Today’s Strategic Imperatives For Directory Publishers

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?

Facebook Phases Out “Places” but Adds Location to Status Updates and Other Shared Items

Facebook announced yesterday that they “are phasing out the mobile-only Places feature“, a check-in service that was introduced one year ago, and replacing it with the ability to add location to status updates, photos or wall posts.  As the announcement says:  ” Now you can add location to anything. Lots of people use Facebook to talk about where they are, have been or want to go. Now you can add location from anywhere, regardless of what device you are using, or whether it is a status update, photo or Wall post.” As Techcrunch adds, “Starting this week, you’ll be able to easily associate location with any update, even if you’re nowhere near the location.”

Another big change, again explained by Techcrunch: “Another location-related change: Facebook now prompts users to include a city-level location tag with all of their updates (for example, if I wrote this from New York City, it would prompt me to include that with a status update). You can disable this if you aren’t interested, but city-level location probably won’t present a huge privacy issue for most people.”

What it means:  A couple of thoughts: it completely makes sense that Facebook now enables location data to be attached to a shared message. Twitter does the same. Location is a data payload of a status update the same way a URL accompanies one. I also like the idea that most status updates on Facebook will now be geo-tagged at the city level. A huge amount of locally-relevant content will therefore be available for consumption by users but also by Facebook API developers.

As for the disappearance of the check-in, two prevalent thoughts are expressed by experts and pundits.  Most people agree that it either means Foursquare has won or that check-ins are useless. I think the answer is probably in-between. On a side note, this report (.pdf) published by White Horse and titled “Lost in Geolocation: Why Consumers Haven’t Bought It and How Marketers Can Fix It” generated four key findings:

  1. Location-based services have not yet reached the tipping point.
  2. The chief barriers today are a lack of clear benefit and privacy fears.
  3. Users are mostly young, active contributors to social networks.
  4. Marketers will need to create and test new geolocation experiences that are not generic but relevant to a particular brand and audience.

From a volume point of view, Facebook had managed to capture a solid number of check-ins vs. Foursquare. I’m a Facebook Places Editor which allows me to quickly see cumulative check-ins for some places. In Montreal, for example,

  • Helm (bar/brewery) has 341 check-ins on Facebook and 502 on Foursquare.
  • Hotel Le Crystal has 756 check-ins on Facebook and 351 on Foursquare
  • Centre des Sciences de Montreal (Science Museum) has 851 check-ins on Facebook and 715 check-ins on Foursquare
  • Brit & Chips (restaurant) has 342 check-ins on Facebook and 439 on Foursquare

Obviously, the sheer size of Facebook usage in Canada makes those numbers quite small (it probably should be 100 times more to be proportionate with Foursquare’s traffic) , but still people were doing the check-ins. Since I acquired my latest smart phone (a Samsung Galaxy S2), I’ve been finding myself doing more check-ins on Facebook than on Foursquare, probably because the friends I want to share my location with are already on Facebook. I’m going to make a prediction: expect the check-in to come back in one form or another on Facebook in the near future.

From a Needium point of view, we’ve found check-ins to be an excellent way to prove that a conversation leads to a conversion/sale/visit. So, we definitely like check-ins as a concept!

One last thought: the fact that Facebook wants you to add locations about “where they are, have been or want to go” reminds me of the past, present, and future concept I discussed in my temporal Web presentation. I wonder if they will start exploring this concept further?

Needium: The First 6 Months and Answers to Your Most Burning Questions

This blog has been extremely quiet in the last 6 months and there’s an excellent reason for that. Turns out it’s much more work operating a company that’s successful than one that’s not! Six months ago, Needium, our social media lead generation service officially came out of beta and it became the sole focus of our company. With a full-team in place (currently at 16), we’ve started conquering the local/social space. But before we talk about where we are now, after 6 months, let’s go back a bit in time to explain the insights that lead to the creation of the service.

When I joined Yellow Pages Group (YPG) in 1999 (actually, its ancestor Bell ActiMedia), one of the first things I learned, talking to an experienced sales manager was that, the biggest competitor to Yellow Pages was actually word-of-mouth, that small merchants get most of their referrals through personal recommendations. At the time, it served as a great answer to show there was indeed “competition” in the business directory space but it wasn’t a real threat (yet!).

That thought stuck with me as we saw the arrival of new social media sites like LinkedIn. I was one of the early adopters in late 2003 (user #46,750 in fact) and I started using the site as a rolodex, adding all my contacts in there. When I quickly reached 200 direct contacts (I’m now close to 2000), I discovered that LinkedIn had become extremely useful in my role as head of online business development at YPG. I could reach out to almost anyone working in the Internet industry and it proved very convenient many times.

I realized that there was something bigger in this nascent social media space. If you could assemble a network of contacts readily available at your fingertips, you were really building this huge word-of-mouth network that you could use to ask any questions, find answers, connect with people, get recommendations and interact with brands and businesses.

In the summer of 2006, when I first met with my co-founders Sylvain Carle and Harry Wakefield (who left the company in 2009), we knew something big would be happening at the intersection of local and social. We set out to build technology to capture, aggregate, structure and make sense of local content being generated in social media, hereby creating value for local media companies and/or local advertisers. Over the years, we developed core technology expertise in local questions & answers, real-time local search and real-time local content which would become the backbone of Needium.

Early 2010, I was fascinated by reputation management software but felt these technologies were too reactive for most small businesses. I’ll oversimplify but with reputation management, you wait until someone express an opinion about your brand/business, the technology detects it and you reactively jump in to thank the person or try to solve a problem. This is not how small merchants see the world. Small merchants are proactive; they’re always promoting their business. They’re not sitting on the sidelines waiting for people to comment on them. They want to engage consumers; they distribute leaflets on the streets, they offer samples in grocery stores, they give away their business cards in networking events. Why would small merchants behave differently in social media?

Another key insights that lead to Needium was all those questions publicly being asked in social media (take a look at one of my 2008 post for an early look at that insight). You’ve all seen them: “Can anyone recommend a North East photographer for a wedding on Sat 27th August?” or “Can anyone recommend a cool/modern or cosy/lovey hotel in Berkeley, CA?”.

Thinking about local search and Yellow Pages usage, we started thinking about those explicit needs but also about life events and situations that trigger an implicit need. You’ve seen those as well. “I need to eat .. I’m hungry”, “Well Since My Laptop Got Stolen Guess I’ll Get A Macbook Or iPad .”. Taken all together, this means that, every day, millions of needs are expressed by consumers in social media. These represent a huge amount of potential leads for local businesses. Yet, very few of these needs get acknowledged or answered. What if businesses could quickly identify local leads that are relevant to them? Could they convert those into real customers? And this is where Needium steps in. We’ve created this short video to clearly explain what we do. Watch it before you continue reading this blog post.

Whats is Needium?.

Needium is a customer discovery service that monitors, identifies new local business opportunities in real-time based on expressed explicit and implicit needs found in Twitter. These opportunities are surfaced in a dashboard where Needium community managers select which consumers to engage with and we do that using the merchant’s own social media presence. Needium is invisible in the whole process.

Basically, with Needium,

  1. We create the social media presence of a merchant if they don’t have one (Twitter and occasionally Facebook and Foursquare)
  2. We identify business opportunities in social media for them
  3. We engage in conversations with potential consumers
  4. We transform those conversations into sales.
  5. We listen and reply to existing consumers.

Our retail price for the service is $150 per month, no set-up fees.

Using hundreds of keywords and expressions, our semantic formulas surface relevant tweets based on merchant categories (restaurants, hotels, bars, auto dealers, plumbers, etc.). We currently cover 88 business categories in 73 cities in North America. Altogether, we cover 197,548 Km2 of North American metropolitan areas.

We currently have 300+ advertisers using Needium and are growing at 30% per month in the last few months. We’ll reach a thousand advertisers by the end of the year. Our sales strategy uses a two-pronged approach. First, a small local sales force in Montreal has enabled us to quickly build up revenues but most of all, it has allowed us to refine the sales process iteratively.

That’s key because our core sales and distribution strategy is executed via large-scale local media sales channels. We have a white-label platform and processes and a wholesale price based on volume. Reseller either bundle the service within an existing offer allowing them to increase share of wallet by having a solid proactive social media solution or as a standalone service. Eight sales channels are presently reselling the white-label version of our service. That includes four large North American local media publishers who have started reselling the service in the last 8 weeks and we’re starting to see some explosive sales from a few of them.

We’ve pitched the service to hundreds of potential advertisers, sales channels and venture capitalists. Here are the most frequently recurring questions about our business:

Q: Right now, you’re mostly focused on Twitter. Is there enough activity in Twitter to create a robust and scalable lead generation business?

A: Yes. Twitter recently disclosed that they generate 200 million tweets a day. Out of those, in all the cities we cover, we’re indexing 10 million tweets a day (and growing as we expand into new cities).

Q: How do you know if a tweet is “local”? And are there enough “local” tweets?

A: we use implicit and explicit geo-location. Explicit is obvious enough. It’s the location shared by the Twitter user. Implicit is derived by words used in tweets like city names, neighborhoods, points of interest, merchant names and local events. And if you’re wondering about volume of local tweets, these examples are telling:

  • Los Angeles: 1 million+ tweets
  • London, UK: 1 million+ tweets a day
  • Atlanta:  800,000+ tweets per day
  • Chicago:  700,000 tweets per day
  • Washington, DC: 600,000+ tweets a day
  • Toronto: 500,000+ tweets a day
  • Boston: 400,000+ tweets per day

Q: Are there enough local needs being expressed?

A: Yes in every B2C business categories. For example, we’ve been able to extrapolate that about 10% to 15% of all local tweets are related to food, entertainment and travel needs. Right there, you find a substantial volume to sustain thousands of advertisers in every large metropolitan area in North America and the UK. Other more specialized categories like dentists for example will see a few hundred leads per day. We are also working on integrating other social networks where “needs” are expressed: Facebook, Yelp, LinkedIn, Foursquare, Localmind, etc. to increase that number even more.

Q: Do small merchants understand what Needium does? Do they require a lot of education?

A: They understand quickly because they already know what Facebook is and they’ve heard of Twitter. They’re often Facebook users through a personal account and understand that Twitter is similar. Most of them don’t have a corporate Twitter presence. We show them in real-time the local opportunities they’re missing out and they understand the need to have a proactive presence. Our direct sales team can close the sale in one meeting if the right decision-maker is in the room.

Q: Is Needium generating return on investment for the advertisers?

A: Yes. Needium helps increase consumer awareness, strengthen loyalty, increase social media follower count and drive store visits and sales. As soon as you can show a few great conversations where consumers say they’re going to come visit you or tweet that they visited following a merchant suggestion, advertisers are extremely happy. Most telling, our churn rate is in the single digit percentage, much lower than other popular online products.

Q: Can you prove that you’ve generated an actual sale?

A: Yes and no. We can anecdotally but we don’t purely sell the product on “leads”. We sell the service on a variety of metrics, number of tweets sent, conversations, number of followers being three key ones for most merchants. Advertisers see the value of the conversations we’re generating but they also see the value of having an active Twitter account and new followers joining month after month. We’ll soon be indexing Foursquare and Facebook check-ins to track actual visits following a Needium conversation but we want to get closer to a pay-for-performance model. We want to explore the pay-per-call model and the pay-per-action model. Is there a pay-per-check-in model in the future? A revenue share on transactions? Maybe.

Q: Don’t consumers think what you’re doing is spam?

A: We’ve sent over 40,000 tweets so far and only a few hundreds have generated a negative reaction. This is much lower than I expected originally. This is key for us as we don’t want to create a product that’s seen as spammy or in a negative light. We want to add value to the ecosystem and even if that number is extremely low, we’ve learned from them and know which situations trigger negative reactions.

Q: How different are you from the hundreds of social media monitoring tools out there?

A: We don’t see ourselves competitive to social media monitoring solutions. We’re focused on “consumer need” discovery, which leads to commercial conversations for our advertisers, something that’s highly monetizable. It certainly has more upside in the long term than pure social media monitoring usually priced at $10 to $50 a month. We’ve shown that the service can sell for $150 per month and a performance-based component will probably bring us higher revenues. My experience with local merchants has shown me that only a small percentage (5%?) will be sophisticated enough (or have the time) to operate social media tools themselves. By partnering with large local media publishers, we’re going after that other 95% who will not buy self-serve and will not operate tools themselves.  Finally, through the API we’re developing, we will be able to integrate Needium in any social media monitoring solutions providing instantly the local lead gen portion as a paid service.

Q: Any additional learnings?

A: Yes.

  • SMB advertisers are hungry for social media solutions tailored for them but they need managed service. For the bulk of SMBs, self-serve still doesn’t work.
  • Small merchants can outsource their social media efforts without losing credibility or their voice.
  • At the intersection of local and context (need expressed), consumers welcome conversations with businesses.
  • B2C works much better than B2B because companies and company owners are not yet expressing corporate needs in social media (although nothing prevents them!).
  • Large local media companies sales forces can easily sell Needium

When we set out to pivot Praized Media to Needium last year, we knew we were unto something big. I had created DirectoryPlus at Yellow Pages Group, an online ad product that’s very successful, and I know what a great local ad product feels like. Needium is my next DirectoryPlus. This will be a huge space. Our early success has generated a lot of good buzz. We’ve shown the product works, that advertisers will buy it, that it’s generating ROI, that sales channels can sell it and that it can generate explosive revenue growth. We’re now heading for breakeven and, with the support of our current VC firm, we might not need funding from a new VC. Still, we’ve had meetings in Canada, in Silicon Valley and on the East Coast to see if there’s an opportunity to raise a new round of funding to accelerate our growth. The best compliment we often get is “We’ve never seen this” and “you guys are onto something” (if you’re a VC, you can see our AngelList page here).

In addition, we’re always looking for new sales channels to resell our white-label service. If you’re interested, send us an e-mail at sales@needium.com. This has been an interesting ride and I’ll try  to keep you updated regularly over the next six months.

Needium Pay-Per-Call Trial: Looking for a Few Good Advertisers

I’ve been very silent on this blog in the last few weeks but it’s not because of a lack of topics to discuss. With the success we’re having with Needium since our launch in January, I am simply too swamped and busy helping the team scale the company! I have a blog post coming up soon that will talk about our first six months of operations.

As a recap, Needium (www.needium.com) is a social media customer discovery service. Our service monitors Twitter and retrieves local business opportunities based on user needs and life events. Basically, we’re  identifying and indexing public local tweets that have an implicit or explicit need expressed such as “I’m hungry”, “My car just broke down” and “Does anyone have a good Phoenix restaurant to recommend?”. We then surface that information in a Web-based dashboard where Needium community managers (yes, humans!) log-in to join conversations on behalf of the merchant (using the merchant’s own Twitter account). We converse with Twitter consumers to convince them to come visit us (us being the small merchant). You can see a 1-minute video explaining what we do here: http://needium.com/video

Needium can definitely amplify consumer awareness, strengthen consumer loyalty, increase social media follower count and drive store visits and sales, but we think Needium can also drive phone calls in some business  categories. We would like to test that hypotheses and we’re looking to trial Needium on a pay-per-call basis with a few advertisers.  If you or your advertisers already use the pay-per-call model and you’re interested in trialing Needium, I want to hear from you. E-mail me at seb AT needium.com.

Flickr Picture by plenty.r.

Yellow Pages Association Morphs into the Local Search Association

I’m a little late covering this (the news was announced on Monday) but the Yellow Pages Association just announced a rebranding as the Local Search Association.

From the release:

The Yellow Pages Association (YPA) today unveiled a new name – Local Search Association – alongside a new visual identity, reflecting the industry’s transition from print publisher to a provider of local search services to small businesses and their consumers.

The announcement is an important step in the right direction for the industry but is not surprising. Major directory publishers had started making the transition from “directory” to “local search” as early as 2002-2003 (I was part of the team that made the change at Yellow Pages Group). Most of them now behave like large local search agencies who also own media properties. So, the name fits perfectly the new strategy (by the way, anyone else thinks it’s amazing that the name was still available?)

I would have liked to be at their conference this week, to take the pulse of the attendees regarding the change. As I told Neg Norton, the Local Search Association president, when we discussed the announcement, the real litmus test will be when new local search industry stakeholders become members en masse on both sides of the spectrum. First the big players like Google, Microsoft, Facebook and maybe Twitter. And then, small local search engine marketing agencies. These guys will infuse new cultural strains and help propel the association forward. But a clear “what’s in it for them” needs to be presented and event/membership competition in the very sexy geo-space is fierce (I counted at least 12 different geo and local conferences in 2011). I think they can do it but there’s a lot of work ahead.

Twitter: the Next Five Years

Flick picture by Melanie Cook

Last weekend, I was interviewed for an article that was published on Monday in Montreal’s La Presse, one of the major Canadian daily newspapers. In the context of Twitter’s five-year anniversary, Alain McKenna asked me to gaze in my crystal ball and to play the prediction game for Twitter’s next five years. Alain published a few of my suggestions in the article but I thought the complete answer would make an interesting blog post.

So, without further ado, here are my Twitter predictions for the next five years:

The company:

  • With their $360 million in VC money, we can expect the number of employees at Twitter to continue growing quickly especially at the San Francisco headquarter. I also expect the company to open international offices especially in countries where the service is popular. Already, they’ve inaugurated a London office reflecting the high Twitter usage in the United Kingdom.
  • Twitter will continue to reinforce its technical infrastructure and we will probably see the extinction of the infamous “fail whale”.
  • Twitter’s usage will continue to grow in its own North American backyard but, in the next two years, Europe will see tremendous growth. I predict France, Italy and Spain to furiously embrace it. This will follow Facebook’s European usage pattern, with a two-year adoption lag.
  • With more and more people joining the service, Twitter will discover that its real utility is at the local level. Twitter will become the often-wished for democratic and commercial local space we’ve been expecting since the beginning of the Web. Citizens/consumers, merchants, politicians, and news sources/journalists becoming an intrinsic part of the same communication and relational system.
  • The company will definitely have its initial public offering (IPO) in the next five years and if you twist my arm, I’ll predict 2012 or 2013. Twitter’s co-founders have had entrepreneurial successes in the past and want to leave a long-lasting trace instead of doing a quick sell-out. They’ve probably already received offers for an insane amount of money.

Functionalities:

  • The major product challenges for Twitter are 1) enabling users to increase their individual reach within the service; 2) increase the quantity of conversations; 3) create mechanisms to discover new relevant accounts to follow; 4) develop robust filters to surface relevant content under two dimensions: topics/interests (for example, who are the ornithology experts on Twitter?) and local (what’s going on in my region, my city, my neighborhood?).
  • I expect Twitter to quickly adopt two winning functionalities from Facebook that are fast becoming standards in social networking: attaching and maybe threading all comments on an individual tweet and the ability to “like” a message. These functions will allow for a better social signal to discover important messages and increase the level of conversation (today, we see a lot of unidirectional message broadcasts).
  • Without neglecting the Web, I expect that mobile will the main way people will access Twitter in the future.

Business model:

  • Within five years, Twitter will have discovered its winning business model. I don’t think it will be one of the models currently in trial (like sponsored tweets). I think we will see the arrival of paid professional accounts for users who have thousands of followers. These paid accounts will provide additional exposure in the network, integrated promotional tools, extensive reporting and a guarantee of superior service. In addition, Twitter will build psychographic profiles for users and identify influencers. Consumers will be courted by big brands and local merchants based on their interests, lifestyle and influence. Twitter will sell privileged access to this information to enable better targeting. For example, movie buffs will receive invitations to see movie premieres. Cola drinkers will receive a case of that newly launched soft drink. Foodies will receive a rebate to try their new local bistro or revisit one they haven’t been to in a while. We could eventually see the arrival of new financial model systematizing word-of-mouth by rewarding consumers who talk positively OR negatively about brands or local merchants.

There you have it. I hope my crystal ball wasn’t too muddy. Here’s to many more exciting years! Happy 5th anniversary Twitter!

The Daily Deals Industry in Numbers

(picture by Kenny Herman)

Jim Moran, Cofounder at Yipit, took the stage this morning to share with us many interesting quantitative data points about the daily deals industry.

About the daily deals market:

  • It has low barriers to entry. Yipit has identified 400+ daily deal sites in North America
  • That number has been increasing rapidly because of white-label technology platform providers and the entrance of major media companies in the space.
  • The market has high barriers to scale though. You need to scale sales, geographies, salespeople, number of deals, media buying (to advertise your service), subscribers, offer deal personalization and increase conversion in order to truly scale. Jim showed a great slide showing the “virtuous cycle of daily deals”.
  • Looking at a slide that presented the types of stakeholders in the ecosystem, you could clearly see that the next big opportunity is “Merchant Agencies”, that would negotiate deals across providers.

In the top 20 markets (February 2011 data):

  • Groupon had $39M in revenues (#1 player)
  • Livingsocial: almost $12M in revenues (#2 player)

Top daily deal verticals by revenue:

  • Hair removal
  • Food/grocery
  • Massage
  • Outdoor adventures
  • Spas
  • Automotive services
  • Yoga

From a merchant economics point of view, Yipit found:

  • A breakage rate smaller or equal to 20% (this is the percentage of deals unredeemed)
  • That deals became profitable for merchants if they were able to retain 19% of coupon buyers
  • High merchant satisfaction: 93% said they would use a daily deal site for another promotion
  • Some ad spend shifting: 43% say we’re reducing other advertising spend after running daily deal.

His biggest surprise from the data they collected: the gap between Groupon and LivingSocial seems to be narrowing. You can review his complete presentation here.

Following Jim Moran’s presentation, we heard from Eric Eichmann, COO at LivingSocial. Here are the interesting tidbits from his keynote:

  • LivingSocial describe themselves as “the local commerce expert helping people discover new experiences in their neighborhood”
  • Daily offers is a pivot for LivingSocial (like Groupon). They used to be a Facebook applications developer.
  • Their pillars of success are: local, mobile, social and commerce
  • They like to target neighborhoods as opposed to cities
  • They launched “Instant deals” in their mobile app. They are real-time mobile deals.
  • LivingSocial today: 12 countries, 230 markets, 24 million members, 1200 employees

David Weinberger’s Thoughts on Local and Social

On Monday, I probably watched the best keynote I’ve ever seen at BIA/Kelsey conferences. David Weinberger, co-author of The Cluetrain Manifesto, author of Everything is Miscellaneous, and Senior Researcher at the Berkman Center for Internet & Society at Harvard University gave us his thoughts on local/social.

I will never be able to capture his whole speech in this post but here are some of the thoughts that blew my mind.

Talking about networks and markets, he obviously said the very famous “markets are conversations”, describing them as being connected, real and out of control but he also added “markets are networks”. People are shopping for things (like  a new car) and this base of shoppers is changing every minute as people drop out of that process and new people come in.

Talking about huge networks like Facebook and Twitter, he explained to us why these networks happened so quickly. He told us the web is made of interests, people talking about stuff. They have an interest and they’re meeting with people with similar interest. meeting of interest. If we engage on the Net with other people online, it’s because we share the same interest. The big question is what happen when companies arrive and want to have a conversation. Traditionally, businesses have a single interest: profit. Consumers are weary because interests are not necessarily aligned. Why would I engage on the Net with companies if we don’t share same interest?

He said he didn’t like the expression “social media” as media has traditionally stood between people but that’s not happening with social media because “we are the medium”. We are a medium that passes things along. We move it because we found it interesting and thought that you would find it interesting as well. The stuff we share is so compelling that we put our reputation on the line to pass it along.

He also talked about the impact of social media on our sense of time. It used to be, when you graduated, you lost track of people. You only saw them again when you went to your reunion. If you left a job, you lost track of your former colleagues. Our kids will have their friends/colleagues/contacts with them for the rest of their lives because why would you push someone outside of your memory, delete them, unless they’ve done something bad?

And with mobility, we get ubiquitous connectivity. We can connect with any of our contacts at any time. We’re now filling “moments” all the time, for example, when we’re waiting. We’re filling up everything, with no empty time. We’ve reached plenum, a plenum of interests, filled with what we care about.

Talking about “local”, he said it’s becoming embedded in the Net more and more but that when we get to ubiquitous access, things will change. The Internet will match our real lives. We are inventing the “blur” between online and offline (the real world).

As for things that are challenged by social in the local space, Weinberger mentioned pricing. Owners were used to set their prices but with daily deals, for example, they’re losing some of that pricing power. The notion of inside and outside the store is also blurring. We want to know everything about a business. The outside is becoming the inside. The shared common space where we engage with one another is becoming the inside of the store. A good example is the mayorship in Foursquare.

He concluded by mentioning three imperatives for local media companies (and merchants): Align, add, and get out of the way. It’s not about you. Consumers know better than you what they need, what they want.

Lior Ron: Google Hotpot is About Collecting Relevancy Signals

At the BIA/Kelsey ILM East 2011 conference this morning, we heard from Lior Ron, the Group Product Manager for Google Places (including Maps and Hotpot).

A couple of interesting information points came out:

  • Google Places contains 50M places around the world
  • They felt they were missing “people” in the local equation and that’s why they launched Google Hotpot
  • Hotpot is all about organizing the web around people and places and is a local recommendation engine.
  • Hotpot now has generated more than 3M reviews and ratings (see this BIA/Kelsey post from last week for more data points)

Lior Ron said that Hotpot is not about Google building another silo or reviews site. It’s about collecting short signals to enable better ranking/relevancy. A few conference attendees were not convinced by that statement.

Seven Drivers of Interactive Local Success

In a short presentation yesterday afternoon at the BIA/Kelsey ILM East 2011 conference, Peter Krasilovsky presented several slides about the local media industry. In them was, I think, an interesting nugget of information: The seven drivers of interactive local success within a media organization.

They are:

  1. Strategic separation of business units. This is key to develop a solid new business that’s not encumbered by traditional thinking and conservatism. In the words of the BCG Matrix, it reminds me of the need to nurture “rising stars” that will eventually kill “cash cows”.
  2. Investment.  A must. In addition, risk-taking must be rewarded, not punished.
  3. Social media
  4. Search
  5. Geotargeting
  6. Multiple users and business touches. Fragmentation brings with it the need to re-aggregate to help advertisers make sense of the media/advertising/social media landscape and create substantial value.
  7. Mobility. Creates ubiquity, permanent access to the internet.

I would add Human resources to that list. You need visionaries/thinkers that can innovate and execute quickly. That’s a huge challenge for traditional media company today.