The Home Depot is set to significantly boost its home contractor leads network with today’s acquisition of RedBeacon. No price was announced for the acquisition, which puts Home Depot in the same boat as Sears, which has been quietly developing ServiceLive, its own contractor leads service.

RedBeacon, which takes a 10 percent commission for service jobs, was one of a number of socially driven leads companies that started in the 2008-2009 time frame. Others include Cox’s Kudzu, which has developed an intriguing partnership with Scripps’ HGTV; The Washington Post’s Service Alley; LikeList, HelpHive, and Thumbtack. The latter received $4.5 million in venture funding last week.

Last year, Red Beacon announced $7.4 million in funding from Mayfield and Venrock, but it hasn’t been easy sailing for the company. The service never landed media partnerships that it had been hoping for, and replaced its founder last year with new CEO Anthony Rodio. It has, however, managed to launch services in nine markets. Under Home Depot, one assumes it will take a national approach to contractor leads.

ILM East is coming back to Boston March 26-28 with a lineup of do-ers and innovators that are transforming and re-defining the local space.

Highlights include a featured keynote from industry legend Ted Leonsis (Groupon Vice Chair/Amex Board Member/Sports team owner/AOL mastermind), along with keynotes/interviews from Jason Calacanis, Leslie Berland, Jay Herratti, Michael Zimbalist and Michael Silberman.

Other highlights of the 2 ½ day event includes a pre-conference rundown on Local search run by Andrew Shotland of Local SEO Guide; a full plate of Top BIA/Kelsey research and forecasts; a special Venture Capital panel; and innovator panels on Social, Mobile, Deals, Video and Hyperlocal (the latter co-moderated with Merrill Brown.)

KEYNOTES/KEYNOTE DISCUSSIONS
• Ted Leonsis: Owner, Monumental Sports (Washington Capitals, Washington Wizards;) The Vice Chair of Groupon;, Board member of Amex, former Vice Chair of AOL; Author, The Business of Happiness
• Jason Calacanis: CEO, Mahalo; Investor. Calacanis’ career has been at the cutting edge of local and social media and reflects all the big trends, from his development of The Silicon Alley Reporter to Weblogs (AOL), Mahalo, and the creation of TechCrunch50 and Launch.
• Leslie Berland, Vice President, Social Strategy, American Express. Berland’s a major deal maker deeply involved in Amex’s mega FourSquare and Facebook deals.
• Jay Herratti, CEO, CityGrid Media. Herratti always gets top rankings at our events. He runs IAC’s super quad of the CityGrid Media Network, Citysearch, UrbanSpoon and InsiderPages.
• Michael Zimbalist, VP, Research Operations, New York Times Co. Zimbalist leads the NYT’s 12 person research unit. He’s deeply immersed in cutting edge social, mobile, tablet and video efforts.
• Michael Silberman, GM, New York Magazine Silberman is the mastermind of NYMag’s development of a super set of verticals catering to the “New York state of mind.”).

FEATURED SPEAKERS
• Bill Bice, CEO, SpaBoom
• Merrill Brown, co-founder. MSNBC.com, Court TV
• Jim Douglass, EVP, Cartera Commerce
• Jere Doyle, CEO, EverSave
• Walt Doyle, CEO, Where
• Adam Japko, CEO, Digital Sherpa
• Maria Kermath, Dir.,, New Tech & Sales Apps, AT&T Advertising Sales
• Mark Josephson, SVP, AOL Local
• Charlie Kim, CEO, Next Jump
• John McIntyre, CEO, Pixelfish
• Randa Minkarah, SVP, Revenue, Fisher Communications
• Randy Parker, President, SMB Apps
• Mark Schmulen, GM, Social Media, Constant Contact
• Andrew Shotland, Publisher, Local SEO Guide
• Andy Slater, VP, Digital Agency Sales, Katz 360
• Christopher Tippie, CEO, FindNSave
• Darren Waddell, EVP, Product and Corporate Marketing, Reply.com

Join hundreds of senior level local executives at ILM East for the local community’s best networking and insights. You can register here for earlier bird rates.

Internet Pioneer Ted Leonsis

Companies are beginning to focus on loyalty programs for existing customers, rather than simply using deal a day to acquire new customers. Closely and WildFire App are both pursuing loyalty programs.

A loyalty startup that we like is “Punchcard,” which launches today. The brainchild of MerchEngines founder Andy Steuer, Punchcard is a smartphone app that provides a virtual facsimile of the loyalty cards that customers are familiar with from their favorite coffee or ice cream shop (Get 10 purchase stamps or punches, get one free).

Punchcard has gotten $1 million in seed funding from IdeaLab, and has hired five people, including local business development executive Dawn Padungian (Local.com, Charter Cable.)

Consumers sign up for Punchcard on a store-by-store basis, and receive a virtual punch after snapping a photo of their receipt. They can sign in via Facebook Connect.The service is currently available for iPhone users, and an Android version will launch in January.

Steuer tells us that the card’s virtual nature gives it real flexibility in terms of incentives, or what he terms “offer triggers.” After their 10th purchase, for instance, customers can get cash or credit. The amount would be based on their average spending. That’s the standard offer. Since it is all electronic, however, merchants could opt to provide rewards after a certain number of purchases in a given month, or after a certain amount is spent, etc.

The company will also be in a good position to leverage behavioral data, and make nearby recommendations. It doesn’t have to worry about email fatigue issues since all its communications are via the app, rather than email, notes Steuer.

To rev up the market, Punchcard is seeding the market in Southern California with a pre-populated list of 147,000 merchants. During the trial period, it will pay the credit for the merchant’s 11th sale (up to $30.). The company’s actual revenue model, however, is based on monthly fees ranging from $29 to $129. At launch, 40 companies are already paying.

If Punchcard is successful in winning five percent more local users, research from The Center for Retail Management shows that can translate to 60-100 percent gain in revenue, adds Steuer.

ILM West is shaping up to be one of the great ones. Taking place Dec. 12-14 in downtown San Francisco, ILM West really reflects a sea change in local marketing from advertising to the new hybrid model of advertising and commerce (i.e. prepaid deals, reputation management, mobile app sales etc.).

We’ve made some big additions since our last update, starting with Google and Facebook. These add to the existing lineup, including our “rock stars” (Clear Channel CEO and industry legend Bob Pittman AllThingsD’s Kara Swisher, Media News Group/Journal Register CEO John Paton and Deseret Media and former Harvard Business School Professor Clark Gilbert), and major sessions on deals, offers, verticals and the whole spectrum of local trends.

We will pursue three unique angles on Google at ILM West:

1- The local efforts, under Marissa Mayer’s local team. Jeff Aguero, head of local marketing, will present on everything local, from Zagat, to Google Places, to the Big G’s new “Get Online” program for SMBs. These strategies have really developed since this summer.

2- The global reseller effort. Global Channels head Todd Rowe will engage in an in-depth conversation with BIA/Kelsey President Neal Polachek on all his efforts.

3- Google Mobile. Mobile and Local Search exec Surojit Chatterjee will provide insights into this critical area for Google as part of our All SoLoMo morning on Day 3.

We’re also going deep with Facebook at ILM West. Facebook’s new local leader Matt Idema is our afternoon keynote on Day 2, with a lot of new details and a progress report on the local and vertical strategies. On Day 1, we are also taking a special look at working with Facebook’s platform with execs from Trada, Oodle and Kenshoo Local/Social weighing in. Eager but not sure how to play with Facebook? You will be when ILM West is done.

The SoLoMo event on Day 3 itself is going to be quite the cornerstone for ILM West. Curated by the research teams from our Social Local Media and Mobile Local Media programs, SoLoMo features top line data; and indepth and fresh looks at SoLoMo implementations from leaders at Google, AT&T Interactive, Zaarly, PayPal, XAd, JiWire and AppStack (Steve Espinosa’s new project.)

You can see the full agenda here. And register here.

Remember: We are making a donation to the SF/Marin County Food Bank for all registrations that come in by Thanksgiving.

Yelp’s S1, which was issued last week as a run-up to a $100 million IPO, reveals a lot of new data about the reviews leader. The big question about Yelp has been whether it can grow against increased pressure from Google, and also begin to take market share away from traditional media players such as Yellow Pages.

Yelp’s plan for growth relies heavily on overseas growth. It is now in 22 international cities on top of 43 domestic markets. But it would also grow its primary business via local and brand advertising; monetizing mobile services that now make up 40 percent of its searches; boosting revenue from deals (where it has lowered expectations); and more revenue sharing dollars from restaurant reservations and travel.

Launched in 2004, Yelp had initially risen to the top of the heap among service and city guide leaders by dominating Google’s organic local search. After Google’s effort to acquire Yelp for $500 million ended under murky circumstances, Yelp has seen its prior dominance of Google search fade away. Moreover, Google Places – enhanced by Google’s purchase of Zagat — now looms as a competitor in its own right for reviews and advertising.

“Our success depends on our ability to maintain a prominent presence in search results for queries regarding local businesses on Google,” notes the S1.

Yet, Yelp is growing splendidly, even with the apparent Google woes. Yelp earned $47.7 million in 2010 and $58.4 million in net revenue in the first nine months of 2011, representing 80 percent growth over the first nine months of 2010.

During the nine months of 2011, the company claimed 19,000 paid accounts – up 75 percent from the same period in 2010, And 529,000 claimed pages –up 114 percent. And in a business where the number of current reviews is its currency, it has an archive of 22 million reviews, up 66 percent from the same period in 2010. Overall, it sees 61 million monthly users.

Yelp is primarily known for its restaurant reviews. That is still its primary image, and what has made “to yelp” a verb. But Yelp is also more diversified than generally perceived, and resembles a combination city magazine/Yellow Pages.

Restaurants and dining now make up 23 percent. Other major segments include shopping (22 percent), services (10 percent); beauty (9 percent); arts and entertainment (8 percent); Health (5 percent) Night Life (4 percent) and Travel and Hotel (4 percent). It also has a broad demographic, with 42 percent between the ages of 18-34, and 33 percent between the ages of 35-49.

What investors will be looking at is not only Yelp’s ability to grow and move into new areas, but also it’s potential for profits. The company has accumulated a deficit of $32.1 million since its launch, and lost roughly $7.6 million in the first 9 months of 2011. Sales and marketing costs have been especially heavy, eating up $38.5 million for the first nine months of 2011.

Business Insider suggests that “Yelp is Groupon without the cash flow,” basing its comment on Yelp’s increasing marketing costs for customer acquisitions. But to us, Yelp is working to get over a tipping point. And unlike Groupon’s one-time relationship with local businesses, Yelp is working on Yellow Pages-like renewal rates.

In fact, the key to Yelp is to continue its ability to maintain and leverage its huge user base; satisfy advertisers; and stay abreast of social media trends that help match users with establishments based on their interests. It won’t be easy and is not a sure thing. But Yelp’s trajectory to date has been an impressive one.

Shares of Yelp Searches

We’ve long known that coupons provide real traction for SMB advertising. Nothing beats a customer walking through the door with a coupon in hand. But a lot of SMB website publishers haven’t really focused on them.

DataSphere, on the other hand,,has had a coupons product for some time. But it only recently has really zeroed in on their potential as “an adjacent space” to normal SMB activities, along with events, notes SVP Gary Cowan.

Coupons are actually easier to pull off than daily deals because “they don’t require the level of investment from partners,” he says. “They’re accessible to a wider set of companies. And they target advertising in a similar way.”

DataSphere, which is now in 85 markets with more than 300 sales reps, has taken an approach that more closely resembles “closed loop optimization,” adds Cowan. “We’re now helping businesses provide better content, and to make better offers. We tell them what the difference is between making an offer that is 10 percent off and 30 percent off.”

While coupons don’t drive the same volume as deal publishers such as Groupon, they lead to higher profitability because they feature smaller discounts, and have no commissions. They also typically run for longer time periods than deals.

DataSphere has also been focusing on exposing the coupons across a larger network of relevant sites, including Coupons.com. “There is no reason not to publish a coupon on several sites,” says Cowan. “It all goes to help the SMB advertiser in the end, and if they see more value, they’re more likely to stick around.”

With TV station partners such as Gannett and Fisher Communications, Cowan says the focus is on leveraging DataSphere’s increasing scale to “continuously evolve and add services with clear and demonstrable value for small local advertisers.”

Facebook advertising and integrated marketing concepts seem to be top of mind for 200+ reps of mid-sized agencies gathered in Scottsdale, AZ at BOLO 2011: Be On The Lookout.

It is my second year in a row speaking here—certainly, one of the best events for agencies. I got to run a local marketing superforum with great help from John Triplett, AZ Republic, who discussed hyperlocal and vertical marketing; David Simon, Rovion/Local.com, who discussed rich media integration; and Steve Yeich, Relevant Ads, who discussed SMB search marketing.

While local is part of the equation for the agency attendees, many of whom have local SMB clients, discussions among the agencies at breaks and receptions focused on the practical issues of the new marketing.

“Paid, earned, owned and shared media is a virtuous cycle,” notes one speaker.

When it comes to social media services, some of the agency reps in attendance proved to be way ahead of the curve, with great results engaging users with product giveaways, games, check-ins etc. The “social listening tools” have added a new dimension to their ability to support clients, and mentions, positive sentiment and discovery for their brands.

By following best practices, for instance, and holding special online events (draft day party, etc.), The Phoenix Suns boosted their Facebook fans count by 20,000 users, “likes” by 138 percent and comments by 473 percent. “The Suns partner with a lot of smaller sponsors. This is something to show them,” notes their agency rep. Before all the innovations, the Suns were “not optimizing “their social media count, with just 42,000 of 600,000 fans engaging.

But for agency owners, hiring social media practitioners remains an issue. One owner told me he didn’t really want to shell out $65,00 to $80,000 a year on an experienced account executive to handle social media. At the same time, however, he wasn’t comfortable leaving postings and tweets and Facebook profiles in the hands of inexperienced J-School grads who didn’t necessarily have a holistic view of the account.

Balancing social media with other parts of the marketing budget remains a work in progress. Facebook ad specialists – a new field, obviously — were eager to share details of the various Facebook ad products and tools for measuring activity that are now available. While BOLO attendees, in a vote, gave universally bad results to Facebook’s fairly radical User Interface changes (and few people actually understand them,), the company was admired as one that moves amazingly fast and is compellingly “data driven.”

Acquisio, an agency software provider, has now integrated Facebook ads and Google programs directly into its agency planning and reporting tools. In fact, it allows for direct comparison of Facebook and Google spending, recognizing that while they are different, the budget may come from the same place. “People make the mistake that Facebook is search. It isn’t,” notes a rep. While Facebook gets good results for advertisers, the range of Google products continues to far outpace Facebook, he notes.

When you get beyond the limited form factor of mobile, it really turns out to be a better platform for creating, managing and bidding on used goods, says Dan Zheng, a co-founder of EggDropApp, a new mobile-based auction service. Mobile is fast, geo-location oriented, fun and can be programmed for automatic notifications when items are added or sold.

“Selling stuff online is really hard,” says Zheng, who previously served an 8-year stint at Google. But that’s no excuse for leading solutions like Craig’s List or eBay to basically stand still in the midst of the mobile revolution. “You can’t even provide feedback” on Craig’s List, he notes. Buyers also can’t tell if items are active. Or make a counter offer. “Buyers always want to make a counter-offer,” he says.

EggDrop, which is now operating in the U.S. and U.K., has been set up as a falling price auction. Items are put up for a set price, and shows to users within an 80 mile radius so they can be personally picked up, rather than shipped. If an item doesn’t sell, the price automatically drops at a certain point. And then again, and again, until it does sell (hence “EggDrop.”) Buyers can see who is interested in an item, and can play chicken until someone actually pays the price.

“There is definitely a games mechanism here,” says Zheng, who notes that he envisions the service appealing to both “busy pros” and “garage sale” frequenters. “People are interrupt-driven,” he says.

The four person company has some venture funding and isn’t currently seeking partnerships. Instead, it is focusing on building itself up as a destination site, initially for Android and iOS. While the service is free, it expects to eventually go to premium models for larger merchants, such as furniture merchants and car dealers.

While deals are getting most of the attention right now, coupons remain a substantially larger player in the promotions business, says Steven Boal, CEO of Coupons.com, who was keynoting at BIA/Kelsey’s Deals 3D conference this week in San Francisco.

Boal notes that deals and coupons have very similar demographics. They’re both heavily used by women, for instance. But the industries are really very different in terms of sales, product segments, redemptions and user habits. “We tried to get into the ‘local commerce’ space ten years ago” but it didn’t work at all, he said – something that the CEO of ValPak warned him would happen.

It has all ended up fine, however. Electronic coupons are poised to go deeper than the deals space with established consumer brands than the deals space. They enjoy huge redemption rates, and are riding the backs of social media to even greater, viral success. Indeed, the potential for electronic coupons lead institutional investors to recently invest $200 million in Coupons.com.

“Coupons were the first form of social media,” noted Boal. Historically, housewives “used to get together to clip coupons and socialize” Now, social capabilities might take coupons to the next level. “Social might be the next newspaper,” in terms of being an offer distribution point, he said. When brands like Oreos can attract 22 million fans on Facebook, they don’t need the Sunday paper anymore.

Coupons.com itself has implemented its offers within Facebook; integrated offers with fan pages, and applied the same app credentials across its entire platform. Mobile remains another opportunity. Boal said that much more is to come as the company spends some of the $100 million it has slated for development on integration and acquisitions.

Ease of transaction, rewards and “exclusives” will be key to the next generation of deals, and the credit card companies are determined to play a major role. MasterCard is working with NextJump for special rewards programs, and has a number of other initiatives in the space (which key execs will discuss at our Deals 3D conference next month). CitiGroup branded MasterCard, similarly, is partnering with Google to offer deals over mobile phones. Groupon is also said to be working on a credit card arrangement.

Now, American Express is revving up “Serve,” its erstwhile Paypal killer. Serve is an online and mobile commerce platform that enables consumers to preload cash on the card, and eliminate the need to print out coupons, among other things. A key part of the platform will be local deals, which will be promoted on AOL’s Patch.com, which expects to have over 1,000 hyperlocal sites by the end if the year.. Customers will need a special credit card to participate.

The arrangement kicks in this fall, launching in Eugene, ORE. Full personalization based on individual customer data will be fully developed in six to 12 months, according to Amex (via Chicago Business.)

It isn’t clear whether Patch will also be sourcing deals. Patch had previously announced a new initiative it calls “Patch eSaver,” which will show all the deals available in town every Tuesday.