How Real is WiFi for Local Ads?

There’s been speculation that free WiFi would be used by Google and others as a carrot to target users and seize the local advertising market. That’s hard to do under any circumstances. But assuming that all the stars align, how attractive can WiFi be as a targeted, local delivery medium?

It can be “very attractive,” according to Nitin J. Shah, Executive Vice President of Feeva Technology, a San Francisco-based software company focused on WiFi ad targeting.

Shah is the first to concede the real limitations of WiFi technology. But he argues that WiFi’s adoption in laptops, PDAs and cellphones, combined with the rapid proliferation of free WiFi hotspots, “clouds” and “zones,” creates real opportunities for local advertisers and other geo-targeters.

IYP/Search Case Study: Morris Communications

Morris Communications is well known within the newspaper industry for being a highly entrepreneurial media company, especially in its pursuit of new, Internet-based revenues. In the summer of 2004, Morris launched Yellow Advantage, a hybrid of online search and Yellow Pages products. Yellow Advantage is branded as “a new breed of Yellow Pages.”

Since its launch, Yellow Advantage, or a similarly-branded product, has been introduced in 20 Morris markets, ranging from Ardmore, OK (circulation 10,800), to Jacksonville, FLA (circulation 167,229). It is powered by Interchange, which provides the search technology, licenses the listings, and supplements Morris’ local advertisers with an extensive network of national advertisers. (Disclosure: Krasilovsky Consulting provides strategic consulting to Interchange).

Revenues from Yellow Advantage aren’t critical to Morris’ bottom line today, although it has a positive return on investment. Strategically, it plays a more important role. It helps defend the papers from increasingly local-oriented search engines and Yellow Pages. At the same time, it extends the range of newspaper advertising to existing advertisers, and reaches out to small business customers that don’t normally advertise in the newspapers (or their websites).

How ‘Review’ Sites Fit In

The next generation of Internet Yellow Pages will inevitably include user reviews and ratings of services, whether they scare away advertisers or not. Some people have concluded that such reviews will be an interesting “extra.” My expectation is that they’ll be a core service from which all the other features sprout, including maps, urls, professional ratings, phone numbers, and Yellow Pages “copy points,” such as brands stocked, photos, hours, credit cards accepted and nearby businesses.

User reviews and ratings aren’t new. Of the major services, AOL has probably been collecting reviews the longest. Reviews from 1998 still show up on AOL’s undernourished “local experts” site. Yahoo! Local’s reviews, however, overtook AOL some time ago.

Since then, a lot of startups have entered the picture, hoping to carve out their own niches. These are generally more focused on the reviews, and less on other Yellow Pages features. Strategically, most probably have an end goal of selling to a major player at some point. Such local service-oriented sites include Insider Pages, Judy’s Book, CitySearch, Tribe, Cox’s Kudzu, BackFence and American Towns.

Among the local-oriented review sites, I liked Judy’s Book for its ease of use and high level of community. By allowing users to comment on all their life interests, it builds a better sense of community and more thoughtfulness. The site also provides a unique window into who is actually looking at which reviews, and counts them up. I’ve apparently got 319 looks at my 16 reviews; 119 of those looked at my mixed review of a local Honda dealer. It is definitely interesting, and brings a much heightened sense of community beyond Craig’s List.

Women Pass Men in Key Local Uses

Men and women are frequently targeted by local online marketers for different applications. Men are generally thought to be more interested in tech, news, cars and just surfing around. Women are thought to be less interested in aimless surfing, but are more interested in community, shopping/coupons, health services and real estate.

To me, it is still safe to generalize like this. But an updated 2005 study by The Pew Internet Project, based on 6,403 surveys with a margin of error of 2+-, suggests the differences in men and women online are becoming less pronounced.

From a local vantage point, the study contains several little surprises. For instance, user-review services such as Judy’s Book and Insider Pages are largely aimed at women. But the new Pew findings suggest that men are actually more likely to “rate a product, service or person.” 33 percent of online men say they do it; 28 percent of online women.

Big Talk: New Telecom’s Impact on Local

Microsoft Local Group’s Erik Jorgensen thinks “the majority” of local access will be from mobile devices in five years. My gut tells me that mobile access may not dominate quite so quickly.

But whatever the timetable, it suggests a sea change in local advertising models. It also suggests a stronger role for telecom players in serving mobile and IP-based content: whether they are traditional carriers, or just as likely, portals providing VoIP, PSTN and instant messaging services over mobile.

The impact on local usage and advertising will be a big one. And the seeds are being laid. As Issac Kato of General Catalyst Partners noted at the Kelsey ILM conference in early December: “Wireless is inherently local….when you do mobile search, pay-per-call becomes trivial.”

Microsoft Local Pushes Maps, Imagery

When Microsoft quit its Sidewalk city guide in 2001, it promised to keep its foot in the door of local services. At that time, it was probably thinking “small business,” since it was bent on remaking the small business marketplace around the Great Plains software company that it had recently purchased.

But small business services have never really pushed local into new areas. Arguably, software never has. In fact, Microsoft’s role in local is only now getting established, due to the newly accorded prominence of two areas that Microsoft also considers part of its core competency: maps and imaging.

Speaking at Kelsey’s ILM conference in early December, Microsoft Local Group head Erik Jorgensen presented a masterful picture of local’s image-driven future. “People want true visualization, showing them ‘what is there,’ he said. “Fundamentally, people are visual. And people want location integrated into relevant services.”

AOL Promises ‘Local’ Progress in 2006

AOL was early in investing in its Digital City city guide, early to solicit local business reviews, early to see the power of mapping via its acquisition of Mapquest, and early to see the importance of offline activities by purchasing MovieFone.The company wasn’t necessarily strong on follow-thru, however.

Speaking at Kelsey’s ILM conference, AOL Senior VP Jim Riesenbach reminded the audience that AOL remains a major player in local. He promised that the company would see significant progress in 2006, especially now that AOL has worked out many of its transition problems and is widely considered a hot property again.

A major emphasis for AOL will be to leverage its assortment of platforms as a “communications suite,” now that it has been freed from emphasizing the fire-walled access service. “ To Riesenbach, local figures into all of it.

“It is counterproductive to think of local as a vertical,” he said, responding to a comment by a Microsoft executive earlier in the conference. “The question for us is how we integrate local as an enabler for everything that people do online.” Riesenbach added that the richness of AOL’s local offering will make its local search among the industry’s most compelling.