Category Archives: Research

Media Execs: ‘Local’ Sales Are 7th Most Impactful Revenue Issue

Localizing ad campaigns via geo targeting and local sales is increasingly important. At BIA/Kelsey, of course, the importance of localization for digital ad sales is an article of faith.

Local Sales are not, however, part of the “A” list of impactful issues for media executives. In a poll of media executives attending Operative‘s Op/Ed 2014 event last week in Palm Desert, Local Sales ranked 7th out of 11 features that impact revenues.

It ranked as less impactful than Effectively Scaling Ad Ops; Changes in buying/RFPs; Consultative Selling; Mobile Monetization; Ineffective Technology; and Cross-platform Selling. Video Monetization; Third-party Data; Buy/Sell Automation; and Real-Time Bidding ranked lower than local.

IAB Presenation 2014_2

Local Onliner Bookshelf: Christopher Schroeder’s ‘Startup Rising ‘

Let’s just concede that Silicon Valley is the biggest hub for Web activity, and that it has some real advantages over other locales in terms of engineering and programming talent, fundraising and industry attention. But Silicon Valley’s tech-centric view –which is less oriented towards media and content smarts and culture– doesn’t always hit the bull’s eye. We certainly find a lot of talent in Seattle, Boston, Austin, New York, Washington, Chicago, Los Angeles, Atlanta and Salt Lake City.

There is also fantastic new activity in countries like the U.K., Germany, Finland, Israel and China. But can countries without a core tech center also cut it? A significant challenge is posed by the countries of the Middle East, including Turkey, Egypt, Jordan, Lebanon, The UAE, Kuwait and Saudi Arabia.

Former Washington Post. Newsweek Interactive and HealthCentral CEO Christopher Schroeder, in his powerful new book, Startup Rising, focuses on how the tech community in the Middle East has not only developed a solid infrastructure for new Web and mobile companies, but has been an important driver of democracy and social progress as well. In fact, the new generation is demanding a life and opportunities that its parents and grandparents never had (See Google’s Wael Ghonim’s leadership role in the Egyptian revolution).

Schroeder got involved in the Middle East as an adviser to several companies and as a judge for a State Department startup competition in Cairo. Prior to his direct exposure to the region, Schroeder concedes he probably held the patronizing view of the region as lacking the political and economic freedom, or the culture or technology infrastructure, to develop startups from scratch. It is not just that women aren’t allowed to drive in Saudi Arabia. It is also that the Arab culture itself seemed unable to accept failure.

But in studying the startups of The Middle East, Schroeder discovers a lot about the grit of the entrepreneurs who organically build apps based on their real day to day needs – some of them desperate (Amazon-like ecommerce sites, social nets, online education, traffic apps, event guides, restaurant review sites, investor guides) And as he points out, entrepreneurship isn’t exactly new to the Middle East – it has been going on for thousands of years, dating back to the ancient bazaars.

Ecommerce especially drives the activity here, as the region moves from a cash on demand culture. But so does mobile, in its leapfrog over the landline based telcos that have held back the countries. And so do women – many of whom — even in their hajibs and burkas, in some cases — are focused on educating the next generation, and working to develop new services.

Schroeder points out that the entrepreneurial efforts in The Middle East can be broken down into Improvisers that play off successful sites elsewhere; Problem Solvers that take over roles once reserved for government; and Global Players that can impact any market.

Developments in the Middle East, of course, are at the book’s core. But what really makes this book important to the tech community — and a worthy complement to other “startup” tomes such as David Kidder’s “Startup Playbook” — is that it strips away the hubris and conventional thinking of what has made startups successful in the U.S. Instead, it focuses on the passion and creativity, real needs of consumers, and community that really anchor next generation services.

We are proud to announce Chris Schroeder’s keynote at BIA/Kelsey’s Interactive Local Media conference Dec. 10-12 in San Francisco.

Local Onliner Bookshelf: The LMA’s ‘Innovation Mission 2013′

Sometimes there is no substitute for dropping in on industry leaders to exchange ideas and specifically, to find out how their efforts relate to yours.

That’s what our friends at The Local Media Association have been doing the last few years with their “Innovation Mission,” a tour of top companies and industry leaders that really impact their member base of small local publishers. This year’s tour was especially top-notch, with headquarters visits to Facebook, Twitter, Google, Plug and Play Tech Center, The Denver Post, The San Francisco Chronicle, The McClatchy Company, AdTaxi and Emmis Radio.

BIA/Kelsey was pleased to be part of the tour, going up to San Francisco to present our vision of verrticalization, ecommerce and transaction marketing opportunities for publishers, along with FiveStars CEO Victor Ho.

The LMA’s Nancy Lane and Pete Conti have put together an excellent report of The Tour. We all tend to live and breath this stuff, but I personally learned a lot about native advertising, digital ad agencies and Twitter ad products. In fact, the report is a field guide to the key things that small publishers (and in fact, everyone) should be thinking about in terms of their digital and mobile transition. Non-LMA members can purchase it from this link for $479.

Yelp Rolls Out Local Revenue Estimator

Primitive (and perhaps misleading) estimates on effective ROI have driven many local publishers up the wall. During Yelp‘s IPO period, one analyst suggested that it cost pizza shops almost a hundred dollars in advertising on Yelp for every pizza sold.

To combat such mistakes and show how local ad dollars are really working, Yelp has come out with a new “Estimator,” which seeks to close the loop on the value of each lead. Any merchant that has claimed a Yelp page can track leads and engagement that Yelp brings in via phonecalls made from its App , check ins, or uploaded photos.

VP of Revenue and Analytics Matt Halprin, recently recruited to Yelp from Boston Consulting Group (where he worked on similar SMB analysis, as covered by our colleague Steve Marshall), noted that SMBs are confused about the value of their Yelp advertising compared to other channels, such as circulars, coupons, display and radio.

The Estimator, which is based on actual data pulled from Yelp’s logs, will give SMBs a much better idea of Yelp’s effectiveness, he says. But it “undercounts customer leads. We can’t see calls coming from consumers who are looking at their laptop and then making phone calls. It also can’t track customer walk-ins.”

Already, the Estimator has determined that Yelp advertisers do significantly better than non-advertisers. A local business that has claimed a Yelp page sees an $8,000 annual lift from Yelp, but advertisers see a lift that is $23,000. Halprin notes that typical ad packages run about $4,000 a year, or $350 a month.

Local Onliner Bookshelf: David S. Kidder’s ‘The Startup Playbook’

The startup ethos is something that a lot of companies want to emulate: the constant drive and hustle, passion and ruthlessness of it all. We are many years from the first dot com explosion, but I still have a habit of checking corporate parking lots after dinner to see how many people are doing all-nighters.

What can we learn by talking to the “winners” in business about their startup experiences? How can we transform what we focus on, how we scale for growth — and how we work with our colleagues?

These are questions not only for the Future Stars of local media and commerce, but for all the established companies that would like to reinvigorate their dusty, musty ways. And they are the questions posed by serial entrepreneur David S. Kidder.

After raising $32.5 Million for his startup, Clickable, from the likes of Amex (and then successfully exiting with a sale to Syncapse,) Kidder says he had come to realize that he had to update his “playbook.”

Kidder’s solution: go out and talk to 50 business and philanthropic leaders about what their playbooks were for success. And failure. Among the executives were many of the tech luminaries who may have known once who have gone on to spectacular success: people like Elon Musk, of Zip2, PayPal, Tesla and Space X fame; Kevin Ryan, from DoubleClick and Gilt City; Reid Hoffman, from LinkedIn; and Steve Case, from AOL and Living Social.

The results are captured in his new bestseller, The Startup Playbook. Topics range from product development to team building and HR; from investors to culture, design, marketing, finance, crisis management and more.

“The playbook I began with simply wasn’t robust enough to capture all the extremes of taking a company from its fledging roots, when you are solving five to ten challenges at a time, to a much larger company, where you are suddenly required to juggle hundreds of problems, often instantaneously,” Kidder writes.

Kidder confirms many things that I have long suspected in this totally fascinating book. Among them: That startup people are completely irrational and self deluded; that they will do anything to keep ALL of their options open. And with the expansion of tech tools, they are the stuff of the next generation’s success. As Kidder cites blogger Chris Dixon: “Building a startup will be the homeownership of the next century.”

Kidder is customizing highlights from The Startup Playbook for his Keynote at BIA/Kelsey’s “Leading in Local: The National Impact” conference in Boston March 18-20. You can register here.

SFSW: Taking on Punch Cards with Loyalty Marketing

Loyalty and engagement programs are now flooding the local ecosystem. They see themselves as the next step up from daily deals. At the same time, they hope to be more effective than “buy 10 get one free punch cards,” according to execs from LevelUp, Swipely and Closely who were among htose who spoke at Street Fight Summit West in San Francisco.

Level Up’s John Valentine says results from his company’s loyalty program are already apparent. The discounts and loyalty points give consumers a better feeling of value, and in a review of 500 locations, have resulted in consumers paying seven percent more on average compared to regular tabs, he said.

Valentine acknowledges that the audience is self-selective. The fact that they have an iPhone suggests they’re more affluent. But it has “gone beyond the cool factor,” he says. “Using a phone for paying is becoming more normal.”

Mostly, however, Valentine says the race is on to gain a strong customer base. Level Up claims 200,000 users after just nine or ten months, and it is growing 20 percent month over month. It winds up paying $5-8 apiece for customer acquisition, he said. Even if the industry does a fast switch into NFC, and starts working more with entities such as Google Wallet, “ we don’t care,” Valentine added. “We will have a base of customers” and will be in a position of strength.

Swipely’s Angus Davis, meanwhile, suggests it is not going to be so easy getting that customer base. “Acquiring consumers is very difficult,” he says. Swipely’s approach is to build up customer loyalty, and after several months of experimentation, get them to develop restaurant specific loyalty programs.

Ultimately, it is all about fostering more repeat business for restaurants, says Davis. Sixty percent of their business comes from repeat business. Getting customer engagement and providing rich analytics will win merchant accounts over from the legacy of credit card accounts, “where bi-furcation and crust has built up.”

A different approach is being taken by Closely. CEO Perry Evans said that that the key is to give merchants “tools that get to the heart of loyalty.” Evans is especially intrigued by CardSpring, the new loyalty and promotions platform that allows consumers to opt-in to various deals and services. It puts incentives in front of consumers at a time that makes sense. “You want to give them the remote control so they can turn things on and off and decide what channel they want,” he said.

“Consumers are living their lives facedown into their phones and into their network,” said Evans. “Shopping decisions are becoming more live and based on a new combination of quality (review related) and price (putting incentive in front of consumers at time it makes sense). Give them the remote control to turn things on and off and give them a channel,” he said. That will beat Facebook. “The tools are not there. It centers only around the display ad category.”

Local Display vs. Search: Display Often Wins

Local display doesn’t get as much attention as search for SMBs, but we know that in many situations, it can complement search campaigns, or even produce better results. No one pushes harder on this than PaperG, which has developed a network of local media sites for its automated display solutions, and is now working with 20,000 SMBs. It has put together a great Infographic based on its research, coming up with some striking data.

Supporting the sense that display and search are complementary, PaperG notes that 35 percent of people who see a display ad will later search for the business. It also notes that display is cheaper on a cost per click basis that using radio or direct mail. The average CPM cost is $1.50, compared to $4.50 for radio, and $350 for direct mail.

The cost of a display ad for key verticals also runs substantially less than desktop or mobile search. Dentists, for instance, will pay a CPM of $2.58, compared to $6.13 for desktop search and $3.55 for mobile search.

“We’ve seen display work well when positioned as creating “brand awareness with performance upside,” says CEO Victor Wong in an email. “Certainly advertisers with multiple locations or that spend $1,000+ a month on print advertising benefit from greater brand awareness from online display at far cheaper costs than traditional channels. That said, we’ve now gotten targeted display to start working for single location businesses spending $500/month and with re-targeting, we can get results for as low as $100/month.”