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.

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What, Where and Now When? Time and Local Search

Today is the second edition of the Local Social Summit conference in London. I’m keynoting in the afternoon and will talk about “What, Where and Now When? – Time and Local Search”. Description: In the last 18 months, the rise of the real-time Web has created many interesting business opportunities but is this only the tip of the iceberg? Is the real-time Web hiding a bigger, more strategic opportunity? Is the temporal Web the next big revolution after “location”? Seb will present his latest thoughts on the subject.

You will find the presentation on Slideshare.

It’s a follow-up to the first presentation I did this week: Opportunities With Real Time Local Search and Content

IYP SearchMeet: Opportunities With Real Time Local Search and Content

I just finished my presentation at the IYP SearchMeet conference and just uploaded the actual document to Slideshare. Titled “Opportunities with real-time local search and content”, I explained what is the real-time content, how it’s used today and I also explored with attendees various ideas to leverage the real-time world in a Yellow Pages environment. You can see the presentation here.


Google to Embrace "Newsfeed" Revolution

Robert Scoble reports this morning that he’s now “heard from three separate Google employees that Google will release a news feed that will compete with Facebook and Twitter”. He gives an excellent description of the products that will serve as building blocks for that feed: Google Profiles and Google’s Social Circles Connections. Scoble says it’s a serious threat to Twitter.

On a related note, ReadWriteWeb makes the case that Facebook could soon become the world’s leading news reader because of the enormous size of the social network and the ease of sharing/commenting information.

What it means: yet more proof that my prediction that we would soon consume all local content in a real-time activity stream format will come true. Traditional media companies: when Google launches this newsfeed, don’t say you were not warned in advance. Embrace the real-time Web and the newsfeed format. It’s becoming a de facto Web standard.

Getting to the Next Stage: Praized Media Hires Siemer & Associates to Find Strategic Partner

One of the first things you learn when you launch your own startup is to actively monitor opportunities in the market and move quickly to leverage them. In my case, it happened three times in the last three years.

The first strategic move happened back in the fall of 2006 when Sylvain Carle, Harry Wakefield and I founded Praized Media to help local media companies leverage the rising force of social media and online word-of-mouth. I also started blogging about what I call “local 2.0,” the intersection of local search and social media. At the time, most people believed that this convergence would not happen. Three years later, it’s one of the hottest sectors.

We made the second key move in fall 2008. Having launched our first social local tools (for WordPress, Movable Type, Facebook and our hub site) a couple of months before, we were approached by a few major media players who signaled to us they would be interested in using the technology we had built within their own online platform. This gave us the confidence to develop white-label enterprise versions of our social local media software, which has been in the market since spring 2009. Building on the popularity of our initial module, we developed many more enterprise modules described here.

The third strategic move is happening now. Last fall (what is it with fall???), we were approached by two US investment banks who aspired to represent us if we ever wanted to find a strategic partner for Praized Media. A few companies also hinted to us that they might be interested in investing in or acquiring Praized Media. Based on that enthusiasm, Sylvain and I (along with our board) discussed the pros and cons of going to the altar with a strategic partner vs. continuing alone.

The market is super-hot for technologies like ours. In the last three months, there has been a flurry of acquisitions and funding events in the “social local” space (we’ve created a document listing them if you’re interested). We could go on the road and raise new VC money to fuel our growth, but anyone that has raised those kinds of funds before knows that this is a brutal process, even when your market is hot. It takes a lot of time and energy, and for small companies, the process forces you to take your eyes off the product/company development roadmap. At the core, Sylvain and I are product/technology guys and that’s what we want to do. In the last two years, we’ve built world-class real-time social local search technologies. We’ve assembled a five-star (pun intended) social local technology development team. We’re notable thought-leaders in our space.

The future of local media will be centered on Aggregation / Discovery / Social / Search and our technology stack enables that. We believe what we’ve built (team and technology) represents the cornerstone of the next-generation local media company (traditional or pure play), and we want to focus on building that vision with a larger organization.

For all those reasons, we have decided to hire [praized subtype=”small” pid=”858569eeccb433824aca7193236f55ce” type=”badge” dynamic=”true”], an investment banking firm in Los Angeles that specializes in digital media, to represent us in our search for a strategic partner. We’re obviously supported a 100% in this decision by our board and the whole team is excited by this new move. For our current customers, collaborators and service providers, it is business as usual as this does not impact our day-to-day operations (actually, it frees up more time!). Given current market conditions, we are extremely confident we will find the right strategic partner.

If you’re interested in discussing more the opportunity, you can contact Siemer & Associates at (310) 496-4510 or info@siemer.com.

Marissa Mayer On Recent Google Innovations and Newspapers

In the most-awaited session of the afternoon of Day 1 at LeWeb, Michael Arrington (from TechCrunch) sat down with Marissa Mayer, Vice President, Search Products and User Experience at Google to discuss a series of hot topics like recent Google innovations, mobile and the newspaper industry.

Marissa Mayer Google Michael Arrington Techcrunch LeWeb Paris December 2009 - 1

On recent innovations:

  • Mayer says Google is focused on future of search and they expect different modality of search, not just through keywords. That’s why they launched Google Goggles this week which is basically image recognition (you take a picture and Google tells you what it is). See this example. They also expanded voice search to Japanese and added the “What’s nearby” mobile functionality. Mayer thinks that people will eventually talk to their phone or take a picture to make a search. They also added real-time results (from Twitter, blogs, Facebook, MySpace, etc.) to regular search results, which drastically increases the relevancy of Google search results.
  • On Google Chrome, she mentioned the release of Chrome Extensions which allows anyone to add functionalities via plugins in the Chrome browser (like Firefox). She said there are “tens of millions of Chrome users”.
  • On Google Wave, Arrington stated “there’s something there” but wondered if we needed more “training”. I think most people are unsure of the value of Wave today and that’s why the Techcrunch founder asked the question.

On mobile searches:

  • Mayer says they’ve grown tremendously on smart phones. Asked by Arrington if their total share of mobile searches over total searches was in the 1 to 5% range, she answered “slightly higher than that”.

Marissa Mayer Google Michael Arrington Techcrunch LeWeb Paris December 2009 - 2

On newspapers:

  • Arrington started by saying we all understand the dire situation of print media and mentioned Eric Schmidt recent vision piece in the Wall Street Journal. He then asked Mayer: “What’s your vision?”. The VP from Google answered with a question: “how do you get users more engaged with news online?” She continued by stating that if we could build a news site from scratch today, it would probably look very different than what we have today. She then mentioned The Living Stories experiment they’re doing with the New York Times and the Washington Post. “What if the story was alive? Not just the print version posted online.” She added that the Web “puts pressure on the atomic unit of consumption. The article is the atomic unit.” She then suggested we could aggregate all news story on the same topic on one page, like Wikipedia, to help with discovery in Google.
  • She closed that topic by suggesting “personalized stream of news”, probably on your mobile phone, would be interesting. The stream would be filtered according to your social circle, location, the news brands you like, the writers you like, and the important news you should know about (she called them “veggies”).
  • Asked if newspapers will move fast enough, she thought so and mentioned the New York Times and Washington Post are very progressive partners and very interested on how they can reinvent themselves.
  • On Murdoch, Mayer mentioned the partnership with MySpace. Asked if she thought News Corp would pull their content from Google, she answered “I hope not” as it would impact comprehensiveness of their results set. She added “we have to respect the content owners. We would respect his will.”
  • Finally, Arrington asked if Google would consider paying for content, Marissa Mayer proposed that they already have programs for content monetization through Google Adsense and their display ads network.

See more on Techcrunch.

My Lady Gaga Twitter Experience

I attended the kick-off of Lady Gaga’s World Tour on Friday night at Centre Bell in Montreal (for those who don’t know her, she’s a rising star in the pop world, you can read more on Wikipedia). The evening allowed me to generate some interesting insights on real-time media, real-time search and mobile phones.

  1. At the end of the first act, a group called Semi Precious Weapons, Lady Gaga tweeted from backstage “You had 96 hrs to learn the lyrics. I can hear u screaming.” (the 96 hours was a reference to the release of her new album 4 days before). It wasn’t much but isn’t it cool when the artist you’re going to see is actually sending Twitter messages minutes before stepping on stage? It definitely increases engagement with the fans and personalizes the relationship. Interestingly enough, Semi Precious Weapons had also tweeted before going on stage and they also shared some pictures on Twitter after the show.
  2. After the first act, we were supposed to listen to Kid Cudi but the guy didn’t show up. After waiting patiently for one hour without any information, the crowd consisting mostly of teenagers started getting restless (some people even booing!). I picked up my phone and did a search on Twitter for Lady Gaga, see if anything had popped up in the “back channel”. I saw that Perez Hilton, the well-known celebrity blogger, was in Montreal that evening and had just tweetedJust for tonight… GaGa is going on at 10 pm. Tell everyone near u!”. That information wasn’t shared with the audience even though it was known. Real-time search won that night.
  3. Now, being a good guy, I shared the information with the people around me. The teenager in front of me had a Blackberry (a Pearl, I think), which surprised me because I didn’t think RIM had been successful in promoting their devices to teenagers. I still associate Blackberries with “work”. The other thing that surprised me was that the teenager and his friend were vaguely aware of Twitter but were clearly not users of the service. These teenagers were clearly in a Facebook world. An anedocte, but still interesting.