The Praized Blog

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).

The Kelsey Group (TKG) just released their 2008 Local Media trends. They believe 2008 will be a pivotal year for the global Yellow Pages industry. Here are the highlights:

• Print local media: TKG wonders if the directory business will continue to be as recession-proof as it used to be, as more ROI-driven online local ad products are launched. For large US urban areas, they also talk about the creation of print opt-out plans, important market rescoping and the launching of new directory formats. They also expect higher cannibalization of traditional media sales, mostly from search engine click packages.

• Online local media: 2008 is the year where user-generated content becomes a critical aspect of consumers’ decision-making process. Merchants will be widely invited to join that conversation as well. In addition, auto and real estate verticals will continue to develop in the local search context, new devices will lead to new sources of searches and local search inventory will increase drastically.

• Sales: 2008 will continue to see the uphill struggle to build independent local sales channels.

• ROI/Performance-based products: this year, we will see the beginning of the untethering of print and online usage and more use of robust ad reporting. TKG thinks that 2008 is the year where the promise of pay-per-call gets realized as multi-channel management becomes a critical success factor.

• Verticalization: from a seller perspective, high ad spend categories will attract lots of sales competition from many different sources: SEO/SEM firms, newspapers, vertical sites, start-ups, etc. In national sales, we will see more ad localization.

• New products: Video, Mobile and Outdoor, with a mention that “video is where the immediate action is”.

You can find the Praized blog’s 2008 predictions here.

What it means: As a regular attendee of Kelsey Conferences, I am usually well aware of most of the local media trends but there are a couple of surprises in there for me. First, the creation of opt-out programs for print directories in some US markets. I did not realize the pressure was high on US publishers to create these mechanisms. The second one is Outdoor as a new product. I wasn’t aware that local media companies were looking actively to sell “outdoor” products. In my mind, it’s the kind of interesting opportunity that’s always discussed but is never “low-hanging fruit” enough to execute. Will be interesting to follow. I also like the call to disconnect print and online usage. TKG was the first organization to warn directory companies not to couple print and online value for too long (back in 2001-2002). What they’re saying is: there used to be a time where bundling print and online usage was useful to sell but online is now strong enough to sell on its own.

Seen on TechCrunch this morning, MySpace is going to announce a new self-serve advertising platform today. A couple of things caught my eye:

The Local angle: “MySpace says there 23 million small and local businesses in the U.S. (citing government statistics) Only about 1 million of them advertise online, and those that do generally advertise only via search (Google, Yahoo, Microsoft). MySpace says about 10 million businesses maintain a profile on the service. The goal of the product is to give those businesses a new way to reach out to the community.”

The Vertical angle: “MySpace will also announce the completion of the first phase of another new advertising platform, “HyperTargeting by MySpace” which allows marketers to buy advertising targeted to specific interest-based segments of the MySpace audience. (…) There are around 1,000 total categories.”

I just read the release as well. Chris DeWolfe, CEO and co-founder, adds: “MySpace is the first and only place where a small business can create a display advertising campaign and target it to their desired customer. There are 23 million small businesses in the U.S. and less than a million advertise online. SelfServe is designed for the millions of businesses that don’t advertise online today—we want to bring that new class of advertisers to MySpace.”

What it means: I predict strong success reaching national advertisers (the Techcrunch article mentions that Procter & Gamble, Microsoft, Ford and Taco Bell are among the first 50 advertisers quietly trialling the system) but some definite challenges reaching SMEs using self-serve. I’m not sure DeWolfe understands local but, nonetheless, local media companies currently selling Google AdWords and search engine marketing firms should be keeping an eye on that new ad network. There is a lot of inventory in MySpace and if targetting works well, it will be very valuable inventory.

I recently attended a short webinar from Weblistic, my friend Dick Larkin’s company. Weblistic helps SMEs generate more local leads from a very fragmented Web. They have not revealed too much about their secret sauce but yesterday, they showed how successful they were when search engine optimizing local video ads.

Their first assumption is that search engines are going to integrate video content within their universal search results. Google has already started to do so. Video is also a very fragmented market and opportunities to be found abound. Weblistic is placing bets on all major video sites and has created accounts at most of them. They use the “localvidsdotnet” handle on a variety of social video sites like YouTube, Yahoo Video, Guba, iFilm, and stickam. They then upload their local advertising videos and tag them with a variety of relevant keywords. Videos start appearing in the Google search engine results pages. In this example, Weblistic has managed to capture 7 of the top 10 positions for their merchant name. Cool isn’t it?

What it means: in a fragmented world, there will always be a business opportunity to defragment and simplify. The local video market is a good case study. Weblistic seems to understand that concept and is hoping to simplify Web SEO/SEM for small businesses.

Google and eBay had a staring contest in the last few days, which resulted in eBay winning a round against Google.

TechCrunch has a great summary of what happened:

1. eBay doesn’t allow merchants to use Google Checkout to settle eBay transactions. Google invited eBay online sellers attending eBay Live! in Boston this week to a party that they called the Google Checkout Freedom Party.
2. eBay decides to pull all U.S. advertising on Google.
3. Google backs down, cancels the party.

What it means: eBay is the biggest Google AdWords advertiser (which might be worth more than $100 million in revenues for Google). According to this SF Chronicle article, “EBay’s ads showed up on Google 188.3 million times in March, according to comScore Networks, more than double the number run by Target, the No. 2 Google advertiser.” and I think that does not include Shopping.com numbers. You should never underestimate the power of any of your coopetitors. If you’re coopeting with another large organization, be careful not to disrupt the delicate equilibrium, unless you’re prepared to go to war.

Adage.com discusses how Weather.com (The Weather Channel’s web site) managed to become the eight-most-visited media site with 37.8 million unique visitors (March 2007, Nielsen/NetRatings).

1) Focused on one thing, weather, and the URL brand says it all.

2) “It’s primarily a reference site, a genre that does very well online”.

3) Search engine optimization (SEO) and marketing. “Lately it has seen its distribution through widgets growing as well.”

The article adds that Weather.com ranks eighth in mobile search according to M:Metrics.

What it means: if I put this article in the context of directory publishing, this makes me think that there’s no reason why a directory publisher could not see its traffic explode through smart strategic online moves. Directories are reference sites and they usually focus on one thing: finding a person or finding a business. Those are things you do multiple times during one week. But I think one of the killer apps directory publishers have is their residential search (this might come as a shock to many people!). “Find a Person” is like weather information! This is clearly a under-exploited segment today (under-exploited by directory publishers) and could serve as a locomotive to increase local business searches. But you’d need to have strong SEO and syndicate your “find a person” content via widgets and other affiliate programs.

A potluck of industry news this morning:

Agendize previewed some usage data in their latest newsletter regarding increased call volume when click-to-call is combined with a click-to-save functionality. According to their release, “a major European online directory publisher who recently added AgendiZe Click-to-Call to the already-implemented Click-to-Save & Share options experienced a 90% call volume increase in the January – March time frame compared to the last three months of 2006″.

ClearSense, a subsidiary of World Directories, announced a strategic alliance with LocalLaunch!, a subsidiary of RHD, to help World Directories sell SEM products to their SMEs.

Mobivox, a Montreal-based mobile application company, announced the beta launch of its hosted service that allows people to bring Skype to any mobile device without downloads. The service is now available in 23 countries.