Yearly Archives: 2005

Women Pass Men in Key Local Uses

Men and women are frequently targeted by local online marketers for different applications. Men are generally thought to be more interested in tech, news, cars and just surfing around. Women are thought to be less interested in aimless surfing, but are more interested in community, shopping/coupons, health services and real estate.

ShopLocal, Insider’s Pages and Realtor.com, for instance, each believe they are reaching significantly more women than men. To me, it is still safe to generalize like this. But an updated 2005 study by The Pew Internet Project, based on 6,403 surveys with a margin of error of 2+-, suggests the differences in men and women online are becoming less pronounced.

From a local vantage point, the study contains several little surprises. For instance, user-review services such as Judy’s Book and Insider Pages are largely aimed at women. But the new Pew findings suggest that men are actually more likely to “rate a product, service or person.” 33 percent of online men say they do it; 28 percent of online women.

The study also found that online maps and directions are becoming universally used, but especially by women. Eighty-seven percent of online women use these services, compared to 82 percent of men. The study also didn’t find significant differences in the extent that men and women use shopping services, which I am sure is news to the many sites targeting local shoppers.

What’s the explanation for all this? Some of it is simply a measurement of the comfort level that people have with the Internet as they gain experience. But some it may be in the very generic way that Pew asks its questions, and the groupings of the categories. For 2006, I’d like to see Pew get more specific in regard to the local applications.

Big Talk: New Telecom’s Impact on Local

Microsoft Local Group’s Erik Jorgensen thinks “the majority” of local access will be from mobile devices in five years. My gut tells me that mobile access may not dominate quite so quickly.

But whatever the timetable, it suggests a sea change in local advertising models. It also suggests a stronger role for telecom players in serving mobile and IP-based content: whether they are traditional carriers, or just as likely, portals providing VoIP, PSTN and instant messaging services over mobile.

The impact on local usage and advertising will be a big one. And the seeds are being laid. As Issac Kato of General Catalyst Partners noted at the Kelsey ILM conference in early December: “Wireless is inherently local….when you do mobile search, pay-per-call becomes trivial.”

Already on the bandwagon is Yahoo!, which has gotten Intel Centrino to sponsor the keyword, “WiFi Hotspots,” which is a top local search.

AOL has more to discuss. Its AOL Instant messenger already pushes more text messages than any wireless carrier. In addition, its MapQuest unit reports “hundreds of thousands” of mobile users. AOL will clearly seek to leverage that usage to provide a suite of additional, local-oriented data and telecom services.

The synergies are so apparent that at the Kelsey event, AOL’s top messaging executive, Chamath Palhapitiya (who has since joined a venture firm) derided the idea that AOL should try to limit itself to becoming a “telco.” “I don’t think so,” he said. “They have a half-life. Being in a telco…is a very marginalized business,” especially given the persistence of wireless use in urban markets by younger people.

Instead, AOL will focus on leveraging its customer relationships and its customer data to mix n’ serve a wider range of telecom and data-oriented services, including content, calls, emails and instant messages. Most interestingly, it will try to jumpstart its telecom efforts by providing a free PSTN number at the beginning of 2006. In 12-13 months, AOL thinks it will introduce call-related advertising via geo-targeting, age and zip code – although Pailhapitiya acknowledged that advertisers have “de minimus” interest right now.

Ultimately, Pailhapitiya expects to see “more action on PC to PSTN” than on VoIP, which currently has about three million users in the U.S. “It complements mobile plans,” he said.

Microsoft Local Pushes Maps, Imagery

When Microsoft quit its Sidewalk city guide in 2001, it promised to keep its foot in the door of local services. At that time, it was probably thinking “small business,” since it was bent on remaking the small business marketplace around the Great Plains software company that it had recently purchased. But small business services have never really pushed local into new areas. Arguably, software never has. In fact, Microsoft’s role in local is only now getting established, due to the newly accorded prominence of two areas that Microsoft also considers part of its core competency: maps and imaging.

Speaking at Kelsey’s ILM conference in early December, Microsoft Local Group head Erik Jorgensen presented a masterful picture of local’s image-driven future. “People want true visualization, showing them ‘what is there,’ he said. “Fundamentally, people are visual. And people want location integrated into relevant services.”

Jorgensen note that Microsoft isn’t necessarily going to emerge as local’s new nucleus. “Local,” he said, “is the most important vertical in search overall. But you can’t win alone in local.” He basically acknowledged the fact that local is permanently fragmented, with several well entrenched players, including Yahoo, Google, AOL/MapQuest and IAC. But an equally important role, he suggested, will be played by non-commercial players who might use Microsoft’s API to do mashups and spread the word – just as tens of thousands of sites do with Google Maps today.

In any case, local “is going to change in two years,” said Jorgensen. By then, we’ll have begun to sort out the role of community social nets; imagery; local services; and the future of map platforms. In five years, he said, “the majority of access will be from mobile devices.”

Going out on a limb a little, Jorgensen also suggested that local’s future will also turn on establishing electronic connections for “traditional relationships.” Currently, he noted that most Internet content and groupware hinges on “anonymous user generated content.” “Trust sources matter. You don’t want to rely on new ones,” he said. In this regard, Microsoft would seek to leverage the “12 billion relationships” it has captured via Windows, HotMail, MSN, Office etc. Jorgensen, of course, hopes this will happen via Microsoft’s new “Windows Live Local” service.

Whatever occurs, Jorgensen said that Microsoft’s commitment is to provide a comprehensive search service built around local features. “Loyalty comes from finding the hard to get info,” he said. Microsoft’s “local content” will be the most comprehensive and up to date.” Its “local city” will connect people and businesses. Just as critically, its services will be “immersive,” as people find, discover and explore using Virtual Earth. “It is a pristine eco-system.”

AOL Promises ‘Local’ Progress in 2006

America Online has been seen by Forrester’s Charlene Li and others as a hidden force in local that could emerge as the segment’s breakout player. I worked as a consultant and observer with AOL Local for several years, and tend to agree.

Under the direction of Ted Leonsis and Paul Debenedictis, AOL was early in investing in its Digital City city guide, early to solicit local business reviews, early to see the power of mapping via its acquisition of Mapquest, and early to see the importance of offline activities by purchasing MovieFone.

The company wasn’t necessarily strong on follow-thru, however. In fact, funding was being stripped from the local properties, even as local was being prominently promoted in the hype surrounding AOL’s software releases (i.e. AOL 6.0). During its dark, transitory period (2001-2004), AOL Local actually lost market share and users, while the rest of the local segment was growing in ace and spades.

During this period, AOL got rid of a 200-person strong local sales force, and coasted on Mapquest’s high awareness. It also made an Apple-like mistake – keeping MapQuest’s API internal, and selling it on a B2B basis, netting just 1,400 customers. Meanwhile, a new online mapping industry based on open API was opening up, winning thousands of new sources of access, and becoming the beneficiary of lots of innovative applications.

Still, AOL’s infrastructure for being a leader in local remained in place. That is what the current management is seeking to leverage as it repositions AOL as a portal.

Speaking at Kelsey’s ILM conference, AOL Senior VP Jim Riesenbach reminded the audience of AOL’s advanced status in local. He promised that the company would see significant progress in 2006, especially now that AOL has worked out many of its transition problems and is widely considered a hot property again.

A major emphasis for AOL will be to leverage its assortment of platforms as a “communications suite,” now that it has been freed from emphasizing the fire-walled access service. “AOL has 220 million users across its networks. But less than 10 percent of that audience uses anything else on AOL,” said Riesenbach. “The vast majority of AIM users, for instance, don’t use anything else in AOL, although AIM is the most meaningful brand for users between the ages of 12 and 24.”

Mapquest’s 43 million unique users will also be prompted to use other AOL services. The service may not have the bells and whistles of Google Maps and Microsoft Maps, but Reisenbach asserted that MapQuest remains the most functional service. He noted that it has retained its enormous brand value, as well as a 70 percent market share.

Starting in 2006, PC-to-Network (PSTN) phone calls will also become a major factor in the equation, with every AOL user being given their own phone number. By 2007, geo-targeting, zipcode and age will become part of the PSTN platform.. Broadband is an even bigger channel for AOL, with 50 percent of all access coming in via high speed, much of it during office hours.

To Riesenbach, local figures into all of it. “It is counterproductive to think of local as a vertical,” he said, responding to a comment by a Microsoft executive earlier in the conference. “The question for us is how we integrate local as an enabler for everything that people do online.” Riesenbach added that the richness of AOL’s local offering will make its local search among the industry’s most compelling.

In recent weeks, all of us have contemplated AOL’s strengths and weaknesses as its spin-off value has been assessed by Google, Yahoo and Microsoft for possible partnerships or acquisition. AOL’s value has also been assessed in a weird, revisionist way, by Steve Case and Carl Icahn. Case doesn’t seem to remember. But he was definitely there, focused on balancing AOL’s difficult books, while key components of AOL, including local, were being methodically stripped.

These days, AOL Local is certainly a little rusty in places – some of its user reviews date back to 1998. But it remains a major community asset and traffic driver. It is a rich collection of synergistic assets and ought to be effectively leveraged by any of these players – or more likely, be developed on its own.

Judy’s Book Launches ‘TrustScore’

Judy’s Book, InsiderPages, CitySearch and others run relatively open social networks. In their efforts to attract as many reviews as possible, they run the risk of accepting some phony reviews sent in by business owners, competitors, sarcastic college students and others that might be incented to cheat.

Now Judy’s Book, the recent recipient of $8 million in VC funding, has sought to mitigate the risk by adding an EBay-like “trust score” to its reviewers. The score appears below user IDs, and runs from zero to 10. It is calculated in a way that makes it difficult to get above the median of “5.” Higher scores are reserved for regular contributors that have positive feedback.

“These kinds of mechanisms will become increasingly important,” said Judy’s leader, Andy Sack, who was speaking at Kelsey’s ILM conference. Conceptually speaking, I like the idea. But then again, I’m an “A” student kind of person. I don’t like being a “2.” Maybe I should post a little more and game Judy’s system. Or maybe I’ll just start using Insider Pages a little more.

How Many Local Advertisers Are Online?

It is oft-repeated that there are “300,000 local advertisers online.” This represents less than 3 percent of the 12 million local businesses that advertise in the U.S., and obviously, plenty of room for growth.

Is this aging guesstimate close enough? I don’t really track the big numbers, but it doesn’t strain the imagination to suggest there are at least 400,000. And that’s just on the search and pay per click side. Overall, there may be more than 900,000 local businesses advertising online.

It is all guess work on our part, but here is how we calculate. Google is close-lipped, but it is thought to have over 150,000 local advertisers. Yahoo Search Marketing (Overture) might have another 100,000. And then there are the localized efforts run by the remaining portals, and many smaller players to contend with, including the contextual networks, the social networks, and various other local services.

Quigo, a contextual network, for instance, has quietly wrapped up more newspaper relationships than Google, so one might guess that a good portion of its advertisers – 50,000? — are local. And Citysearch has said for many months that it has about 35,000. If it has a positive story to tell, Citysearch will eventually update this figure. That’s 335,000 advertisers right there.

The Yellow Pages have also been getting on board with search and click programs. Dex says it is getting 2 percent penetration among its 400,000 advertising accounts from its recently introduced clicks package (8,000). Verizon has a much more aggressive clicks program, and might have many times more the results.

And all this is just for search and clicks. Looking at more traditional local advertising products (i.e. enhanced listings), the number of local online advertisers swells exponentially. Most of the YellowPages companies are still focused on enhanced and featured listings. YellowBook, for instance, has a relatively undeveloped Internet presence. But it is saying that it now has 375,000 advertisers paying an average of $100 for enhanced listings on top of their other advertising. The large number is really surprising, given YellowBook’s traditional lack of focus on its online business.

One wonders what the results are like for the more developed players, specifically Verizon SuperPages, or Yellowpages.com, which is the jv between AT&T (SBC) and BellSouth. Even bigger numbers, of course, will come from Web hosting. Our surveys tell us that roughly 47 percent of local businesses now have Web sites.

Why does it matter how many local advertisers are really budgeting for online? Because the higher number shows that most local sites are really underperforming.

WashingtonPost.com Revives City Guide

Spurred on by the likes of BackFence in its suburban territories, WashingtonPost.com has launched its third attempt at a city guide. The new effort, which succeeds previous efforts with CitySearch and Zip2, has a new search engine powered by FAST, search by location and proximity, improved navigation, selected newspaper content, editors picks, ShopLocal sales information, and a calendar that can be browsed by events and categories.

What the site does not include are Yellow Pages, which had been abandoned after Switchboard stopped supporting it. While washingtonpost.com has been an innovator in selling ads on podcasts, video pods and RSS, it has never found “meaningful ways” to sell local service and merchant ads. Indeed, CEO and Publisher Caroline Little, during a keynote at the Kelsey ILM show, said that washingtonpost.com is “4-5 years behind national players” such as Yahoo and AOL who have local templates.

“The previous city guide was off target,” noted Little. “We watched people navigate. Users had no idea” they were in the local part of the site. Little hopes that this effort’s advanced search solution will keep people onsite who might have otherwise strayed to Google, while serving as a home for user’s social life in the DC area.

A major emphasis of the new city guide is on “frictionless consumer generated media,” including user reviews of Washington area services and events. Soon, users will also be invited to comment on news and feature articles. Coming up in three-to-six months will be a photo library where users can send in their favorite photos – among the most popular features, coincidentally, on BackFence. “People love photos,” said Little. “We learned that on 9/11.”

The site also hopes to spur community via blogs and chats. It has launched 25 blogs since January, and also hosts 60 chats a week. Little says they are all “tools for creating demand for news.” With all the government workers, interns and others moving in and out of Washington all the time, she noted that “this is a transient city…and there is limited opportunity to build loyalty.”

What is my view? After the collapse of Sidewalk. Zip2 and others, and the diminishment of CitySearch and Digital City, the conventional wisdom is that city guides are dead. But that’s a little broad. They just aren’t going to be disruptive. For entities such as The Post, a full service city guide fits like a hand in glove. It will be interesting how they fare against more organic, Yellow Pages-oriented fare such as Backfence, Kudzu, Judy’s Book and Insider’s Pages. One cautionary note for The Posties: any effort to generate user reviews will falter unless they are giving a laser like focus (and maybe some Starbucks cards as promotions).