May 21, 2008
I’ve heard from a well-informed source that ReachLocal is opening a sales office in Toronto, to better serve the Canadian market. I was able to confirm it when I found these employment ads. Steven Woods, senior recruter at ReachLocal, posted the ads. ReachLocal is a well-funded local search engine marketing firm. According to the Kelsey Group blog, their latest funding round ($55M in October 2007) will be used “to continue the company’s rapid expansion both in the U.S. and overseas, and for technology. In the past 12 months alone, ReachLocal has opened 11 sales offices in the top 10 DMAs. It expects to open a top-down DMA rollout in one market per month throughout 2008 and 2009. The company now claims to have “several hundred ad sales reps.” It sells for most of the local portal and sales engine leaders, including Yahoo!, Google, MSN, AOL and Superpages.com.”
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.
September 27, 2007
Scott Karp from the Publishing 2.0 blog lists five arguments explaining why mobile is not yet very exciting:
1. Wireless carrier networks are SLOW
2. Public WiFi access is a SCAM
3. Sites aren’t formated for small screens
4. Mobile device screens are too small
5. Advertising gets in the way
What it means: I agree with his assessment, especially in North America. I’ve often been asked by traditional media publishers: “How do we leapfrog Google, Yahoo, MSN?”. I think one of the potential answers is Mobile. I’ve never been really excited by mobile’s potential until I attended the Web 2.0 Expo last April. I got the feeling when I was there that mobile is about to become real. Something in the zeitgeist, about the convergence of the various interests of hardware manufacturers, content publishers and the technological community. I think we’re still 24 months away from tangible results but, if you operate a local media business, you should be thinking hard about mobile today. You should have a couple of dedicated resources working on the mobile strategic plan, thinking about user experience specifically adapted for mobile browsing and the 3-inch screen, thinking about what kind of ads will be most efficient in that medium. Send that team to Japan or South Korea to see what people are doing with their mobile devices there. Invest some dollars now. Mobile is all about local and you can’t afford to miss that wave.
Update (& related topic): my friend Colin talks about overpriced mobile data plans in Canada