Back to My Roots: Setting Up My Own Research and Consulting Shop

Effective October 1, my role with BIA/Kelsey will change from “Chief Analyst and VP” to “Advisor and Local Expert.” The change allows me to refocus on specific research and consulting areas and work on a case-by-case basis with chosen clients. I’ll be using Local Onliner as my hub for all communications.

Working with BIA/Kelsey has been a great privilege. I’ve been with the company now for 9+ years (and with The Kelsey Group for 2 ½ years before that). I hope to continue to work with the company and to benefit from its thought leadership and events for many more years.

BIA/Kelsey has given me fantastic opportunities and deep friendships in-and-out of the company – and allowed me, as the head of conferences, to work with conference attendees and the 1,000+ industry leaders who graced our stages. I am deeply honored that you have invested your time, thinking and money with us.

Thank you to Tom Buono and John Kelsey for supporting the research and conference development. And a special shout-out to my mentor Gary Arlen, who showed me the ropes in the nine years we had previously spent together at Arlen Communications Inc., and made sure to bring out the fun and intellectual excitement in all of our work.

As for my next steps in research and consulting, I look forward to reaching out to the community. You can also find me at several great events over the next couple of months. Here is my schedule:

Sept. 22: The Cardlinx Association, Data Driven Commerce: Card-Linking and the Transformation of Offers, Bellevue,WA
Sept. 28-30: BIA-Kelsey SMB, Big Ideas on Local Marketing for Small Business, Denver Tech Center
Sept. 30-Oct. 1: Local Media Innovation Conference, Denver Tech Center
Oct. 25-38: Money 2020, Las Vegas
Dec. 8-9: BIA/Kelsey NEXT: The Future of Local Digital Media, Hollywood

Shopping Malls as Local Rewards Targets? Starwood Partners with Spring

Shopping Malls get a lot of foot traffic, but other than some email and newsletter marketing, haven’t really had success parlaying their brand and their consumer loyalty to online marketing efforts.

Starwood Retail Partners is seeking to change that with the rollout of “Oh, So Simple Rewards” at the Chicago Ridge Mall. The launch will be followed by three additional markets by the end of 2015, and all 29 Starwood properties during 2016, reaching 3000 retailers locations and more than 100 million annual consumer visits. The rewards program is a partnership with Spring Rewards Network, which says its mission is to connect digital marketing efforts to in-store sales.

For consumers, the one-step signup process links an existing Visa, MasterCard, or personal American Express credit or debit card to an Oh, So Simple Rewards account. Members can connect as many of their cards to the account as they wish. They will then automatically earn credit for purchases made across the entire mall and receive real time notifications for cash back rewards. When the shopper spends $250 at Chicago Ridge Mall stores, they will automatically earn a $10 credit connected to the card(s) registered to their rewards account. Members can use their earned cash value at a retailer they choose.

At the Chicago Ridge Mall, the Rewards program will be promoted via kiosks, signage etc. In return, the malls receive a small percentage of spending and also incents its customers to return more regularly and spend more. (malls typically receive a percentage of gross receipts).

On Demand Companies Focus on Deliveries

Cheap deliveries will drive impulse buys and new revenues: or at least, that’s the hope of a number of new local commerce players. Uber and Sidecar – high profile on demand leaders – have seized on the strategic value of delivery (along with Google, Amazon, Groupon, WalMart, PostMates and specialized delivery players such as GrubHub and

During the process of raising hundreds of millions of dollars, they’ve positioned themselves as local commerce players that enhance their freelance taxi origins. As Sidecar put it this spring, delivery represents “a passenger in the trunk” that can help drivers stay busy during idle periods – and one that it expected to account for 50 percent of its revenues by the end of 2015.

Uber has now rolled out Uber Eats, an update on its Uber Fresh program – in itself part of a broad extension effort called Uber Everything. Uber Eats is available in six markets: San Francisco, Los Angeles, New York, Chicago, Barcelona and Toronto. The idea of the $3, no tip deliveries is to scale/batch service from the most popular eateries and defeat long lines with 10 minute delivery service. Uber Essentials, an earlier effort to deliver small household products like toothpaste and aspirin, was discontinued in January 2015.

Sidecar, meanwhile, goes so far as to say it is now “deliveries first.” And after just seven months, it also told Geekwire that it has become the “largest B2B network in the U.S.” It is also working around some of the built-in inefficiencies of delivery , including complicated pickups, traffic, driver parking and the ability to batch orders. In fact, it has now added walkers, bicycle couriers and scooters to its regular driver network. According to the Sidecar blog, its walkers have been able to decrease pickup times by 75 percent.

So – is this really going to work? Or are these companies just dressing up their S1s as they prepare their public offerings? It may in fact be going well. And the no tip delivery charge is a good deal for consumers. But one Uber driver complained to me that there is almost no way drivers can make any real money with the low delivery charge. The only time that drivers ever really make money is during surge pricing. And no system is in place to assure that the food is hot ( or that the food doesn’t smell up the car). One customer who got a cold plate was really angry at Uber and took it out on the driver. Obviously, there are some kinks to iron out.

G5 Raises $75 Million; Extends Vertical Marketing Focus

We like vertical specialization for local marketing, and have long admired the approach of G5, the Bend, Ore- based local marketing firm that started with a focus on self-storage unit owners in 2005, and later added senior housing, multi-unit property managers and student housing. The 175-person company has 425 customers controlling 6,900 properties. Sixty percent of its business now comes from multi-unit property managers.

Last week, G5 hit the big time with a $75 million raise from Peak Equity Partners. The company says it will use the funds to extend its Marketing Cloud, which has gone beyond G5’s origins in search, and now also provides a full slate of analytics, search, social and advocacy.

CEO Dan Hobin told BIA/Kelsey that the key is to recognize the individualities of each vertical. Self storage takes about a month to fill a vacancy. Multi-family units take two weeks. Senior housing has a longer cycle: three months.

Most vertical owners perceive their marketing efforts as too expensive for property owners, and too cumbersome for consumers, says Hobin. It takes three days for consumers to get an apartments, from the time they look at it to the time they sign the lease, he says. “It is easier to buy a car than rent an apartment. You should be able to find a place in five minutes.”

Hobin says G5 works with all levels of property owners, but in the apartment space, for instance, most of them are the “middle level” below the publicy-owned, giant REITs which have traditionally used sites such as They could use G5 to complement those big site efforts, he says. G5’s emphasis on a wide range of channels, including lower cost channels such as social media and ratings and reviews, saves them money and drives more traffic to their sites. The analogy is to a site such as Kayak in the travel space.

While G5 is focused on its four verticals today, it is looking to expand to additional verticals. If it adds a vertical, it will really focus on its individual characteristcs, says Hobin. “It is difficult to enter new verticals,” he said.

New Paper: Local’s Stake in Programmatic Advertising

A new era of big data analysis and automation has been heralded in by the rise of programmatic advertising. But what is the actual impact on local? That’s the subject of my new Insight Paper for BIA/Kelsey: Defining the Local Stake in Programmatic Sales.

Programmatic advertising supports the ability to automatically plan, buy and optimize ad campaigns. By adding transparency, discoverability and transactability to media inventory, much of the buy/sell friction is reduced When it comes to local, however, programmatic’s rise has been slower because of local’s fragmentation, natural inefficiencies and non-early adopter status. We estimate that fewer than five percent of ad sales are now oriented towards programmatic exchanges.

Will programmatic ultimately prevail in local? We think so, and in a big way. Local programmatic allows marketers to optimize local inventory buys efficiently and effectively at scale – and close the loop with better attribution insights. It is already strong in search and display, and should become increasingly important in the new powerhouse channels of mobile and video.

In our paper, we detail the elements of programmatic; discuss major issues that impact local sales channels (i.e. the purported flight of sales agents?); and provide insights from top thinkers in the space. Those include MediaVest’s Jason Dailey, Prohaska’s Matt Prohaska, Advance Publishing’s Sandy Lohr, Hulu’s Kristen Wnuk, Balihoo’s Dabid Olivera,’s Frost Prioleau, Operative’s Lorne Browne, Enradius’ David Carberry and Ninth Decimal’s David Staas.

Come to Denver: BIA/Kelsey’s SMB Show, Sept. 29-30 (+ Discount Code)

The “local” space has become many things to many people…which makes BIA/Kelsey’s SMB Show the most focused event in our annual lineup. Produced this year by my colleague Charles Laughlin, the event has been growing every year and is making a case for itself as the company’s new flagship. It will be held at Denver Tech Center Sept. 29-30.

Some great features are planned for the event, including a new version of the Future Stars showcase and contest; a robust exhibit hall; and of course, the industry’s best local networking. The Denver area in the fall is quite nice, too.

Some of the 40+ handpicked industry leaders that I am especially looking forward to listening to and talking with include Vistaprint’s Scott Bowen, Go Daddy’s Raj Mukherjee, YP’s Darren Clark, Hibu’s Kevin Jasper, Booker’s Josh McCarter, Constant Contact’s Joel Hughes, Microsoft’s Kelly Thomas Johaim, SMB visionary Randy Parker, and Home Advisor’s Craig Smith and Chris Terrill.

Use my discount code “SMB2015PK” for $200 off. Rates go up August 31.

Belly Adds Apple Ties, Enhancements: A Look at Local Loyalty, Post 2011

A slew of membership-based loyalty plays such as Belly, Five Stars, SpotOn, MOGL, Spring, Perka, Thanx and others launched around 2011 to focus more on customer loyalty than new customer acquisitions. The business model: charge SMBs monthly fees; recognize customers via Point of Sales or other means; drive new purchases and loyalty.

Since then –but not recently– a lot of VC Money has flowed into the space. At the top level, Five Stars raised $42.7 milllion, and Belly raised $30 million. First Data likely spent a similar amount in purchasing Perka.

Is there light at the end of the tunnel? The companies haven’t scaled as quickly as they thought. Local sales channel issues have been paramount. There have also been issues attracting customer signups, a glut of promotions options; and a shortage of attractive merchant offers. Without significant marketing budgets, there are also under-developed brands. The economics of the services also haven’t been great. It’s tough to score big with high built-in costs for tablets, etc.

Here’s the situation today: It is hard to see how many subscribers each company has, but Belly may be the leader – especially if the space is narrowly defined so that it doesn’t include the larger, financial institution-oriented, card-linked offer players. It has 10,000 announced customers, each presumably paying near the rate card of between $100 and $199. Eighteen markets have been fully launched. Five Stars may be the second largest, in terms of merchant count. It is forecasting 8,000 SMBs by the end of 2015.

Meanwhile, the companies have learned a lot and keep working at it. Today, Belly announced it was adding several enhancements. These include DIY offer generation for the SMBs; and analytics for SMB email marketing campaigns. Most intriguing to us are efforts to leverage its Apple relationship, which is no surprise. Belly was among the first to embrace Apple Passbook, and the company’s salesforces rely on iPads. Under the new deal, Belly is included as one of 40 + partners for Apple Pay and one of the most significant players tied to smaller SMBs.

Will the relationship deepen? Would Apple, for instance, be interested in acquiring Belly? As Perka executives noted after its sale to First Data, there are real advantages to working with a major partner. In a story published by Crain’s Chicago Business, CEO Logan LaHive said “This is an incredibly exciting new distribution channel. It allows us not to just focus on direct sales but focus on resellers and other channels, with new partnerships that will open up new geographies.”