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.

Yelp's Monetization Strategy

Big fracas in the local social media space today with the publication of a long anti-[praized subtype=”small” pid=”ef0b9b94446693e82f569cf40375566a” type=”badge” dynamic=”true”] article, “Yelp and the Business of Extortion 2.0”, in the East Bay Express. Jeremy Stoppelman, Yelp’s CEO, has many issue with the article and answers on the company blog. You can read Greg Sterling’s analysis on the whole situation here.

What I found interesting in the East Bay Express article is the description of the package Yelp is selling to small merchants.  According to an e-mail sales pitch that was forwarded to the journalist, advertisers receive the following:

  1. Advertisers “can highlight a favorite review to appear at the top of the page about their business.”
  2. “They also show up first in search results for similar businesses in their region (for example “coffee” near “Alameda, CA”).”
  3. “Ads for that business appear on the page of local competitors, while competitors’ ads do not appear on their page.”
  4. “Owners can post photo slideshows, add a “personal message” about their business, and have the ability to update info on special offers and events.”
  5. They also can find out how many users visit their web site, update their page, contact Yelpers who’ve reviewed their business, and have access to an account manager who will help “maximize” their experience with Yelp.”

You can see some of that info on the Business Owner section of Yelp.com.

What it means: people often ask me how you can monetize social media in a local search context.  Yelp seems to have found a combo of items that could be attractive to merchants in such a context. Ranking a review, appearing as a “related merchant”, the ability to upload additional content, and some tracking and reporting appears like an interesting social media ad bundle.  Does this package monetize as well as the traditional “advertiser ranking” model we find in many local search sites?  I don’t think so, but it’s the delicate balance between users and advertisers’ needs that Yelp is trying to maintain.  Not easy!

Yelp's Monetization Strategy

Big fracas in the local social media space today with the publication of a long anti-[praized subtype=”small” pid=”ef0b9b94446693e82f569cf40375566a” type=”badge” dynamic=”true”] article, “Yelp and the Business of Extortion 2.0”, in the East Bay Express. Jeremy Stoppelman, Yelp’s CEO, has many issue with the article and answers on the company blog. You can read Greg Sterling’s analysis on the whole situation here.

What I found interesting in the East Bay Express article is the description of the package Yelp is selling to small merchants.  According to an e-mail sales pitch that was forwarded to the journalist, advertisers receive the following:

  1. Advertisers “can highlight a favorite review to appear at the top of the page about their business.”
  2. “They also show up first in search results for similar businesses in their region (for example “coffee” near “Alameda, CA”).”
  3. “Ads for that business appear on the page of local competitors, while competitors’ ads do not appear on their page.”
  4. “Owners can post photo slideshows, add a “personal message” about their business, and have the ability to update info on special offers and events.”
  5. They also can find out how many users visit their web site, update their page, contact Yelpers who’ve reviewed their business, and have access to an account manager who will help “maximize” their experience with Yelp.”

You can see some of that info on the Business Owner section of Yelp.com.

What it means: people often ask me how you can monetize social media in a local search context.  Yelp seems to have found a combo of items that could be attractive to merchants in such a context. Ranking a review, appearing as a “related merchant”, the ability to upload additional content, and some tracking and reporting appears like an interesting social media ad bundle.  Does this package monetize as well as the traditional “advertiser ranking” model we find in many local search sites?  I don’t think so, but it’s the delicate balance between users and advertisers’ needs that Yelp is trying to maintain.  Not easy!

How to “Reward” Your Users in a Social Media Environment: the Yelp Example

Having worked in the videogames industry in a previous life, I was intrigued by this blog post by Jeremy Liew from Lightspeed Ventures Partners. In it, he discusses how point systems can reward user behavior in social media and takes Yelp as an example.

Here’s an excerpt from his post:

Look at a typical Yelp user page

Yelp Profile Page

Note that each number (circled in red) corresponds to a user behaviour that Yelp wants. Most important of all is the number of reviews – in this case 26. But almost as important is that those reviews are of high quality – that they are Useful (45), Funny (4) or Cool (11). Readers of reviews can with one click rate a review as Useful, Funny or Cool, and this positive feedback incents users to write reviews that will earn the appropriate feedback. Another important metric for Yelp is Firsts (7) as this helps drive the coverage ratio of businesses that have at least one review. (…)

An interesting point to note is that while reviewers rate businesses with 1-5 stars, users can only rate a review as Useful, Funny or Cool. There is no option to rate a review as Useless, Lame or Boring. Thumbs up, but no thumbs down. Why the difference? I suspect its because reviewers drive Yelp . Positive feedback is more likely to drive more reviews than negative feedback. (One of the “compliments” that Yelp users can send each other is even more explicit – “Write More!”). On the other hand, giving a business a poor rating (1 star for example) won’t change their behaviour towards the site one way or the other, and it is valuable information to users. (…)

What it means: in the traditional business directory world, there are all sorts of promotions to incent the advertiser to “contribute”, i.e. be the first to advertise in a specific heading, add more content to his/her ad, etc. But not a lot of thoughts is being put into the user side of the equation. In a user-generated content world, you need to think about your user “incentive plan”. How will you motivate your user contributors? I am a strong believer in point systems as they put a numeric face on your contribution. A bit like your school report card. “Did you do well this year?” “Are you top of your class?”, etc. This motivates contribution. I suspect though that this system must create a pareto principle effect, with 20% of your users contributing 80% of your content. These are the people you want to identify and nurture.

Citysearch buys InsiderPages for an Undisclosed Price

VentureBeat has the news:

Citysearch, the division of IAC focuses on local reviews of restaurants and other services, has acquired the struggling local review start-up, Insider Pages.

The purchase (amount undisclosed) comes at a time of increasing competition in the race to deliver a compelling local search services. Citysearch’s parent, IAC, has already bolstered its local search offerings, namely with Ask City, a property that packages everything from local search to local maps, reviews, and ticket services.

However, more entrants have arrived to nip traffic away from Citysearch, an early player that has seen its traffic stagnate in recent months. There’s Yelp, Judysbook and Backfence, for starters. Earlier today, we mentioned new competitor Outside.in, another company going after the local community news and events area. (…)

Insider Pages has about 600,000 user reviews, and they’ll be integrated into the Citysearch’s offering, she said. It has 2.5 million monthly unique readers, she said, based on Comscore and internal tracking numbers.

She would not say whether the purchase price was more than $10 million invested in the company by Sequoia Capital, Softbank and Idealab. She said there were multiple bidders, but that Insider Pages preferred Citysearch because it is complementary. Insider Pages is popular among suburban parents and homeowners, she said, giving it strength in the home, garden, health and plumber review areas. Citysearch is stronger in bars, arts and entertainment. Citysearch will absorb Insider Page employees in its San Francisco office.

Rev2 says it was sold for “for an estimated sum of $13 million.”

What it means: I’m surprised it was not acquired by a directory company as it would have been a great jumpstart for any user review strategy (becoming more and more important in any local search site). From the article above, it sounds like the acquisition will be complimentary based on different content & users. I know the Citysearch demographics well (Yellow Pages Group used to be the Citysearch licensee in Canada) but I don’t know enough about InsiderPages’ users to really comment on the complementarity.

Citysearch buys InsiderPages for an Undisclosed Price

VentureBeat has the news:

Citysearch, the division of IAC focuses on local reviews of restaurants and other services, has acquired the struggling local review start-up, Insider Pages.

The purchase (amount undisclosed) comes at a time of increasing competition in the race to deliver a compelling local search services. Citysearch’s parent, IAC, has already bolstered its local search offerings, namely with Ask City, a property that packages everything from local search to local maps, reviews, and ticket services.

However, more entrants have arrived to nip traffic away from Citysearch, an early player that has seen its traffic stagnate in recent months. There’s Yelp, Judysbook and Backfence, for starters. Earlier today, we mentioned new competitor Outside.in, another company going after the local community news and events area. (…)

Insider Pages has about 600,000 user reviews, and they’ll be integrated into the Citysearch’s offering, she said. It has 2.5 million monthly unique readers, she said, based on Comscore and internal tracking numbers.

She would not say whether the purchase price was more than $10 million invested in the company by Sequoia Capital, Softbank and Idealab. She said there were multiple bidders, but that Insider Pages preferred Citysearch because it is complementary. Insider Pages is popular among suburban parents and homeowners, she said, giving it strength in the home, garden, health and plumber review areas. Citysearch is stronger in bars, arts and entertainment. Citysearch will absorb Insider Page employees in its San Francisco office.

Rev2 says it was sold for “for an estimated sum of $13 million.”

What it means: I’m surprised it was not acquired by a directory company as it would have been a great jumpstart for any user review strategy (becoming more and more important in any local search site). From the article above, it sounds like the acquisition will be complimentary based on different content & users. I know the Citysearch demographics well (Yellow Pages Group used to be the Citysearch licensee in Canada) but I don’t know enough about InsiderPages’ users to really comment on the complementarity.

What’s More Important: Social Or Local?

The blogosphere has been abuzz in the last few weeks about the shake-up in local search sites.

  1. Major lay-offs and resignations at InsiderPages (via TechCrunch, Local Onliner, )
  2. Same at BackFence (via Greg Sterling, Local Onliner)
  3. Change of model at Judy’s book, moving away from merchant reviews (via Judy’s Book’s blog)
  4. Resignations at TrueLocal (via Local Onliner)

Consensus seems to be that Yelp is the one that’s running away from the pack in that start-up category (defined IMHO as Local Destination Sites start-ups).

I will note a couple of excellent comments amongst all the buzz:

  • Greg Sterling said: I told a reporter on Thursday that winning in local “is like climbing Mt. Everest.” We’re now seeing attrition (or something like it) in local because it’s much harder to monetize local consumer destinations with direct sales than people think when they start out. That’s not to say building a great consumer destination is easy, but in many respects that’s the easier part.”
  • Uri L. commented in Techcrunch: “In terms of community social reviews – Yelp had the most successful model, which put a focus on the community interactions (pictures, “i like” features), and build around it the local biz reviews. The site design reflected the warm and cozy attitude, and was to young people (who are probably the most contributing sector to ugc). Insider Pages took a more “directory” style, cloning traditional YP with the added value of community. (…) Judy’s Book is somewhere in between, focusing originally on parents and 30+ sector. (…) However, it seems that Yelp has managed to come with the best model for Karma – “You review, the community loves you back”. In none of the other sites you could really feel “loved” as in yelp. Maybe that’s a thing to remember…”

What it means: Two things:

  1. Local/Social sites should come up with an alternative business model that does not depend on having their own sales force and instead should try to partner with existing traditional local media companies.
  2. I believe the social aspect might be more important than the local aspect when dealing with a site that combines the two.

User-Generated Content: Recap of 2006 and What to Expect in 2007

This article by Bambi Francisco in MarketWatch recaps 2006 and sets the stage for 2007 in terms of the impact of user-generated content:

“Given our obsession with users, and ourselves, I’ve highlighted what will be in demand or wanted in 2007 as the audience is increasingly relied upon as the voice, the experts, the supporting actors and/or virtual stars of tomorrow. These bottoms-up celebrities combined with traditional top-down stars will increasingly dominate the new media landscape of 2007.

Wanted: Your contribution

The concept of a wiki — a site that essentially enables egalitarian editing and collaboration of everyone from experts to novices — has been around for many years. The best-known example is Wikipedia, an encyclopedia that anyone can edit. Today, Wikipedia has 725 million page views per month, up more than 400% from last year, according to Nielsen//NetRatings. And, the beauty of Wikipedia is that it has about 6 employees. This year, the wiki model exploded to the point that now a book is being written in wiki style. Barry Libert is spearheading the first book project to be written in such a manner. (…)

Wanted: Your expertise

“Everyone is an expert [in something],” according to Richard Rosenblatt, who was the former chairman of MySpace and who sold the social network to News Corp last year for $580 million. Today, Rosenblatt is heading up Demand Media, which he calls a new media site. Demand Media is looking for professional, expert content on any topic since the core of its strategy is to start with trusted, professional content and then provide the tools to let people contribute related content or opinions. Some of Demand Media’s sites that use expert commentary include eHow, trails.com, gardenguides.com and golflink.com.

Yahoo Answers is probably the most popular of services that rely on volunteer experts to give people answers to their questions. (…) Yahoo Answers, which now has 60 million users and 160 million answers, marked its one-year anniversary in early December. Those answers helped drive Yahoo Answers traffic from practically zero in November 2005 to 14.5 million this November, according to Nielsen//NetRatings. In a survey conducted by Yahoo Answers and Harris Interactive, a third of online adults have used a Q&A site. (…)

Wanted: Your opinions and comments

About 30% of online news site Topix.net comes from user-generated or reader comments. That’s expected to jump to about 50% next year, Topix.net’s CEO Rich Skrenta tells me. Take a look across the blogosphere and you’ll note that comments make up a large part of the content.

Wanted: Your history

User-generated content can come in the form of a users’ history. As long as people can know your history, it can help form recommendations that drive sales of products, movie rentals, or news articles. In the past, roughly 5% of Amazon‘s book sales came from recommendations, as estimated by analysts. According to Netflix members select approximately 60 percent of their movies based on movie recommendations tailored to their individual tastes.

Wanted: Your reviews, ratings

It all started with ePinions back in the late ’90s. It was a site that thrived on users giving their opinions about sundry topics. Now, reviews and ratings are not only everywhere, they’re essential in influencing what we buy, where we eat, and what we read. They’ve become a great filtering process. They’re the reason sellers are trusted on eBay. They’re the reason local restaurants which are reviewed by users on Yelp.com get new clients. They’re the reason we read certain articles from across the Web, thanks to Digg.com, which relies on users to vote for articles they like by submitting it.

Wanted: Your profiles and journals

We live in an age where what we do, and who we are, is the news. That became clearer to me after Facebook decided to make any update on a users’ profile become a news feed. While the service wasn’t very popular when announced, I think the millennial generation will get used to it. Profiles of every day people make up the social network sites — the fastest-growing sites — on the Web. News Corp’s MySpace, with 115 million members creating the content with their own profiles, saw page views and unique visitors more than double in November. Microsoft’s Windows Live Spaces, which has 70 million members creating profiles, also saw its unique visitors and page views more than double last month.

Wanted: Your video creations

NBC is integrating user-submitted videos, such as favorite pets and wedding woes. They’ll be videos that are family-oriented, said Mark Moore, founder and CEO of One True Media, the technology company hosting the user-submitted videos. Mixing user-submitted video and traditional content will become a bigger deal in 2007.

What it means: this is a great summary of the major pillars of user-generated content. Still looking for a good New Year’s resolution? Make sure you open the conversation with your users. They want to tell you something!