With $15.5 billion dollars at stake and consumers getting ready, it's no wonder every day brings an acquisition or a new product launch.
I came home last night to a rather sad sight. Lying on the stoop of my Brooklyn brownstone was a plastic bag full of new yellow pages books. It was late, but no one seemed to have been interested enough to take any inside. My bet is the books went straight into the recycling bin.
It was an appropriate image to conclude my day. I'd spent the day with yellow pages and newspaper folks at the Kelsey Group's Interactive Local Media conference. At one point, conference organizers screened a videotape of a focus group. The leader asked participants how many times that year they'd used the yellow pages. Most said about once a year, but one guy asked what type of usage the leader meant. After all, he said, there are times when, "my cousin's baby comes over and she needs something to sit on."
Between anecdotes like that and data showing 74 percent of Internet users search for local information online, it's pretty clear where things are headed. Whether yellow pages companies will suffer the same fate as those print books (left out in the cold) remains to be seen. As yesterday's BellSouth/SBC deal to buy YellowPages.com shows, they're not going down without a fight.
Make no mistake, there's big business in yellow pages. Simba Information actually expects the yellow pages industry to grow in 2004, to $15.5 billion, from $14.9 billion in 2003. Some growth is undoubtedly from the electronic versions. The research firm said it expects Internet yellow pages advertising to grow 50 percent in 2004.
Given all the money at stake, it's no surprise companies are duking it out for those dollars. The last few weeks have brought a tremendous number of developments in the area. Let me share a few trends I've been watching.
The Consumer and/or Broadband Comes First
People have been talking about local search for years, but only now that Internet access, specifically broadband access, has become like another utility, is consumer behavior catching up. It only makes sense that when the computer and connection are always on, people use them more.
Consumers in the abovementioned focus group appeared to think search is the answer to all product or service research needs. When it came to local products and services, however, the Internet isn't always top-of-mind. Many simply weren't aware of some of the offerings out there. Yahoo's current consumer campaign, running online, on radio and outdoor, is a great move -- when consumers become aware of the existence of local search, they'll associate it with Yahoo I think it's about time Google thought about doing some marketing (at least, as soon as their local offering is out of beta).
Where consumers go, advertisers follow... eventually. And when it comes to small- and medium-sized businesses, at least one financial analyst at the conference said he expected change to be generational. In other words, the current crop of mom and pops must first hand their businesses over to their kids.
That idea is borne out by a recent JupiterResearch report, which concludes local search advertising will be dominated by national advertisers in the foreseeable future.
Small- and medium-sized businesses have gotten more serious about the Internet. In June of this year, the Kelsey Group found 61 percent of such small businesses viewed the Internet as "a big opportunity for my business to target and acquire new customers." A year earlier, only 51 percent showed such enthusiasm. Over the same period, the percentage of businesses actually using the Internet as a substitute for traditional advertising went down a point, from 37 to 36 percent.
I expect social networking and user-generated content to play a significant role in local search. Yahoo Local's consumer ratings; Citysearch and Evite; and start-ups like Judy's Book and Insider Pages are doing really interesting things to add value for consumers. For these companies, getting users and their friends involved, and getting them to provide ratings and reviews, is key. That will result in a big battle for consumer mindshare.
Local-i, another start-up, has a different approach. It bypasses the need to develop a robust community by crawling a variety of user-generated content sites and aggregating reviews in one place. Given the growth of the blogging phenomenon, an ability to tap into disaggregated content sources may prove to be the way to go.
If the launches of Google SMS and Yahoo Mobile Local search hadn't convinced you, let me tell you wireless is the hot new local search distribution method. After all, when better to search locally when you're out there in a local environment. Advances in mobile phone technology and consumer adoption of SMS messaging drive this trend from the user side.
So far, I haven't seen much of an ad model around these offerings, but combine the pay-per-call model with the clickable phone numbers in Yahoo's mobile results, and it could be a winner.
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Pamela Parker is a former managing editor of ClickZ News, Features, and Experts. She's been covering interactive advertising and marketing since the boom days of 1999, chronicling the dot-com crash and the subsequent rise of the medium. Before working at ClickZ, Parker was associate editor at @NY, a pioneering Web site and e-mail newsletter covering New York new media start-ups. Parker received a master's degree in journalism, with a concentration in new media, from Columbia University's Graduate School of Journalism.
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