishers agree to distribute their videos in YouTube and Google Maps. I think they should do it and leverage the enormous amount of traffic found in those two sites.

Why local is in the zeitgeist, proof # 286:

LocalChoice Milk, sold by UK supermarket giant Tesco, is a new line of milk that is produced by local farms and sold at local Tesco stores. Responding to customer requests to make it easier for them to buy food which is genuinely local to their area, Tesco has started paying a premium to smaller local farmers which is above the rate they are paying to farmers who supply their standard milk. This means that farmers supplying new ‘LocalChoice’ milk will receive up to GBP 0.22 per liter, which is one of the highest prices paid to any producer in Britain. The company assures their customers that LocalChoice will not only reduce food miles but will also provide confidence to shoppers that if they buy a local product, they are helping their local economy and local suppliers, in particular small, independent family farmers. The milk packaging is branded as LocalChoice, instead of as Tesco, and uses simple handwriting on the labels to underscore the regional value message. (source: TrendWatching.com)

More info on Tesco’s regional sourcing strategy: http://www.tesco.com/regionalsourcing/

What it means: We’re seeing more and more examples of businesses/products built around the local angle. I think this trend is here to stay and will grow in the future. I believe that local search will play an important role in our future, as people realize there are hidden environmental and community costs associated with buying products manufactured/produced far from the point of purchase. It seems like this is an interesting communication angle for any local search media company, i.e. helping people make better local purchase decisions, supporting local communities, and improving the environment. Who wants to own this positioning?

Techcrunch reports on a rumor this morning that would have Google either buy Skype from eBay or Google partner with Skype.  According to the site,

“Skype, acquired in late 2005 for $3.1 billion, has been a financial albatross around Ebay’s neck. eBay removed Skype co-founder and CEO Niklas Zennstrom in October 2007, reportedly due to frustration at the financial performance of Skype. Ebay also negotiated down the huge earnout due to Skype stockholders and took a $936 million one-time loss around the transaction.  It’s clear that eBay wants to either unload Skype, or significantly drive performance.  Google, by contrast, is just beginning to think about how to dominate the voice space. They have a VOIP service through GTalk, a free 411 service and GrandCentral, a telephone management service they acquired last year for $50 million.”

What it means: I think this potential acquisition/partnership makes complete sense. IMHO, call tracking and pay-per-call represents a large portion of future local search revenues and Google clearly sees that local search is where they will get tremendous growth in the next 5-10 years.  By buying the Skype infrastructure (and user base) and combining it with the GrandCentral technology and expertise, they instantly get core assets to execute that strategy globally.

MediaPost’s OnlineMediaDaily reports on a speech given by Team Detroit SVP Cary Tilds at CTIA Wireless in Las Vegas:

Mobile is mainstream–no longer emerging–which means advertisers and marketers need to be always on to reach consumers, according to Tilds, an executive from an agency created about a year ago combining JWT, Y&R Wunderman, Ogilvy and GroupM. “The more mobile data people use, the more they search, and I think it will continue to increase this way,” she said. “People are using mobile for impulse local searches, impulses, and restaurant and entertainment. Today, hotels make up about two thirds of the pay-per-call ads served.”

What do consumers search for on mobile phones? People look for local listings first–which gives smaller businesses an opportunity to reach a wider audience, followed by news and information, and mobile content. Tilds told conference attendees it’s not just about sending and receiving text, but rather about finding things online to consume.

What it means: mobile and local search, approaching a turning point. Will become strategic before the end of the year for anyone playing in the local search space. The merger of Local Matters and mobilePeople makes complete sense in that context.

Was reading this morning a great analysis by Mathew Ingram about a New York Times article describing the way “young people” get/read their political news. It’s clearly more and more about word of mouth and your social graph.

As Mathew says: “It’s not that there is anything earth-shatteringly new in the piece, mind you. But I think it does a great job of describing how digital “word of mouth” — in other words, social networking of all kinds including Twitter, IM, Facebook and so on — has become a dominant means of news delivery for young people in a way that I’m not sure old geezers like myself quite grasp, no matter how often people describe it”

The Times sums it up: “In essence, they are replacing the professional filter — reading The Washington Post, clicking on CNN.com — with a social one. (…) In one sense, this social filter is simply a technological version of the oldest tool in politics: word of mouth.”

What it means: I remember when I joined Yellow Pages Group in 1999 (called Bell ActiMedia at the time), old-timers used to tell me that the biggest “competitor” to directory publishers wasn’t other directory publishers (or Google or other online directories), it was word of mouth. People have always asked their friends for recommendations and it has always represented a large volume of local search “queries”.

Admittedly, news and local search are not totally the same. Local search information is usually more of a pull (i.e. someone looking for a product/service) than a push (i.e. someone broadcasting information about a new merchant they found). It’s also more “evergreen” than news, i.e. unless you’re a total local merchant junkie, you don’t need to learn in a timely fashion about a new restaurant opening in your neighborhood. But there’s the seed out there of future consumer behavior which could create a great disruption effect on local search. Who knows? It might become valuable to broadcast information about your favorite local merchants. As I estimated in this blog post, there’s potentially 7 more times online local conversations than online directories searches currently. Anyone who successfully harness these conversations will create very valuable local search inventory.