Wednesday, August 29, 2007

Age as a Factor in Utilization of Social Networks

Age as a Factor in Utilization of Social Networks
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My Take

The video podcast by Rob Scoble got me thinking about FaceBook. Yeah - the site my kids use. Actually - used. One of them has cut it out of her routine as a means of simplifying. But back to the subject.

So I joined. An immediate contrast with LinkedIn is, of course, the presence of faces. When I looked up old classmates I can see their faces on FaceBook. Then I began to wonder about the adoption rate of FaceBook by my college classmates (-.10%) compared to the younger alums. So I ended up generating this distribution chart for BC grads on FaceBook aged 26 to 59.

This says it all for the power of social networks to revolutionize consumer purchasing decisions, among countless other things.

Wednesday August 29, 2007 - 02:14pm (EDT)

Monday, August 27, 2007

"Will Social Search Bash Google?"

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My Take

Response to Huw Leslie's blog, "Social search to bash Google":

>>However, search needs bidirectional ranking - query in, result out - and that is not likely to be achievable in any meaningful way.<<


I agree with you about the limitations of 'search'. But what if we could capture 'word of mouth' - in its natural element; where people are sharing in the context of their personal relationships. Harness it offline and facilitate it online instead of vice versa.

Then the emphasis would no longer be on 'searching', but rather on 'connecting'.

IMO the 'search engine' model needs to be turned upside down and inside out to capture local referrals and influence buying decisions where people live. These local transactions seem to be the 'long tail'.

Monday August 27, 2007 - 12:16pm (EDT)

Sunday, August 26, 2007

Local Advertising Network Revenues Threatened By Search Industry

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Local Advertising Network Revenues Threatened By Search Industry

Battle of Search Engines Vs. Search Directories

Posted on Aug 24th, 2007

"Local advertising networks will continue to lose relevance as search engines become the first stop for consumers. To date they have prospered as the “middlemen of paid search". Will savvy advertisers cut them out of the loop?"

Advertisers aren't their only threat. New media may arise that are easier to use and morebeneficial.

"Compared to the print publishers of old, these local guides offered outstanding value to advertisers. Using a performance-based model, a business paid for results in the form of a click or a call. Advertisers had the ability to better gauge spending and ad performance."

Pay for clicks. H-m-m-m-m... Is that the best that we can come up with?

With AdWords, Google forever changed the nature of advertising on the internet. They applied the same performance based model to the entire web. The search behemoth now controls close to 50% of online ad dollars. Google’s ad distribution far exceeds that of its closest competitors.

My Take

Enter the search engine. Funny thing about engines...

"The engine vs. the water wheel – gas vs. gravity"

Vrooom. VROOOMMM!!!

Engines are great. They’re sexy and provide horsepower to get you where you’re going - faster and with more stuff.

But engines need to be fueled and maintained. They also cause pollution, eventually wear out and end up scrapped.

Water wheels are quite different from engines. They expend no fuel. Rather they use gravity and the natural, non-polluting, renewable energy of flowing water that has the power to carve canyons, shape shorelines and move large vessels. Water wheels require minimal operating expense. Anyone who can get to the water’s edge can harness their power.

Let’s draw an analogy and say that engines are to water wheels as search engines are to word of mouth referrals.

Internet search engines are like their internal combustion cousins. They are great for the Internet superhighway – but get bogged down on local back roads when trying to find trustworthy products or services in your town.

Fuel for these search engines makes them an expensive advertising choice. Charges for clicks really add up considering that so many don’t convert to sales. Search engines also need periodic maintenance – optimization to keep them performing better. This gets expensive as competitors are both paying to continually optimize their search engine results, creating a costly cycle.

The pollution caused by search engines - customer dissatisfaction and advertiser disillusionment - choke their efficiency. Both customers and advertisers are in a dilemma when a search engine is replaced by a newer, more powerful model. Do I trust the new one? Should I use both? Should I pay for both? If not both, which one?

‘Word of mouth’, on the other hand, captures a natural process that occurs whenever people are together. It can be positive or negative for businesses and is highly trustworthy. ‘Word of mouth’ covers all topics from gossip to business or medical referrals.

The motivation of organic ‘word of mouth’ is communal benefit - benefiting the "refer-ee" as well as the trusted service provider. It is a very personal interchange, sharing trust and experience. Although they would love to do so, and many have tried, vendors cannot create artificial “buzz” that which generates true word of mouth referrals.

Would a consumer prefer a ‘search engine’ or a word of mouth referral when purchasing a product or service? The answer is obviously ‘word of mouth’ – their choice is less stressful and they normally receive preferential treatment during the transaction.

Which prospective customer/patient/client would a local business prefer? A word of mouth referral or a sales engine sales lead? Any local professional, merchant, contractor or business owner will tell you that their best sales result from ‘word of mouth’. More of these referrals translate into sales and they are more likely to refer more of their friends and neighbors in the future.

What if consumers could harness their local, “offline” network of trusted providers with an online network of friends and associates? What if businesses could reward their clients and the community when they provide offline referrals through such an online network?

If ‘word of mouth’ is so superior to search engines for local commerce, why not harness it using a technology and common sense?

Sunday August 26, 2007 - 11:17am (EDT)

Friday, August 17, 2007

The Long Tail II

My Take

The Long Tail was the subject of an earlier entry (January 2, 2006). Here is a look at its application for the local, small business market.

The above figure shows how national brands expend large ad budgets to support their market shares. But according to the Long Tail Theory, small businesses account for the majority of sales dollars.

Local vendors are not served well by the same regional or national media as national brands. Yet successful vendors in the local market have developed the intense, personal and loyal customers, clients and patients that national advertisers could only dream of. This loyalty powers a media that is far more powerful than any other - word-of-mouth.

Consumer experiences automatically create word-of-mouth, either positive or negative. Ask any merchant, contractor or professional where their best new sales come from and you will get the same answer: "word of mouth referrals". The only way to generate true word-of-mouth referrals is by delivering reliable and high quality products and services.

If true word-of-mouth occurs inevitably and organically, the question is how can local businesses improve the process? How can they
  • stay closer to their satisfied clients?
  • increase the efficiency of word-of-mouth referrals?
  • prevent lost referrals?
  • allow their customers to participate?
  • benefit the community?
Excellent questions...

Friday August 17, 2007 - 09:11pm (EDT)

Wednesday, August 15, 2007

Word Up! 07 - Word of Mouth Conference » Profectio

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Word Up! 07 - Word of Mouth Conference » Profectio
"Word of Mouth marketing has been hailed as one of the most effective and possibly the oldest way to market your companies brand or product whether it be online, offline, using blogs, podcasts, viral videos, contest and much more, come and learn from these smart minds."

My Take

This 'word-of-mouth' is geared toward national brands and Internet marketers. What's missing?

The multi-billion dollar local B2C market comprised of loyal consumers who naturally (n-a-t-u-r-a-l-l-y) spread WOM and where quality products and services create organic buzz.

Oh, that...

- - Tim

Wednesday August 15, 2007 - 08:24pm (EDT)

Sunday, August 12, 2007

Two Articles and 'My Take'

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Local Search – Two Articles and My Take

1. The Kelsey Group – “Adding High Touch to High Tech

Local Search vs. Internet Yellow Page Search: US Local search projected to surpass Internet Yellow Page Search by 2011 (graphic above - pardon the size, please click article link to see it in full size)

2. Vertical Leap - Local Search vs. Traditional Search

A recent report from leading internet analysts, comScore, shows that

  • Local Search grew faster than traditional search by 40% this year.
  • In a single month, more than 850 million local searches were performed in the United States resulting in an average per year of 1 billion local searches. According to many industry analysts, this total is expected to grow to 30 billion per year by 2009 (less than two years away).
  • Almost 50% of local searchers visited a local business as a result of performing search online.

This clearly demonstrates the importance of online marketing to offline conversion. This issue of "offline conversion" has been considered by many as being the "last mile" for internet marketing and is notoriously difficult to track but should not dissuade businesses from engaging in online marketing initiatives.

Currently, the majority of local searchers still rely on directories such as the Yellow Pages. I believe that this grip will be weakened in the near future as the main search engines really start to flex their muscle in this segment of the market. Furthermore, mobile internet usage will also play a huge role in changing the landscape of local search over the coming months and years.

My Take

It seems clear that consumers are ready to use – and are in fact demanding - better, easier to use, Internet-based local search.

The questions are:

  • “What search model will best meet their needs?” Social-based? Algorithm based?
  • “Will a new search model utilize the existing relationships that local vendors already have with their satisfied customers, patients, neighbors?”
  • “Will it encourage consumer participation? Provide consumers with a reward for their referrals? Build their customer relationship while building their businesses and benefiting the community?”


Sunday August 12, 2007 - 08:43am (EDT)

Tuesday, August 7, 2007

Yellow Pages Seek Relevance

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"Strategies to Deliver High-Quality Leads to Advertisers"

August 06, 2007: 09:00 AM EST

The $65 billion US Yellow Page market is at risk. (I mean, seriously, when was the last time you used the Yellow Pages to make a purchase?) Yellow Page publishers, like Verizon’ s Idearc suffered lower 2006 revenues as consumers turn to online sources for local information.

Idearc ($3.2 billion in sales) is looking for a solution. They are teaming with the Kelsey Group (Yellow Page industry consultants) and eStara (sales contact technology) to hold a public Webinar. Excerpt:

“Advertisers have learned a valuable lesson from search engine advertising: it's not about the quantity of leads received -- it's the quality of them. As the local search landscape continues to explode, advertisers are now searching for ways to capitalize through a profitable marketing channel. This leads marketers and media companies to search for effective tools and methodologies to execute successful online advertising campaigns in a relatively new marketing channel.

In the ROI-focused local search space, marketers and media companies are increasingly tasked with finding the best marketing channels for their small- to medium-sized business advertisers, track results across channels and deliver maximum return on investment. Local search publishers are evaluating every option for lead generation for their advertisers to combat the risk of losing business to a growing list of local and national competitors.

Please join host John Federman, CEO of eStara, and industry thought leaders Robyn Rose of Idearc Media and Matt Booth of the Kelsey Group for a free Webinar on Aug. 16 at 1:00 p.m. EDT titled "Delivering Quality Leads to Platform Neutral Advertisers" to learn more about local search trends and best practices for delivering high-quality leads to local advertisers.

My Take:

Sometimes when you step back and look at a problem from a different perspective a whole new approach becomes be evident. Facing falling ad revenues, Yellow Page publishers might try doing this.

From our point of view it seems clear. Turn the traditional model inside out and upside down.

That’s what we’re doing. Feel free to contact me to discuss in greater detail.

Tuesday August 7, 2007 - 04:49pm (EDT)

Thursday, August 2, 2007

Recovering Journalist: Backfence: Lessons Learned

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Recovering Journalist: Backfence: Lessons Learned

Lessons from the failure of a user-generated hyperlocal network, thanks to its founder, Mark Potts. His advice:
  • "Engage the community. This may be the single most critical element. It's not about technology ... it's not about whizbang Web 2.0 features. It's about bringing community members together to share what they know..."
  • A top-down, "if you build it, they will come" strategy absolutely does not work, and that's not what Backfence did... Backfence employed a group of talented journalists and community representatives who sought out and interacted constantly with members of each of our communities to encourage them to participate. Over time, in our more mature communities, this really bore fruit. You have to get a critical mass of community participation and eyeballs coming to the site. You have to get the community involved. There’s no substitute for that.
  • Hyperlocal content is really mundane. We heard this criticism all the time. You bet it is—if you're an outsider looking in. To members of the community who actually live with these local issues, it's vitally important. It's precisely that mundane content, and the conversations around it, that brings life to hyperlocal sites.
  • Trust the audience. We were asked all the we avoided having Backfence become a nasty free-for-all. There were many answers... But most of all, we trusted the audience to do the right thing—and invariably it did. All of that is why we can boast that we very, very rarely had to police Backfence by deleting content. ... The audience took responsibility for what went on at each local Backfence site ...
  • Leverage social networking. The rise of MySpace, Flickr, YouTube and the commercial version of Facebook—virtually all of which have happened since Backfence launched more than two years ago—demonstrates the power of social media. Local communities are social beehives anyway. Why not take advantage of existing local connections and the virality and marketing reach of social tools such as member profiles, "friending" tools, widgets and the ability of members to exchange messages with each other? This was an element we unfortunately were unable to get off the drawing board at Backfence, because of business issues and other priorities.
  • There is most certainly a robust hyperlocal advertising business. Indeed, local advertisers are eager for new online advertising vehicles. I've seen it suggested repeatedly that Backfence failed because it couldn't sell advertising to local merchants. Not true. In fact, we sold ads to more than 400 advertisers, more than any other similarly sized hyperlocal effort that I'm aware of. It was clear that we had staked out an affordable and lucrative corner of the local ad market. Ads in local newspapers—even community weeklies—are too expensive for many small local businesses. Alternatives like the Yellow Pages, Val-Pak-style coupon flyers and local radio are similarly pricey. And most small businesses don't know from AdSense. That presents a ripe target for a talented, hard-working ad sales team concentrating on offering low-cost ads to local businesses who want to reach members of their communities through hyperlocal sites. It's a rich, untapped marketplace.
  • If there's anything I've learned from Backfence, it's that the power and potential of local communities still is waiting to be tapped.
Thanks, Mark!

Thursday August 2, 2007 - 01:25pm (EDT)

Local Search Bonanza Stirs Patent Investigation - Sramana Mitra on Strategy

Local Search Bonanza Stirs Patent Investigation - Sramana Mitra on Strategy


Last year in Feb the Kelsey Group made the eye-catching forecast that the global online local search market is set to explode from $3.4 billion in 2005 to $13 billion in 2010. This put the growth rate at a handsome 30.4% over the next 4-5 years.

...local search is a very high growth area, and one that companies like Google are drooling over.

Against that backdrop,’s (NASDAQ: LOCM) recent award of a patent for indexing and retrieving web-related information by geographical location assumes serious significance. At least superficially, the patent covers much of what giants like Google, Yahoo, Verizon, Ask and InfoSpace are already offering in the local search area.’s patent has therefore set the buzz rolling as to whether the Irvine, California based company is up for acquisition by giants like Google, Yahoo or IAC.

My Take

The local advertising market is ripe for revolution. Who is leading the charge toward this innovation? Advertisers? Nope. Consumers who simply demand more than bulky yellow books dropped onto their driveways or entryways.

septuagenarians are using Yahoo Local or Google to look up phone numbers. Twenty-something first time homebuyers certainly expect more.

The door is open for a new model. Clearly large investors are investing in this space. The local ad model of the future has not yet been introduced. A model that will literally "turn the Yellow Pages 'inside out and upside down'".

Stay tuned !!

Thursday August 2, 2007 - 07:19am (EDT)