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Mar 7 2006
ShopLocal Redesign and the 'Offline' Future of Online Shopping
I have seen the future of online shopping and it's ShopLocal. OK, so maybe that statement is somewhat overblown, but it's essentially true. Newspaper-owned ShopLocal just relaunched with a new and improved design and interface. The site offers both online and local deals on a range of products. Consumers can browse newspaper inserts, content from merchant feeds and compare online and local deals.

I can see how much it would cost to buy that laptop online and, with a click, compare those prices to local retailers (with an emphasis on big boxes right now). However the site does increasingly offer true local business information. And that's an area ShopLocal is working to build out.

Froogle, CNet, Interchange Corp.'s Local.com and AOL's Pinpoint Shopping, which both distribute ShopLocal content, and ShopLocal's newspaper affiliates (e.g., Knight Ridder's Mercury News) offer local/offline shopping information. So do Cairo.com and Yokel.com. But the major shopping engines and portal sites are going to need to introduce this "local shopping" content to be competitive over the long term. StepUp.com and Channel Intelligence are two companies working to provide that offline data about merchants and inventory information.

In its redesign, ShopLocal has done a good job organizing and presenting a huge amount of content and visual information in a clear and generally intuitive way. It cannot be disputed that consumers want this local shopping content. According to research conducted in 2005 by Yahoo!, in certain "commodity" categories, consumers may convert or transact online in as many as 50 percent of the cases (depends on the specific category). However, in "high consideration" categories that number drops to 30 percent or below.

The Kelsey Group's research indicates that with purchases over $500, where the Internet is the starting point, over 90 percent of the transactions finish offline. And, my favorite statistic these days: e-commerce represents only 2.5 percent of U.S. retail � despite the growing influence of the Internet over consumer shopping behavior. Clearly the majority of Internet-influenced transactions are happening and will continue to happen offline.

An indication of consumer demand for local shopping information is ShopLocal's rising U.S. traffic (per comScore, August 2005):
  1. Shopping.com sites (eBay)
  2. Shopzilla/BizRate sites (E.W. Scripps)
  3. Yahoo! Shopping
  4. NexTag sites
  5. inStore (AOL)
  6. PriceGrabber
  7. ShopLocal (Gannett, Knight Ridder and Tribune)
  8. Froogle (Google)
  9. CNET Reviews
  10. Monster Marketplace.com
These data are now relatively old, so I would expect ShopLocal's ranking to be rising further.

At the upcoming Drilling Down event, we'll be exploring the relationship between the Internet and offline transactions in the panel, "The New �Purchase Funnel�: Online Shopping, Offline Conversions," featuring:

  • Kendall Fargo, CEO, StepUp.com
  • Brian Hand, CEO, ShopLocal.com
  • Catherine Kelly, Chief Technology Officer, HarvestINFO
  • John Kim, Sr. Director, Advertiser Product Marketing, Yahoo!
  • Search Marketing
  • John Melideo, CEO, Jambo
  • Rob Wight, CEO, Channel Intelligence
Blog: Local Media Blog
 
posted by  Greg Sterling at  04:30 | permalink | comments [0] | trackbacks [0]



Mar 6 2006
2006: The Year of M&A?
Just the latest in what appears to be increasing M&A activity, NBC Universal announced that it is buying iVillage (soon to be Women.com) for $600 million. That marks three deals in four days: Fox Interactive Media on Friday, AT&T on Sunday and today NBC.

What it reflects, I believe, is that the Internet's credibility and centrality to the future of marketing and distribution have been firmly established and the larger traditional media players are starting to wake up to that and are getting scared about being shut out or having to rely exclusively on third-party relationships (e.g., Google, Yahoo!, Apple).

Fox and NBC want to control their fates (as do other major media companies) and position themselves as much stronger competitors going forward. They're trying to set that up by making acquisitions. What this means to me is that we're going to see quite a few more acquisitions this year.

By the end of the year, the online world could look quite different from how it does today.

___________

Update: Hearst buys UK consumer health destination NetDoctor. Expect it to launch a US site in the not-too-distant future.
Blog: Local Media Blog
 
posted by  Greg Sterling at  08:43 | permalink | comments [0] | trackbacks [3]



Mar 5 2006
AT&T to Buy BellSouth
According to a story in today's New York Times AT&T (formerly SBC) is near a deal to acquire BellSouth:

AT&T is expected to pay about $65 billion for BellSouth, the country's third largest phone company, which operates in a nine-state region in the Southeast. The price represents a 25 percent to 30 percent premium for BellSouth shareholders.

The Times is reporting that a deal may be announced as early as Monday. The combination would create (recreate) a communications giant with combined estimated Yellow Pages revenues of roughly $5.6 billion and approximately 3,800 sales representatives. Both AT&T and BellSouth have DSL partnerships with Yahoo! (both also have IPTV initiatives). AT&T has a market cap of $91 billion, while BellSouth is worth approximately $56 billion today.

There were numerous rumors of earlier, failed discussions between the two companies. And there has been considerable speculation in the recent past that the two companies would combine and spin off their directory divisions at some point in the future. It's not clear to me whether this deal, if it were to happen, would make that more or less likely. (My colleague Charles Laughlin would have a more nuanced perspective on that issue. However, telco parents have sold directory assets to pay down debt in many instances in the past.)

The Wall Street Journal (sub. req'd), says:

AT&T is targeting at least $2 billion in cost savings in BellSouth deal, said a person familiar with the matter Sunday ... The total equity value of the deal is at least $65 billion, plus the assumption of an additional $17 billion of BellSouth debt.

The two companies have a parternship in the newly re-energized YellowPages.com (and Cingular, to become AT&T wireless). And I could imagine a combined company becoming more active and making some intreresting online acquisitions to better position itself on the Internet. In fact I could imagine a fairly major acquisition in the search space.

We'll go into all aspects of the transaction, including the competitive implications, if it's confirmed, later this week.

________

More from Reuters, MarketWatch, USAToday and many others. Here's another N.Y. Times piece (reg. req'd) that has a great deal more detail and some additional features.

Thus far in my "career" as a blogger I have resisted the urge to use the term "grok." But now I break that solemn vow with: Om "groks" the deal.
Blog: Global Yellow Pages Blog , Blog: Local Media Blog
 
posted by  Greg Sterling at  12:36 | permalink | comments [1] | trackbacks [26]



Mar 3 2006
Fox/News Corp. Online Buying Spree Continues
From Techcrunch ... FIM CEO Ross Levinsohn announces he's bought one of the companies on the list (scroll) and may buy more. More M&A to come ...

The company was NewRoo (a personalized news aggregation site). SiliconBeat has more.
Blog: Local Media Blog
 
posted by  Greg Sterling at  19:42 | permalink | comments [0] | trackbacks [1]



Mar 3 2006
Legal Category: Cause for Concern?
As I was doing some research on attorney spending online I stumbled across this blog on legal advertising, which basically argues with some anecdotal evidence that the print directory is delivering less value to lawyer-advertisers today than it has in the past:

I get calls every week from lawyers saying they�re not getting calls anymore from yellow page advertising. They don�t want to continue wasting their money, but they�re afraid to stop advertising and lose their spot. They want to know what�s going on and what to do.

I have no idea whether this blog is truly reflective of the feelings of lawyers generally or has any influence in the legal community. But the sentiments should be noted and are a cause for concern because lawyers spend more than $1 billion annually on print Yellow Pages and legal is, in fact, the top revenue category (lawyers-attorneys is the sixth most popular consumer category).
Blog: Global Yellow Pages Blog
 
posted by  Greg Sterling at  19:12 | permalink | comments [0] | trackbacks [1]



Mar 3 2006
Friday Festival of News
And away we go ...

In the most recent installment of their ongoing small business research, Wells Fargo and Gallup found (no surprises here) that small businesses preferred free word-of-mouth referrals and rated them more effective than paid advertising. (This is effectively what many of the "social networking" sites seek to offer.) Simultaneously, however, the survey also found that 57% of respondents expected to be advertising online over the next two years (up from 49% now). The survey found that of the 55% of SMEs that advertised in 2005, 67% of that group did so in a newspaper or local magazine. One of the problems here is that the release doesn't define "small business." I suspect that the definition extends to well beyond 99 employees. TKG research does not reflect that 49% of SMEs are spending money online. Instead it is closer to 15%, but we define "small business" as fewer than 100 employees.

According to this piece in MediaPost (reg. req'd) research firm Outsell found that online shoppers turn primarily to search engines and portals as a starting point in their research. Here's the data:

  • 58% Google, Yahoo!, MSN or AOL
  • 44% "online shopping sites"
  • 29% magazines
  • 23% word of mouth
  • 22% print newspapers
  • 14% TV (this is mysterious)
  • 8% online newspapers (generally bad user experience here)
  • 4% radio (again mysterious)
Directories were strangely absent. And without seeing the report or primary data it's hard to be clear on the significance of these findings except for the powerful influence of the major search/portal brands on shopping behavior. What people need to start getting at more clearly now is the relationship of these sources to one another in the entire "purchase cycle."

MTV parent Viacom plans to enter the "social networking" world in order to compete with News Corp.'s MySpace (per this Reuters article). The article quotes Viacom executives implying they'll make an acquisition this year. While social networking has been a stand-alone segment it's ultimately just a layer in a broader application. Perhaps there's hope for a Friendster acquisition yet.

Per John Battelle's blog, the Washington Post has teamed with Yahoo! (the N.Y. Times did the same thing with LookSmart's Furl) to offer del.icio.us's tagging and community features to users as a way to save, organize and share content. Here's the release. Definitely a nice feature to add, but it's not quite as broad as the TimesSelect's tool, which allows articles from across the Web (not just the site) to be saved.

Om Malik posts about how the mobile industry doesn't understand consumers and what they want from phones, citing research data.

More marketers are getting a clue and trying to launch integrated campaigns that use traditional media for branding and send people online for more information or to further the branding experience. Examples include a new TV campaign by Cars.com (reported in MediaPost) and new MasterCard and American Express campaigns to debut during the Oscars.

Also per Battelle ... he points to a CNET story about Google's analyst day. Of interest to me is the statement: "Google Local is now the No. 3 site for classifieds." I wasn't there so I don't know the conext for that statement. I am unaware, however, of many people doing classified lookups (Jobs, Cars, Real Estate, Private Party merchandise) on Google Local. One could argue that Google Local should expand into classified listings and arguably has some listings that might be considered "classifieds" in a broad definition of the term. But I'm quite confused by the statement. Here is the October 2005 comScore traffic data on top classifieds sites:
  1. Craigslist.org
  2. Trader Publishing Company
  3. Cars.com
  4. Apartments.com
  5. Abracat Property
Finally, here's a Reuters story on ad execs' frustrations with growing media fragmentation and the complexity of now reaching audiences. That's the essential theme of this year's Drilling Down on Local event: Consumers have more devices, choices and control than ever, how do marketers and businesses respond?

Whew! Have a good weekend.
Blog: Local Media Blog
 
posted by  Greg Sterling at  15:10 | permalink | comments [1] | trackbacks [1]



Mar 3 2006
Ingenio's Ether
A couple of sites are reporting on the beta launch of Ingenio's Ether. It's essentially a billing and payments infrastructure with scheduling and phone number provisioning. It allows anyone who sells advice/expertise to do so remotely over the phone using the system.

Ether takes the "negotiation" out of the process for sellers, which is a subtle but key element of the system. A seller sets a price and the buyer can accept or decline to pursue. The system uses 888 numbers (with unique extensions) to protect the seller's privacy. Ingenio sees Ether benefiting segments such as legal and financial professionals, therapists/coaches, accountants, computer support, authors/subject matter experts, etc.

SiliconBeat and other sites argue that the functionality isn't new. But I think the company has put together a nice suite of tools and services that essentially "e-commerce" enable certain kinds of service businesses. Ingenio isn't doing any marketing on behalf of the individual would-be users/sellers. It's up to the individuals to do that. The company instead envisions this as a module on a blog or Web site that helps manage a consulting relationship between a buyer and seller. Here's how it works.

There's some complexity in the process of connecting the calls � in circumstances when the expert is unavailable or doesn't want to accept the call � that will need to be tested and probably refined. Ingenio gets a percentage cut of the total value of the transaction. But, presumably, that's not a problem because this would all be incremental revenue for the provider/seller.

A very interesting thing about this is that it takes local service businesses and potentially extends their reach to a national audience. There might be some issues where a caller from state A contacts a seller/expert in state B and there are regulations governing the seller (think law or psychotherapy). But how all that plays out remains to be seen.

The service, built on Ingenio's patents and telephony infrastructure, is part of a larger phenomenon of using VoIP/telephony to provide leads or real-time connections between buyers and sellers via the Internet. Right now Ingenio is keeping PPCall and Ether separate. But there might be some synergy between the products going forward.
Blog: Local Media Blog
 
posted by  Greg Sterling at  12:39 | permalink | comments [0] | trackbacks [2]



Mar 2 2006
Local Search Performance and Google Click-to-Call
I moderated two panels on local at SES this morning. Both were very interesting and took slightly different perspectives on Local Search. Both had tactical aspects and we were lucky to have an advertiser in the room that was part of the Google click-to-call beta test (more on that in a moment).

Patricia Hursh, president and founder of SmartSearch Marketing, was one of the panelists on the first panel and she presented an interesting case study on a national client (an ISP) that wanted to target regionally on Google. Her agency ran three campaigns. One was purely national; the second was "national" but used place name keywords and other geographic modifiers; the third campaign used no geographic keywords but relied on Google's IP targeting AdWords product.

The true national campaign performed the worst of the three. The "local keywords" national campaign performed better in terms of clicks (CTRs), but was more expensive than the national campaign. The "IP-targeting" campaign had the highest CTR and turned out to be the least expensive as well on a per-click basis.

She argued, however, that these three campaigns were not mutually exclusive because they each caught prospects/consumers that the others did not and because Google figures out which ad to serve depending on the query. There was also the branding value of the national campaign versus the more "direct response" quality of the local campaign. So in this case national and local ads could serve different potential objectives.

We talk about the higher CTRs and the more qualified nature of consumers who click on local/geotargeted ads. Sometimes I feel like I'm in an echo chamber so it's gratifying to see real-world examples from those "in the trenches" that validate these hypotheses.

Now to the Google click-to-call beta advertiser, who emerged during the second panel and is in the hotel industry. We didn't get into detail on the program but he characterized the performance as "great." Panelist Jake Baillie, president of TrueLocal, wondered aloud whether the performance of the product was affected in any way by the absence of competition. The marketer said he didn't think that accounted for it. But he did say that he thought the presence of the call option motivated consumers to go directly to the hotel rather than continuing to click around. It provided an immediacy for the consumer that made it correspondingly quite effective for the advertiser.

I made the comment that the presence of the call option had the potential effect of moving the consumer along the buying cycle more quickly. I'm going to follow up with him to learn more.
Blog: Local Media Blog
 
posted by  Greg Sterling at  14:00 | permalink | comments [0] | trackbacks [0]





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