Local small business advertising has been largely synonymous with Yellow Pages. But a compelling case for the rise of classified-and-vertical marketplaces is made by Oodle CEO Craig Donato. (It is a position that we obviously admire, having just launched our Marketplaces research program.)
There has been “a radical transformation in how the world looks,” says Donato. It isn’t about republishing ads in numerous publications. “Republishing ads is lunacy. It is about having traffic delivered to your website.”
The consumer focus is still locally oriented, spanning many categories. This is good for a newspaper or a Craig’s List. But on the market “sell” side, sites have to be vertically organized. That makes the market ripe for the new breed of SEO/SEM reps –and it is naturally becoming more lead driven, even as it creates fragmentation. “It is changing the expectations of advertisers,” says Donato.
The change has impacted aggregators like Oodle, too. While competitors like Edgeio switched business models (and have apparently folded), Oodle is going strong, he says. “We are very effective at monetization. We have more demand than supply. The rate of bidding is up 10 percent.” In fact, he says the company is set to start earning its first profits in 2008.
One big change for the company is a smaller reliance on newspaper partners like The Washington Post. The partnerships will continue, but Oodle is doing a lot more work with TV station group owners, such as Cox and Media General, as well as a bunch of SEO/SEM agencies. It is also going to announce a deal shortly with “a major online community,” says Donato — presumably meaning Facebook or MySpace.
Hi Peter, I totally agree with your take on this, and indeed thats not the only change/challenge that is facing traditional ‘classified’ advertising. When you consider ‘business classifieds’ the old stock answer was always ‘yellow pages’, where else would businesses advertise. But more and more people are seeing that large centrally managed classified business databases are at risk from peer-produced and wiki type models (Don Tapscott writes well on this in Wikinomics, as does David Silver in Smart Startups).
Here is my view: http://blog.brownbook.net/?p=3.
The Brownbook is a peer-produced business database that is searchable locally and which contains local reviews. There are a few key concepst that radically distance it from traditional yellow pages services:
1. Its peer-produced. OK, so its seeded with base data to make it immediately useful, but anyone can add any new business, at any time, and it instantly appears on the service. Similarly anyone can edit or review any business.
2. It uses tags for business type, not classifications. Rigid taxonomies go out of date quickly, and don’t allow many businesses to express what they do in relevant ways (or indeed for consumes to search in relevant ways). Folksonomies (tags) allow a natural organic structure to emerge and change over time. (it also makes for dramatically simpler internationalization).
3. It uses tags for business locations, so now a business can self-define how it wants to be found. If for example you are a yacht broker, you will do business county, state, or country wide; if you are a dog walker, you will define more local tags. Neatly this works for businesses and consumers, because people looking for businesses also naturally select the region they know is relevant.
Theres a whole lot more to it than that, so I wont write an essay here, if you’re interested in more about our views and this projects then by all means browse the forum or blog.
Thanks indeed Peter.
Jerry
oops, I meant to give you a link, http://www.brownbook.net
Regards
J
We have been using oodle and like the service. We recommend it to our friends.Dallas Computer Support
The idea that yellow pages ‘like’ ads, whether in print or online, are dead is ridiculous. In fact, most directory publishers (YellowPages.com for one) offer a suite of online services, including SEO/SEM, printable coupons, customized landing pages and keyword searches across their online sites. Often, advertisers purchase several vertical categories for which to be published, both in print and online. Additionally, most sites offer self-provisioning options and also online-only packages that aren’t tied to the book. Lastly, with the marketing power the traditional companies that operate in this space have, it’s a false assumption we’ll see the death of any of these entities anytime soon.