Jake Winebaum, President, RHDi, CEO, Business.com, took the stage yesterday afternoon with a very interesting keynote address at the Kelsey ILM 07 Conference in Los Angeles. Winebaum joined RHD three months ago following the acquisition of Business.com by RHD in July and he offered his first observations on the local search market and the blessings/curses of being an incumbent publisher.
On the blessings and curses of being a media incumbent, he listed “brand”, “scale” and “business model” as both blessings and curses with the only differentiator being strategy and execution. RHD has a great brand with Dex but that brand does not necessarily mean local search. Scale (especially in sales) can make you very successful but at the same time can be very bureaucratic. The yellow pages business model is an amazing one as it is an pure advertising model with great cash flow and margins but it’s tempting not to question it and protect its large margins. He added that incumbents usually start with a defensive strategy when competitors attack and that they need to attack their own business in order to be win in the long run. He concluded that the strategy needs to be focused on offense, that it needs to take into account the needs of both advertisers AND users and finally that execution has to be efficient and crisp.
On his first observations about local search, he listed the following challenges:
- Local search is fragmented from both a user and advertiser point of view. To compete effectively in local search, companies have to aggregate a critical mass of local queries and local advertisers to create a true performance-based ad marketplace.
- The IYP user experience is compromised by selling rules as it is built on print model and rules. It needs to become relevancy-based. Companies that create a better match between users and sellers will create more loyal users and generate better ROI for the advertisers.
He also listed the following opportunities:
- The yellow pages advertiser base and sales force offers unmatched market coverage and advertiser penetration. Companies that effectively leverage their existing sales force and advertiser base will be winners in local search.
- Ad dollars follow usage. As the local search market is in its early stage of development, local usage currently exceeds local advertiser adoption. Companies that make it simple and easy for SMEs to harness the Internet efficiently and effectively will be winners.
- Vertical user experience. Current local search user experience is generic. Companies that can aggregate deep vertical local content and create unique vertical user experiences will be winners.
What it means: again a very honest look at the local search market from one of the top executives in the US directory industry. I had the same feeling when I listened to Scott Pomeroy at the last Kelsey conference in September. I think Winebaum is right when he says it’s now time for clear strategy and crisp execution.