Category Archives: Misc

GrubHub IPOs: GrubHub and the ‘Food’ Segment

photo courtesy of Crain’s Chicago Business

All eyes are on “local” this morning on Wall Street, with GrubHub’s IPO off to a great start. The company has placed 7.4 million shares priced at $26, or $192.4 million. The shares closed at $34.

We’ve been watching GrubHub’s IPO with real interest. The Chicago-based online take out ordering company – which merged last August with Seamless, its primary competitor – represents a key local “food” anchor, along with Open Table, UrbanSpoon, Groupon (reservations); Yelp and Google+ (reviews); and eventually, Amazon, WalMart, Google,eBay, TBD (grocery delivery).

It has 28.8K restaurants and 135,000 daily orders. Forty-three percent of its activity now takes place from mobile devices, a key metric in this space which relies on impulse purchasing. The company has operations in most major U.S. cities, but is strongly penetrated in several.

In this area, which might loosely be termed as “food,” the silos are falling fast – they each do a little of each. We expect to see a major land grab by the key players that are already in the space, and the possible addition of other tech and retail players.

At its most basic level, GrubHub views, confirms and tracks food orders, It makes its money from commissions of roughly 10-12 percent. Last year, it made $137 million. But the company’s value extends beyond order taking. It acts as a giant search and discovery engine that can bring customers back to locations, and recommend others when they are in the mood for something else.

The cost to use GrubHub is relatively high. There have been anecdotes in the press about some restaurants quitting GrubHub, seeing a drop in orders, but making higher profits. Obviously, these reports are not the general consensus, as the company continues to grow.

But the best way for restaurants to justify its cost is if they chalk it off as a promotional expense. GrubHub executives like to point out that it is ultimately cheaper and more retentive to spend on GrubHub than on a deals site such as Groupon, with its high commission structure taking 30-50 percent, on top of high discounting off menu prices.

While GrubHub has a nice lead in this space for now, the key for it now will be to extend its brand and reach. Its brand awareness remains low, and it is mostly known among niches such as office workers and college students. The company’s current competitors include, which claims a roster of almost 10,000 restaurants in 50 cities; and, which covers 20,000 restaurants in 1,000 cities across the country.

We’ll be watching for activity from companies such as Yelp, Google and other players too, either via start up or acquisition.

BIA/Kelsey’s Discussion with New ReachLocal CEO Sharon Rowlands

ReachLocal today announced the appointment of longtime B2B and information services leader Sharon Rowlands as CEO, replacing interim CEO David Carlick, who remains chairman; and founding CEO Zorik Gordon, who left in December 2013 and is pursuing his vision for ClubLocal, a consumer-facing home service that has been spun off by ReachLocal. Groupon is among the lead funders of ClubLocal .

Rowlands, a 20+ year industry veteran is an English native currently based in New York. She is on the board of Constant Contact and previously served in many leadership capacities, including as CEO of Penton Media, the B2B publishing and events giant; and as President of Thomson Financial and The Financial Times.

In a conversation with BIA/Kelsey last week, Rowlands noted that she was drawn to ReachLocal’s efforts to provide SMB digital marketing services because the publicly-owned company has achieved “scale and a global footprint.” The SMB market has tremendous potential but “it is going through significant change,” said Rowlands. “SMBs must be overwhelmed with all the options facing them. I really think there is an opportunity to partner with SMBs and solve their problems in a more coherent way.”

One of the keys to Reach’s growth – and keeping its current base of 23,900 customers from churning — is to segment the market correctly, adds Rowland. “There is a lot of difference between someone signing up with one or two employees and someone with 30. The one-size-fits-all-approach is not the right approach,” she said.

The company is also seeking to develop more sticky tools for its customers, including ReachEdge, a comprehensive marketing solution that begins a $399 a month and now has over 1,000 SMB customers; and ReachSEO, a new search package. ReachEdge is also useful for attracting new customers – 65 percent of those signing up were not a prior customer of ReachLocal.

Saleswise, Reach has historically been focused on premise sales. But the company will now embrace “the whole breadth of go to market approaches, including telemarketing, partnership and ‘handholding,’” Rowlands said. “There is not one segmentation lens.”

The company is also moving beyond its emphasis on search solutions, which currently makes up 85 percent of revenue. While traditional search remain a strong anchor, discovery tools must make room for social media, which are increasingly important, Rowlands noted.

Sharon Rowlands, CEO, ReachLocal

Local Market Launch Pushes on Discovery for National Brands, Local Markets

National brands, franchises and multi-location outlets often lose business by only providing standard name/address/phone number information, instead of focusing more on discovery search, says Local Market Launch CMO Gideon Rubin. “Name, address, phone information only represents 15 percent of searches. If you know ‘Subway,’ you can look it up,” he says.

But the real market opportunity is in the discovery market, which constitutes 85 percent of searches. “What we do is add keywords and categories that increases the likelihood of showing up in non-branded searches,” he says. “We’ll add the name of the sandwich or other menu details. That creates additional revenues for merchants. It is a really large opportunity.”

Listings, LAT/long information, pictures and reviews are other key data points that national brands must keep up to date across all the search engines, adds Rubin.

Local Market Launch primarily works with digital agencies and certified marketing reps that have national brand accounts. It wins accounts after finding missing information for national brands during search audits of local locations. It all comes down to “completing the process of delivering products,” Rubin says.

The company also does a lot of work helping large, multi-location businesses claim listings. Many have locations that never show up, says Rubin. LML will work on them individually, adding them to sites such as Yelp, Bing and Google.

LML has just raised a new $1 million round led by former ValueClick execs Jim Zarley and Steve Umberger, adds Rubin. The revenue will help fund the Santa Barbara company’s expansion effort.

Rubin is speaking on search issues, along with LocalVox CEO Trevor Sumner and YP VP Chuck Lee at LIL: The National Impact May 7-9 in Atlanta. Register here

‘National Brands, Local Marketing’: BIA/Kelsey’s Spring Event is May 7-9 in Atlanta

BIA/Kelsey, forecasting $52.9 Billion in national local spending by 2017, has unveiled its new Leading in Local: The National Impact conference, which will take place in Atlanta May 7-9.

The 2 ½ Day event is expected to be the largest gathering of national brands and local marketing players that has ever taken place. Brands, franchises, multi-location stores and others will be the focus.

We’re ready with national local’s top leaders, including Weather Company Global Revenue Officer Curt Hecht; Gannett/G/O Digital SVP Mark Marinacci; Foursquare VP of Sales Rob Wilks; Living Social SVP Mitch Spolan; AutoTrader Founder Chip Perry; YP SVP David Lebow; ReachLocal SVP John Gould; Yodle VP Corey O’Donnell; MediaVest EVP Maribeth Papuga; and many other leading innovators.

A number of speakers will be accompanied by top brands they are working with. The list already includes marketing leaders at brands such as Scion, Two Men and a Truck, Genghis Grill and PostNet. BIA/Kelsey is also holding The GoLocal Awards for brands, which will include an on stage presentation at the end of Day 2.

This isn’t your typical “local” event. It’s all new, it’s all important. And it’s all here. Register.

Hyperlocal Lives! Chris Jennewein On ‘Times of San Diego’

Chris Jennewein

The layoffs at Patch have been met around the industry as the latest sign that hyperlocal can’t work because of the difficulties in scaling content and ad sales locally while attracting a reasonable quorum of local readers. Hale Global, the new owners at Patch, don’t believe it. And neither do the hundreds of people who make up an extended hyperlocal community, including a number of ex- Patchers who remain at least personally committed to making hyperlocal work.

Chris Jennewein has been pushing the envelope in hyperlocal since the early days of Videotex at The Atlanta Journal Constitution. Since then, we’ve followed him as he lead a series of major initiatives at Knight Ridder Digital, The San Diego Union Tribune, The San Diego News Network, The Las Vegas Sun and most recently, as Southern California’s editorial leader for Patch.

Today, Jennewein launched The Times of San Diego. Is he The Man of LaMancha, chasing the Impossible Dream? I asked him a few questions via email.

Q: People think hyperlocal will never work. What did you learn about what does work?

The challenge with hyperlocal is to match the market size with the economic opportunity. Bigger markets simply have more opportunity. We think the San Diego metropolitan area, with a population of 3.2 million, is a sufficiently large opportunity and yet still local. In fact, in today’s world regional is probably local because people commute long distances and their personal and professional networks stretch far beyond individual communities.

Q: What have you learned about San Diego as a media market in terms of hyperlocal? Pros and cons?

San Diego may be farther along in regionalization that some older markets in America. San Diegans think they live in the entire metro area, not just La Jolla or Chula Vista or Carlsbad. So a regional news source is more likely to succeed here.

Q: Is this a model you can take to other markets?

I think this is a model that would definitely work in other markets, especially in the West, but our focus is solely San Diego right now.

Q: Do you think you are directly competing with other media properties at this point? Which ones?

We’re not competing with other media but instead going after what we call “unaffiliated local news consumers.” These are people who get news from a wide variety of sources on an almost serendipitous basis. Our goal is to provide this audience with essential local news and information in an easy-to-consume manner.

BIA/Kelsey Presents ‘Enlisting SMBs for Card Linked Offers’ at CardlinX Forum April 7

Local marketing has increasingly been about non-advertising channels, including Web sites, reputation management, social media, prepaid promotions and big data analytics. In recent months, much of our attention has been on the leveraging of card payment information before, during and after transactions – especially for promotions and analytics.

Card-linked offers and transaction marketing will only get more impactful as commerce transitions to mobile. As they say: “You are not what you search for, you are what you buy.”

With this in mind, a wide range of companies banded together last October in The Cardlinx Association to develop common standards and awareness for the space. Cardlinx is now set to launch a one day event April 7 at The Mandalay Bay in Las Vegas (before The Electronic Transactions Association conference.)

Cardlinx has developed a great lineup, including many industry leaders — some of whom you’ll recognize from BIA/Kelsey events. Some of the more familar “names” include Erik Jorgenson, Microsoft; Dom Morea, First Data; John Bax, Living Social;Eckart Walter, CardSpring; Patrick Grady, Deem; and Schwark Satyavolu, MasterCard.

BIA/Kelsey is also involved: we’re running a session entitled “Enlisting SMBs for Card Linked Offers.” We’ll pair some brand new BIA/Kelsey research with presentations from Ed Braswell, CEO, Edo Interactive; Doron Friedman, CEO, SpotOn; and Kevin Lewis, Director, Strategic Solutions, First Data.

Cardlinx is giving BIA/Kelsey community members $100 off registration prices. Just write “BIA/Kelsey” in the comments section when you register,and it will be taken off the fee.

Radius Intelligence Raises $13 Million Round; Eyes D&B’s SMB Business

Watch out Dun & Bradstreet. Radius Intelligence is coming.

Radius, a five year old, San Francisco based firm formerly known as FWIX, is gunning for D&B’s SMB data business by scraping the Web for insights into how users find and engage SMBs, and then providing leads for them. Today, Radius announced that it has raised $13 Million in new financing. The new amount comes on top of $15.2 Million raised in prior rounds.

The new round is led by Formation8 Partners, which has been joined in this round by prior investor Blue Run Ventures and CEO Darian Shirazi. American Express, Western Technology Investment, Stanford University and Comcast Ventures participated in earlier rounds.

Speaking at BIA/Kelsey’s Interactive Local Media event in December, Shirazi said the company is committed to “empowering people to make good decisions around big data.” Radius scrapes the Web and uses additional sources to provide a rich picture of SMB engagement with customers and comparing that data with their competitors. Social media, news, listings, neighborhood information and other sources are all indexed.

Radius says it accurately categorizes firms based on such usage, and provides leads based on the types of customers it sees by looking at SMBs and their competitors. Leads programs begin at $99 a month, and the company is already pulling in “millions of dollars in annual recurring revenue,” according to figures cited by The Wall Street Journal’s Venture Capital blog. The blog quoted Shirazi as saying that Radius’ goal is to reach $10 million in annual recurring revenue this year.

At our ILM conference, Shirazi argued that his firm’s cloud-based approach has become much more relevant than the “antiquated,” “spreadsheet” approach taken by traditional data leaders, such as D&B and others. Historically, a good chunk of their business intelligence comes from SMB suppliers, said Shirazi. But SMBs have “moved from checks to credit,” making it more difficult to get an accurate snapshot about a business from their purchase data (i.e. how many cups have been ordered by a restaurant, etc.)

Radius Intelligence CEO Darian Shirazi