Twitter's Future According to Loic Le Meur

Loic Le Meur takes a stab at predicting Twitter’s future and lists 30 predictions on his blog. Here are some related to local media:

  • “It will reach masses of people”. Reaching masses of people means “mass media” but with a strong local tangent.
  • “Status updates will be open across social software. All social software will have status updates”. I make the same claim in the “perfect local media company” presentation I’m doing at the Local Social Summit tomorrow.
  • “We will laugh thinking we were updating them all manually. Location will be one of the most widespread status update”. From a local point of view, expect mobile devices to ping Twitter with our permission.
  • “Live reviews of any place and product will deeply influence it though”. Ah! Couldn’t agree more. This is the biggest opportunity and threat for traditional local media.
  • “Promos by brands and retailers will have big success for last minute deals”. This will be the core monetization model of real-time conversations and search for local media. Newspapers & coupon companies are already well positioned for this kind of product. Directory publishers not so much.
  • “Talking to shops and restaurants via Twitter will become standard and will get opt in coupons as we enter a shop, based on location”. This is the natural evolution for small businesses. First they will listen, then they will engage and offer promos.
  • “Hyperlocal news sites with Twitter geotagging feature”. Obviously, Twitter will be a powerful broadcast mechanism for local news.
  • “Google will have its own Twitter and won’t acquire Twitter”. This means traditional media publishers will have to contend with two (three if you count Facebook) major worldwide competitors (or coopetitors depending how you see the world).

Le Meur is also the organizer of the LeWeb conference happening in Paris in December. I will be attending the conference as an invited blogger.

Local Advertisers Planning a Big Increase in Social Media Usage

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

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.

Close to 50% of Qype's Traffic Comes from Germany

Just stumbled upon this interview with Andrew Hunter, [praized subtype=”small” pid=”e05a4250d652484974e47fda5bd84b6b” type=”badge” dynamic=”true”]’s VP of Marketing (listed as UK country manager on Linkedin). The interview with Hunter starts at 3:35.

The VP says Qype is similar to [praized subtype=”small” pid=”fbc5d89826a49a78e7c8f39d86f90980f2″ type=”badge” dynamic=”true”] but that their main difference is that it’s multilingual. He says they have communities in 9 European countries plus Brazil. When asked what Qype has in common with Yelp, he says that both are strong believers in community (their main growth driver). They also have a city-by-city approach stating that cities like London, Edinburgh,  Manchester and university towns like Oxford and Cambridge love Qype immediately. He adds that their business model is similar (I discussed Qype’s and Yelp’s business model previously). Hunter says the number one benefit of Qype for users is the quality and volume of reviews.

He ends the interview by telling us Hamburg and Berlin are the largest communities on Qype, mentioning that the site has 5 million unique visitors from Germany out of 11 million total (according to their CEO, they had 9 million users in May). This is not surprising given the company was founded in Hamburg. The UK and France are the second biggest countries with 2 million unique visitors each.

Close to 50% of Qype's Traffic Comes from Germany

Just stumbled upon this interview with Andrew Hunter, [praized subtype=”small” pid=”e05a4250d652484974e47fda5bd84b6b” type=”badge” dynamic=”true”]’s VP of Marketing (listed as UK country manager on Linkedin). The interview with Hunter starts at 3:35.

The VP says Qype is similar to [praized subtype=”small” pid=”fbc5d89826a49a78e7c8f39d86f90980f2″ type=”badge” dynamic=”true”] but that their main difference is that it’s multilingual. He says they have communities in 9 European countries plus Brazil. When asked what Qype has in common with Yelp, he says that both are strong believers in community (their main growth driver). They also have a city-by-city approach stating that cities like London, Edinburgh,  Manchester and university towns like Oxford and Cambridge love Qype immediately. He adds that their business model is similar (I discussed Qype’s and Yelp’s business model previously). Hunter says the number one benefit of Qype for users is the quality and volume of reviews.

He ends the interview by telling us Hamburg and Berlin are the largest communities on Qype, mentioning that the site has 5 million unique visitors from Germany out of 11 million total (according to their CEO, they had 9 million users in May). This is not surprising given the company was founded in Hamburg. The UK and France are the second biggest countries with 2 million unique visitors each.

Why Social Media is Not Just About Merchant Reviews

Merchant review functionalities and sites are all the rage currently in the Yellow Pages industry. In the last 2 months, amongst others, we have seen:

  1. Truvo launch their own social site under the Truvo.com URL
  2. Eniro launch a beta social site under the Rejta.se URL
  3. AT&T Interactive announce the launch later this year of a social Yellow Pages site under a different brand than YellowPages.com
  4. Herold, the Austrian directory publisher, make an investment in Tupalo, a Yelp-like destination site.
  5. Canpages, the independent Canadian directory publisher, acquire assets from ZipLocal, a Canadian merchant review site.

Often called Social Yellow Pages sites, the biggest representatives of that category are Yelp (US, UK, Canada) and Qype (most of Western Europe). Both are independent, venture-funded companies. As of June 2009, more than 22 million people had visited Yelp in the past 30 days according to published internal numbers. Yelp users had written over 6 million local reviews. Qype had 9M+ unique users in May 2009 (+350% in 12 months) and 1M+ reviews.

Impressive usage numbers but an important challenge remains for these sites: monetization. For example, even though Yelp has been extremely successful from a user point of view, revenues are still low in proportion. Articles from 16 months ago mentioned Yelp’s revenues were “rumored to be sub $10 million/year” (I discussed Yelp’s monetization strategy here.)

On the other side, directory publishers, even though they’ve had for the longest-time advertiser-focused web sites, have been extremely good at generating revenues out of their web sites. For example, Yellow Pages Group (Canada) generated $C 247 million in online revenues in 2008. Over the same period, Pages Jaunes Groupe (France) achieved 471 million euros in online revenues. In the US, Yellowbook’s online revenues were up a spectacular 97.5% to $US 227 million in the last fiscal year.

Why is that? Yes, we could obviously underline the fact that these publishers represent trusted media brands, that they have large sales forces and that regular merchant contacts all play a big role in their financial success. But I would posit the moment in the consumer purchase decision process when online directories are used plays a bigger role in monetization potential.  Looking at the traditional decision process (see diagram below), online directories are clearly used when consumers are doing information search and evaluation of alternatives. Consumer reviews only happen at the end of the whole decision process, at post-purchase evaluation. Consumers will obviously look at past reviews as a proxy when doing information search but I don’t think it’s as attractive a real estate for advertisers.

buying_decision_process

Figure: Consumer Purchase Decision Process (source: Tutor2U)

I’m definitely not saying consumer reviews are useless from a strategic point of view. Consumers love to provide feedback and they love to read comments on merchants to make up their mind. I’m saying directory publishers should see reviews as one of the elements on which they build their social media strategy and one that happens at the end of the purchase cycle. It should be integrated within a more complete social media consumer purchase decision process strategy.

The filter of the consumer purchase decision process is very powerful to see who’s competing against you and to identify opportunities. Google, for instance, is clearly used by consumers when they do information search and comparing alternatives. This explains why the search giant from Mountain View is perceived as a serious threat by most directory publishers.

Enter Twitter and Facebook, the new juggernauts of the real-time conversation and real-time search world. Where do they fit in that purchase decision process? They’re definitely used for information search as well. If you search on Twitter for “Can anyone recommend” or “Looking for“, you’ll see that, every day on Twitter, thousands of people are asking for recommendations and advice. That’s why, by the way, we implemented a social media broadcast mechanism in our Praized-powered Local Answers module (used here by Yellow Pages Group in Canada) to send consumer requests to Twitter and Facebook. But I think what’s even more powerful with this new real-time conversation world is the fact that people are now actually expressing needs to the world. More than 100 people per day on Twitter say:

All these consumers are facing major life events (or know someone that are facing one) and are amazing advertiser leads for any publishers that can corral them. Consumers now want to express their needs/problems and have people/companies come to them with solutions. As I expressed in my “I have seen the future of local media” blog post, this is a new and important consumer behavior online. That’s why I believe every local media publisher will be introducing locally-relevant real-time conversation and real-time search tools within their Web sites in the next three years. That’s why I believe social media lead generation, customer and reputation management tools will become more prevalent in the next few years. That’s why publishers will introduce social ratings/reviews functionality to allow consumers to close the purchase loop after expressing needs and shopping for options. But be aware that Twitter and Facebook will certainly go after this market. This is probably the biggest opportunity directory publishers have seen since the arrival of the world wide web but it needs to be a complete strategy. Merchant reviews alone do not make a social strategy.

AT&T to Launch New Social Yellow Pages Site

According to this Forbes.com article, AT&T is preparing to launch a social Yellow Pages site to compete against Yelp and likes.

Later this year, AT&T plans to roll out an alternative brand for local search, geared primarily at younger users. The site will feature the same core data–listings and advertiser information–as Yellowpages.com, but differ in how it presents information and how it uses user-submitted information. While Yellowpages.com returns data based on advertisers’ profiles, similar to a directory, the new site will prioritize results based on a user’s social connections and recommendations, says Yoo.

On this new site, a search for a sushi restaurant could pull suggestions from a broad group of friends. A more targeted query, such as one for a pediatric dentist, would be handled differently. Rather than search a user’s entire social network, the site would only provide recommendations from friends and relatives who currently have kids.

What it means: As David Yoo,chief product officer for AT&T Interactive, says in the article, they’ve realized that the Yellow Pages brand appeals to older consumers (Yoo calls them “professionals in their late 30s or older”) but that they need another brand to maintain their relevancy with a younger crowd. They also need a “play” to compete against Yelp who has managed to capture a good share of mind and usage in some of AT&T’s major markets (like San Francisco). It’s not always obvious to launch a new brand but I think it’s becoming more and more evident that it’s needed.

Qype: "People + Algorithm Better than Algorithm" (EADP 2009)

Heard from Stephen Taylor, [praized subtype=”small” pid=”e05a4250d652484974e47fda5bd84b6b” type=”badge” dynamic=”true”]’s CEO, this morning in a presentation titled “Competition from new business models”. As most of you know, Qype is a social local site in Europe (we could say it’s the equivalent of Yelp there).

Here are some interesting data points about them:

  • The largest local review site in Europe (also present in Brazil) – 6 languages
  • Reviews in 140 countries (I think they allow anyone to add listings from any country)
  • 9M+ unique users in May 2009 (+350% in 12 months)
  • 1m+ reviews
  • They monetize using display advertising, Google AdWords, eCom and transaction revenues and premium business listings

As Taylor said, their business leverages the fact that anyone with a keyboard is now an author, that anyone with a browser is a publisher. With the rise of social media, presentation of facts/data is not enough to sustain an audience. It’s now about sharing, community, connecting with other people. I think he described it perfectly when he said “people + algorithm is better than algorithm”. Today, we’re in the fourth phase of the evolution of search (he calls it social search) which includes editorial, automation and topology.

As for future developments, Taylor offered the following advice: recognize where audiences are and he mentioned the long tail of the Web (smaller sites, blogs, forums, etc.). He said that’s where people are connecting. Qype is ready for those new opportunities via their open API currently in v1 (which exposes geo content). v2 will allow content to be written.

What it means: I think Qype is a very interesting company. They’ve been able to corral the voice of the European consumers. I agree with the future direction, of trying to embed yourself in smaller web sites. I was a bit disappointed by their monetization strategy. I was hoping they would have been further ahead in terms of sources of revenues.

CitySquares Offers Merchants Opt-Out for Reviews

Excerpt from the  CitySquares Blog.

So now, if you’re a small business owner you can opt-out of consumer reviews on your CitySquares business profile.

Here’s how it works:

If you are a paying customer, you can choose between having reviews, or not having reviews. Period. End of story. There is no gray area – reviews are either enabled, or disabled, for paying customers only.

If you are not a paying customer, we cannot disable reviews. You must be a customer. And all it takes is $5.99/month to become a customer, and that is all it costs to have reviews disabled on your profile. Not a penny more.

What it means: I think the time might be right to offer such a product on local search sites offering user reviews. Why? Because I think the majority of merchants now understand they need to participate in the conversation. As for those who feel reviews “threaten” them, they have an easy way out (and it’s revenue for Citysquares). Let it be known that those businesses will look suspicious to the average user if they don’t allow user reviews but it’s their choice. In addition, it’s a nice way for CitySquares to build a lead list for potential “upsell”.  Ben Saren, CitySquares’ founder, feels the need to defend the move by saying that the feature “is not some crafty bait-and-switch” but I don’t think that was necessary. I think the merchant reviews space is mature enough to allow for this exception product. I hope it proves very succesful as I think Ben has stumbled upon an interesting concept.

Trendwatching: Two Important Social/Local Trends for 2009

The most recent Trendwatching newsletter (sent to me by Eric Baillargeon) covers two trends of note:

Feedback 3.0 which they describe as being “all about companies joining the conversation, if only to get their side of the story in front of the mass audience that now scans reviews. Expect smart companies to be increasingly able (and to increasingly demand) to post their apologies and solutions, preferably directly alongside reviews from unhappy customers. Expect the same for candid rebuttals by companies who feel (and can prove) that a particular review is unfair or inaccurate, and want to share their side of the story.”

Mapmania is all about map mashups and local content. Why is that happening?  According to them, “Geography is about everything that is (literally) close to consumers, and it’s a universally familiar method of organizing, finding and tracking relevant information on objects, events and people. And now that superior geographical information is accessible on-the-go, from in-car navigation to iPhones, the sky is the limit.”

What it means: Feedback 3.0 is definitely the normal evolution.  Companies (even small ones) are now realizing that there’s a lot of activity going on around their “brand” and with the rise of social media, store owners (or their employees) are now becoming savvier.  They should embrace this opportunity to join the conversation, learn from their mistakes or correct misconceptions.  They should also corral their loyal customers and ask them to become their evangelists online.  As for Mapmania, I obviously agree that we’re getting close to the “Local Wide Web“.  I think maps are an intrinsic part of local search (no service should be without maps) but I’m not 100% convinced local search user navigation needs to always start with a map.