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Feb 15 2006
Verticals and Local
Here's an interesting post I came across from the Internet Stock Blog (quoting the earnings call) on how local advertising is driving revenue growth at online wedding vertical/portal and directory site TheKnot.com:

Online ad sales constituted 57% of the company�s revenue for the quarter, and just over 50% of the year�s revenues (other revenue streams: merchandise sales and print publications). In the conference call, The Knot CEO David Liu made a number of statements indicating that localized online advertising in The Knot�s 69 local sites is a key factor behind the company�s ongoing growth:

Our local advertising continues its steady growth largely due to the fact that we do deliver measurable results to give our advertisers immediate payback from their investment on The Knot. A basic local listing on The Knot site goes for about $1000; still a bargain compared to the cost of the plain Vanilla yellow pages of advertising and in listing.

The average spend by our local advertiser is approximately $1400 as many local advertisers take advantage of the extras we offer above the basic listing. These include a premier listing on a category page like photography or banner on the front first stage of their online city guides, say for example, Atlanta � An incremental cost can still be below that of the yellow pages or their local newspaper.

Last April, we�ve raised our local rates by 10%, and plan a similar increase this April. Given our strong local revenue growth through 2005, our rate increases have in no way affected our customers� appetite for advertising with us�

We launched local advertising on The Nest in the fourth quarter and are now in ten of the 69 local Knot markets. Since advertisers seeking to reach newlyweds have far greater ad budget in many categories like automotive, financial services and real estate, related advertisers are already spending a growing proportion of their budgets online.


(emphasis mine)

Fascinating stuff. It shows that a vertical that can establish a strong brand and become a destination (not all can) has the ability to generate some strong revenue because of the very high-quality leads such sites can deliver � especially highly targeted local leads in the case of TheKnot.

And everyone selling to local advertisers is selling against newspapers and Yellow Pages.
Blog: Local Media Blog
 
posted by  Greg Sterling at  18:03 | permalink | comments [0] | trackbacks [0]



Feb 15 2006
Traffic 'Smackdown': Yellowbook vs. InsiderPages
In an admittedly self-serving e-mail, InsiderPages VP Andrew Shotland pointed me to Alexa traffic data that show basically that YellowBook.com and the newer online-only site are neck and neck.

YellowBook has been running a TV campaign during the Olympics, whereas InsiderPages relies on SEO/SEM, syndication and word of mouth. If the Alexa data are to be believed (and they're not as credible as some sources), then TV is delivering very limited value to YellowBook vs. other more "grassroots" techniques being used by InsiderPages.

But this may also go to the product itself. Take, for example, a query for "contractors, Chicago":

Here are the YellowBook results. Here are the InsiderPages results.

In many ways these products are comparable, although there are no "decision support" filters, reviews or other tools to help users choose between contractors on the YellowBook site, and InsiderPages has many fewer listings. While it's true that users can click "view ad" and see the print ad, which some argue does offer decision support, YellowBook.com is now essentially a White Pages product with some additional/enhanced features. In other words, I've got a "name in mind" and I'm looking for contact details.

Take a look at "contractor, Chicago" on Yahoo! Local. One can argue the data are incomplete here. But I'm focused right now on Yahoo! Local's filtering/drill down features (left column) as being examples of "decision support." They offer me several ways as a user narrow down the universe of potential choices.

The InsiderPages results have fewer of these features, but they do offer reviews (though sparse in this particular geography and category). Assuming no fraud, they offer insight and information about the business and thus help me decide which one(s) to contact.

This is not to say that reviews are mandatory to compete, but there need to be filters, sort features or other ways for people to get from the 100 or 50 or 20 listings to the three or the one.



Blog: Local Media Blog
 
posted by  Greg Sterling at  12:32 | permalink | comments [1] | trackbacks [0]



Feb 15 2006
Sober Review of Google Desktop and Privacy
Chris Sherman has a very balanced write-up of Google's enhanced destop search and its privacy implications.

My personal view is that Google has become highly sensitized to its perceived position in the market and the privacy issues swirling around the company. I've had several conversations about this with Google folks.

Anyway, privacy is a serious issue � especially in view of the U.S. government's domestic spying and illegal wiretapping. But critics should take a thoughtful, careful view and not simply react in a knee-jerk fashion.
Blog: Local Media Blog
 
posted by  Greg Sterling at  10:59 | permalink | comments [0] | trackbacks [0]



Feb 15 2006
Kelsey Group Forecast
We put out a press release this morning highlighting some top-level numbers from our forecast released to clients late last week. Here are some of the numbers featured in the release:

  • Global print Yellow Pages revenues will increase 1.5 percent from $26.3 billion in 2005 to $28.4 billion in 2010.
  • Global local search revenues (Internet Yellow Pages, local search and wireless) will increase 30.5 percent from $3.4 billion in 2005 to $13 billion in 2010.
  • Global classified advertising revenues will decrease 0.2 percent from $79.5 billion in 2005 to $78.5 billion in 2010.
  • Performance-based phone leads or "pay-per-phone call" revenues are expected to grow to $3.7 billion (in both online and offline media) by 2010 (this is U.S. only).
All percentages above are compound annual growth rates (CAGRs).

We added classifieds to the forecast this year because it involves the same user mind-set/behavior as Yellow Pages and Search: a user has a predetermined need/interest and is looking for a provider/seller to fulfill that need.

We also expanded the definition of "Local Search" to encompass online YP, search engines and wireless (mobile local) for similar reasons.

In the past we had been using the term "Local Search" in a broad sense to capture all these but simultaneously in a more narrow sense to refer to geotargeted lookups on search engines alone. That created some confusion in the marketplace. Also, the "form factor" between the IYPs and the local products of search engines are becoming virtually identical on the front end and the Yellow Pages Assn. has adopted the term "local search" as a branding/marketing vehicle as well. Ultimately, we probably will include classifieds engines in that category. But for now we declined to include them because of potential confusion and dilution of the term.
Blog: Local Media Blog
 
posted by  Greg Sterling at  10:00 | permalink | comments [2] | trackbacks [0]



Feb 15 2006
A Few Newsbits
Search and Win: A story that's circulating today is one about the prospect of MSN and Yahoo! "incentivizing" users to switch to their search engines with rewards and prizes. MSN is further along; Yahoo! floated what might be called a "trial balloon" on the subject. Nielsen's Ken Cassar thinks the general idea is "smart promotion." Others have been critical of the idea as one that smacks of "desperation." (This is the common journalist question: "Doesn't this suggest desperation?")

I wouldn't say it's a desperate move; I would say it's an effort to get attention and motivate users to show up and try the engine. Many people argue there's effectively no difference between the top search engines' results (Infospace disagrees). And there's plenty of data that says there's effectively no search engine "loyalty" out there. I think there's a great deal more nuance here, but it's a much longer discussion.

Here's my view: Prizes might be a good marketing hook, but they aren't going to win over users permanently or cement loyalty longer term. The search experience itself has to deliver value and be as good or better than the preferred engine (read: Google in many cases). There's also the danger of what might be called "search fraud" by users just seeking to fulfill requirements to qualify for incentives/prizes. This danger will diminish or destroy the credibility of the engine with marketers over time.

AOL the Conversions King: Analytics firm WebSideStory reported (consistent with a similar report last year) that AOL had the "best conversion rate at business-to consumer e-commerce sites" of the four major portals/search engines. Here are their data:

  • AOL Search (6.17 percent)
  • MSN (6.03 percent)
  • Yahoo (4.07 percent)
  • Google (3.83 percent)

The WebSideStory explanation of this (user demographics/intent) isn't entirely satisfying. However, one might explain the difference in the fact that Google is perceived as a starting point for research, while AOL, Yahoo! and MSN to varying degrees are destinations that keep people on their sites longer. According to Nielsen, here are the relative, average amounts of time (minutes) spent on each:

  • AOL Search (2:16:49)
  • MSN (0:37:29)
  • Yahoo (1:09:19)
  • Google (0:18:40)

Google Schadenfreude: Since Google missed the sky-high expectations of Wall Street in Q4, there's a distinct quality of "schadenfreude" (pleasure at the misfortune of others) in the air. Barrons caused a further decline in GOOG when it speculated that competition would weaken Google's market position this year. There's nothing new or especially thoughtful in the article. It's simply that investors may now be nervous about future performance and are selling (GOOG is off about $130 from its 52 week high).

Also, John Battelle, who owes Google quite a bit for his current status as best-selling author and search "guru," argues now that Google had "jumped the shark" given its appearance on Time magazine's cover.

Lining the halls of Google are high-profile magazine stories dating back to 2000. (The Time cover is nothing particularly special or significant.) Google will succeed, grow or fall to earth largely based on the actual value (quality of search, tools and services) it provides to users and how the competition stacks up. The danger as I see it is that Wall Street's distorted expectations will cause the company to do things (to produce growth/revenues) that are not in the long-term best interests of the user experience and, ultimately, the company.

Nokia Wi-Fi Phone: This week Nokia announced a Wi-Fi phone that offers can "travel" between cell and Wi-Fi networks. Carriers DO NOT LIKE this development and it's a parallel one to VoIP on the fixed-line side of the house. But because they do not control the handset makers and because there's competition and potential demand for these phones, this is a development that they cannot prevent. Thus there will be more pressure on wireless carrier revenues (both on voice minutes and data use). The only real question here is: Will Wi-Fi networks proliferate to make them real alternatives to cell networks on these phones?

PC vs. TV: Reported in today's MediaPost (reg. req'd) is a piece of research that argues consumers want to be able to watch movies and TV on their PCs and vice versa:

25 percent of Internet users are interested in watching downloaded TV shows and movies on their PCs, 38 percent expressed interest in watching that same video on their TVs.

WebTV was largely a failure because of the bad user experience. The opportunity this time is to build a Web-surfing capability into IPTV, cable, etc., that combines the best of both worlds.

This leads me to another "shameless plug" for our coming Drilling Down conference and the session:

Who Will Own the Living Room?
The battle for the living room has begun with cable companies, telcos and search providers, among others, seeking to control the pipe, the programming and the advertising channel to the local audience. Will people hook up their PCs (or Macs) to their TVs? Will telcos succeed in installing IPTV and gaining share versus entrenched cable companies? Or will cable providers, arguably in the dominant position today, extend their dominance in TV to local advertising delivered through the living room?
Blog: Local Media Blog
 
posted by  Greg Sterling at  08:44 | permalink | comments [1] | trackbacks [0]



Feb 13 2006
Windows 'Expo' Replaces 'Fremont'
A little while ago I got a peek at the successor to Microsoft's classifieds marketplace "Fremont." The new site is being called "Expo" and offers a number of advancements and enhancements over the original incarnation of MSN classifieds. It was described as a "locally relevant social marketplace."

My understanding is that site won't go live for a couple of months, which is a bit of a disappointment, but it offers some tantalizing possibilities. It's classifieds + community + chat + maps + personalization. (The site also features local events.)

Windows Live Local maps, including Birds Eye photography, is integrated into Expo, which will be especially relevant in the apartments/homes category. Chat, a really valuable feature, requires both buyer and seller to have MSN Messenger (and could become a promotional tool for Messenger). Microsoft has also integrated Expo with MSN Spaces -- you can present your listings via an icon on your Spaces blog (and there's similar functionality for Messenger).

I was told that Expo listings would be integrated into Live Local and I asked whether the opposite would be true. That is being considered. The business model is contextual advertising from Kanoodle right now; but may include premium placement and/or Craigslist-style charging for selected verticals like Jobs.

Basic listings are free (now standard for online) and they include the ability to add images. The listings set-up process, which requires Passport registration, was pretty simple and fast.

The product will launch in the U.S. but ultimately will be global and will thus compete with eBay's Kijiji sites. But right now Expo has more functionality. The challenge is getting the content and building the user base. But the huge installed Messenger base should jump start that process for Microsoft.

Given all the advanced capabilities and potential content richness it's quite possible that this product could become more popular than Live Local. (There's the beginning of a services directory.) But the opportunity for Microsoft is to integrate the two products to build a kind of "uber-local marketplace" (not very "Web 2.0" I realize), where both local business listings and classifieds information would reside.

That would create more convenience and utility for local users who don't, generally speaking, want to go to one site for this, one site for that and five other sites for the other thing -- if they can get all their needs met in a single location or destination.

For the time, the market share distribution of general Web search seems to be fixed. But local is still in its early stages and there's still lots of opportunity. Apple has proven you don't have to be first to market to become the market leader. So if Microsoft can build a great and complete local product it has a chance to differentiate itself and gain consumer traction, which has to date eluded it in the general search arena.



Blog: Local Media Blog
 
posted by  Greg Sterling at  17:34 | permalink | comments [1] | trackbacks [0]



Feb 10 2006
Jobs Classifieds: Crossing a Threshold?
It appears that something of a milestone has been reached (if the data are to be believed). According to this survey written up in MediaPost (reg. req'd), the Internet has become the primary hiring vehicle for employers. The research was sponsored by the DirectEmployers Association, "a non-profit consortium of over 200 U.S. employers and operator of the JobCentral.com employment search engine."

The survey reportedly found that the Internet was responsible for "51 percent of all hires in 2005, with the largest source of hires being the employers' own corporate Web sites, while newspaper classified advertisements were the source of only 5 percent of the new hires."

Ouch: bad PR certainly for newspaper classifieds. The NAA forecast that 2006 would see $18.14 billion in print classified revenues in the US. Just like Yellow Pages, the revenue is offline, but the growth is clearly online.

Here's how the survey broke down the distribution of online hiring sources:


  • Corporate Employment Web Sites: 21 percent
  • General Job Boards: 15 percent
  • Niche Job Boards: 6 percent
  • Social Network Web Sites: 5 percent
  • Commercial Resume Databases: 4 percent

These categories are quite broad; I assume that CareeBuilder (owned by newspapers), Monster and HotJobs fall into the "general job boards" category. But it's not clear. Sites like SimplyHired and Indeed, crawl corporate job boards (in addition to other sources) as does Yahoo!'s HotJobs. So there's more complexity probably in the actual market than the survey reflects.

One must always be skeptical of sponsored research (which almost always has an agenda), but directionally at least these results are certainly accurate.

More and more print newspapers (a la the Tribune Co.) will need to start offering "free" classifieds (with upsell opportunities) in order to be competitive. If the perception in the marketplace is that newspaper classifieds no longer "work," (which we may be approaching), there will be a precipitous decline in print classified advertising.

It makes the issue of how newspapers respond to online trends, regarding classifieds in particular, quite urgent.

Classifieds seem to be on everyone's minds these days. I just moderated a panel on classifeds and search and I'll be at the NAA show later this month doing the same. And then again at the Editor & Publisher conference in May.
Blog: Local Media Blog
 
posted by  Greg Sterling at  09:17 | permalink | comments [2] | trackbacks [0]



Feb 10 2006
Media Discovers Google 'PrintWords'
The WSJ (sub. req'd) and MediaPost (reg. req'd) today both have articles about the new, public auction of ad placements in major magazines on Google.

We first blogged about it (after a tip from Battelle's blog) here on Wednesday.

From the WSJ article:

Google has been placing ads on behalf of its advertisers in three magazines and the Chicago Sun-Times newspaper in what it has characterized as tests. Last month, it said it would acquire closely held dMarc Broadcasting Inc., a Newport Beach, Calif., company that places ads on radio using an online system similar to Google's.

Google has said it aims to integrate radio-spot buying into its AdWords program. Tim Armstrong, Google's vice president of advertising sales, said that if the print tests prove successful, print-ad buying would eventually be integrated as well. AdWords allows advertisers to bid on keywords, which Google uses to target ads to Web surfers, to set the price they will pay each time a consumer clicks on their ad.

"The hope here is we'll have an integrated format for advertisers and agencies ... across multiple media," he said.

Regarding Google print ads, "we know there's demand both from advertisers, agencies and publishers," Mr. Armstrong said. The current magazine-ad auction will allow Google "to work on the product itself and continue to roll it out and look at the results over time."


Blog: Local Media Blog
 
posted by  Greg Sterling at  09:06 | permalink | comments [0] | trackbacks [2]





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