Local Advertising Online: SMEs Hold the Billion Dollar Keys, ILM ANALYSIS
I had the pleasure of helping close the Kelsey Group Interactive Local Media Conference 2007 today in Los Angeles, participating in the final panel wrap-up and big picture local advertising opportunity analysis, along with Kevin Heisler, Executive Editor, Search Engine Watch.
Conference producer Peter Krasilovsky asked me to do a high-level overview of conference themes presented and key takeaways. The theme of my presentation: SMEs hold the keys to local’s future.
In the “National Advertisers Going Local Panel,“ Shawn Riegsecker, CEO, Centro, said the big local opportunity is still years away. I agree and believe SMEs are the current big stumbling blocks, for three principal reasons: SME Adoption Rates, SME Control Issues and SME Market Confusion.
SME ADOPTION RATES
The industry looks at the local opportunity glass as half full rather than as half empty. Conventional wisdom is that online local ad spend growth will inevitably catch up to online local media consumption. There are two fundamental flaws with that assumption however:
1) The majority of local merchants do no advertising whatsoever in any medium, online or off, and will continue to remain happily advertising-free.2) Getting SMEs online–one way or another–does not mean that they will stay online.
Matt Van Wagner of FindMeFaster shared case studies of his local search campaigns for small businesses which he described as “miserable failures.“ MerchantCircle claims it has more SMEs online than anyone else, 300,000. It also says it has contacted every single SME in the U.S., about 15 million. MerchantCircle then has a 2% conversion rate, and many accounts are not active.
Jonathan Weber, New West, shared during his keynote, “It is hard to get local businesses to participate, even if it is free.”
SME CONTROL ISSUES
comScore hailed the rise of consumer reviews, but local merchants are bunkering down to take back control of their messaging, we learned from Jay Herratti, Citysearch CEO. Despite passionate pleas from small businesses, though, Citysearch says it leaves most consumer reviews online.
Many reviewers are motivated by personal agendas, however. I believe the ultimate fallout will be one of two scenarios:
1) Local merchant abandonment of the online wild, wild west for safer pastures, or
2) Merchant investment to secure favorable reviews.
SME MARKET CONFUSION
How many landing page profiles does a single local business really need?
Nevertheless, SMEs are being inundated with the same SEO and SEM pitch from all the players in the local ecosystem. IYPs and SEMs offer similar distribution partners and the same ultimate holy grail, to be found by consumers in Google.
While the ReachLocals claim simplification of the online ad buy, SMEs still must wrestle with trying to figure out how, where and when their messages are being broadcast throughout the entire World Wide Web, and, to what avail.
Yahoo’s massive ecommerce failure Cyber Monday underscored the fragility of SME confidence in online committments.
SO, is the local advertising opportunity one of revolution, or evolution? The local ecosystem is an evolutionary one, hoping for revolutionary movements, nevertheless.
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Jason Calacanis: ‘Wrong About Local Too,” ILM REPORT and
The Future of Local IS (Google) Search: ILM REPORT and
Google AdWords Plus Box: Local CPC Bidding War Unleashed! and
Local is Global: $134 billion in Yellow Pages, Classifieds and Internet Advertising, ILM REPORT
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