The Praized Blog

I just finished giving my presentation at the European Association of Directory Publishers (EADP) conference in Barcelona, Spain. Topic was “Blended Search: Local Media Content Discovery”. It explores blended/universal search as it currently appears in a local context in search engines and local search sites. I propose in the presentation that the evolution of blended local search and content discovery will be through real-time feeds.

You can see it on Slideshare. If you’d like a copy, please e-mail me.

Heard from Stephen Taylor, Qype’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.

Microsoft’s new search engine Bing excels at finding a good restaurant. Unlike Google, which generally returns links to mere web sites, Bing crawls listings at review services like Yelp.com and CitySearch. It then summarizes the results and displays a scorecard for each, rating things like service, drinks, food, wait time, lunch offerings, and so on, all laid out in a neat comparative table.

via Microsoft’s Bing Hides Its Best Features | Epicenter | Wired.com.

What it means: we still don’t have a lot of information about Bing, the new search engine from Microsoft that was unveiled today to the press (and will be available to the general public on June 3rd) but I found that this was an interesting nugget of info. You can see some screenshots in the Wired.com article. Expect this feature to be copied by Google and become a key element inside Yellow Pages websites.

(…) discussed what’s emerging as one of Schneider’s top priorities to help jump start the company: more local content and more local ads.

Rather than confine news and other local content to a separate product, Yahoo wanted to extend the “lens of local” across all its programming. That includes everything from being able to show a user news about their hometown on the Yahoo homepage to being able to show them an ad with an offer for their local Costco in Yahoo Mail.

via Yahoo’s Schneider Sees Light Around Local – Digits – WSJ.

What it means: in an interview with the Wall Street Journal, Hilary Schneider, Yahoo’s executive vice president for North America, thinks that the portal will embrace “local” more in the future. Expect Yahoo! to try to push local ads to newspapers and directory publishers’ sales forces.

Over on the Praized product blog, learn about Praized Media’s first “enterprise” deployment with Canada’ s Yellow Pages Group. Version française ici.

Fascinating morning at this first day of the EADP conference in Barcelona. We heard from a variety of top executives from European directory publishers but two of them stood out: Donat Rétif, CEO of Truvo (the multi-country publisher), and Alon Raz, VP head of customer division, at Golden Pages in Israël.

Rétif started the morning with sobering thoughts about the industry. He talked about the fact that directory publishers are facing both cyclical and structural challenges. In terms of structural challenges, he mentioned:

1. Online will not offset Print decline (usage, advertisers and revenues). He added that “the print product will not prosper in its current form” and “online directories will not be enough” to offset loss of usage and revenues in print.
2. ROI is becoming increasingly important
3. Large and small accounts behave differently (larger accounts are impacted much more)
4. Significant variation in user needs, usage and revenue across categories
5. The importance of search continues to grow

For cyclical challenges, he discussed about the fact that the recession means lower ad spending by SMEs, that print is more heavily impacted than online, and that everyone in the industry (including search engines) are feeling the pain.

Based on those thoughts, Rétif said the focus at Truvo is currently oriented around:

1. User focus to grow user engagement and usage
2. A rich network of traffic (first and third party)
3. It’s about leads, clicks and contacts provided to advertisers (the end of the paid inclusion model basically)
4. Simplicity in an increasingly complex world will be a differentiator

But this means having to radically transform organizations. In specific company departments, it means:

• Sales needs to go from “product focused and infrequent customer contact” to “cross-media and related service adviser with account management”
• Fulfillment needs to go from “shallow and with limited customer contact” to “deep expertise, frequent customer content with upselling”
• Online needs to go from “an add-on to a print business – peripheral to the business” to “drives the organization, people, technology, process, etc.”
• People (HR) needs to go from “majority of staff print focused and difficulties in recruiting” to “all online aware and skilled. Talent management focused”
• IT needs to go from “closed and proprietary approach built on print systems” to “open (ex: APIs) and flexible approach enabling speed designed for new world”
• Finance needs to go from “terms & processes designed for printed product” to “flexible payment terms with supporting systems and processes”

Rétif’s concluded by saying the directory publishing industry has strong assets (database, high customer retention, large experienced sales force, well-known brands, a collection of highly used directory products) but rapid and significant change is needed, moving from advertiser/product focus to customer focus, deepening the content and distributing it in a variety of ways, adapting sales and fulfillment capabilities and deploying agile technology and processes to support change.

Later in the morning, Elon Raz from Golden Pages, came on stage to tell us about their experience and it was eerily similar to what the Truvo CEO told us. Raz started by saying he thought Golden Pages had executed perfectly  on their online strategy but even with that execution, there was a problem, and that problem was the future. In terms of revenues, print is going down quickly, around 15-20% per year. Online average revenue per advertiser (ARPA) is far lower than print ARPA, large customers are not willing anymore to pay what they have paid in the past (large customers ARPA is down 36% in 2 years), and in many cases, directories are perceived as inferior to other media channels (ex: Google). He added that “the online business cannot compensate the loss of the print” .

They’re now deploying what they call a Second Step strategy involving these two elements:

1. Value: create it, measure & manage it, communicate it
2. New game: establish a new category of revenues, prepare it and attack

To change the rules of the game, they need to enter new territories while leveraging their assets. They consider their assets to be their sales force (1000 meetings/day), their customers (40K), their database (260K listings) and their brand. Golden Pages is good at “selling advertising”, “talking to plumbers” and “managing a sales force”. To some surprise, they clearly put a stake in the ground and declared their biggest competitive threat was Google. Most publishers say the relationship with Google is coopetitive but I think what Raz said openly what is said behind closed doors at most directory publishers, that the competitive aspects of Google are starting to outweigh the cooperative side.

So, where are they going? They’re going to enter what they call “the advertising area”, by selling customers an entire advertising solution (SEO/SEM, YP, radio, newspaper, direct mail, etc.).

Why are they doing it?

• The advertising market for SMEs is unaddressed. Only large firms work with ad agencies.
• Google is not active in that field in Israel (focused solely on AdWords).
• It’s a huge market, approx. 3 times Golden Pages sales volume.
• It’s natural, they possess the relevant assets.
• Gaining a leading position may strengthen their relationship with customers

They intend to become the largest advertising agency in Israel. The sense of urgency is there. As Raz said “shifting to online is insufficient! The Yellow Pages business alone cannot sustain the shift from print to other means. We have to be where Google isn’t. We have to bind the customer with services. Unless we change, on the long run, we are doomed to disappear. We could become irrelevant on an horizon of 5 to 7 years”

What it means: Wow. First time I hear directory publisher executives openly say that online directories revenues will not be sufficient to cover the loss of print revenues and that the future is possibly at risk. I’m a firm believer though that online revenues at directory publishers can cover the loss of print revenues but they need to be much more aggressive and much more innovative with their online initiatives, to build up usage on their own network of sites. They also obviously need to continue aggregating traffic from third party and re-sell it ad-network-like.  Elon Raz says publishers should go “where Google isn’t”. I agree but as I said in this post, publishers should go where Google is thinking of going (and where the online market is growing) and in my mind, that’s the real-time world and social media. As Rétif said, “Get prepared now to take advantage of the economic recovery and recognize we will be operating in a changed world”.

According to Robert Scoble who was liveblogging Alex Payne’s presentation at the 140 Twitter Conference, it looks like Twitter will be adding location-based information into each short-form messages that comes out of the site.

Here’s what Robert Scoble wrote:

“He told me they are going to add features that look like friendfeed’s “likes” and “comments.” But he said they would be different, though. Also, during his talk at #140TC he told the audience they would make other changes to support search, including adding location based info to each Tweet.”

via Twitter’s Alex Payne told me that Twitter will be… – Robert Scoble – FriendFeed.

What it means: the introduction of location information into every Twitter message is a definite building block for a very powerful Twitter local search engine that will mine not only user and merchant activities but also news.

Update: now Scoble is liveblogging the presentation from Anamitra Banerji, one of the product managers at Twitter.   “There’s lots of interesting things they could do, he says, around how they filter things that come in.  Categories, types of businesses. Ahh, they ARE thinking about how to get onto Google’s table. Do a search for “Palo Alto Sushi” on Google. Now imagine how a list like that could be used by Twitter. ” I think it’s sufficient proof that Twitter is thinking that local will be key to their future success.

At the YPA Conference a few weeks ago, I had the opportunity to sit down with Bill Dinan, who was recently named CEO of Telmetrics, the Toronto-based call measurement company.  Bill has been with the company for 11 years (as a real jack-of-all-trades, doing technology, product management, operations, finance and sales) and our sit-down session gave me the chance to explore what Telmetrics was up to. As most of my readers know, I’m a big fan of call tracking and pay-per-call.

Telmetrics is known for their call tracking technology providing local numbers anywhere in North America (a lot of competitors only provide 1-800 numbers and Canadian local tracking numbers are usually hard to come by). They provide call data which can be transformed into a pay-per-call products by publishers. They also recently launched unique URLs to enable click tracking. Their customer base includes Yellow Pages publishers, local search companies, and national advertisers who are interested in tracking their results across a multitude of media vehicles.

As a recently-named CEO, I couldn’t help but asked where Dinan wanted to take the company. He told me he wants to help publishers transition from print to online, go to a model where the important thing is total calls generated notwithstanding the media form. He also wants to expand across new media like magazines and direct mails (even if those that are sold by a Yellow Pages sales force).

When I asked him why Telmetrics is important and where they fit in the local search ecosystem, he told me he saw his role as “saving revenues by proving value”. According to Dinan, “Call tracking is becoming a cost of entry like maps.” But it sure sounds like this is now a core business that every local media should own, no? The CEO answered that Telmetrics is structured to scale a lot of numbers, very quickly. He suggested they are the biggest call-tracking company out there.

On a related note, Telmetrics just released some data that shows that shows “that many Yellow Pages users visit a business’s Web site after reviewing their print ad.” After tracking 1,200 print Yellow Pages ads from November 2008 through April 2009, they found that, on average, URL visits represented 44 percent of leads, while call traffic generated 56 percent of leads. “Tracking unique URL activity in addition to call measurement shows a 78 percent increase in the overall leads driven by print Yellow Pages.” As Telmetrics says, we might be underestimating the power of the Print media if we don’t calculate the online leads driven by it as well.

What it means: for the longest time, print advertising was sold on trust, i.e. “trust me, it works”. Now, print media needs to prove it works by providing numbers. That’s definitely an impact of the “Google Revolution” which created the impetus to prove ROI and value. Call-tracking is a must for every local media. I also like the fact that Telmetrics aggregates information on millions of calls (and now clicks) and is able to look (in aggregate) at user behavior, call durations, what consumers are asking, etc. This could become the most profitable portion of the Telmetrics business as publishers start providing marketing advice and feedback to merchants.

(…) HP (…) recently ran a campaign with more than 20,000 ad permutations. To do this, said Catherine Paschkewitz, director of demand generation, HP Direct, “you need to take the time to think of your testing framework and the different things you want to test. It’s having an up-front process as you’re launching and refreshing campaigns.” (…)

Another challenge for brands is that consumers now expect instant gratification when it comes to customer service, which is why marketers like Apple, Bank of America and Overstock.com now provide live customer service on their sites. Kevin Kohn, evp of marketing at LivePerson, which worked with BoA and Overstock, said this is nearly a requirement in a real-time world. (..)

Consumers also expect marketers to respond quickly no matter the issue. Take the now infamous Domino’s saga. In April, Consumerist pointed to a video of two employees doing gross things to the food. Within a day, Twitter was alive with demands that Domino’s address the matter. (…)

For corporations, this requires new strategies. It means, for instance, bypassing the normal layers of sign-off to get information out to quell customer revolts, Jacobs said. (…)

via Real Time: The Web’s New Prime Time.

What it means: as I wrote in my “I have seen the future of local media” blog post, we now clearly understand the format users are expecting when looking at real-time content/feeds but we’re just starting to see what impacts it will have on businesses. The fact that Facebook and Twitter have both struggled at monetizing their feeds is an example of how early we are in terms of feed business models. I will address this in details in future blog post.

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.