As you probably know if you read this blog and follow me on Twitter, I’ve been thinking about local commerce, local search and discovery for the last 13 years. That means thinking how to create a better match between consumers and local businesses.

I’ve been following with high interest the rise of vertical peer-to-peer marketplaces like Airbnb and I finally had the chance to try the service a few weeks ago when we reserved a Florida house for a family vacation. As you probably all know, Airbnb offers homeowners the opportunity to rent their home or a room to tourists. You can build a very detailed profile and the site relies on strong identity checks and reviews to build up trust. After doing a lot of research, we finally settled on a house that seemed adequate for our family and it had 16 glowing reviews from strangers. Owner was extremely friendly in all his communications and we were looking forward to a well-deserved vacation.

When we arrived, the house was a little more rundown than expected (be aware that “rustic” has an interesting meaning in real estate) but nothing that we haven’t seen before, as we travel a lot in North America and Europe, and we’ve seen a wide variation of accomodation quality. I’ll skip the next two days for the sake of brevity but sadly, we had to take the decision to leave the house earlier than planned. We found too many ants and saw three roaches-like bugs over a 48-hours period in the house. The solution would have been to spray the house with repellent but we feared that this could be harmful to our toddler. I realize that Florida sometimes brings its lot of “domestic” insects but for the price we were paying, we felt it wasn’t worth it. This house wasn’t for us. We thought of complaining to Airbnb but, according to their policies, they require photos and we didn’t take any (it’s not the first thing you think about when you’re in a hurry to leave a place!) We lost our money and rented a hotel room for the rest of our stay. All in all, a very disappointing experience.

My local search mind started thinking feverishly (or maybe it was the hot Florida weather?): given that it’s probably a recurring problem in that house, why is it that, in 16 reviews, nobody mentioned ants and roaches?

Were they fake reviews? No, I don’t think so.

Were people ok with bugs? Maybe that’s a possibility, although I highly doubt everyone is fine with bugs (you just need to Google for the word cockroach in TripAdvisor)

And that’s when it hit me.  In Airbnb, you deal with individuals, not faceless corporations.  Tenants might be more hesitant to leave a negative comment about a fellow human being. There is a reason social media experts have been saying to corporations they need to have a human face and voice. It keeps the conversation more cordial. In addition, tenants and owners can review/rate each other, which means a negative rating from an owner can prevent you from possibly renting a house ever again on Airbnb.

Turning to eBay, the grand-daddy of marketplaces, I also realized that reviews from strangers in a peer-to-peer marketplace eventually become meaningless. You can read many complaints about that on the web. In a review site, what’s often missing is a like-mindedness filter, to let you know if people have the same taste as you. Yelp has that same problem.

I also realized that Airbnb is going after a vertical (hotels) that is more complex emotionally than many local purchases:

  • Vacation = positive moment in life. You mess up my vacation, I’m mad.
  • Dollar amount is bigger. I make a bad choice, I’m mad.

In addition, the hotel ecosystem comes with basic standard:

  • You know brands stand for something, a level of quality. Sheraton, Hilton, Best Western.
  • There is also a standard 5-star system, where in effect you can opt-in to lower quality (and lower prices) with full knowledge.

It also got me thinking about trust and social media. Ken Larson on Quora says:

“We really do not know who to really trust. To an extraordinary degree the age in which we live is requiring us to redefine trust and the degree to which communication and expectation contribute to it. Consider simpler times a few years past (say 50). Trust was necessary in many venues as a means of survival on a day to day basis. We relied on others extensively for our well being from our local store to our banker, from the policeman to the politician. And we knew them all better, we could reach out and touch them and we were not viewing them in sound bites and web sites, nor were we being bombarded with multiple forms of input to digest about them.”

Through all these reflections, I came up with an equation for trust. To have trust in an ecosystem, you need:

  • A strong brand (can be an umbrella brand or an individual brand)
  • Real identities (everyone uses real names and pictures)
  • Detailed Descriptions
  • Solid knowledge about local prices (being able to compare prices for same level of quality)
  • Reviews/recommendations
  • Social graph (friends or friends of friends have bought the product/service)
  • Detailed enforced standards via a certification program

Looking at this list, Airbnb is executing perfectly on almost all criteria except for one: standards. Airbnb has “host obligations” but I don’t think anyone is really enforcing those. Did you know BestWestern has a 30-page standards book you need to respect if you want to be a franchisee? Without solid standards and a certification program, I won’t be going back to Airbnb. They currently have a great brand, but they’re putting that brand at risk every day.

 

Update 1: less than 30 minutes after I posted this online, I was contacted by Airbnb to discuss my case.

Announcing My New Role

January 14, 2013

Today, I’m very happy to announce that I’ve joined HomeAdvisor Canada as Vice President of Product Innovation. Based out of Montreal (Canada), I will be responsible for growing HomeAdvisor in Canada and developing innovative new products for homeowners and service professionals.

For those of you less familiar with HomeAdvisor (formerly called ServiceMagic), it is a U.S.-based company that connects homeowners with pre-screened and customer-rated service professionals and provides a suite of comprehensive tools, products and resources to help with home improvement, maintenance and repair needs. HomeAdvisor’s international operations include Canada, France, UK and Germany.  HomeAdvisor is a subsidiary of IAC (NASDAQ: IACI). You can find out more about the company in its About” section.

I’m very impressed with the company’s senior management team and I’m excited to join the organization. This new senior role fits perfectly as a next step in my career, allowing me to continue building innovative local search products in a very entrepreneurial environment.

You can find the official press release announcement here.

Vous trouverez le communiqué de presse officiel ici.

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In less than two weeks, BIA/Kelsey is organizing its ILM (stands for Interactive Local Media) West 2012 Conference, a must-attend for anyone in the local media space. Held from December 4 to December 6 in Los Angeles, the team has put another yet another great line-up of speakers and panelists.

As I will be attending, I’ve put together a list of “can’t miss” keynotes and panels:

Day 1 (December 4)

  • The ILM West Kickoff: The View From BIA/Kelsey. That’s when the analysts share interesting data on “local”. Helpful for all those PowerPoint presentations you’ll be preparing in 2013
  • Opening Keynote: Bill Gross, CEO, Idealab. Bill Gross. ‘Nuff said.

There’s also panels on venture capital, on sales transformation and on innovative startups. Those are often “hit or miss” but you never know.

Day 2 (December 5)

  • The Google Executive Interview: Todd Rowe, Managing Director – SMB Global Sales, Google. Should be good.
  • Keynote: Jason Finger, CEO, CityGrid. Definitely interested to hear what CityGrid is up to. They’ve been silent recently.
  • SuperForum: Mobile’s Impact on Interactive Local Media: National to Local. Those 4 mini-sessions all focus on local and mobile.
  • Afternoon Keynote: David Krantz, CEO, YP. Like CityGrid, interested to hear the latest news at YP.
  • Targeting Local Audiences: Hollywood Shows the Way. Ah, I love when they bring new industries to the table. Lots to learn usually.

Day 3 (December 6)

  • A Discussion With Ben T. Smith IV, CEO, Wanderful Media. This one should be very very interesting. Ben’s company has been very active lately, including a huge $22M funding roundfrom newspaper companies in September.
  • Keynote Speaker: Dan Levy, Director, Global SMB Markets, Facebook. Facebook doesn’t usually share a lot of new information in these conferences, so stay tuned.

If you want to connect when I’m there, don’t hesitate to ping by e-mail: sprovencher AT gmail

In addition to the conferences, the event is great for networking. If you’re planning to attend and haven’t booked your ticket yet, Use my personal code to get $200 off the registration fees: ILMWSEB

Good interview with LivingSocial CEO Tim O’Shaughnessy in Fortune today. A couple of questions/answers stood out for me:

A few months ago, you said that while Google may be the go-to solution for search and Facebook for social, there isn’t a “default answer” for local. Do you still think that?

Absolutely.

How can LivingSocial be the default answer to local then?

I think particularly on the consumer side, there is a desire for people to be more connected with their city. And people want to support the business down the street. They want to, when they’re walking around, go and know something about their community. They want to brag about their community. ‘This is why my sports team is better than your sports team.’ Those things all matter, and I don’t think there’s been a company able to go and help facilitate that in a broad-based way. I think if we can go and do that, while providing merchants and customers with new revenue streams in a thoughtful, effective way, there is that opportunity to seek that answer for local.

viaWhat’s next for LivingSocial – Fortune Tech.

What it means: From a merchant point of view, there are two sides to “local search”. The first one, known merchant searches, is now controlled by Google. That’s when consumers are looking for a phone number, hours of operations or driving directions of a local merchant they already know. The second one, discovery, is the one that hasn’t been fully cracked yet. Merchant reviews, daily deals, local Q&A, search, recommendations, etc. all contribute to this discovery process but I believe no one fully controls that space. It’s still wide open and huge opportunity. LivingSocial is part of the solution but it’s still a small part, and they’re still far from dominating the “local discovery” space. Lots more work and evolution to the service will be needed.

In the New York Times yesterday, we learn about the new “local” strategy for Pandora, the music streaming service.

Pandora’s pitch to advertisers is that its technology can cater to consumers with far greater precision than radio — it can pinpoint listeners by age and sex, ZIP code or even musical taste — and that as it grows, Pandora will effectively be the top station in many cities.

This year, Pandora has had 400 local advertising campaigns across the country. One new client was Planet Honda in Union, N.J., whose president, William Feinstein, said he gave up on terrestrial radio years ago because he felt it cast too wide and expensive a demographic net.

viaPandora Courts Local Advertisers by Reaching a Narrow Audience – NYTimes.com.

What it means: as radio gets atomized (i.e. the atom is now the song), the future of this media goes through mass customization (or mass personalization), this ability to listen to the music you like whenever you feel like it. Pandora provides consumers with that experience. In today’s world, that’s probably a better experience for consumers and it puts Pandora directly against local radio stations and ad dollars. Four hundreds local campaigns is still a very small number but it shows the potential. As always, the challenge will be getting these ad dollars through a local sales force. Expect radio companies to eventually start reselling Pandora ads as part of their Internet package.

On day 2 of the BIA/Kelsey ILM 2011 conference,  Gillian Heltai, Senior Director at comScore presented a series of interesting data points to attendees:

  • Total online searches grew 9% year-over-year to exceed 19.3 billion searches in September 2011
  • 2.8 billion of those searches were “local” (a growth of 9% from last year). Local searches growth is decelerating
  • IYP (Internet Yellow Pages) searches are down 20% year-over-year
  • 1.7 billion click-thrus to directories and regional/local content sites were generated from search in sept 2011
  • Top organic search terms by click-through rates: driving directions, white pages, yellow pages, maps, los angeles
  • 10% of US display ads are locally targeted
  • 3 of every 4 mobile subscribers own a device with GPS capability
  • Over one third own a smartphone
  • Mobile search usage grew 25% year-over-year with 26% penetration in September 2011
  • Search is the top activity of mobile browser users. Social networking is second.
  • 88 million mobile subscribers access local content on a mobile device, up 28% from a year ago.
  • Nearly 40% of mobile users access local content on their device in September 2011, compared with 75% for smartphone owners
  • 16.3 million smartphone owners scanned a QR code, 43% in a retail store, 42% from a product packaging.

I moderated a panel yesterday at the Local Social Summit on the real-time Web and its impacts on the Local/Social space. Details here.

Don’t have much time to write a long post but one of the key insights that came out of the panel was:

Main benefit of the real-time Web for consumers: convenience. You get your needs/wants answered in quasi real-time, you live a more efficient life, etc.

Main benefit of the real-time Web for businesses: differentiation. It’s difficult for businesses to adapt to the demand of the real-time Web but those that will might be able to build a strong business on that differentiating factor.

As I get prepared for two exciting days at London’s sold-out Local Social Summit 2011 this week, BIA/Kelsey just released an early taste of their latest U.S. Local Media Annual Forecast.

Highlights:

  • Total local advertising revenues for 2011 will be $135.9 billion, down from the $136.2 billion it forecast earlier this year
  • Traditional media segments such as Yellow Pages and newspapers are experiencing the largest downward revisions
  • U.S. local online/digital advertising revenues will rise to $23.3 billion in 2011, compared with $22.3 billion predicted earlier this year
  • Local online/ digital advertising revenues will be 17.2 percent of total local advertising revenues in 2011, up from the earlier forecast of 16.4 percent. By 2015 that share will increase to 25.4 percent, up from the 24.7 percent originally predicted
  • The overall local media market will grow slowly over the next five years, at a compound annual growth rate of 1.7 percent, reaching $149.4 billion by 2015

The rest/details of the forecast will be revealed at their next conference ILM West 2011, in downtown San Francisco, December 12 to 14. I will be attending the conference. BTW, I just reserved my hotel using Hotwire and I found a 4-star hotel within walking distance for $109/night. See you there!

I will be moderating a panel on day one of the next Local Social Summit happening in London on November 9 and 10 (it’s a two-day event this year). The panel is titled The Right Place At The Right Time: How The Real-Time Web Influences The “local” World.

Its description: The rise of the real-time Web is well documented.Propelled by both the social networking revolution and mobile device ubiquitousness, we’re seeing the birth of new user services and business opportunities. In this panel,  we will explore the time element in the local/social Web and will try to discover what kind of content works well in real-time, what are the benefits for consumers and what kind of business models can be deployed to leverage the
“time” dimension.

My panelists:

People that have been reading this blog and following my Twitter feed know that I’ve been interested in the real-time (sometimes called the Alive Web)and the temporal Web for a few years now.

On day two, I’m also on a panel titled Can Social Media Be Outsourced? headed by Jonathan Ewert from Codero. I’m looking forward to that discussion as well!

It should be an excellent conference with speakers from Yelp, Foursquare, European Directories, Decarta, Mueller-Medien, the BBC, in addition to Greg Sterling, Dennis Yu and Perry Evans.

The organizers have provided me with a 20% discount to my readers but I hear there are less than 20 tickets left. So, hurry up if you want to join us. I will be in London the whole week. If you want to meet, ping me at seb AT needium.com.

Flick picture by disoculated

Yesterday, I gave an interview to the Globe & Mail about Canada’s Yellow Media / Yellow Pages Group, the incumbent directory publisher and my former employer (I worked there from 1999 to 2007). Even with the challenges they’re facing, I’m still a fan of the company (and of the industry in general) but the interview gave me the opportunity to put in writing what I think are the core strategic imperatives today for any directory publisher, not just Yellow Media. The list won’t surprise anyone in the industry but it’s always good to remind ourselves what they are.

  1. Change the culture. “Internet culture” must truly permeate every aspect of the organization. Concepts like speed of execution, innovation, quick iterations, coopetition, risk-taking, failing fast must become second nature (other people on Twitter & Google+ suggested “internet culture” also meant constant learning, openness, willingness to help each other out, adaptability to constant change, sharing, crowdsourcing, diversity, immediacy, learning, and expectation of access)
  2. The sales force. I believe the sales force is now the major asset of all directory publishers and this sales force needs to be able to sell print directory products as well as a variety of online products including third-party ones like Google AdWords or Facebook advertising. This means recruiting and training are critical success factors. I use to believe the brand was a major asset but not anymore.
  3. Reinvent the Print. I still believe print business directories have legs and they won’t die tomorrow (and by the way, stop it with “Yellow Pages are dead” please, nothing ever dies, it just becomes niche). Even I still use the neighborhood book once in a while. But the book needs to be reinvented to become more locally relevant, more about the consumer. As Francis Barker (SVP at Dex Media at the time) said in 2004 at a BIA/Kelsey conference, print books design should be influenced by online local search patterns/usage. I’ll add that they now should be influenced by mobile local search/discovery apps. On a related note, book distribution in apartment and office building should be improved to avoid the PR disaster pictures like this.
  4. Continue investing in the Web. Beef up your dev and product management team, invest in R&D, try things. Facebook has shown that you can continue innovating even when you have huge consumer usage and ad revenues.
  5. Focus on mobile.  The Web is extremely fragmented and some players like Google and Facebook have managed to capture gigantic market shares. There’s probably a bigger opportunity to support the franchise by focusing on mobile and launching various vertical apps. Directory publishers need to invest and build up their mobile team and technology.
  6. Get serious about social media. I’m obviously biased because of the work I’m doing on Needium, but the time for experiments in social media is over. This is serious business now both from a consumer and an advertiser point of view.

Am I forgetting anything?

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