AOL Deal with Citysearch to Boost Local Ads for Platform A

A new distribution partnership between AOL and IAC’s Citysearch promises to expand the reach of Citysearch content and business listings while giving AOL feet on the street for regional ad sales.

“Generally, AOL has not had a local ad sales force,” said John Kannapell, SVP for AOL Search. “This is a way for us to augment advertising opportunities that reach very local advertisers,” he continued.

Starting in March, AOL will integrate Citysearch’s user and editorial reviews, videos, menus and business listings across its Mapquest pages. The eventual plan is to roll out Citysearch content across AOL’s local properties, including CityGuide, Local Search and Moviefone. In addition to providing more inventory and reach for Citysearch advertisers, the new Citysearch content pages will make for added display and text ad inventory sold by AOL Platform A units including Advertising.com and performance-based contextual ad network Quigo. Citysearch and AOL will share performance-based ad revenue according to the agreement.

“This is about [AOL] saying, ‘We know we have a lot of consumers looking for local, but maybe we don’t want to [hire] a lot of sales reps,’ ” explained Citysearch CEO Jay Herratti. “They want to be in local, but they don’t want to have the infrastructure it takes to acquire all the merchants.”

As a result of the partnership, Mapquest users might be able to scroll over a business location on a map to view a business review or actually take an action like buying something, said Herratti. Targeted Citysearch paid business listings might also end up alongside maps, for instance.

“The strategy of both proprietary advertising offerings as well as partnerships is the right strategy now,” said Kannapell. “We have to find ways to reach a much larger footprint in the U.S.” YellowPages.com also distributes its listings on AOL Yellow Pages, giving AOL access to the IYP’s local sales force.

According to ComScore, Mapquest reached 24 percent of the U.S. Web population in December 2007, attracting about 43 million unique visitors; however, it’s not clear how much ad inventory the relationship might represent when Citysearch content is pushed out across Mapquest and other sections of AOL.

“A lot of it depends on how well we’re deployed and how consumer friendly we make it,” said Herratti.

Citysearch spent last year building its content through acquisition and partnering. The firm bought reviews-based local search provider Insider Pages in May 2007 and signed a deal with small business marketing and referral platform MerchantCircle in November to cross-promote ad offers and share content.

“AOL to us is really the biggest new partner,” Herratti said. “It represents the work we refined over the last year.”

Citysearch signed a similar content and ad distribution deal with Local.com in December of last year.