Sometimes it seems there are as many local sites and services online as there are local businesses to advertise on them. From the search-centric approaches of Google and Yahoo to IYPs and directories to pure review plays like Yelp, the local services space has many winners, but none dominant. Things seem likely to go on that way for awhile.
It's not hard to gauge where Yahoo sees the market going. In recent days the company restructured its Network division to move Yahoo Local from its Marketplaces unit into its Search unit. Meanwhile the company has come out with new research on the influence of reviews and has introduced a new hyper-local pilot program, called Yahoo Local Neighbors, in Sacramento and San Carlos, Calif. to let people discuss community issues at the block level.
ClickZ caught up with Yahoo Local General Manager Frazier Miller this week to discuss his division's combined focus on user involvement and search, and what that might mean for advertisers.
Q. How do you navigate the local space, given the sheer number of competitors and approaches?
A. The early years of local were very much about yellow pages directories. That was the killer application because you had a very immediate way to monetize that with advertisers trying to get listed. That is becoming more and more of a commodity.
We're spending a lot of time thinking about the degree to which search is part of the local experience, whether it's a yellow pages search or a more considered research decision.... It's about how you understand local intent at the search box and provide a different experience from just a list of algorithmic results.
The Citysearches and Internet Yellow Pages I see as being very advertiser driven... optimizing for the advertiser experience. Ourselves and Google are looking very much at this from the search angle.
There are a lot more chapters in this book.
Q. Speaking of search, as of this week you're a part of the search division at Yahoo, whereas before you reported into Marketplaces.
A. That's a great thing from our perspective, because that's an area we can compete very successfully in. If you look at the number of local queries going on across Google and Yahoo, Yahoo has a much greater percent of our overall queries that are local [ed. note: according to comScore].
Google leads us slightly in the local search realm, but it's very different from the overall search realm.
Q. How does the "Neighbors" pilot in Sacramento and San Carlos fit into your evolution?
A. We have focused quite a bit on making the site more social in eliciting user feedback and comments. Features we introduced in August allow users to connect with each other, by making comments on ratings and reviews. You can see a list of comments other people have made on your reviews. You can also rate reviews as helpful/not helpful, which users find valuable.
The most recent pilot, called Neighbors, is a suggestion board for local communities. The intent is to take this notion of altruism, wanting to participate in the community and help the community out, into a direct forum. It's more about suggestions users have on any topic throughout the community. We've found this is an area where users want to get more information. They don't feel they've got a venue to do that in a constructive [way].
By providing a forum, we think they'll have more affinity toward the Yahoo Local brand and have a more engaged experience, and that will bleed over into the core experience of looking up and evaluating businesses.
Q. Have you thought about advertising or sponsorship models for Neighbors?
A. We need to make sure we're providing the best, most engaging user experience foremost, and then feed the monetization into it.
Q. Duly noted.
A. Merchants do often play a role [in our local services]. In the offline world they'll sponsor soccer teams... We see that happen on our regular site where merchants will participate as part of the user community.
The Neighbors concept creates an opportunity for merchants to be helpful and offer benefit to the community.
[Local advertisers] think in a very graphical way, with their yellow pages and newspaper mindsets. There are opportunities to look at sponsorship and a more "media" type of monetization that could lend itself to the Neighbors environment.
Q. How many of your local campaigns are coming in through certified marketing representatives that are representing the interests of a great many small and local advertisers?
A. We have definitely taken a strategy that is reseller dependent. We've partnered with AT&T in a pretty major way, and we also recently closed a deal with Dex of R.H. Donnelly. Both have lots of feet on the street. We're still at a point in the market with how dollars are spent with local merchants that you need that reseller sales force to help [small businesses] understand what's possible. More people are starting to self-serve online. We're well positioned to turn those types of merchants on.
Q. How's the uptake in IP targeting within Sponsored Search accounts on Panama?
I can't say specific revenue numbers, but the geo-targeting within Panama has been very successful. We've seen an increase in RPMs (revenue per million visits) as a direct result.
Our business has definitely picked up speed from the advertising we get through Yahoo Search Marketing. That continues to be a supplemental way for the local properties to monetize. We monetize directly through the resellers, and we backfill with our Yahoo Search Marketing [placements]. That part has grown due to Panama efficiencies around geo-targeting.
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Until March 2012, Zach Rodgers was managing editor of ClickZ's award-winning coverage of news and trends in digital marketing. He reported on the rise of web companies, data markets, ad technologies, and government Internet policy, among other subjects.