Kelsey Group

Twitter's Ineluctable March Towards Local Relevancy

~ Sebastien Provencher ~ Leave a comment

Multiple news in the last few days points towards Twitter and Facebook becoming serious forces in the world of “local”.

First, in yet another chapter of Twitter’s improvements to become locally relevant, it has started rolling out its “local trends” for a series of US cities and ome countries (probably based on the ones with the most usage).

Twitter Local Trends Techcrunch screenshot

Screenshot source: Techcrunch

On a related note, the Kelsey Group analysts issued five predictions for 2010 and one of them is “location and geotargeted advertising will represent a long-elusive revenue stream for Twitter and for third parties that mash up Twitter streams and location data.” They also suggest Facebook will also “integrate automatic location detection into the status updates” .

Third, supporting the permanent shift of user behavior towards sites like Facebook and Twitter, Forrester reports that “a third of all Internet users in the U.S. now post status updates on social networking services like Twitter and Facebook at least once per week.”

Fourth, David Hornik, a well-known American investor, recently attended a Procter & Gamble (P&G) outreach event in Silicon Valley. Asked what they thought of Twitter, Hornik writes: “To P&G, Twitter is a great broadcast medium — it is best for one to many communications that are short bursts of timely information — but as good as it is for timely information, the P&G folks do not view it as particularly relevant to what they are doing on the brand building and advertising side. For those things that Proctor & Gamble thinks are most interesting and important, they do not believe that Twitter will ever approach the value they can get out of a Google or Facebook.” This reminds me of what big brands think of Yellow Pages as a medium. They don’t understand it but it’s still drives business for millions of advertisers. Twitter will be (is?) all about the same thing. And for the record, I’ve always thought packaged-goods companies could have made a killing with Yellow Pages by making their product information locally-relevant…

Fifth, Hitwise’s traffic reports in Australia (as reported in ReadWriteWeb) show that “For perhaps the first time ever, social networking sites have surpassed the traffic search engines receive”. That would explain why in the long run Google is afraid of the new conversational capacity of sites like Facebook and Twitter. And why they’re racing to
introduce social functionalities within Google Maps.

What it means: Twitter and Facebook are both on their way to becoming serious local discovery and communication tools. It is happening.

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Kelsey Group: 32% of SMBs Plan to Use Social Media in the Next 12 Months

~ Sebastien Provencher ~ Leave a comment

[praized subtype=”small” pid=”66afa9c1b5e4cd2f613f200ec61d955d” type=”badge” dynamic=”true”] just released some interesting data around small merchant social media usage coming from their Local Commerce Monitor study.

Highlights:

  • 9% of small and medium-sized businesses (SMBs) currently use Twitter to market their businesses.
  • 32% of SMBs indicated they plan to include social media in their marketing mix in the next 12 months by using a page on a social site such as Facebook, LinkedIn or MySpace.
  • 39% of SMBs plan to include customer ratings or reviews on their own Web sites
  • 31% plan to include links or ads placed on social sites or blogs.
  • The study revealed adoption of social media by SMBs is more prevalent among younger businesses. For example, 16% of SMBs that have been in business for less than 3 years use Twitter to promote themselves

What it means: still think real-time conversation and social media for small merchants is a fad or a dream? Think again. We’re only seeing the point of the iceberg. SMB adoption is now on the radar screen and will grow tremendously in the next 18 months.

10 Things to Focus on When Building a Great Mobile Local App (Peter Schwab – Idearc Media)

~ Sebastien Provencher ~ 2 Comments

This is a post about the Kelsey Group’s DMS ’09 conference which happened two weeks ago in Orlando.

In a presentation titled “Idearc Mobile Growing Revenue”, Peter Schwab, Director of Mobile Product Development at Idearc Media (Superpages), offered 10 things developers should focus on when building a great mobile local application.

10- Focus on growing your user base (build a great product which offers a simple utility plus a “Wow” factor)

9- Embrace location ( location makes mobile its own medium)

8- Give users a voice (through reviews/ratings and real-time input)

7- Remove barriers (build features and pursue channels that get you closer to the user. “On Deck” model still makes money but has too many barriers. Focus on app stores.)

6- Embrace the hardware (camera, compass, video, voice)

5- Explore alternative distribution channels (take your content where the users are today. He gave the example of Sp411 on Twitter. )

4- Measure everything (measure for mobile, not online)

3- Drive non-Yellow Pages revenues (CPM ads, coupons, sponsorships)

2- Are you a “painkiller” or a “vitamin”? (become an ally of your user, users respond to deals. For example, Idearc ranks superguarantee merchants on top of the search results on mobile)

1- Experiment and grow as mobile grows (no silver bullet yet, don’t be afraid to move beyond Yellow Pages. Land lines are dying and mobile is becoming the primary Internet access. Social brings a new engagement model)

As an interesting note, when asked “how much does it cost to build a mobile application?”, Schwab replied “if you’re spending more than $25,000 to build an iPhone application, you’re over-paying”

What it means: reading between the lines, Schwab teaches us two important lessons: 1) adapt to the mobile experience (i.e. don’t simply put your web site on mobile). Hardware is different, usage is different, business models are different; 2) the “perfect” mobile local application has not been invented yet. Iterate quickly, try things and go social.

Dave Swanson: "Facebook and Twitter are Both an Opportunity and a Threat to Directory Publishers"

~ Sebastien Provencher ~ 2 Comments

This is a post about the Kelsey Group’s DMS ’09 conference which happened last week in Orlando.

Dave Swanson Photo

Day two of the DMS ’09 conference saw a brilliant keynote from Dave Swanson, Chairman and CEO of R.H. Donnelley (RHD). After hearing sobering thoughts from European Yellow Pages leaders at the EADP conference in May (see The Wake-Up Call: “Unless We Change, on the Long Run, We Are Doomed to Disappear” (EADP 2009)), I was really looking forward Swanson’s keynote given the situation RHD found itself in (they filed for Chapter 11 protection in May) after having an amazing stock market ride in the last few years. the Kelsey Group “wanted someone who has had his butt kicked” for this keynote, someone who could explain what happened and what’s ahead for the industry and he didn’t disappoint.

Here’s what happened according to Dave Swanson:

  • The economy
    • “It changed everything for everybody. If you look at the timing of ad sale declines, it compares exactly with the economic contraction. If you index Google’s financial results with RHD’s, you realize they have suffered as well. We’ve seen broad-based sales compression. We had enjoyed the longest growth period in history, but it created unsustainable bubbles: housing bubble, advertising bubble, credit bubble (with mergers & acquisitions and leverage buyouts). It was an unsustainable situation because we needed to refinance regularly. There was no money left after the financial bubble burst. When I’m asked “Dave, do you regret this strategy?”  I answer, “no, absolutely not. RHD might not exist today.” “
  • Secular changes
    • “Print competition is intense. We keep pointing out the shortcomings of each other’s products. Other local media companies (i.e. newspapers) pitch “against” Yellow Pages also. Media Fragmentation didn’t help as well. Finally, the media trumpeted “no one uses the Yellow Pages anymore” and we became an “environmental hazard” for a segment of the population. We have been very good at shooting ourselves in the foot.”
  • Execution
    • New products did not deliver and had a high rate of churn.

Where are we?

  • “I hope the freefall from the economy has stopped but I think that we’re a long way to go before “main street” joins the current Wall street rally”
  • ” We need multi-platform solutions, more creative pricing, more transparency”
  • “Competitive environment is intense. We could see a shake-out. For RHD, the worst is behind us. Financial house must be in order.”
  • “We need to challenge the premise of our business”. He gave as example: “do we need separate Internet Yellow Pages platforms and ventured to answer “I don’t think so”.
  • “We will never dominate consumer usage as we did in the past.”
  • “We need to become have a service-centric model vs. product-centric model.” RHD’s objective is to be the number one provider of directional services in the eyes of the SMBs in the market they serve. Yellow Pages publishers are provisioning more keywords on search engines with small businesses than anyone else. Because of the channel, this has been a natural extension of their existing product.
  • “Execution hasn’t been very good, but we’re getting better and we’ll dominate”
  • “Publishers have to look at micro-strategy, geo-vertical opportunities. It’s not one large homogeneous search business.”

Swanson observed it would be very easy to be pessimistic but his philosophy is that when things are going very good, something very bad is about to happen and vice-versa. The next several years will be all about climbing out of the hole but “it’s going to be a hell of lot more fun than the last two years”.

Following his keynote, I sat down with Dave Swanson for an exclusive interview.

On print innovation

I asked Swanson if he thought there was innovation left in the print product, what he thought a print product would look like in 5 years. He said he thought the print book really works in smaller markets and that he didn’t see much change needed there. But he confirmed he thought the format wasn’t right for urban centers. He suggested limiting geography (smaller scopes), having more relevant information in the books (possibly a subset of headings instead of all of them) and more specialty products. But he also added Yellow Pages were not supposed to be glamorous. They have to be efficient.

On online innovation: verticalization & micro-strategy

I then asked RHD’s CEO where he thought DexKnows.com, their main online property, was going. He said he was extremely happy to have Sean Greene heading their RHD Interactive division (I interviewed Sean a few months ago), bridging print and online culture. He mentioned DexKnows’ future lies in two directions: verticalization and Micro (which I would call hyperlocal)

Verticalization is the improvement of high-potential verticals within Dexknows.com. It means depth of content, aggregate categories/headings and a combination of expert and user content. He gave the example of “wedding” as a meta-category, an interesting vertical.

Micro is recreating a community, a subdivision, a neighborhood within Dexknows.com (or maybe more “local” brands. He wasnt’ allergic to trying other online brands for this initiative). User recommendations would play a big role there. When asked about aggregating hyperlocal information that’s not directly merchant-related (classifieds, neighborhood information, municipal government info, etc.), he remarked that a lot of community information already appears in the print Yellow Pages and said there’s no reason why it shouldn’t appear online.

On social media

Swanson acknowledged that social media has the potential to be a big disruptor in local search (which made me very happy as I’ve been saying that for a couple of years). He called social media “word of mouth on steroid”. He confirmed that Facebook and Twitter are both an opportunity and a threat to directory publishers.

On combating the negative industry press

RHD’s CEO wasn’t too optimistic about industry-wide efforts to combat negative press. He suggested we change the way directory publishers market themselves and start talking to SMBs more to improve their image (instead of doing consumer advertising to garner usage).

What it means: perfect tone for the Swanson’s keynote. Things are not going as well as they used to in the Yellow Pages industry and it doesn’t serve any purpose to hide it. “We will never dominate consumer usage as we did in the past” is most realistic statement I’ve heard in industry recently. At the same time, the industry has tremendous assets it can leverage starting with the direct relationship publishers have with small advertisers. Very happy that RHD is looking at improving the print product in large urban areas. I believe there’s a lot of leg left in a print product that’s tailored to an urban consumer. Ecstatic that Swanson is talking seriously about social media. I sometimes felt like I was preaching in the desert in the last two years… We’ll have to follow RHD closely as they come out of Chapter 11 in the next few months.

Local Advertisers Planning a Big Increase in Social Media Usage

~ Sebastien Provencher ~ Leave a comment

This is a post about the Kelsey Group’s DMS ’09 conference which happened last week in Orlando.

In a presentation titled “Understanding Users and Advertisers – A Deep Dive Into Exclusive TKG Data”, Steve Marshall from BIA/Kelsey provided attendees with some juicy nuggets of information from the 13th wave of their SME Local Commerce Monitor study (and the 6th wave of their user study). This study looks at SMB advertisers and users trends.

Advertiser highlights:

  • The latest wave tells us that SMBs have an on-going need for new customers, are using more digital/online media and plan a big increase in the use of ‘Web 2.0’ capabilities.
    • Penetration of online media exceeds traditional media for the first time
    • Major increases planned in usage of video, social sites and corporate blogs to promote their company

Advertisers Planning a Big Increase in Social Media Usage - Kelsey Group Local Commerce Monitor 2009

User highlights:

  • Search engines continue to have the greatest penetration of information sources for finding local goods and services
    • 90% of consumers surveyed use search engines for that purpose
    • newspapers are up but print Yellow Pages and Internet Yellow Pages are down
  • According to the study, only 16% of consumers trust “social networking sites” as information for local shopping. As I’ve mentioned before, I’m convinced that if we were to ask how many people “trust their friends” for information on local shopping, that number would go up drastically. Social networking sites = friends!
  • 68% of consumers surveyed said that had at least one profile in a social network site
  • 47% think that product/service ratings are important, an increase of 5 percentage point since the last wave

Global Yellow Pages: Entering the "Presence, Performance, Permanence" Era

~ Sebastien Provencher ~ 1 Comment

This is a post about the Kelsey Group’s DMS ’09 conference which happened last week in Orlando.

In a presentation titled “Global Yellow Pages: A Prescription for Future Success”, Charles Laughlin and Neal Polachek from BIA/Kelsey (the new name of The Kelsey Group) exposed important trends and offered a new way to look at the future for directory publishers.

Current trends:

  • Over time, print Yellow Pages usage (as an advertising vehicle) is down for SMBs
  • Advertiser volume (i.e. the total number of advertisers with a relationship to a directory publisher) is decreasing
  • Average average revenue per advertiser (ARPA) is up (i.e. squeezing more money out of current advertisers) but EBITDA margins are down
  • Share of revenue coming from online products is up (10% of total directory publishers revenue in North America, 25% in Europe)

Future trends:

  • Publishers will sell leads instead of products (i.e. need to move away from print/online nomenclature)
  • The business model will evolve (blends traditional and performance-based advertising + fee-based services)
  • There will certainly be a change in the publishers’ cost structure (when revenues go down, margins go down also)
  • We will see a changing sales force (training, recruitment, smaller channels, outsourcing)
  • We will see a changing core print product (more local, more vertical, smaller, less categories)

Neal then exposed what I think is a revolutionary new way of seeing the world and coined a new era for the Yellow Pages business: ” Presence, Performance, Permanence”

Kelsey BIA Presence Performance Permanence

“Presence” is defined as “Be found”. It’s usually fee-based. It includes product like signage, listings, print, banners, search/SEO, digital outdoor, door hangers, radio, cable TV and mobile TV. I think we could also include things like website building, Facebook & Twitter profile management, etc.

“Performance” is all about driving leads. It’s performance-base and includes clicks, calls, forms submitted, store visits, inquiries, etc. It could also include coupons exchanged.

“Permanence” is to help the advertiser retain customers. This works on a fee for service business model and includes ratings, reviews, online reputation management, online booking, customer reminders, customer updates, retention strategies, telephone training, etc.

The list of business opportunities Neal presented was certainly not exhaustive but I like how this model helps organize product initiatives under large umbrellas. I also like the fact that social media is now part of the overall Yellow Pages strategy via things like ratings, reviews and reputation management. The whole industry seems to be waking up to the disruptive power (opportunity and threat!) of social media I think we’re just seeing the tip of the iceberg there.

In Orlando Next Week For The Kelsey Group DMS '09 Conference

~ Sebastien Provencher ~ 1 Comment

I will be in Orlando next week for the Kelsey Group DMS ’09 conference. I haven’t missed many of those great events over the years and I’m looking forward seeing my industry colleagues in person.

Here are the presentations/panels I don’t want to miss:

Tuesday Sept. 22, 2009

  • “Moving Multiproduct Selling Beyond Bundles”. The interesting challenge directory publishers face today is to transform their sales organization into one that’s able to sell online advertising-only, not just print/online bundles. There’s also the new real-time Web which will create opportunities to launch time-sensitive offers and coupons, requiring multiple touch points during the year. That’s something directory publishers need to improve. See this conversation between Michael Taylor and myself on Linkedin (you need to be a member of the Kelsey Group Linkedin group to see it)
  • Kelsey’s User View and Local Commerce Monitor. Always interesting data points on users and advertisers.

Wednesday Sept 23, 2009:

  • The keynote from David Swanson, Chairman and CEO, R.H. Donnelley. As RHD prepares to exit bankruptcy protection, it’s going to be interesting to see how RHD is expecting to reinvent itself.
  • “The Global Yellow Pages Leadership Forum: Answers to the Tough Questions”. This should be the highlight of the three-day conference. Six global industry leaders will discuss the opportunities and challenges of the local industry. I wonder who will replace John Kannapell from AOL who was just let go.
  • “Mobile Search & Yellow Pages: The Business Model”. Four senior mobile managers from directory publishers talk about the importance of mobile, their strategy, and the business model. Curious to ask them about their “big ideas” around mobile.
  • The second keynote of the day, David Krantz, President & CEO, AT&T Interactive.

Thursday Sept 24, 2009

  • The keynote from Donat Rétif, CEO, Truvo. I saw him speak at the EADP conference back in May but given that Truvo wants to be innovative in the directory space, it’s going to be interesting to get an update from them.
  • “Print Yellow Pages 2013: Critical Changes to the Core Product”. Very curious to see if we will finally hear about real print innovation.

The conference is held at the [praized subtype=”small” pid=”79b0fad769b11f4b8998b682a0374edd7f” type=”badge” dynamic=”true”]. If you’d like connect in Orlando, send me an e-mail sprovencher AT praizedmedia.com

The Kelsey Group's Directional Media Strategies '09 Conference Preview

~ Sebastien Provencher ~ Leave a comment

In less than 6 weeks, many decision makers from the Yellow Pages industry and other directional media companies will be attending the next Kelsey Group conference called Directional Media Strategies ’09.  Two of [praized subtype=”small” pid=”66afa9c1b5e4cd2f613f200ec61d955d” type=”badge” dynamic=”true”] analysts (Charles Laughlin and Matt Booth) organized a preview web conference yesterday to explain the “meta-themes” of the conference. They are:

  1. Embracing accountability (for example, with print pay-for-perfomance ads)
  2. Transforming the sales channel (becoming multi-product, digital and explicitly performance-based, sales training needs with those changes)
  3. Reinventing the business model ( every aspects of the Yellow Pages business model is under scrutiny, 12-month cycles, etc.)

The session became very interactive when Charles asked the attendees (more than 100) to vote on three different statements.

The first one, “In 5 years, what percentage of total directory revenue will be generated by performance-based advertising programs?”, produced some interesting results. 35% think that between 25% and 50% of total directory revenues (print and online) will be performance-based. That’s what I think as well. It will be a combo of preserving current advertisers with some advertiser gain as well.

webinar-poll-01

The second question, “in 5 years, what percentage of directory advertisers will be handled entirely by an automated/self-service sales channel?”, also produced some interesting results. 37% think that it will be “between 10% and 25%”. I’m not a big believer in self-service in the short/medium term. I think it will be “less than 10%”.

webinar-poll-02

The third question, “In 5 years, what percentage of large metro print directories will be produced in a size similar to that of a mini or companion?”, did not produce a clear winner. For my readers not in the industry, mini or companion directories (also called neighborhood directories in Canada) are smaller, more geo-focused print directories. Based on my personal experience, I always feel my neighborhood directory is always more relevant than the big Montreal-East book and when I use a print directory, I usually use the neighborhood edition. I think publishers will have no choice but to embrace this new format/model. I voted for “between 50% and 75%”.

webinar-poll-03

The conference is being held at the [praized subtype=”small” pid=”79b0fad769b11f4b8998b682a0374edd7f” type=”badge” dynamic=”true”] in Orlando. You can register here.

I will be attending the conference. If you want to meet, make sure we connect by e-mail (sprovencher AT praizedmedia.com) beforehand to schedule some quality time.

What is MySpace?

~ Sebastien Provencher ~ Leave a comment

Day 1 of the Kelsey Group’s MarketPlaces 2009 conference. Jeff Berman, President, Sales & Marketing for MySpace, was on stage for a keynote address.

Of note in his presentation:

  • Jeff described MySpace as a “social portal” halfway between a portal and a social network
  • 40% of online moms in the US are on MySpace each month
  • Their classifieds section, powered by Oodle, generates 500K postings a month
  •  They’re recently introduced MySpaceID, their equivalent of Facebook Connect or Google FriendConnect
  • When asked how do they differentiate MySpace from Facebook, he answers that Facebook is a social utility, a very powerful, elegantly designed, communication platform. But that there are no licensed music content and no licensed video content in it like you find in MySpace.
  • When asked “what is your USP?”, Berman said ” Massive content platform, social discovery around music”.
  • When asked if they’re interested in “local”, he started by replying that they’re careful before they go in a space because they don’t want to upset their large user base. They need the right model. They also need a foreseeable revenue component but he did say local was interesting to them.
  • Questioned about their target market, the MySpace exec said “everyone”

Here is the Kelsey Group blog summary of the presentation.

What it means: a couple of thoughts. First, I got the feeling that MySpace is in this bizarre brand/product positioning situation. They’d like to be Facebook and embrace social networking to the max but they’re not there yet. At the same time, the music/video component of the platform is what makes it compelling to a lot of users. If you’re a new music group, you need to be on MySpace and personally, I often start my search on the site when I want to listen to new acts bypassing search engines completely. I also like the level of activity in their classifieds section. Not bad at all! Finally, on the “local” question, I decoded from Berman’s answers that MySpace is not going to play in “local” in the short term. They’re still trying to find a model that will work. So, what is MySpace? A music/video site? A social network? Given that they’re owned by News Corp, I think they should morph into a “social entertainment” destination and platform. The launch of MySpace ID (now available on Yahoo! by the way) should increase their relevancy in the social ecosystem.

My Next Events: Kelsey, YPA, EADP

~ Sebastien Provencher ~ Leave a comment

I thought it was a good opportunity today to list the next three events I will be attending.

1) The first one is [praized subtype=”small” pid=”66afa9c1b5e4cd2f613f200ec61d955d” type=”badge” dynamic=”true”] ‘s MarketPlaces 2009 conference in Los Angeles. Definitely looking forward hearing Jeff Berman (President, Sales and Marketing at MySpace) talk about verticals and local, Jay Herratti (CEO, Citysearch) discuss the latest Citysearch initiatives (maybe some fresh Facebook Connect data?) and Chris LaSala (Director of Local Markets, Google) talk about any Google Local initiatives. The conference is on March 16, 17 and 18 (yes, in 10 days!) at the [praized subtype=”small” pid=”d919d1d277951c5164c26320a00b783fe1″ type=”badge” dynamic=”true”].

2) I will also be attending this year’s [praized subtype=”small” pid=”85bbe9714ba1f95167e8691d35364b0a8c” type=”badge” dynamic=”true”] conference. Believe it or not, it will be my first time after almost 10 years in the industry. They invited me to speak on a blogger panel with my friends Mike Boland and Greg Sterling. Can’t wait to hear Carol Johnson (COO, Sensis Yellow and White Pages) talk about “Sustaining Yellow and White Pages Growth” and Malcolm Gladwell talk about “Outliers”. The conference is April 26, 27 and 28 at the [praized subtype=”small” pid=”2824998ee1a44bb195b97335593818ba2c” type=”badge” dynamic=”true”].

3) Finally, a month later, I will be in sunny Barcelona at the EADP conference. I will be talking about “blended search”. Their line-up of speakers is amazing with many CEOs and Head of New Media divisions speaking at the event. The conference is May 28 and 29 at [praized subtype=”small” pid=”fe88067181f3c2b456ee063861fe1985″ type=”badge” dynamic=”true”] (probably the most beautiful hotel I’ve ever stayed in!).

If you want to sit down and chat at any of these events, send me an e-mail seb AT praizedmedia.com !