evans ink

we’re in the neighborhood

Perry — Tue, 27 May 2008 17:47:23 +0000

I’ve long believed that neighborhoods represent a key ingredient in how local search and media evolves. Back around 1995, Brad Inman held a brainstorming retreat for online real estate people at his redwood forest home. I still remember Brad’s passion about the importance of neighborhoods in the fabric of online real estate - and community in general; as a former real estate newspaper writer Brad used to love doing neighborhood profiles. While the concept has stuck with me, the content gap made it an impractical pipe dream.

no boundaries

Creating the geographic boundaries that define neighborhoods is a complex content development task, but over the last 5 years, the gap has been reasonably filled for US neighborhoods. A couple of companies (notably Urban Mapping) and Zillow both recently opened up free access to their proprietary boundary files. You’re beginning to see the structure seeping into platform mapping companies, search services and even US-based YP publishers. And, of course in real estate, the sector in which this content is mission critical. While the developer momentum seems pretty nascent, never underestimate the power of an API.

Problem is, this content is US centric, which challenges those of us who try to focus on global application opportunities.

minimal importance in consumer search

Yep, you read it right. I do not think that consumers intuitively think in terms of neighborhoods as a logical area qualifier for search. While the concept is solid, searching in your neighborhood is just not a part of our natural search vocabulary. While searching from your home address is very relevant, searching only within your neighborhood is less intuitive. Perhaps this will evolve.

As a building block of personalization, it gets more interesting. Selecting the neighborhoods you frequent has long intrigued me in local search personalization. Visualizing and browsing search results by neighborhood can also be a compelling visual navigation concept. So, while I’m not a huge fan of neighborhoods as a search phrase, I do believe in it as a building block “behind the search experience”.

strong affinity for discovery and community

I really believe in the power of neighborhoods as a logical organizing and gathering structure for consumers. As such, I see the value of neighborhoods being much more punctuated in social local than in core search.

Consumers are continually signaling their desire to reconnect, to simplify, and to balance their lives. The appeal of neighborhoods feels like a fundamental part of this macro trend. People want to be less isolated, and the trends you see in urban development point to a desire for more real world local identity and connections.

When you overlay this motivation with the Web 2.0 world, the evolution of neighborhood gathering places becomes a very important thing to figure out. Where do social networks and neighborhoods connect? How can consumers form new patterns of neighborhood interaction? My hunch is that the power of social networks can be harnessed in very interesting ways.

friends vs. neighbors

The vast majority of the focus on social media centers on networks of friends. While this is big idea stuff, I find myself stretching to find broad applicability in local business advertising. While my friends are “technically ideal” to advise me in my purchase activities, the majority of my friends come from a geographical context that makes their advice irrelevant (in most service-based businesses, for sure).

While very interesting, I think friend-based networking concepts (for local) will take some time to materialize and scale. Neighbor-based concepts offer more local search leverage with scalable near-term potential.

the social - neighborhood gap

It’s been fascinating to see how little local structure has been designed inside the major social networks. All good to me, since this spells opportunity! The concept of local in Facebook is secondary, and - so far - its pretty rudimentary. Facebook was constructed around networks of friends not location. However, when you attain the kind of critical mass you have in Facebook or MySpace, there are large concentrations of people in the same neighborhoods.

There are start-ups who have chosen the aggressive mission of creating new websites and web services built on the neighborhood concept. Glad to see it. My current curiosity is centered on the evolution of neighborhoods inside the critical mass social networks, rather than another brand new thing fighting for consumer attention.

closing the loop

The context of this post was, in part, to help explain the thinking behind an important development partnership that we just announced at Local Matters. We’ve taken over the ownership and development of the Facebook Neighborhoods application, which was developed by Point2 Technologies (a leading real estate technology company) to syndicate local home listings to FB users.

It’s a great partnership that allows us to expand and stretch this new space in local media. We share the belief that by improving the consumer value of Facebook Neighborhoods, the opportunity for real estate listings naturally expands. Makes sense. What’s also exciting, is that this neighborhood engine provides a foundation for international neighborhoods, which is central to the way we think of the business.

More details will follow. In the near term, we’ll be spending our time listening to the users who have downloaded the Facebook app (there are >800K of them). I’ll try to fill you all in as we learn and grow from this.

mine the gap

Perry — Wed, 14 May 2008 19:45:28 +0000

I’m bummed that I had to bow out of this year’s Where 2.0 conference; I had been slated to speak, and had a list of people to meet and sessions I wanted to hear. One of the most interesting sessions, moderated by Greg Sterling, was on the “monetization of maps and mashups“.

Following a blogger’s coverage of the session, I was really tweaked by one comment, roughly paraphrased by blogger John McKerrell, in attendance. From Skyhook, Jed Rice:

“When we started trying doing more local targeting and being able to insert a lat/lon.We had to flood adsense with a lot of local information to get any information from them at all. We had a click-through rate of 7/8/12% as if you can position ads around a relevant map you get a higher click-through. But there’s a problem that there isn’t enough ads to serve, requires a huge inventory to serve at such a granular level.”

This is a pretty important observation.

Experience is beginning to demonstrate that AdSense does not offer much hyper-local ad inventory.

digging deeper

Exchanging messages with Greg Sterling after the session, he also mentioned that one of the other panelist believes that the AdSense application is actually designed (purposefully? algorithmically?) to discourage hyper-local ad targeting. Presumably, this is because scaled local business participation has yet to show up.

It’s smarter business for Google to force advertisers “up the geo hierarchy” where they then have to compete at the MSA or town/city level. Competition drives higher keyword pricing, so up you go.

The paradox? Hyper-local targeting should pull a higher CPM, but if the competitive model is not engaged, the ad value is not realized.

supporting math

A few months back I blogged about the “implied math” of AdSense small business participation. An “industry insider” estimated that about 800,000 businesses actively participate in AdSense, and about 20% were at budgets lower than $10,000 per month. Well, we all know that this ~160,000 group of “low budget participants” probably represents a mix of small local businesses and not so small.

The conclusion? AdSense is just not there as a mechanism for hyper-local advertising. Not today. Not even close.

gaping hole or beautiful opening?

This has pretty material implications to those focused on hyper-local applications, map mash-up apps and local mobile businesses.

I’d be careful not to place too much of your revenue bet on the AdSense model. You’ll probably be sadly disappointed with the monthly check. VC’s, caveat emptor!
To the yellow pages industry - this becomes a seriously interesting opportunity. Contrast the penetration of millions of local advertisers in YP. This channel could be in the “right place, right time” position.
Arguably, the print YP guys actually have deep pricing and sales experience with hyper-local ad value. In print terms, it’s about book scoping, and gaining more revenue from narrow, well focused distribution products.

Google and others undoubtedly have techniques up their sleeve to close this gap. But when you do the math and observe the live examples (as reported in this session) this gap will probably exist for some time.

Is anyone seeing anything that contradicts this viewpoint?

the wagging tail of local vertical

Perry — Wed, 07 May 2008 12:16:33 +0000

It’s encouraging to see Kelsey Group take a lead role in sponsoring the industry dialog on the verticalization of local search.

We all have our own definitions of vertical search - most commonly we align around large shopping niches such as automotive, real estate and A&E. However, of late, we’re seeing this expand beyond “classified verticals” into key life event or considered purchase segments such as attorneys (avvo), weddings (wedding channel) and new homes (zillow).

why are YP’s vertically challenged?

Why are publishers watching the development of local vertical search from the wrong side of the podium?

Having spent the past 5 years processing YP advertising records into deep searchable content, it is exciting to see this trend reach mainstream. The industry is remarkably well equipped for tackling local vertical search, yet so little attention has formed in the frontal lobe of the industry.

Why do I think we’re so well poised for this opportunity?

attorney search - a case in point

Let’s take Avvo, a well organized local shopping portal for attorney search. Avvo has obviously invested in structured shopping to give the consumer a detailed way to filter down its results by practice areas. On top of this, they blend consumer reviews and industry-specific rating schemes. It’s nicely packaged into an experience that encourages structured and comparative searching, and active participation by the consumer and the business.

Now, go to Dexknows.com - and work through an attorney search example - try “bankruptcy attorney” in Seattle:

View the left hand navigation filtering choices - the tools are there to fully refine the search based on detailed comparative attributes of each law firm or attorney.

Select on the “show more refinements” and you also see “assurances” and “reputation” search attributes - the kind of content that has used by consumers for decades as “proxies for review content”.

The site also has the ingredients of consumer ratings and reviews, comparison shopping and personal list building and planning tools.

So, “buried deep inside” an IYP site you can see the framework to create an AVVO. Couple this with the the YP sales team’s content collection abilities, and you have all the pieces for an AVVO killer.

But this isn’t really about AVVO or Dexknows - I can readily expand this example across dozens and dozens of vertical search segments, and apply it to any YP publisher’s assets and market position.

IYP - the inn-n-out experience

Much of the challenge in tackling vertical search lies in the ruts we have worn deeply into the IYP user experience. For nearly a decade now, we’ve taught the consumer to come in, find a business, get the number/address, and leave to make a call or visit the merchant.

Ask just about any IYP site owner today, and you’ll hear this same observation - “richer navigation” features are used today by a small minority of users. We have created a drive-thru experience for the consumer, so it’s no real surprise that the sit down menu for a carefully crafted meal gets met with some head scratching.

The real danger in this observation is to conclude therefore, it’s not useful.

What we really have is a growing crisis in brand and experience.

necessity, reinvention’s mother

Like it or not, the ruts we’ve come to rely on - business name and simple category look-ups - do not give us a predictable foundation upon which to secure the growth opportunity in online yellow pages. Portal search is getting this problem nailed better every year, and is increasingly unlikely to direct a search consumer to an IYP to meet the search need.

Equally importantly, the documented spending of advertisers in key life events and considered shopping categories is growing in value and scale every day. The business case is approaching slap-your-forehead obvious.

So, the choice is there - build a position in vertical search, or see it systematically siphon off into new vertical sites in the coming years.

just how far will yellow stretch?

Underlying this trend is a critical brand and positioning decision. The YP brand is a double edged sword when it comes to expanding the business scope. The IYP “deep ruts” pose challenges as we realign consumer usage into a combo of drive-through and sit down uses. Can we create vertical channels inside the YP brand and website model, or do we have to create a new network of brands built to encompass a range of verticals?

Important stuff, hats off to Kelsey for igniting the conversation.

sleep less in seattle

Perry — Wed, 23 Apr 2008 18:01:29 +0000

I’m guessing a bunch of you are heading to Seattle for the upcoming Kelsey Conference, Drilling Down on Local ‘08. If you’re undecided, take this as a strong recommendation - this will be one of the top events of 2008 for local search industry vets and newbies alike.

Unfortunately, I have to be in Europe. However, I thought you’d enjoy seeing a handy Guide that was created by a Seattle native, to give you an orientation beyond the hotel walls. It’s kind of a cool way to preview our local social beta site, Guidespot.com.

Click on the widget to the left, and you’ll see it.

Hope you enjoy, and feel free to pass it along - even better, make your own!

stirred, not shaken, in Vegas

Perry — Tue, 08 Apr 2008 14:14:17 +0000

Opening the Yellow Pages Association annual convention was Chairman Dave Swanson, Association President Neg Norton and an impersonator of Gloria Estafan. Damn, I wish they had picked Rodney Dangerfield!

Hats off to Dave and Neg for two stirring performances.

I think the tone that Dave brought to the convention was strong. He demonstrated a genuine grasp and frank recognition of the gravity of the challenge facing the industry (and his company) balanced with a strong conviction that the channel advantage can be built upon for a “center stage” position.

head on, apply directly where it hurts!

Neg Norton took the podium and tackled the PR problems and the opt-out challenges facing publishers head on. The PR problems were exemplified with a replay of the brutal treatment dished out by CNBC, and the opt-out challenge was well documented in both successes and a sober picture of the growth in the trend towards legislation giving consumer’s rights to opt out of book delivery.

Bonus points for a clear headed recognition of the tremendous PR problem of the YP industry, which is on a path of self inflicted destruction if it continues to act in a knee jerk defensive manner with the “I’m not dead yet” focus on print.

I really hope this leads, as it was implied, to an aggressive focus on the “rest of the story” and not clinging to the statistics on print product usage. The stats on how well the sales channel is adapting is what is missing - articulated with usage stats for online, voice and mobile and ad revenue.

Resisting the urge to defend print is going to the toughest job for this industry, but every time we go there we come off as defensive and desperate, not convincing, to reporters and analysts.

The industry should use the heck out of these real usage stats in sales, but get the right NEW GROWTH stats and attack with a growth success story. A “slower than you’d think” defensive campaign will surely fail.

there’s got to be a morning after

I sincerely hope the follow through from association and industry executives retain the sober recognition and aggressiveness of commitment evidenced at the podium yesterday. It’s going to be one tough year for this industry, and follow-through has never been more important.

the domain of intent…

Perry — Mon, 24 Mar 2008 13:53:37 +0000

The NY Times does an interesting piece on (yet) another enhancement to the Google Search Engine Result Page (SERP). The article, entitled “A New Tool from Google Alarms Sites” profiles a new “search within a site” box that has begun appearing, unannounced, into the SERP.

Add another emerging example to the growing list of “third page / second click” creep.

If you search Google for common retail brand names, such as ‘target’ or ‘walmart’, or ‘walmart.com’, Google will display a “search within the site” box on the SERP.

This search box triggers a secondary Google search of the pages it has indexed from that website, and displays it in a new Google SERP. Naturally, this page includes another set of SEM ads running alongside, for the targeted product you are looking for.

An example: Search for “300 count cotton sheets”

Google’s results from the Search Walmart.com here

Walmart’s site search result here

The big difference? Note the ad content alongside the Google page, chock full of competitor ads.

Every retailer of any size has learned the value in having their content indexed - it was/is critical to exposing their retail offering to consumers who search for specific products. But now, when the consumer is searching for retail brands or brand sites, they are being prompted by Google to keep the search going on the Google site.

As quoted from the NY Times Article:

“Google is showing a level of aggressiveness with this that’s just not needed,” said Alan Rimm- Kaufman, a former executive with the electronics retailer Crutchfield who is now an Internet consultant. Google’s aggressiveness, Mr. Rimm-Kaufman said, ignores a user’s desire to reach a specific destination and it costs those Web sites visitors.

Have we lost the intent?

When a consumer uses search terms like walmart or walmart.com, it’s one thing to “help the user” by giving them sub-site links, it’s an entirely other thing to use the site’s content and perform your own search, while showing competing ads. Shouldn’t this be a retailer opt-in scenario? Is there not an underlying TOS issue on the crawled content?

This feels like the user intent is being hijacked by Google’s intent.

Version 1.0.

guide spotting

Perry — Thu, 20 Mar 2008 12:13:54 +0000

Greg Sterling previewed our new 3-week old beta of GuideSpot.com in his blog yesterday, with an appreciated nod “Over time the site could evolve into something very interesting and valuable.” At Local Matters, we certainly would agree. Here’s a little more on the site, and how we see it positioned in the social-vertical-search triangle of local.

Clearly, the growth momentum is there for social participation - consumers are more comfortable with self-expression and interaction every day. Sites that align with this trend generally outperform those that center on search, and create more fundamental pull and engagement. When we looked at this space, we centered our energy on the concept of a consumer’s list at the core of a social engine.

In one dimension a list and a search result page are pretty similar. For example, Mahalo, the human powered search engine, is directly aiming at editorialized search results, a explicit hybrid of search and human generated lists.

GuideSpot aims to that space, but in a different manner. We focus on user generated local lists, a more humble and focused agenda. We do this by wrapping this concept with a rich multi-media self-publishing application, and with a site environment that promotes discovery and interaction. We get local by giving the user direct access to a ton of local content which can be searched and added into a guide. This content comes from our experience and infrastructure for local content aggregation with AreaGuides. We then give a powerful set of mash-up utilities for generating maps, adding images, videos, links, etc.

Take a look at a couple of examples:

LODO Restaurants: A True Local Guide: a detailed personal view of where to eat, with multiple tagged map views
Buying Books for Elementary School Aged Children: “expert amateur” editorial mashed up with local resources
Local Matter’s Visitor Guide: answering all the questions people visiting our office commonly ask
Shmoozer: A Guide to Denver Networking Circles: a guide to a range of choices for business and un-business networking

It’s fascinating how much the ability to annotate, mash-up and share turns a simple list into a rich engaging experience. So, our thinking was to really center on the simple principle of making the tool easy, fun and engaging. The work we’re doing also happens to be at the core of how we see the self-serve advertising products evolving, and it connects nicely into the “list-oriented” nature of how we’ve built our local search engine platform - search, create a comparison view, save, edit and share your list.

Greg commented in his preview that “This combination of lists and location is really only otherwise found on Google Maps’ My Maps”, which I appreciate. This is a great observation to comment on. I have enormous respect for Google Maps, but I think maps are best positioned in a “supporting cast” role, not THE metaphor for local lists. We do generate KML and geotag every guide so they can be published and discovered into map engines (for future product use). But, I think the Google vanilla wrapper interface and map-centric metaphor is just holding back the social energy and creative expression of online consumers.

All of these concepts converge on a vision of rich sharing of interactivity for local consumers - as searchers, as explorers and as authors. GuideSpot cranks it up a notch and gives the consumer the tools and the community wrapper to get engaged as authors and explorers.

Ultimately, we’ll connect this with search but it’s a bit early for revealing that dimension. There are other hooks in the “bigger picture of search and social” which simply aren’t ready for prime time. In the meantime, GuideSpot is - we hope - the spot where a lot of guides get created and spotted! Set up your RSS Reader for Fresh Guides, and have some fun exploring what consumers come up with and push out into the community. Because, the lists can range from practical to offbeat, to downright absurd.

we’ll give you OUR best answer

Perry — Wed, 19 Mar 2008 11:37:36 +0000

I was very pleased to see John Battelle exposing the “second click” issue from the pulpit at SES, and in his influential SearchBlog. If you have done any occasional reading through my lowly blog, you’ll recognize the concept of the “third page of search“. It’s the same thing - the issue surrounding Google’s shift within its Search Result Page to bias users towards it’s own version of vertical search experiences.

Of late, this issue has become increasingly visible with Google’s blatant behavior of pushing Google owned/operated “third page search services” into top position on the results page. In local we recognize it with the 10-list box, in video you see it with YouTube bias, in real estate we see it with Google’s home search, in auto, we’re starting to see Google vehicle search. With Google’s recently announced “knol“, you see it’s version of Wikipedia in formation.

Because I’m lazy/busy as heck these days, I’ve copied my reply in John’s blog (down below), to give you a bit of added perspective on how I see this in-formation battle.

This is a really important one, and it’s fascinating because - above all else - it is the closest thing I have seen to a shift which creates an opening for Google to be truly challenged. It demonstrates their hunger/greed pushing them to mess with the fundamental trust (and entrenched identity) with consumers - the trust to put the “best answers” at the top, and the derivative belief that Google won’t push product in front of me.

The ramifications could be huge for how Google progresses with the consumer. I recall marveling a couple of years ago when we did research in which consumers commented that if a Google search result didn’t get their desired result “they were not using it properly”. The implicit belief in Google to “get it right” is at the very heart of their brand and differentiation. Google is messing with this, and the fragility of consumer trust should not be underestimated.

reply post to Battelle Post:

It’s great to see this issue being exposed more for conversation, John. It really is surprising to me that Google is taking this level of risk (albeit small as of today in the grand scheme) to the ONE THING above all others that got them where they are.

To the mass market, Google’s SERP experience is their core identity. The deep ruts they have caved into this road must be maddening to their creative spirit and invention hunger. You call this the second click, I’ve called it the “third page of search” battle - both concepts are the same, but Google’s identity and user experience ruts are carved deeply, and consumers are creatures of habit above all else. (I like third page because I think of this as driving the derivative user experience as you proceed down the user intent path, a multi-phase process which demands unique vertical experiences for maximum consumer value).

I do believe Google is messing with their core identity and when this is shaken - as it should be with these “antics” - there is a risk, a crack in the armor - alas, an opening! I call it antics because it is happening on top of the consumer’s naive and implicit trust which up until recently has been well earned.

What is surprising to me is that in many cases, the quality of results and (not to be underplayed) user experience is a very poor substitution for the quality of what a user can get on “third page sites” - vertical, local, topical web sites where the user can be freed of the plain vanilla wrapper that Google’s success has forced it to honor.

I recently had Google put their “Vehicle Search” in front of all other results and tried it out. Frankly it was sad to see the results. While “technically” it presented a good matrix of makes, models, location search, it was such a starkly anemic user experience when compared with a half dozen known destination sites which combine deep content and user community. Consumers will see this, and they will start to build skepticism into their evaluation of Google’s SERP quality.

It’s a great flag to raise, and it’s a very meaty topic for discussion. Well done!

Look for this to become a serious industry conversation.

time to brand the walking feet

Perry — Fri, 07 Mar 2008 16:18:25 +0000

(photo credit)

It has become painfully clear that the “market at large” has a narrow and deep seated view of YP as the consumer’s fingers walking through a print directory. To me, it’s becoming a severe messaging problem - for the industry.

I would suggest that it just might be the right time for the industry to ditch the fingers, and introduce the feet! The power -and the realities - of the scaled local sales channel are completely missing in the story. This is at the heart of a tremendous misconception about the prospects for reinvention amongst the “YP media companies”.

If we’re ever going to get through to this audience, it has better be a simple re-messaging. You can’t help but grimace when you listen to this kind of vacant conversation with sweeping prognostications about the value of YP.

Try as we may to show how the usage and ROI of the print books protect it from decline, we’re fighting an uphill battle; with people who control the message ready to dismiss the reality of “normal everyday consumer usage“. Industry messaging should consider focusing on “business messaging” and mothballing the “print brand” message.

the geography of YP valuation

Perry — Thu, 28 Feb 2008 18:47:17 +0000

It’s important to think geographically when you assess the current state of YP industry turmoil. A few observations might be useful when trying to align the conflicting signs of growth in some geographies with an incredibly bearish financial profile of US publishers. “Exporting” the US stock market behavior really needs some navigational aid.

unique US market dynamics

This morning the market reacted with a vengeance to the revised guidance of RHD, sending the already pummeled stock down by another third of it’s already trimmed price. I listened to the call, and the triple whammy of 1) a material revision for 2008 ad sales (ad revenue decrease of “middle single digits”), 2) the prudent decision to cancel dividend, and 3) the surprise resignation of their executive leader of RHD Interactive, were clearly troubling to the analysts on the call.

The RHD leadership team presented some useful commentary that helps keep this situation in geographical context (I’m paraphrasing here, reader emptor).

The souring of SME advertiser sentiment was the reason cited for revised 2008 guidance. This appears to be, in (large?) part, driven by unique US market dynamics. The American mortgage and lending crisis and fuel price surges have driven recessionary conditions - and these are very harshly felt in the housing and financial services sectors. Much of RHD’s ad performance strength has been in regions that benefited greatly from a robust housing, lending and moving market. Because of RHD’s unique footprint in robust growth markets such as Nevada, Arizona and Florida, this position has turned on itself to become a driver in ad spend decline.

a unique doorstep battleground in the US

Aside from the economy driving a meaningful wedge into the situation, it’s also important to recall the unique competitive print directory nature of the US market. (It’s common to hear mention of one household having 6 or 7 competing directories land on their doorstep.) In periods of budget tightening by SME’s, the competitive price dynamics of this situation can further exasperate these situations. A decline from one publisher may often come from price “opportunism / desperation” of competing directories selling to the same advertiser.

Ad revenue decline from one US publisher may not be driven by the loss of the advertiser to other media, the statistic may be exaggerated by the shifting of SME spend to a cheap, opportunistic offer from a competing publication.

out of america

Several factors reinforce that the thrashing we’re witnessing in the US public markets should be decoupled from an industry-wide observation. The US financial market indicators cannot readily be “exported”. You can also look at this in the reverse mode - we’ve witnessed solid performance in the Canadian and Australian markets for YP - two resource rich geographies that have enjoyed very different fundamental economic environments of late.

It was also very interesting to sit in the audience at the recent London Kelsey Conference, where two European Financial analysts gave a surprisingly calm view of the valuation challenges facing YP, as blogged about by John Kelsey.