Local Search Gets Its (3) Day(s)

Since 1997 when GoTo.Com launched a pay-for-position search engine, many an industry guru has pointed to the paid search model as the Yellow Pages of the Web. The idea of going local seems to be warming everyone’s bacon lately. No one seems to have the final answer as to how to balance consumer want and advertiser need with site provider equity. Last week, every major player in the space got together to try and find the answer.

Who better to call together a meeting of the industry’s greatest minds (I was there as well) than the leading provider of strategic research and analysis for electronic directories and local media, The Kelsey Group.

For the uninitiated, the idea of walking into a conference from a Yellow Pages research firm might conjure images of a circa 1970’s Elks Club meeting. Not so. Kelsey had state-of-the-art facilities with audiovisual that was on par with leading-edge interactive shows. Not to mention a collection of speakers containing the likes of Yahoo!, AOL, Verizon, Ask Jeeves, the Washington Post and U.S. Bancorp Piper Jaffray.

Reality? Check.

The conference kicked off with an overview of the show from directory research industry living legend John F. Kelsey III. Immediately following the opening, Kelsey analysts Greg Sterling and Neal Polacheck set the tone for the three-day event and presented the latest research in geographically oriented search. Greg summarized the industry boggle well. “Challenge for the search folks: to get local content into search results and to tap the SME market. The latter is very difficult given the inertia that exists there and the challenges of self-provisioning. Challenge for IYPs: to improve the user experience and database/technology, add keyword search functionality and get distribution for advertisers.”

The next two single-track afternoon sessions each provided opposite ends of the spectrum of local search, and in my opinion, the highlights of the conference.

The first session was meant to establish the differences between hype and reality with key local search providers such as Yahoo!, AOL, and Looksmart. According to a few of the early afternoon conference attendees, the general feeling seemed to be the providers were struggling with the definition of local search and how to monetize the space.

As I strolled through the evening cocktail and networking festivities, conference attendees were all abuzz in discussing the final panel of the day, Getting In Touch With Reality. Any site- or portal-driven rhetoric made an immediate departure when a photographer, an entertainment marketer and a roofing contractor with a twelve million dollar business began to discuss local marketing online.

Each panelist provided grass roots insights as to how localized marketing on the Web impacted their business. Not surprisingly, although each marketer seemed to have a good grasp of localized online marketing, only one of the presenters knew his cost-per-lead requirement. Conclusions? Another presenter on the panel, Gregg Stewart, executive vice president from Wahlstrom Group (full disclosure: my firm’s parent) presented the national advertiser’s perspective and had this to say. “Local advertisers, at least the hybrids, are getting it. Each advertiser recognized the value of search and has invested in it from a sales lead generation standpoint.”

Found Nuts. Need Bolts

Day two of the conference included a power panel depicting how online telephone directory publishers face off with search sites in an attempt to answer the ultimate question. Can online directories and search engines work together?

The IYP community was represented well with senior managers from the likes of Verizon, with Lester Chu, group vice president, strategic planning and Switchboard’s chief executive, Dean Polnerow. On the search side, Dave Galvan, Yahoo! Get Local’s director of business development, delivered a convincing synopsis of the current state of affairs for local content publishers and big portals. But it was Dean who profiled Switchboard’s expanded Google AdSense partnership as a good entry point for IYP publishers and summarized the industry focus most eloquently with a quote from Yogi Berra. “If you come to a fork in the road, take it.”

Highlighting the early afternoon sessions was a track on Managing the Complexity of Search, with SEM firms Lead Logic, Did-it.com and Reprise Media. Did-it’s Chief Executive Kevin Lee did an excellent job of illustrating the single biggest problem plaguing local advertisers in the paid search space today (also the central point of many a rant from yours truly); lack of advertiser focus on metrics causing click bid costs to move beyond any possibility of generating a return.

Another panelist, Josh Stylman, managing partner from Reprise Media, offered a forthright assessment of the state of search providers as it relates to being able to service said advertisers. “It was evident from that discussion that we’re just not ready to service the needs of ‘the little guy’ yet.” Seriously folks, you have to respect a guy that can stand up and offer a sans BS assessment on the state of the local search marketplace.

Stylman also had some great insights into the opportunities that exist in the industry. “Given the currently available solutions, national companies targeting locally (e.g. WalMart and Jiffy Lube) have the greatest opportunity to leverage local search in the short term. While search engine marketing can be a low-cost and easily implemented marketing solution for independent local advertisers, the insufficient targeting capabilities, lack of low-cost analytics solutions, need for content-rich, relevant Web destinations and overall complexity of navigating the search market currently put them at a serious disadvantage.”

Wrapping up the day’s events in the all-too-critical just before cocktail party timeslot was a panel offering The Media View when the conference returned to center forum. The panel featured columnists from INMA, the Washington Post and iMedia Communications. The subject of labeling paid ads sparked a slightly heated debate as I sat in opposition to my counterpart (I am not worthy) from the Washington Post. In the end each panelist agreed on some advice for publishers and search firms alike; get the user experience right, then worry about the money.

Square Pegs of the World Unite!

The conference wound down with day three festivities that included the financial industry’s perspectives on the business, challenges of getting the user experience right and a powerhouse roundtable discussion on the future appearance of online directories.

A panelist in the roundtable, Kirsten Mangers, SME Global Solutions chief strategic officer, had this to say about all the local hype of late. “Local is not a buzz, there is no local code to crack ... those of us in the yellow pages world know the answer. Local is a living.”

I was able to catch up with Mr. Kelsey post show and I asked him if his thoughts had changed about the “going local” since the conference began. As I bid you a fond until the next show farewell, here are a few of John’s “a-has” from the summit:

  • It is very early in the local search evolution. The good news is that most of the players are taking different approaches, which means there will be a variety of solutions.
  • I came into the conference thinking that the major search engines had a huge advantage over other companies like Internet Yellow Pages providers. I think the search engines believed that too. During the conference my perspective changed, and I believe the Internet Yellow Pages publishers are at least as strong.
  • Publishers have a relationship that search engines are never going to have because of their sales force. They also have content that search engines could only have by doing deals with Internet Yellow Pages publishers.
  • Local businesses face a huge entry barrier. Not only will the natural "inventory shortage" make it difficult for them to compete with the big boys, but successfully working search engines in your own best interest requires hard work to stay at the top.

You can meet Kevin Ryan next week at Ad:Tech where he will be speaking on search marketing.

About the author: iMedia search marketing columnist, Kevin Ryan clearly needs to find himself a life. In addition to bringing iMedia readers the world of search, he spends his free time at industry events in case you can’t. Kevin is currently Director, Market Development at IPG’s Wahlstrom Interactive where he provides guidance in directional online marketing to Wahlstrom’s prestigious list of clients and sister agency brands.

 

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