A Look at Yodle’s $75 Million IPO Filing

Yodle — part of the class of 2005-2007 SEM-focused Independent Sales Organizations that took on traditional local sales organizations — filed this week for an IPO that could raise $75 Million.

The filing provides insights into Yodle’s evolution, and the evolution of the local online sales space overall, which has moved towards cloud-based automation. As Yodle notes, it not only provides its customers with an online presence, but mobile and social presences as well.

“Businesses need a comprehensive digital presence that includes a professional quality website that is easily discoverable and optimized for mobile devices, exposure on leading online directories and ratings and reviews sites, and tools to communicate with customers via email, text messages and social media” notes Yodle in the filing.

The company’s customer base currently consists of 44,800 local businesses, making it one of the largest sales groups. These customers helped it achieve revenues of $161.9 million in 2013, with the average customer of its flagship product paying under $300 a month – or less than half what they’d have to spend if they purchased similar functionality a la carte, says the company.

Many of Yodle’s customers belong to one of several vertical categories. For instance, the company reports that it has account relationships with 6,400 dentists (out of 166,500); 4,500 plumbing, heating and air conditioning contractors(out of 226,500); 3,400 lawyers (out of 165,000 ) and 1,200 landscapers (out of 459,600).

Yodle has also focused increasingly on servings “brand networks” — national franchisors, manufacturers and multi-location businesses that are targeting locally. As the space evolves, the competitive picture has evolved as well. Yodle’s filing notes that rivals for local business marketing budgets now include a wide range of players, including traditional Yellow Pages, direct mail campaign providers and advertising and listings services on local newspapers, magazines, television and radio.

Other competitors include online search engines, online business directories, providers of digital presence offerings (i.e. GoDaddy, Main Street Hub, Web.com); providers of digital marketing solutions, such as SEM companies; and productivity and office management tools, such as Constant Contact, Demandforce, MailChimp and Solutionreach.

The 2014 LMA Innovation Mission: What Tech Leaders Can Teach Traditional Media

When a traditional media executive visits Google, Facebook and other tech leaders, there is always a lot of oohing and ahhing and a bit of envy.

You can’t help but notice the great perks, such as free dry cleaning and gourmet food. Add to that their relative transparency; open seating that bust out the cubicles; first name relationships with the executive team; grand vision statements that go beyond profit; the distribution of company equity; and their trust in employees.

But these tech perks have been around now for years (and copied.) What are the real revelations that traditional media company executives can gain from a tour of tech leaders, circa 2014? That’s the question posed by The Local Media Association’s Fifth “Innovation Mission,” a six day, multi-city adventure that included on site briefings at tech and media leaders such as Google, eBay, LinkedIn, The New York Times, Buzzfeed, CBS Local, Gatehouse Media, Automattic, RussMedia and others

BIA/Kelsey spoke on last year’s tour, and we have been eager to see the report from this year’s edition. Here’s the summary: The new wave is all about sharing media; the widespread use of mobile has given rise to omnichannel publishing; and the next wave of internal communications and news gathering is quickly moving from email to messaging.

The tour’s focus on shareable media especially caught our attention. BuzzFeed – which gets 23 million of its 57 million daily views from shared posts –goes so far as to say that share data has become “the most important metric.” The report says this about Buzzfeed: “As ideas surface, they ask themselves: ‘would you share this with your friends?’ For Buzzfeed, share data is seen as a stronger indicator of audience engagement than HuffPo-like “click bait” that fools you into checking out an article, but doesn’t ultimately engage you.

What drives sharing? For BuzzFeed, the biggest driver of shared media has been YouTube; but Pinterest is #2 – much more impactful than live media such as Twitter. Facebook is also a big driver, although its impact is not immediate: it takes several days to build.

Is Buzzfeed’s relentless focus on shared media an apples-to-apples “best practice” for traditional media companies? Probably not. After all, it says its real focus is grabbing people who are “bored in line, bored at work and bored at home.” (One of its biggest traffic drivers is Miley Cyrus.) Still, as mobile’s share of media usage gains, and “boredom breaks” pre-dominate, there are definite lessons in studying its model.

The LMA Innovation Mission Report can be purchased here.

Craigslist’s Revenue Up 101%; Measuring Its Impact

There have been several game changers in local. One is Google search. Another is Yelp reviews. Another has got to be Craigslist.

Craigslist started out as a totally free community site focused on recruitment. In recent years, it has incrementally added paid sections – partly to make them more manageable – and it is beginning to make real money from these. According to “conservative” estimates compiled by our friends at AIM Group for its annual Craigslist report, the site’s revenues grew 101 percent in 2013 from $166.5 Million to $335.7 Million.

While Craigslist now serves 700 markets around the world, AIM Group says the vast majority of the revenue comes from 54 markets. The dollars largely come from Craigslist’s affordable fees for recruitment in 28 markets, and its auto ads, which were just introduced in 4Q 2013. AIM estimates that 79 percent of Craigslist’s revenue comes from recruitment; 16 percent comes from autos; and the remaining five percent coming from things like “therapeutic” listers in New York City. The site’s fees range from $5 to $75.

Yet, the site stays true to its roots as an altruistic community resource by not charging for “private party” person to person ads – recruitment ads are just charged to agencies and companies; and auto ads are just charged to dealers.

The question we’ve asked in the past is whether Craigslist is vulnerable. It still seems easy enough to produce a better classifieds site. eBay Classifieds – started after eBay was unable to take over Craigslist — is a much better site in terms of user experience, with links to social media, easy photo uploads, etc.

To be sure, Craigslist is — as AIM notes — “the same drab user experience” as it has always been. Under the hood, however, AIM notes that Craigslist has finally started improving the site. Suddenly, listings are mapped; there are new ways of searching for goods and services; there is a picture gallery view; and even a way to save thumbnail photos. Moreover, by imposing fees on dealer auto ads, it has become easier to find autos for sale — spam entries have been significantly cut back.

Does all this suggest that Craigslist is now poised to become a state-of-the-art site that truly serves the needs of its users as we move into the mobile age? Not necessarily. But Craigslist has probably done enough to keep its critical mass of listers, and users.

Just Out: Hot Agenda for LIL: SMB Digital Marketing (September 22-24, New Orleans)

On the heels of last year’s Leading in Local: SMB Digital Marketing show in Austin, we’ve just announced our agenda for this year’s big event in “The Big Easy”: New Orleans.

Our initial slate of Keynotes include:

Acxiom CEO Scott Howe
ReachLocal CEO Sharon Rowlands
Google’s SMB Revenue director Steve Espinosa
Facebook’s Leader of SMB/Product Insights Joe Devoy

Additional Featured Speakers:

Sprint’s Karen Noel, GM, Small Business
Groupon’s Dan Roarty, VP of Product Marketing

Also at the event: Search marketing leader Kevin Ryan. Ryan will be debuting his new business best seller, “Taking Down Goliath: The Digital Marketing Strategy Guide for beating competitors with 100 times your spending power.”

More great speakers (We’ll end up with 40 or more):

Yelp’s Darnell Holloway, Sr. Manager, Local Business Outreach
NOLA Media Group’s Ricky Mathews, President
Morris Communications’ Steve Gray, Director of Strategy and Innovation
The Houston Chronicle’s Warren Kay, CRO
ForwardLine’s Craig Coleman, CEO
Search Influence‘s Will Scott, CEO
BizHive’s Kim Feil, CEO
Wanderful Media‘s Doug Kilponen, COO
Perka’s Rob Bethage, Co-Founder and VP
Booker’s Josh McCarter, CEO
Agendize’s Alf Poor, President

Will we see you down in New Orleans? Check out the full agenda here. Also, we’ve extended our early sign up discount through July 4. Please register here.

Booker Launches Mobile Apps for SMBs

Scheduling/booking is coming into its own as a key feature for SMBs, as more and more businesses tie their marketing and promotions to open slots in their schedule.

Key companies in the space include Full Slate (recently acquired by Intuit,) ReachLocal’s ReachCommerce, Groupon Scheduler, Agendize, Moon Valley Software, GenBook, Schedulicity, Maxipage and Hakema (in Europe). Another company, MyTime, was founded by RedBeacon founder Ethan Anderson and is an aggregator of scheduled appointments.

Another major player in the space is Booker, which has raised $42 Million. While focused on the beauty, health and wellness space, it also works with a wide range of national-local players.

Booker announced today a mobile app partnership with Como (formerly Conduit Mobile) to take scheduling beyond the desktop. The app takes less than 15 seconds for SMBs to create.

Mobile apps make a lot of sense in this context. A customer might make 12 appointments per year for cut and color treatments at a salon. For such a customer, a dedicated App — perhaps tied to a loyalty program — coule be especially useful. The same may not always be true for “discovery” segments such as restaurants and retail, which may be better aggregated in directories such as Yelp, Google, OpenTable or YP. Customers may also prefer booking an appointment directly with the SMB, rather than going through a directory site — or at least, this is what Booker is banking on.

Booker CEO Josh McCarter is a featured speaker at BIA/Kelsey’s Leading in Local: SMB Digital Marketing, which takes place Sept. 22-24 in New Orleans. You may register here.

Priceline Moves Upscale via $2.6 Billion OpenTable Acquisition

Priceline is sort of like eBay – a company known for its origins in auctions, but more recently focusing on distinct, “buy it now” niches. It has recently fleshed out its core travel brand by moving up the value chain to travel reservations via its acquisition of Kayak. It has also gotten into the “sharing economy” by adding AirBnB-like private listings to its Booking.com brand, which is an international powerhouse.

Today, Priceline added restaurant reservations and search to its stable via the $2.6 Billion purchase of industry leader OpenTable, which works with 31,000 restaurants – mostly high end white table cloth restaurants willing to pay a hefty premium for reservations management and leads to undecided consumers. Open Table is an international leader with strong customer bases in the U.S., U.K.,, Germany, Japan and Mexico.

For Priceline, the most attractive parts of the deal are probably OpenTable’s 15 million, high end, travel-oriented customers; the company’s verified, high quality restaurant reviews; OpenTable’s strong mobile orientation; and its extensive affiliate network with 600+ local and vertical sites, which receive commissions for sending traffic to OpenTable (and accounting for 5-10 percent of OpenTable’s business.) These networks might be extended to include other Priceline properties.

There is probably some disconnect with OpenTable’s high-end customer base and Priceline’s discount set – most OpenTable customers won’t be using Priceline itself. And an effort to extend OpenTable’s feature set with Groupon-like deals proved to be underwhelming (although the company has maintained an extensive and apparently successful “Dining Checques” loyalty program). Many OpenTable customers are also not using the service in travel mode — they are local.

Still, OpenTable customers might use the other services. And the seamless Priceline app experience could also be applied as mobile becomes a paramount factor for all travel services.

A larger question we’d have is the core of OpenTable’s value proposition for restaurants: the reservations management system, which is based on dedicated customer premise equipment (known as The Electronic Reservations Book.) The average ERB using restaurant pays $249 for the service (plus $1.00 per seated diner using the OpenTable system.) But in the age of tablet-based POS and reservations services using WiFI, OpenTable’s proprietary system would seem threatened.

So far, it has held its own against such tablet-oriented companies as UrbanSpoon’s Rez and Groupon‘s Breadcrumb – OpenTable’s base of customers is too strong to quickly turn off. OpenTable itself is preparing for a transition. Yet, it has been developing a Cloud Based program that charge a $2.49 per diner charge.

Structurally, we also ask ourselves whether OpenTable is in a distinct “high end restaurant reservations silo,” where it now sits; or whether it is really part of a developing “food silo” that is based on search and discovery, would also include reviews; restaurant and fastfood delivery (i.e. GrubHub), grocery delivery (Amazon Fresh, Google) and reviews (Yelp.) Priceline might be positioning itself to be in the right of the middle of these conjoining elements. (then again….the new silo might ultimately be oriented more around delivery).

Is Amazon Testing a Local Marketplace?

Amazon has been reported to be prepping a local services marketplace test in one market. If the article is accurate, this effort won’t necessarily be adopted into a nationwide product – Amazon frequently tests product concepts — but should be watched with interest.

Amazon Marketplace – or whatever its final branding – would complement existing Amazon services in local, including Amazon Local, a Groupon-like deals entity now in dozens of markets; and Amazon Fresh, which is providing grocery delivery service in Seattle, San Francisco and southern California. (Amazon also touches the local marketplace via Amazon Web Services and Amazon Payments, both of which provide digital infrastructure support for local merchants.)

If launched, Amazon Marketplace would fit into the company’s mission of making it easier for consumers to make informed decisions on purchases and to buy goods and services. It would also help source deals at the local level for Amazon Local. Amazon may be frustrated at the difficulty of sourcing deals through third parties, and the expense of a local sales force, which is mostly used to sell to local retailers. As described, Marketplace would be an automated product.

It could also fit into Amazon’s growing advertising business, which has made a big play via Kindle Offers and much more importantly, Product Listing Ad tiles at the top of search pages – monetizing photo search for the first time. Amazon made $600 million from advertising in 2013, but hasn’t yet gone into local advertising, which represents a new frontier.

According to the Reuters article, the initial effort for Amazon Marketplaces would focus on hiring local services, rather than goods. Yelp and Angie’s List are the biggest players in the space, but may have less than 10 percent of the overall market.

Amazon may seek to implement the infrastructure for Marketplaces from Pro.com, a new, 30 person service that includes 15 ex-Amazon employees. Pro.com has raised $3.5 million, including funds from Amazon CEO Jeff Bezos. The service matches contractors with consumers and providing job estimates. But Bezos has never sold his personal investments to Amazon (unlike Oracle’s Larry Ellison and AOL’s Tim Armstrong). It seems especially unlikely because Bezos is only a minority investor in the company.

In any case, Amazon’s launch of a services marketplace would be somewhat ironic. In April, the Bezos-owned Washington Post discontinued a service which is almost exactly like what has been described for Amazon Marketplace – Service Alley. (The greatest irony of this is that Service Alley was built – pre-Bezos — on top of TeachStreet, a start up that Amazon purchased in an acqui-hire, and then discontinued).