comScore: The State of the Local Search Nation

On day 2 of the BIA/Kelsey ILM 2011 conference,  Gillian Heltai, Senior Director at comScore presented a series of interesting data points to attendees:

  • Total online searches grew 9% year-over-year to exceed 19.3 billion searches in September 2011
  • 2.8 billion of those searches were “local” (a growth of 9% from last year). Local searches growth is decelerating
  • IYP (Internet Yellow Pages) searches are down 20% year-over-year
  • 1.7 billion click-thrus to directories and regional/local content sites were generated from search in sept 2011
  • Top organic search terms by click-through rates: driving directions, white pages, yellow pages, maps, los angeles
  • 10% of US display ads are locally targeted
  • 3 of every 4 mobile subscribers own a device with GPS capability
  • Over one third own a smartphone
  • Mobile search usage grew 25% year-over-year with 26% penetration in September 2011
  • Search is the top activity of mobile browser users. Social networking is second.
  • 88 million mobile subscribers access local content on a mobile device, up 28% from a year ago.
  • Nearly 40% of mobile users access local content on their device in September 2011, compared with 75% for smartphone owners
  • 16.3 million smartphone owners scanned a QR code, 43% in a retail store, 42% from a product packaging.

Local Business Information: Search Engines Are Number One in Reach for 18-54 But Social Media Can Save Yellow Pages

The Yellow Pages Association just released new consumer survey data regarding reach, total references and trust of the Yellow Pages medium (print and online) versus other sources of local search information.

Highlights:

From a reach perspective: “65 percent said they referenced print and/or Internet Yellow Pages within the past month when looking for local business information. Search engines scored second with 58 percent, flyers/coupons were 38 percent, newspapers were 33 percent, and magazines were 14 percent. When analyzed individually, print Yellow Pages were 54 percent and Internet Yellow Pages were 33 percent.”

reach - small

On references: “consumers referenced print and Internet Yellow Pages 16.9 billion times in 2009”. That would be 4.9 billion online and 12 billion in print. Based on my experience, I suspect search engines local references are much higher than that though.

usage - small

On trust: “More than two-thirds of consumers (67 percent) said that print or Internet Yellow Pages is the source they trust most for finding local business information, compared to 33 percent for search engines”

trust and accuracy - small

Discussing with Larry Small, YPA’s Research Director, he offered these additional data points.

  • Media usage mirrored the economy, Usage increased in the later portion of 2009 and this probably bodes well for 2010.
  • I was also curious about branded searches (known merchant name or product brand) vs. non-branded searches (keywords or categories). Clearly, a big difference here between search engines and online directories. Intuitively, I’ve always thought that consumers use search engines for known merchants, to find their address, phone number or driving directions while they use an online directory for shopping and they need to see a selection of options and data from ComScore below seems to directionally confirm this.

Local Business Search Terms Branded Non-Branded

  • I also asked for data on specific age groups and also for friends/family references (word-of-mouth). When you drill down on “past month reach by age”, you find additional nuggets of information. Younger people use search engines and ask their friends/family for advice.

Burke Additional Data-small

What it means: There is a huge debate on the validity of these numbers happening on Greg Sterling’s blog. Personally, I have no doubt the Yellow Pages category, when combining print and online is still number one in reach. After all, it was the trusted source of local business information for many decades and you see it’s still number one for the 55+ and pretty much tied for number one in the 35-54 age group. I believe we’re seeing a generational usage change. Google was created only 10 years ago and it takes a long time to see significant impacts when those shifts happen (see The Boring Age for a discussion on the pace of technology shifts). I’m also impressed (not surprised though) by the power of friend/family in the search for a local recommendation. I believe the rise of social media will provide consumers tools to help with the gathering of shopping feedback/opinions and users will realize it’s easier to ask your friends/family (and you get better referrals) than with search engines. By embracing social media technology, directory publishers can regain the upper hand becoming the place where you find apps/tools to mine your friends and familiy’s opinions. Imagine a world where the friend/family & PYP/IYP numbers are combined. I’m sure it beats search engines and that’s the real opportunity for directory publishers.

Why Do People Ask Questions in Social Networks?

As a good follow-up to my Google/Aardvark: All About Local? recent blog post, Mathew Ingram from GigaOM covers a new study from MIT and Microsoft Research that explores “What Do People Ask Their Social Networks, and Why?”

Ingram describes the “what” and mentions that “according to the survey, questions ranged from the somewhat open-ended and philosophical (“Why are men so stupid?”) to the explicitly practical (“Point-and-shoot camera just died — need to replace it today for vacation. What should I buy?). The most popular question types were recommendation and opinion questions, such as “I’m building a new playlist — any ideas for good running songs?,” followed by factual knowledge and rhetorical types of questions.”

The question topics (see below) are also very illustrative and many of them have a “local” intent.

Social Network Question Topics

Participants reported that questions about religion, politics, dating, health, pornography and financial issues would probably not be asked in their social network as they are too private. Caveat from the research: “the prevalence of technology questions in our dataset is likely due to the survey population, which consisted of employees at a technology company; we would expect this proportion to be lower for other populations.”

As I was very intrigued by the “why”, I read through the whole study and found the following insights from the researchers (directly quoted from the document):

Type of Information Need: The strength of social networks seems to be in their ability to provide answers to questions of a subjective nature; our respondents especially preferred social sites over search engines for opinion and recommendation questions.

Trust: Although Q&A sites and the blogs and rating sites indexed by search engines provide subjective data such as reviews and recommendations, people tend to trust the opinions of people they know rather than the opinions of strangers

Response Time: Although search engines have near-instantaneous response times, obtaining a timely response requires entering an optimal query, which may be difficult in some situations. Responses on social networks were often received within less than an hour of posting (40% in our sample), and nearly all questions received responses within one day

Effort: Questioning in natural language, rather than figuring out optimal queries for a search engine, lowers the barrier for asking questions on social networks

Personalization: Respondents appreciated that members of their network knew a great deal about their backgrounds and preferences, and were thus able to provide answers tailored based on this context.

Secondary Benefits: In addition to achieving their primary goal of satisfying an information need, asking a question via social networking tools offered two additional types of benefits not present in search engines and Q&A sites. First, by posting a question, participants were also advertising their current interests and activities to their network, creating social awareness. Second, participants found visiting social networking sites to be fun and pleasurable.

What it means: this has tremendous impacts on all search sites (general or local). Consumers are now finding it advantageous to asks questions to their friends/contacts. The main recommendation from the research is very relevant. “By incorporating social features directly into search engines, such as the ability to actively collaborate with others while searching, search engines may be able to turn a mundane experience into one that provides both intellectual and social benefits.”. Seems like a winning combo.

Yellow Pages Group Represents 15% of All Online Revenues in Canada

The [praized subtype=”small” pid=”c4d2d76ecb2f9ad3c44c7561da14799dd0″ type=”badge” dynamic=”true”] released this week their report on 2008 Actual Online Advertising Revenue (.pdf). Some highlights:

  • Online advertising revenues in Canada have more than quadrupled over the past five years, and grew to $1.6 billion (net) in 2008, up 29% from the $1.2 billion $1.241 million reported in 2007
  • Online is now 11% of all advertising revenue
  • French language advertising revenues grew by 22% in 2008 to $317 million (net), and accounted for 20% of total Online ad revenues in Canada during 2008
  • 2009 Forecast: Online advertising revenue in Canada will grow to $1.75 billion in 2009 – an estimated 9.2% increase over 2008 actuals
  • Search advertising continues to lead in terms of share of dollars booked by Online Publishers ($602 million/38%), followed by Display ($490 million/31%) and Classifieds/Directories ($480 million/30%).

The report also explains what are the perceived industry challenges and opportunities going forward. The following have been identified:

  • Coping with the severity of the economic downturn
  • Demonstrating Display advertising’s return-on-investment (with or without a click) in response to growing Advertiser emphasis on performance-based (CPC/CPA) pricing models
  • Training offline media sales forces to effectively integrate Online into cross-media sales proposals
  • The commoditization of Online media by the growing number and increased market share of Advertising Networks.

What it means: very good growth in online advertising in Canada last year with 29%. An interesting particularity of the Canadian market is the large share of Classifieds/Directory online revenue, almost as big as Display ads. That’s definitely due in a large part to [praized subtype=”small” pid=”7ac08d444f37191c8a97699e6530751c” type=”badge” dynamic=”true”] who reported revenues of $247 million in 2008 (most of them in Classifieds/Directories I suspect). They officially represent more than 15% of all online revenues in Canada. Impressive results.

Enter BingTweets and Suddenly Bing is More Useful Than Google…

Bing  was the first of the big search engines to integrate Twitter  into results, albeit, not in the most exciting of implementations. Today, Microsoft’s fledgling search tool is doing a bit more with Twitter, launching BingTweets, a separate site that combines Bing search with Twitter search and trending topics.

via BingTweets: Bing + Twitter Search Results Side-by-Side.

What it means: as I discussed in my “I have seen the future of local media“, integration of real-time search with regular search creates an environment that provides much better search results to consumers. This is a smart move by Bing to differentiate themselves, although I would have integrated real-time results directly in Bing and I would have also integrated other sources than Twitter.

Update: the Bing team explains the project. I love the example they’re giving as it is very time sensitive: “For example, when Harry Potter and the Half Blood Prince comes out tomorrow, you may want to scan the official reviews, local theater listing, AND the latest Tweets on the movie to help you decide whether to rush to see it. With BingTweets, you can cover all that ground in one place.”

Microsoft Goes Pepsi Challenge against Google: Will it Work?

Microsoft has used attack ads to go after Apple, and now it has Google in its sights. The software giant is set to launch an $80 million to $100 million campaign for Bing, the search engine it hopes will help it grab a bigger slice of the online ad market. (…)

People with knowledge of the planned push said the ads won’t go after Google, or Yahoo for that matter, by name. Instead, they’ll focus on planting the idea that today’s search engines don’t work as well as consumers previously thought by asking them whether search (aka Google) really solves their problems. That, Microsoft is hoping, will give consumers a reason to consider switching search engines, which, of course, is one of Bing’s biggest challenges.

“If you grab the average user off the street and ask them, ‘Does search suck?’ I think they’d say no. They don’t know what else can be done,” said Shashi Seth, a former Google executive who is now chief revenue officer at Cooliris. “They think search does a pretty good job, and if you could prove otherwise with a product that’s differentiated, people will sit up and take notice.”

Indeed, data show that about 65% of people are satisfied or very satisfied with online search. But Microsoft sees an opening on its own proprietary search data: 42% of searches require refinement, and 25% of clicks are the back button.

via Microsoft Aims Search Guns at Google With Bing – Advertising Age – Digital.

What it means: Microsoft is planning a big ad push for their new search engine Bing (I’ve seen it called Kumo elsewhere) and they’re hoping they can get people to re-think the way they search the Web. As the search world reaches parity in terms of result relevancy, Microsoft thinks it can make a dent in Google’s hegemony.  This advertising effort from Microsoft reminds me of the Pepsi Challenge. As we remember, the second place cola manufacturer was quite succesful in the 80’s at convincing people that Pepsi tasted better than Coke (the dominant brand) through blind test situations. They gained market shares against Coke.  I’m curious to see how succesful Microsoft will be with this strategy but it seems to make sense.

Update: it will be certainly called Bing. You can see the future logo here.

CPM of Various Media Advertising

Excerpts from “How Much Ads Cost” – eMarketer.

(…) broadcast TV had the highest cost-per-thousand (CPM) rate of $10.25, with syndicated TV at $8.77. Magazines, cable TV, newspapers, radio and outdoor advertising round out the space. (…)

US Advertising CPM by Media 2008 eMarketer

As for spending in the online sector… it’s a little more complicated. (…)

For display advertising, Credit Suisse estimated that in 2009 the average CPM will be $2.39, down from $2.46 in 2008. (…)

As for paid search, JPMorgan projected that for every 1,000 searches, $75.33 would be generated from ads in 2009. (…)

What it means: always interesting to compare the CPM of various media. It gives you a good benchmark to calculate revenues needed to counter offline to online revenue migration. Again, no Yellow Pages CPM to compare though. I wonder if someone has made the calculation before for the directory publishing industry.

Analysis: "Online news aggregators – friend or foe?"

“Online news aggregators – friend or foe?” via Hitwise Intelligence.

Like many categories, search is one of the main sources that drive traffic to the News & Media category, referring nearly 22% of visits in March 2009. Branded searches for news properties represent a large share of the top search terms driving traffic to the category. Another major source is the front pages of portals such as Yahoo! and MSN, including the personalized versions like My Yahoo and My MSN. In comparison, social networking websites and blogs referred a far smaller share of visits to News & Media websites from links or references posted on their pages.

Mini what it means: as I blogged about a few days ago, many newspaper organizations are questioning the role of Google (and other search engines & aggregators) in the Web ecosystem. Hitwise has data that shows that aggregator (if they respect “fair use”) create traffic value in the ecosystem.  One question mark though: are aggregators building their brands to the detriment of news outlets? I don’t think anyone has answered that question yet.

Local Searches Are Now 12% of All Searches

According to this study done by the [praized subtype=”small” pid=”20178e0104701d2c9f1cfd74135355c7″ type=”badge” dynamic=”true”] and ComScore, local searches online are growing at a faster pace than regular Web searches. Year over year, local search volume grew by 58% (vs. 21% for regular search) for a total of 15.7 billion searches. This represents 12% of all searches at the top 5 search portals.

In addition, “Internet Yellow Pages and locally-focused online business directories also saw double-digit growth of 23 percent in the same period, totaling 4.6 billion searches in 2008. ” The press release adds: “75 percent of the top 100 keywords searched on Internet Yellow Pages sites were non-branded, indicating that a majority of consumers have not decided on a specific company or product brand when they begin their search. ” One last data point: “nearly half (45 percent) of Internet Yellow Pages and local online directory searchers made an online purchase in the fourth quarter of 2008.”

What it means: The discrepancy between local search and online directory search growth means two things. First, that directory companies still need to play catch-up in terms of user relevancy and branding vs. search engines. Second, that search engine optimizing your local directory content is still critical to get found in regular search.

I’m also a bit disappointed at the number interpretation in the press release. To start with, on the non-branded keyword stats, I don’t think you can infer that people are mostly searching on non-branded terms when they use an online directory. We would have to look at total search volume to properly interpret those numbers, not the top 100 keywords. Obviously, top keywords will be generic terms (more people search for the word restaurant than the name Joe’s Pizza). But I’m convinced the sum of all business name searches is certainly higher than the sum of all keyword searches. It’s basic long tail theory.

The second data point (online purchases by online directory searchers) is nice but it would have been better to compare it with local search “searchers”. I’m convinced data shows that online directory users end up purchasing at a higher percentage than search engine users but we don’t know for sure.

Google Q4 2008 Results: Some Thoughts on Mobile and SME Ad Budgets

Just read through the details of the Google Q4 2008 results conference call on Seeking Alpha. I extracted a couple of interesting comments.

On mobile:

Eric Schmidt, CEO: “In the area of Android and mobile, we’re going to open up mobile devices to developers to stimulate innovation. As an example, 800 free apps are already onto the Android marketplace and making the mobile Web much more user friendly, with billions of page impressions already available through the G1 phone.”

Jonathan Rosenberg, SVP, Product Management: “It’s also clear more people are searching from mobile phones and they’re doing that more often. Our general objective there, with mobile, is simply to make search from a mobile phone as easy and as fast that as it is from a computer. In some cases, like with the voice search feature that we launched this quarter for iPhones, we’re making it even easier. You basically just pick up your phone and talk. I mean it couldn’t be much easier than that. (…) With all of our improvements, mobile search traffic went up substantially this year and not surprisingly it peaked at the end of December.”

On SME ad spending:

Jonathan Rosenberg: “What we see is that small and medium advertisers tend to cut their ad budgets back less than the larger direct advertisers. We think what happens there, is that the larger advertisers are much more prone to doing more across the board media spend cut”

On blended search:

Jonathan Rosenberg: “We’ve also mentioned universal search on many calls this year, and for perspective over 2008, we tripled the number of queries that trigger different types of results across images, videos, news, blogs, websites, and of course, books.”

What it means: Google continues to bet on mobile as they see more usage with new smart phones. They are hopeful Android will be successful but, until the mobile OS has a larger installed base, it’s still an early adopter product and ecosystem. On SME ad budgets, Google is confirming what everyone in the directory business knows, that directional advertising is much less susceptible to budget cuts in a recession. Finally, Google is experimenting with more types of blended search to deliver a better search experience to the users. Their long-term vision is trying to “guess” your search intent to deliver you the best results possible. I’m surprised Rosenberg didn’t mention “local” in his universal search examples…