Six Takeaways from Kelsey ILM 07

Last week, I was in Los Angeles for the latest Kelsey Conference (ILM 07). We heard presentations from many interesting speakers, most notably Jake Winebaum from RHD, Jay Herratti from Citysearch, Chamath Palihapitiya from Facebook, Stuart McKelvey from TMP, John Hanke from Google and the always interesting Jason Calacanis from Mahalo.

Kelsey ILM 07

Once again, I had the opportunity to meet and discuss with many of my local search and directory industry peers, making this conference a must-attend if you’re in the local search industry. It took me the a few days to come up with takeaways from the conference, not because there weren’t any, but because they were embedded deeply in the zeitgeist of the whole conference and needed to be extracted. After a “disappointing” 2006 (as reported in this post from SES Chicago), I think we’re at a new inflexion point for the local search industry. It was almost as if every stakeholder in the room had realized that things were not as they had seemed to be and that they were being more realistic and pragmatic about online local search.

Without further ado, here are my takeaways from Kelsey ILM 07:

  1. People are finally realizing that it is very difficult to “do” local. Both advertiser and user markets are very fragmented and local initiatives do not always scale. If you’re not “native” to the local search market, the learning curve is huge.
  2. Clearly, the online local market has not been cracked yet. There is no clear winner yet and we’re still many years away from glory days.
  3. Local is going to be huge online but the various stakeholders need to work together. Players have to identify where are their core strengths and weaknesses and partner to fill the gaps (either through aggregation of technologies, content or sales). M&A should be on everyone’s mind as well. Expect a very active 2008 on that front.
  4. We heard the second reality check coming from a directory publisher in a couple of months. Time is running out and it’s now time to execute.
  5. Verticalization is starting to happen. People are realizing that there are user & advertiser differences between yellow pages headings. We might finally see some real segmentation in the industry (headings-based pricing, vertical sites, specific ad products and content, etc.) .
  6. Call-tracking/pay-per-call is now a strategic pillar of local. To solve the media fragmentation issue, this offers a unified business model to aggregate various products together and simplify the sales process.
  7. Mobile is still the holy grail of local search, coming soon, but not in 2008. Maybe 2009.

Jake Winebaum: 10 Things Directory Publishers Need to do to Succeed in Local Search

In his keynote address, Jake Winebaum also told the crowd how he thinks directory publishers can succeed in local search.

Kelsey ILM 07 Jake Winebaum 

Here are those 10 things:

  1. Keep it simple
  2. Be on the offensive
  3. Invest in talent
  4. Invest in technology and acquisitions
  5. Become a metrics-driven organization
  6. Focus on user experience
  7. Ubiquitous distribution
  8. Leverage sales force and advertiser base
  9. Transparency of pricing and results to advertisers
  10. Enjoy the ride

Jake Winebaum: “An Incumbent’s Brand, Scale and Business Model are Both Blessings and Curses”

Jake Winebaum, President, RHDi, CEO,, 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 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.


Kelsey ILM 07 Conference: Next Week!

I am attending the Kelsey Group’s ILM 07 conference next week in Los Angeles (e-mail me at seb AT if you want to connect). Taking a look a the various speakers and presentations, here are the ones I’m most looking forward to:

Kelsey ILM 07

Wednesday November 28

1) Industry Overview by the Kelsey Group Analyst Team. Always interesting and insightful.

2) Jake Winebaum, President, RHDi, CEO, I’m dying to know how RHD will leverage in their core strategy.

3) Jay Herratti, President, Citysearch. Will Citysearch’s strategy change with Herratti on board?

Thursday November 29

1) Chamath Palihapitiya, VP of Product Marketing & Operations, Facebook. Will we learn about Facebook’s local strategy?

2) The “Localized E-Commerce” panel. I’m a strong believer in the “last-mile of local search” (local product inventory, in-store navigation, tuangou, etc.) but it’s very difficult to execute.

3) The “Future of Local Mobile” panel. As local and mobile is on the verge of exploding, this will either be an incredible panel or will be very boring.

4) A Conversation With Webpreneur Jason Calacanis. Now, this should be fun!

Friday November 30

1) Marchex and The Vertical Opportunity in Local. Marchex has some amazing local assets (localized URLs, VoiceStar, SEM platform, etc.). I’m always interested in learning more about their local strategy and how these assets work together.

2) Injecting ‘Social’ into Local Media. It’s the theme of the Praized blog…

For people attending, see you all next week!