Yext’s IPO filing is a great milestone for location management, based on a brave new world of local marketing, in which 30% of mobile searches involve some type of location information.
In this world, Yext’s tagline says it all: “We put businesses on the map.” But store locations are just the tip of the iceberg of location management. In addition to longitude/latitude info, local promotions, pages and reviews are all baked in to the new, enhanced listing. Indeed, location management could even challenge traditional SEO as the core “anchor” in a platform. As Brandify CEO Manish Patel likes to say, “Chief Marketing Officers should be renamed Chief Location Officers.”
Of the location management companies – among them, Yext, Vendasta, Brandify, Rio, Navads, Uberall – Yext, with 630 employees, is probably the largest. SEO-based companies such as Moz, Whitespark and Brightlocal are also competing in this space.
Yext’s current focus on LONG/LAT-based “Power Listings” has been building since 2011. Prior to that, Yext launched in 2006 as a company generating SMB leads on a pay-per-call basis. It then evolved to a promotions-oriented “Tags” program, and developed an anti-Google coalition that included Yellow Pages and city guides.
With a minimum spend of $500, PowerListings is based on the idea that there are too many search locations for a business to update – especially as consumer searches have gone beyond Google, Bing and Yelp to include image-based social networks, such as Instagram and Snapchat; vertical directories; map providers; and now, IoT-based voice and text-based platforms such as Cortana, Siri and Alexa.
In 2014, Yext worked to complement PowerListings with location-driven “Pages” as an upsell. “Reviews” were added in 2016. On paper, both features help to complete the package. Yet, penetration figures haven’t been provided for either, and it isn’t clear whether either can make a big dent in these highly competitive spaces. It would be a major coup if they can.
There’s a lot of rich information in the prospectus worth mining. Here are some highlights:
1. In preparation for the IPO, Yext revved up its revenue growth by 50 percent in 2016, when it made $89.7 million. Six percent of its revenue now comes from international, mostly the UK.
2. The company lost $26.5 Million last year, and has accumulative losses of $152 Million.
3. Yext syncs listings and promotional information to over 100 services, including the biggest ones: Google, Facebook, Yelp, Apple and Microsoft.
4. More than 925,000 locations are managed, with 17 million attributes. There is rich potential for expansion, with the company eying the 100 million locations tracked by Google Maps.
5. Current customers come from a wide range of verticals, including healthcare and pharmaceuticals, retail, financial services, manufacturing and technology. Brands include AutoZone, Ben & Jerry’s, Best Buy, Citi, Denny’s, Farmers Insurance Group, H&R Block, HCA, Infiniti, Marriott, Michael’s, McDonald’s, Rite Aid and Steward Health Care.
6. The company relies on 3,500 resellers – especially for reaching smaller customers, like multi -store chains. It relies most heavily on Dex, which accounted for 10% of revenues (down from 12% in 2015.)
One of the macro-questions for us is whether location management can “win” as a new local anchor that everyone else builds around. Every company has to start somewhere, but it doesn’t necessarily make sense that location will ride herd over such strong features as search, web pages, reviews, promotions and content marketing. The answer is important to players such as Google, Facebook, Yelp, YP, Go Daddy, Constant Contact etc. Most of these, of course, are Yext partners.