The Praized Blog

Read in the latest issue of Checkerspot, the official magazine of the The Canadian Wildlife Federation, an article about eco-friendly burials.

Natural burial grounds do more than just reduce pollutants otherwise caused by cremation and traditional burials. Some eco-cemeteries function as wild spaces, marking graves with local rocks and flora rather than headstones, keeping track of burial plots through GPS locators.

What it means: the last thing you will be remembered for is a lat/long number… That’s a mapping mash-up waiting to happen, virtual burial grounds displayed on a worldwide map.

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.

Very interesting first half-day yesterday at the Kelsey Group’s Drilling Down on Local ‘08. The theme of the conference is “Marketplaces”. It regroups products such as classifieds, auctions and vertical sites. Here are highlights from the first two sessions:

As an introduction, the Kelsey Group’s team provided us with some background information on “Marketplaces”. Neal Polachek first described the local end game as “better search, discovery, and engagement”. He even quoted the Cluetrain Manifesto’s “Markets are conversation”. He also talked about their latest global ad revenue forecast for 2007-2012, stating that the biggest category winner would be Internet and the biggest loser would be newspapers. As I wrote last week, the Kelsey group believes that Verticals will capture a large chunk of online advertising by 2012. Matt Booth then talked about three specific verticals (travel, automotive, home services) that have had a tremendous impact on offline/online business and media spending. For example, Matt showed two juxtaposed graphs showing the decline of newspapers’ automotive revenues vs. Autotrader.com’s revenue increase. Peter Krasilovsky finished the intro by stating that it’s now time to “uncouple” print and online media bundles. As print revenues decline, you need to have online-only ad products to compensate. Peter added that you also want to “verticalize” your offer to expand your revenues.

The second session “Remaking the Los Angeles Times (Online)” starred Rob Barrett, Senior VP of Interactive Media, GM, LATimes.com. He started by mentioning that most of what he’s currently working on is not very visible online now. He spent the first couple of years at the LA Times refocusing the online business. His main focus has been to build the display ad business (as opposed to classifieds). It’s going to generate $25M in revenues this year. Barrett says it’s now “time to finally break the newspaper paradigm online”. The LA Times’ online strategy needs to be local as opposed to national as it will allow them to differentiate their offer versus other “national” newspapers like the New York Times. They’ve realized that local users are key to online revenues as they generate more monthly page views and twice the display revenue per page views. Their product approach is “we want to own Los Angeles”, i.e. be integral to life of Angelinos, be the source of news and information about Los Angeles to the world and be an information retailer by creating, aggregating and curating LA content.

The Latimes.com web site is slowly transforming itself into a hyperlocal social network. All content pieces are going to be tagged and indexed by category and geography. By targeting on demographics and on geo, the LA Times is hoping to raise their average CPMs and improve ad effectiveness. They are creating the best targeting machine for the LA DNA. Barrett then showed us pilots of various new vertical sections that are very promising:

• The Travel section: http://travel.latimes.com
• A hyperlocal arts & entertainment guide: http://theguide.latimes.com
• Hollywood backlot to show pictures of movies shooting: launching next week
• User-generated photo and video content: photos & videos, http://yourscene.latimes.com
• The Homicide map: http://www.latimes.com/news/local/crime/homicidemap/

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.

The Kelsey Group just issued a new forecast on online classifieds and verticals advertising:

While online advertising has been propelled primarily by search, banners, e-mail and lead generation, The Kelsey Group expects verticals to emerge as a key driver of online advertising by 2012. Based on trend analysis, the firm forecasts the U.S. interactive classified and vertical share of online advertising will grow from 18 percent in 2007 to 24 percent by 2012. Revenues for interactive classifieds and verticals will grow from US$3.9 billion to US$14.7 billion during the same forecast period, representing a 30.5 percent compound annual growth rate (CAGR).

During the forecast period, U.S. online classifieds will grow from US$3.9 billion to US$9.1 billion (18.6 percent CAGR) and online verticals (such as home services, home and garden, health care, legal and auto repair) will grow from US$100 million to US$5.6 billion (461.4 percent CAGR).

What it means: I’m a strong believer in the verticalization of the Web. So, directionally, I agree with those numbers. The first indication for me that this would be a big business was this article about Meganiches in Wired’s November 2006 issue. I forecast that the next big trend will be the “localization” (i.e. the addition of local content/business listings) of all those vertical sites.

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.

I was reading this weekend in the Globe & Mail a long article about billionaire Sam Zell and his purchase and subsequent re-engineering of the Tribune Company, one of the large US newspaper groups. The article as a whole is very informative but I was especially intrigued by this excerpt:

Since taking over, Mr. Zell has attempted to raze the culture by replenishing the senior management team with trusted lieutenants and giving his properties more autonomy: Local papers will decide what they do in a particular market and they will also be responsible for creating and meeting their own budgets. Most importantly, though, in some people’s minds, he’s showed up. “I’d say when he came to visit our shop, what a lot of my managers came away with was we didn’t often get visits from executives before. And when they did, they couldn’t pronounce the names of the local cities,” said Digby Solomon, publisher of the Daily Press in Newport News, Va. “It’s not as though the people who have been running newspaper companies are stupid, but I think in any sort of business, you get trapped in a particular way of thinking, and it’s just very difficult to shake loose from that.”

Flickr picture by William Couch.

The Daily Press fits the mould of what Mr. Zell has described as his “petri dish” model – using smaller papers as testing grounds, or incubators, for new ideas that could be rolled out to the chain’s larger papers. The paper has already taken one gamble, replacing its front page with virtually all local news, rather than the conventional format of national news being afforded the prime placement. It may not sound like much, but this is the kind of change that gives newsrooms pause: There were serious concerns about people cancelling their subscriptions. In the end, none did. “Everyone was afraid to test it,” Mr. Solomon conceded. “But this isn’t a heart transplant – if we screw it up, we can change it tomorrow.”

What it means: very interesting to look at the various strategic imperatives Zell is implementing inside Tribune Company. He’s obviously starting with a clean slate (and a now private Tribune Company) which gives him more freedom but the idea of having decentralized decisions centers, the whole local/hyperlocal angle, and the creation of a culture that rewards risk-taking are all steps in the right direction. Using smaller newspapers as a testing ground is also smart if you can iterate and migrate successes quickly to larger newspapers.