AutoTrader Lays off Some Field Reps; Vows Reinvestment

July 2, 2009


With many auto dealers closing their doors or cutting back on advertising, AutoTrader has announced that it has laid off a “modest percentage” of its field representatives to keep the company stable.

In a video addressed to the AutoTrader community, CEO Chip Perry and Sr. VP of Dealer Sales Alan Smith emphasized that the Cox-owned company is “rock solid” and is “very bullish on the future.” They noted that traffic to the site hit a record 16 million visitors last month and they believe there is “pentup demand” in the marketplace.

AutoTrader is beefing up its on advertising, as it anticipates more auto marketing dollars moving online. Three times more is being spent on advertising in 2009 than in 2008, said Perry.

The company is also investing “tens of millions of dollars” on technology and in a NADA program to train reps how dealerships work. The tech investments include a new home page that makes dealer links and car offers more prominent.

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Some Perspective on High Churn Rates

July 1, 2009

Are small businesses really churning from search packages in droves surpassing 60 percent per year? That’s the contention of a recent report, and has important implications (i.e. that the value added reseller industry isn’t sustainable). To learn more, we talked with leaders from G5 Search Marketing, Marchex, Matchcraft, WebVisible and Yodle.

Highlights from our discussions have been issued in a client report for Kelsey’s Interactive Local Media program. But all agree that the industry has been given a black eye by overly aggressive sales tactics, and poor follow up.

But they also report real progress in engaging their customers. And unless Google and others find a way to sell these accounts on their own – and they haven’t – these companies feel like they’re in good shape.

“At the end of the day,” notes WebVisible CMO Kevin Ryan, “what (advertisers) want to know is how many leads they got; the cost of media; how many people watched videos on their site; how many people got text messages. Actions that have a chance to turn into conversions are the true quantifiable return for the SMBs.”

Marchex President John Keister notes that churn is an issue, but the churn numbers decrease as advertisers “move up the transparency chain. Different advertisers will respond to different things,” says Keister. Ultimately, it is all about selling them “transparent” advertising that clearly bring in ROI. “They all want to see the transparent value. And that doesn’t always mean ‘clicks and search.’”

For Yodle CEO Court Cunningham, there is little doubt that value added resellers like Yodle add value to SMBs. But only if they get a chance to be educated about the value they bring.

While churn rates are very high at first for the entire industry, after six months, Yodle’s churn rate is just one percent more month, or 12 percent per year. By that point, it has had a chance to educate the customers, and they will have seen the value for themselves. “We’re dealing with a marketplace segment where 40 percent still don’t have a website,” he says.

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Great Idea for IAC’s New Sidewalk.com? Enter Contest

July 1, 2009


Citysearch Publishing head Kara Nortman reminded us today that Citysearch and IAC are set to do great things with the Sidewalk.com brand that it acquired from Microsoft in 1999. In the best spirit of Web 2.0, the company has announced a contest to get ideas from the public. The winner will receive $10K, a piece of the new company, and the possibility of a full time job.

The entrants will be judged by an all-star crew from IAC and other places. The winner will illustrate how the new Sidewalk will let people “live life on the go” on the Web and on mobile. The solution will also integrate well with Citysearch’s taxonomy, directory, content and other open APIs focused on local, and obviously, leverage traffic from Citysearch’s publisher network.

Entries are due July 17, and winners will be announced in mid-September. Entrants should log onto www.sidewalk.com to enter. They can follow updates at twitter.com/sidewalkdotcom

The Old Sidewalk

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MerchantCircle Adds Local Coupons on Twitter

June 30, 2009


Coinciding with its high showing in the Quantcast analysis, MerchantCircle today announced that it has added a local city coupon feed for Twitter. Merchant coupons will now be fed to city-specific Twitter feeds (i.e. @MCircleNY) so that local consumers can find local coupons and events in real-time.

MerchantCircle reports that more than 50,000 coupons and events are built on its system every month by local merchants.

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Quantcast Publishes ‘Top 10′ Online Directories

June 30, 2009


Figuring out who is on top of the heap in the online directory business is a complex task: on one hand, a “directory” category is kind of an oxymoron, given that so much of what is quantified is based on search engine optimization.

Only 25 percent of Citysearch’s traffic, for instance, comes from its destination URLs. Some sites, such as MerchantCircle, barely have a directory - they’re mostly about being discovered by a search engine.

Yet we have still attempt to label “top directories.” Obviously, these leaders are going to be the masters at both optimization and destination.

According to Quantcast, here are the leaders, in order:
1. Yellowpages.com
2. Superpages.com
3. Citysearch.com
4. Yelp.com
5. MerchantCircle.com
6. Local.com
7. Urbanspoon.com
8. Insiderpages.com
9. Yellowbook.com
10. Servicemagic.com

IAC’s aggregated share in the Quantcast report is of special note, given its ownership of Citysearch, UrbanSpoon, InsiderPages and ServiceMagic; and investment in MerchantCircle.

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MojoPages Lands $5 Million; Pushes Local Affiliation Strategy

June 30, 2009


MojoPages, a 12 person local search/directory player based in the San Diego beach town of Solana Beach , has landed $5 Million in Series A funding from Austin Ventures. Mojo has settled on $5 million as the amount it needs to get to breakeven on a cash flow basis, says CEO Jon Carder, who founded the company in 2007 after he got “ripped off” by some movers and wanted to build a local ratings and review site.

Carder notes that Austin Ventures was introduced to the company by longtime industry vets Jeff Stibel of Web.com and Dan Finnigan of Jobvite, who previously lead local efforts with Yahoo, Knight Ridder and Pacific Bell. Both had been Mojo angels. Altogether, Carder says that angels have put in about $1 million in the company, while he has put in about $500,000.

The company itself has been in the middle of transition. Shortly after launching, Carder says it began to move away from its initial focus on being a destination site. It had become quickly apparent that destination sites require lots of community interaction and there are already major entrenched players in the space, such as Yelp and Citysearch.

Today, the company includes a bevy of content sources, including reviews from CitySearch and Insider Pages. But it is primarily a traffic aggregator “generating tons of traffic,” says Carder. While community development efforts will continue to be supported, a small company has to focus on one thing or the other, he says. And fast, relevant and linked search wins out.

Part of the strategy going forward is to power local search for local media companies, basically charging a CPM rate of around $8. Already, the company has deals with a number of TV and radio outlets, including Salem Broadcasting, Tritan Digital, Belo Corp. and KSMB in San Diego. It also has advanced field trials with “the largest” newspaper, TV and radio players, says Carder. The signup efforts have been marked by aggressive sponsorship of San Diego-area industry events for newspapers, TV and radio stations, Yellow Pages and geo-domain sites.

Efforts with the site should heat up further in September when a new version of the site is released. At that time, prior efforts at community, including large urban parties sponsored by advertisers, will be de-emphasized in favor of the new focus on search. They were fun, but barely break-even, say Carder.

Today’s MojoPages news has coincided with several recent announcements from Local.com, which is probably Mojo’s most direct competitor in vying for local search contracts via its white label division, formerly known as PremierGuide.com (Other competitors include Localeze and business directory products from Travidia and HarvestInfo. Several other companies have either folded up or been acquired).

Local.com recently signed two major Belo newspapers: The Dallas Morning News and The Riverside Press-Enterprise. It has also secured a window of $10 million in new credit, secured by assets, that could be used for acquisitions.

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New Hyperlocal Network Created via Community Paper Sites

June 29, 2009


Kaesu, a provider of online services to free community papers, has received “more than $1 million” to jumpstart its efforts. The strategic investment, from Media Space Solutions, is geared to open up community paper inventory around the U.S. for Media Space’s national advertisers.

Kaesu, a four-year-old company with fewer than ten employees, has ties with over 100 community paper companies. It also has signed some local newspaper companies, including 45 titles from North Jersey Media. It generally charges a flat monthly fee for its services.

It is not the first time that a media company has tried to organize community papers into a hyperlocal network for national advertisers. The Web operations of at least one TV network has attempted to do the same thing. But community papers have generally been too ad hoc (and cheap) to effectively work with.

Kaesu President and CEO Pete Previte says the investment will help jumpstart Kaesu’s efforts in helping its papers out-hyperlocal the hyperlocal companies. “It is enough to get to the next step,” he says.

Moreover, efforts like this could represent a new era for the free community newspaper community. While the industry has had something of a downturn, he notes that it has been in a much healthier position than daily newspapers. Indeed, some papers have even seen revenues increase, despite the sour economy.

While the community papers have generally had lackluster online results, Previte says Kaesu is well-positioned to boost results. It helps that the company is made up of industry veterans who speak the papers’ language.

The company helps the papers get up to speed by providing a suite of online and offline tools that help their businesses in general.
For instance, it provides electronic tear sheets, online proofs and email communication tools. The online tools that are at the heart of Kaesu’s system can be used to produce online coupons, videos and Web sites. NVSuburbanite.com, which is located in Cresskill, NJ, is an example of a Kaesu partnership.

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