Archive for the ‘Mobile’ Category

Local Search Summit Wrap-Up

Monday, August 17th, 2009

The inaugural Local Search Summit_took place last Thursday in San Jose and was jam packed with top notch speakers and attended by the top companies in the local search industry. With representatives from both Search Engines and the one Decision Engine :) The day also included a much anticipated white list program for Google Maps bulk upload which you can read about here. Here is a wrap-up of all the sessions and important notes.

Keynote with Google TV’s Steve Stukenborg

The Summit got off to a roaring start with Steve Stukenborg’s dynamic presentation about Google TV.  While not directly applicable to Local, it was an entertaining look into one of Google’s newer product offerings.

Google is essentially trying to bring a “Googly” mindset of trackability into a medium that has to-date been largely untrackable.  Through their partnership with the Dish Network and incoming data from viewers’ set-top ID boxes, they’re able to charge advertisers on an Adwords-style CPM auction model.  TV’s increasing fragmentation (compare American Idol’s 25% share today with the Cosby Show’s 49% market share in the 80’s) means that it’s harder and harder to reach large audiences, but easier and easier to target exactly the demographic you’re looking for.  Time for new ads to go live and reporting on reach and audience is typically right around 24 hours, and integration with Google’s web Analytics appeared almost automatic.

I was disappointed to learn that despite Google’s ability to use set-top ID numbers for tracking purposes, it is not possible for SMB’s (or even national franchise-model companies) to geo-target campaigns.  It would seem easy to parse out geo-targeted content to those markets in which advertisers were bidding, and back-filling “empty” markets with national content.  But I readily admit that I don’t understand the technical side of TV distribution one bit!

Local Search Ranking Factors

Localeze’s Gib Olander and I presented the key points to consider when optimizing for Local Search.  Of particular importance (at least in my opinion) is the need to shift one’s mindset from optimizing a website to optimizing a location.

Gib did a terrific job of explaining the two main modes of Local search – those of REcovery and DIScovery.  45% of all Local searches fall into the former category, where people know the business they’re looking for, and are just trying to find “NAP” (Name, Address, Phone) details.  Thus it’s absolutely critical to make sure this basic footprint is accurate across as many search engines as possible.  Tieing back into my own presentation, doing so will also ensure that these additional listings get picked up as citations by Google Maps.

These citations are one of the most important ranking factors and will help immensely with the 55% of searches involving DIScovery—where searchers are looking for a particular type of business but don’t have one particular company in mind. Properly categorizing your business and adding keywords or tags for a richer profile (pet-friendly, happy hours, wi-fi, etc.) will help your business show up for longer-tail searches around those phrases.

In the Q&A, an audience member raised a question about the use of keywords in business title, which was rated one of the most influential ranking factors by the panel of experts.  I got the chance to ensure that people understood including a descriptive keyword in your business title was a best-practice across ALL listings (including offline occurrences like dba’s), not just at the Local Business Center.  Gib correctly speculated that the reason keywords-in-business-title is such an effective ranking tactic is that the Local search engines don’t currently have enough rich information to rely on for the vast majority of listings, a situation that Localeze (and other major data providers) are trying to improve.

What Kind of Online Products Do SMB’s Need?

Unfortunately, I was answering questions related to my presentation one-on-one out in the hallway for much of this session, but I did get to witness a highly-entertaining interchange between Todd Johnson of eLocalListing and Ben Saren of Citysquares.

Moderator Greg Sterling asked these two panelists to role-play a typical sales call to an SMB.  Ben accurately portrayed some of the difficulties in reaching the SMB owner (lack of understanding of the internet, lack of time to discuss marketing, and reliance on a friend or family member for everything web-related).  Todd demonstrated eLocal’s typical strategy of a request for help with servicing search clients and repeated calls and follow-ups to try to bring the SMB up-to-speed with available internet product offerings.

All the panelists rightly asserted the typical SMB’s lack of interest in the process or even the results of optimizing (i.e. rankings or trackable emails) and pure focus on how much additional business am I getting as the only metric that truly matters.

Pay-per-call was briefly discussed with a representative from Marchex whose name I didn’t catch…my own two cents (as well as Gib’s, stated during our Q&A) is that call-tracking local phone numbers have a negative impact on the consistency of one’s listing footprint across the web.  In my personal opinion, call-tracking should be done at the offline level during or after the phone conversations themselves.

Q&A With Google Maps and Bing

Jen Chin of Google Maps and Kevin Hagwell of Bing Local were on the hotseat for this session.  Moderator Jason Calacanis did an admirable job at trying to tease out the mindsets of two of the three biggest players in Local Search.

Bing seems to see a Local profile more like a property, and will likely be taking steps to make their profiles indexable and more static than they are currently (closer to Yahoo’s model).  Google clearly sees Local profiles more as search results and as such, they have no intent to static-ize them any time soon.

With respect to mapspam, Jen reiterated Google’s abiding faith in its community members to police bad results, mark closed businesses as closed, and the like…feeling that Google users will be “highly motivated” to fix what’s wrong. It should be said that those of us in the Local Search community typically have far less faith in this strategy than Mountain View seems to.

And with respect to data feeds and trust, Kevin posed a preliminary indicator of Bing’s mindset in this session and expanded on it during the Q&A.  He feels that Local data from any source will always have flaws in certain places; even business owners mis-type their addresses or phone numbers on occasion.  There will always be a need for Local search engines to attempt to cluster and merge business data in order to present a “most likely to be accurate” result for a particular business. While Bing would like to move towards a trusted-bulk-upload feature (which Google announced later in the conference) they’re not there right now.

Using Facebook and Twitter to Drive Local Leads

Sadly, I was answering emails for much of this session and only had my ears halfway open…

Will Scott mentioned some excellent tools for finding Local followers on Twitter—a popular question in some of SES’ small business sessions on Wednesday.  WeFollow and Twellowhood were two mentioned that I’d seen before.

He also emphasized his concept of “Attention Deficit Twitter Disorder” and the need to repeat your message at various times of the day to ensure that you reach all of your followers, most of whom are probably checking-in and checking-out of Twitter frequently.  (I guess only total geeks like us are on throughout the day!)

I didn’t necessarily agree with some of Will’s recommendations for auto-tweeting and auto-following, but his full slides on Using Twitter for Local are available on his website.

As far as tracking, one of Will’s particularly interesting insights was to use Lo.ly rather than Bit.ly for tracking, due to Lo.ly’s map overlay of where people are clicking in addition to what they are clicking on.

LBS and Mobile: What to Realistically Expect

Mike Boland of The Kelsey Group led off this session with what I found a pretty surprising stat: there are 63 million mobile web users in the U.S.  That is a HUGE audience, and given the natural affinity between Mobile and Local search, we Local Search practitioners are in a great place going forward. The difficulty will lie in the fact that search volume may not be high for obscure categories or obscure locations.

Greg Sterling’s assertion that 1/3 of all Google Japan searches come from mobile devices only suggests further where we’re headed.

Sanjeev Agrawal of Aloqa added an interesting dynamic to The Summit with his conception of Local Search as not necessarily being “pull” based (i.e. it might not involve search at all).  In Aloqa’s mind, “smart” phones should actually be smart.  They should be displaying opt-in content like specials, points of interest, friends, etc. at all times.  Location, time, and social context are more important for mobile ad serving than is text or perhaps even intent-based content.

Q&A with Yelp’s Jeremy Stoppelman

Kudos to Jeremy Stoppelman for attending what seemed like his first search engine conference.  He shared some interesting insights into Yelp’s founding mindset and where they might be headed.

  • Yelp now has over 7 million reviews and 25 million unique visitors per month.  Their traffic is a “testimonial to the model of User Generated Content.”
  • They’re in 28 cities and now several countries.
  • Yelp’s “secret sauce” so far has been to focus on specific communities and to build a core group of evangelists (the Yelp Elite Squad) for which they throw parties and encourage offline interaction. The highly-successful Portland Community Manager was recently shipped to London to help seed the community there.
  • Stoppelman’s impetus for starting Yelp came from his difficulty in finding a reliable doctor using the extant search engines in 2004.
  • Yelp does its best to keep its algorithm opaque.  The obvious factors are proximity, rating, and volume of reviews.  There’s no set number that “tips” a profile into popular status but Yelp does look at rating trends.
  • Yelp isn’t really worried about Google and Yahoo stepping on its toes…Stoppelman feels that Yelp will always be able to provide a deeper level of engagement for users (echoing Google’s mindset that its own results are just that: search results, rather than deep business profiles).
  • In five years, Stoppelman hopes that Yelp is “the premier brand in Local Search.”  At this point, Yelp has no plans to enter the much-hyped arena of HyperLocal News.

Q&A on Local Search: Where Are We Today?

Rather than duplicate content, I’d prefer to direct readers to the semi-live summary I wrote of this session on Thursday evening.

Kudos to Steve Espinosa & his partners for a truly phenomenal day.  The level of networking and intelligence of the panelists throughout the day was exceptional; LSS alone made the entire SES conference worth attending, in my view.

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Posted in Google Maps, Local Listings, Local SEO, Local Search, Local Video, Microsoft, Mobile, Web References, Yahoo! Local | 2 Comments »

Conference Preview: Talking Mobile Local with Metric Voodoo

Monday, July 27th, 2009

This week, I was able to catch up with Michelle Moore, director of search engine strategies at Metric Voodoo. We’ll be sitting on a panel on Mobile Local Search at SES San Jose next month, along with the head of this blog, Steve Espinosa.

In anticipation of the panel, we had some time to discuss the areas where mobile local marketing needs improvement, or requires different ways of thinking. These will also be key areas of discussion the Local Search Summit happening the same week as SES, as well as September’s  Directional Media Strategies conference run by my company, The Kelsey Group.

Here are a few excerpts from the interview.

MB: What are the biggest market factors that you see driving mobile search adoption on the part of both users and content owners or advertisers?

MM: Technology adoption with regard to smart phones is outstripping most previous major technology adoption rates, including touch tone phones, cassette tapes, hi-def TV and DVD video players. There’s an entire generation in high school right now who’s never known a time without cell phones. This ubiquitous adoption is already causing a measurable trend where smart phones are replacing computers, especially with regard to localized searches. People’s habits are changing - when that happens, it forces market adjustments all the way around, not only with how advertisers will get their messages in front of consumers, but also what sorts of targeting these users are willing to accept. Phone searchers love being “helped” but they hate being “tracked.”

MB: What are some of the fundamental differences of mobile marketing and SEO, compared to online marketing and SEO?

MM: I think the main difference now (which I’m single-handedly trying to rectify, heh) is that mobile marketing is a better proving ground for what I call “pervasive SEO.” You’re already dealing with limited screen space. How much more impactful do you think it is to be mentioned on the first 15 search results on several other sites when someone searches your chosen keywords, than to just be number three and show up once for your own domain name. Even if you’re number one, if you’re only there once someone else placing pervasively on ten or twelve OTHER sites will look more appealing, or more like an expert, or more prevalent. Internet users aren’t naïve anymore. They know that what’s on your web site was put there by you. If a dozen other sites are also saying good things about you, that’s much more effective in terms of earning consumer trust.

MB: What are some of the most common mistakes or misconceptions of companies entering the mobile space (media companies, app developers, web publishers, advertisers, etc.)? What about misconceptions preventing companies from playing in the mobile sandbox?

MM: I think there’s still a disconnect between the left and right brain that prevents advertisers from recognizing opportunities in the mobile space, especially for small to medium-sized business. For example, local search - which is one of my main prongs of attack with any business that has a physical location… it takes me about a dozen repetitions and even demonstrations over several weeks of the immense practicality of local business search on a phone before the little light bulb starts to glow. Ultimately, I have to sit back and wait for my clients to actually use their phone in this manner to make a decision or a purchase or answer a question, and then point out to them afterward why they ended up using the vendor they selected. “Do you remember why you ended up calling CVS Pharmacy?”  “Yeah, the first phone number I found for Foster’s Pharmacy wasn’t in service anymore.” “OK, so what happens when you change your business phone number and no one bothers to update all your local business listings that are floating all over the internet?” It’s as if small business owners think that because they have a web site with their name and address and phone number, that’s all they need. They don’t think far enough down the smart phone path to realize that their site might be all in Flash, or that the average local business search through a smart phone portal may put results from CitySearch or Superpages above your business’ own domain name… and oddly, SMBs are who absolutely need to succeed in this arena or get overrun by the big chains.

MB: Is the state of the economy currently having an effect on this adoption, any more so than other media? In other words is mobile’s “experimental” nature preventing companies from utilizing it as a content and/or ad delivery platform in uncertain economic times?

MM: I think this depends on who you’re asking. I don’t know a single consumer who’s given up their mobile phone. But I read all the time about companies abandoning or “back-burnering” their mobile marketing initiatives. It makes me want to ask marketers, “why are you doing this when that market is one of the only markets not shrinking?” Fewer and fewer people read printed newspaper, but more and more people use cell phones.

MB: Conversely, is mobile’s targeting capabilities, greater ad performance (CTRs etc.), and measurability making it resonate to a greater degree during these times when advertisers are demanding more concrete ROI?

MM: You’d think, wouldn’t you? I’m not sure about national numbers, but in the South where most of my work is done, it seems that there’s a different barrier to entry. Much like with social media, there’s a general lack of awareness (and therefore, confidence) in mobile marketing.  I’m constantly preaching a reduction in faith-based advertising models like television, radio and newspaper, and a shift to trackable advertising, whether it’s plain old PPC or mobile advertising. But there seem to be a lot of marketing execs who lack experience with the medium, making it harder to convince the rest of the C-suite to support mobile marketing initiatives. It’s like the fact that you can measure ROI at all doesn’t matter - they’re not willing to dabble in mobile unless you can prove ROI to start with. It makes no sense to me.

MB: It’s my contention that mobile and local are so closely related. Online, searches with explicit local intent are about 10% of overall searches. On mobile, it is currently about 2x-3x more than that, and growing. Do you agree?

MM: Yes, I do agree. Every statistical report I’ve seen in the last 8 months indicates that at least 25% of all searches on phones are local business searches. This is why I start my discussions by showing folks the Sprint commercial that was released in May - “Right now, 6000 people are researching restaurants in the back of a cab.” How many “right nows” are there in a typical day… times 6000.

MB: What are the capabilities of the mobile device that will force advertisers to think differently when it comes to marketing or content delivery? Too many advertisers are porting over existing strategies (i.e. display ads) to a smaller screen. Will this change and “grow into” the capabilities of the mobile device including portability, location awareness, etc..?

MM: I think what consumers react most strongly to in the mobile arena is the gradual return of instant gratification. That’s why local business search volume is soaring. What businesses are slow to realize is that searches on phones are not in any way, shape or form about your web site. They’re about your physical location. This is why porting existing ad campaigns from the web will not be sufficient. I’m waiting for someone to fully develop an app that lets you not only research the restaurant, but see a layout, pick your table, and make your reservation without making a traditional phone call or sitting on hold or even talking to another person… then tie into Match.com and hook you up with a dinner date too.

MB: Who is doing it right? Any mobile sites or apps that you admire for delivering content in a way that is fitting to the mobile device and the way people are using it?

MM: The most awesome new phone app I’ve seen was on a Nationwide Insurance commercial. You have a wreck? You click an app that’s connected to everything you need - it calls emergency services for you, it gives you a checklist for your information exchange, locates the nearest agent or office for you, takes pics of the damage for you, starts your claim process for you, and even includes a flashlight function! This is an example of the total 180 that major companies are going to have to learn to do. This app is all about the consumer. Of course, it doesn’t do you a lot of good unless you are a Nationwide customer but this app is all about helping the consumer handle a difficult situation. Companies have got to figure out that they will get a lot farther when their advertising models are more focused on the consumer, not all about the company. On another note, I’ve seen the television commercial announcing this iPhone app ONCE - it made that much of an impact that I defied all “repeat seven times” advertising advice and remembered it after one viewing… I cannot begin to count how many Allstate, Geico, Liberty Mutual and Progressive commercials I’ve seen. I have no idea of the estimated cost of all those commercials compared to the one airing of the Nationwide commercial that I saw, but I can guarantee you that when my insurance renewal rolls around, I’ll be getting a quote from Nationwide for good measure. The return on the investment in more efficiently serving the customer will most definitely pay off with a higher ROI than those 6 million untrackable television commercials for the other major carriers.

MB: Any other advice for companies entering the mobile space or online publishers trying to seek out opportunities in mobile?

MM: Be proactive. Buck the old traditions and hire some new blood (says the 40-some-odd year old). Take steps to build an online reputation before you are forced to take steps to correct it. Be an expert in your area and make sure to let people know about it. Put yourself everywhere you can afford in order to have the best chance of being found - be that online yellow pages, paid ads in a search engine, paid sponsorship of a mobile portal, name on a bus stop bench, name on the back of a little league jersey, where ever you can get publicity without offending people’s sensibilities. If you can associate that with a topic consumers are passionate about, so much the better.

Posted in Mobile | No Comments »

Mobile Local Search: Where to Begin?

Wednesday, May 13th, 2009

My last LSN column attempted to look at where we are now with the mobile local opportunity: if not entering the oft-predicted “year of mobile”. Since then, the Kelsey Group’s U.S. mobile ad forecast has shed some more light.

The top line figures project mobile ad revenues to grow from $160 million in 2008 to $3.1 billion in 2013 (81.2% CAGR). Current revenues are largely made up of SMS advertising, where the most reach and scale exist.

But growing penetration of smart phones (now less than 20 percent of U.S. mobile devices) and devices that can view full web browsers will cause search to eclipse SMS as the leading revenue category by 2013.

This is also supported by the growth of the mobile web — currently at 63 million monthly users (comscore) . You know the story: The iPhone has raised the bar for mobile hardware, and copycats have begun to flood the market and compete on price.

Carriers have likewise begun to subsidize upfront device costs in order to drive long term data contracts. The price for touch screen based smart phones is starting to settle around $200.

Quickly sprouting application marketplaces will meanwhile provide the killer apps that drive the appeal and utility of these devices. This is all bringing the mobile web within striking distance of mainstream adoption for the first time.

Local Motion

The key point, as examined in the last column, is that local will be a big beneficiary of the resulting search volume growth.

The portability and location awareness of the mobile device is highly conducive to local search, meaning local intent on the mobile device will outweigh the roughly 11 percent of searches online that are local (TKG).

Google agrees, citing that local search on the mobile device indexes higher than the desktop by about 2x to 3x. This lines up with the Kelsey mobile forecast data that show local searches make up about 28 percent of mobile searches.

That figure will grow to about 35 percent by 2013. But more importantly, revenues from local search will surpass 50 percent of mobile search revenues. This is due to the premiums that will be placed on content and advertising that’s location targeted to mobile users.

Given a new form factor, new ways of thinking will be required for content delivery. It won’t just be a matter of transferring online models to a mobile device, and measuring clicks, impressions and the standard set of online performance metrics.

Other content and ad formats will evolve based on the portability, immediacy and location awareness of the device. In addition to the CPCs and CPMs that rule the online world, this could include more pay-per-call models in some categories (i.e., professional services) or cost-per-action models in others (i.e., retail)

This can involve retail data feeds (i.e. Krillion, NearbyNow) which tap into POS inventory systems to indicate prices and availability. The fact that the phone gets you closer to the point of purchase can also bridge the online-offline gap that’s traditionally been a source of uncertainty in local search campaign effectiveness.

Now What?

So the opportunity is there… now how do you tackle it? Application marketplaces have standardized and lowered the barriers to distributing mobile apps. But there are still barriers.

Like lots of things (i.e. writing columns), one of the biggest challenges is figuring out where to start. Given finite development resources, where do you prioritize developing apps for a highly fragmented world of mobile operating systems, devices and formats?

SMS has the most adoption and reach (i.e. all cell phones), but the iPhone has the most engagement. Between the two lies a spectrum of options including web apps, and java apps that have to be customized for a long tail of hundreds of devices.

Yellow pages publisher Dex just launched a series of mobile products that attempt to hit up all the points of this continuum.

“It’s all about extending your reach through different devices and platforms,” Dex director of mobile and personalization Deborah Eldred told me. “We want to make sure we hit the mass of the subscribers but also hit the mass of usage, which is smartphones.”

This represents a common yellow pages attitude lately to jump on the mobile opportunity. They can afford to do so — Though it’s often clouded by valuation declines and dept loads, Yellow Pages publishers still have a fair amount of cash on hand. But what about companies that don’t?

“We’ve had a lot of success with our iPhone app, and we know we have to put more resources into mobile development,” says Sonia Survanshi McFarland, Yelp head of business development. “But you have to quantify how much it’s going to cost from a human resources perspective and weigh that against what else that developer can work on.”

The Short Answer

Perhaps the “short answer” is to look at mobile platforms whose data consumption is growing. These are iPhone and Android according to AdMob data. And what about the Palm Pre? Could it be the dark horse, given the levels of market anticipation it’s seeing?

android

Yelp’s McFarland points out this is risky territory – iPhone development came with the benefit of 12 months of usage that predated the app store. This meant usage metrics were available in advance of app launch: Not the case with the Pre.

Windows mobile 7 is likewise unproven territory with no guarantee of release date or quality. Many carriers and device manufacturers planning Q4 releases (read: holiday season), could therefore bank on the safer option: Android.

The platform question is still an open one, and like a lot of things “it depends”. Lots of factors come into play: target demographics, advertising goals, verticals, etc. The question also comes down to whether you want to go after reach or engagement.

side effects of relafen

Over the next month, I hope to answer some of these questions by getting down and dirty with carriers, local media publishers, and app developers. The result will be a TKG report, which I’ll come back and summarize here. Stay tuned.

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Posted in Mobile | 5 Comments »

The Facebook Strategy

Monday, April 27th, 2009

Facebook has had a hard time in attracting advertisers to their site. Mostly because advertisers have not figured out how to monetize or receive as high an ROI as they do when they advertise on Google with AdWords. As it sits right now, Facebook really only offers display advertising without the demographics guessing game so it is not really a surprise that Facebook has not attracted as many local advertisers as they would like.

You might be asking “Why the heck would Facebook want to attract local advertisers?” The answer is simple: user experience. Not only do users not want to see ads like the ones you see below, but in the conversations I’ve had with people at Facebook, they don’t even like them.

facebook-ads

Besides the fact that Facebook is trying to tell me I need to workout and go get my teeth whitened, it isn’t relevant, and therefore I can guarantee that they have poor click through rate. I don’t know about you, but the last time I checked poor click through rate and lousy user experience doesn’t usually equate to great revenue. So what should Facebook do? The answer is simple, make it easier for local advertisers and search marketers to target relevant users.

Data is King

diarex


Facebook is an information company just as much as they are a social networking company. Their biggest attraction as a company, from a marketing perspective, is the fact they know everything about their users. They know what kind of music they like, where they live, how old they are, where they went to school, who their friends are, and much much more. In fact, they could potentially be the most valuable market research company out there because users are volunteering this information and have no reason to lie about their answers. It is real time information where we can actually see and predict trends amongst demographics before they happen. They even track their users click paths, navigation summary, and as you can see below, if there are two ways to get to the same destination on the same page they track that too.

facebook-clicks

It starts with categorizing
Currently when advertisers go through the process of setting up a Facebook campaign they are not asked what kind of company they are, only what demographic they service. So why wouldn’t Facebook categorize their advertisers? Wouldn’t it make sense for advetisers to categorize themselves when they sign up or before they create a new campaign? Instead the only real categorization Facebook can make of its advertisers are amount spent, targeted demographics, and keywords. But that is not enough. Completely different companies could be targeting me (i.e. teeth whitening and free stimulus check companies) and two different companies could be targeting the same keywords.

If and when Facebook starts categorizing all their current and future advertisers they will be able to track performance across specific verticals, whether they are small businesses, national chains, or just scams like this ad:

picture-351

They will be able to utilize this by implementing the my next suggestions: keyword and demographic information clouds.

desyrel

Information Clouds
Yes I know, we all have had about enough of the hype about information clouds, cloud computing, or cloud anything for that matter. However, now that Facebook has all of its advertisers placed into categories we can take real advantage of that by letting advertisers help each other out. We now have the ability to let a small business with a $100 per month budget take advantage of information and data that would have cost 10’s of thousands of dollars to put in place. You may be asking how do we do this. It is simple, store all advertising data by advertiser category, demographic, economic, and city population.

Facebook first needs to overlay the United States with population data, demographic data, and economic data such as median income. All of which they can easily get from the census bureau. Yes,the census bureau data is a little old but it is a great starting point. After they do this they will easily be able to place Facebook user data over those information layers and determine their market shares per neighborhood, cities, etc. So what does this give us? This tells Facebook where their advertising will be most effective compared to other advertising sources due to market share.

Now that we have our data layers in order, let’s bring this all together. Let’s say that I am Widget, Inc. and I sell blue widgets to people . I only have a budget of $125 per month to advertise on Facebook and I can not afford anymore because of the recession. Why should Facebook rely on that user to know what demographic is going to work best for Widgets, Inc? You have no way of knowing that the current demographic Widgets, Inc is currently targeting will be more profitable or successful than any other demographic. The answer is simple: let the users tell you, and no, not by the little thumbs up and thumbs down icons, but by tracking click data and conversion rates.

You might be thinking “but we only have $125 spend and thats not enough for a good test size”. You’re right, it isn’t, but remember that Facebook’s strength is in its numbers. The entire crazy valuation it received was based on the number of users and the information it had about its users. So wouldn’t it make sense for Facebook to combine all their advertisers into one information cloud, into one database. If Facebook implemented the categorization method they would be able to track all companies that sell blue widgets and treat them as a whole. Now, instead of $125 in spend data we have $20,000 in data. Each company still holds unique traits such as economic climate, geographic are, etc. but now each advertiser can learn so much more and therefore they can earn so much more from their dollars. This new data set can go much further than any one widget company’s data could. In this solution, the advertisers help Facebook find out what demographics are perfect for specific verticals and users tell Facebook which companies and ads they like best.

Imagine if advertisers had a feature similar to the current “You might also know” section where Facebook suggests other people on Facebook you might also know and have not yet run into. Well what if we had a section similar to this entitled “Demographics you might also like” where advertisers will receive suggestions from Facebook itself based on data where Facebook has noticed great performance amongst the demographic and the category of the advertiser.

Template Ads
Ad copy and content is one of the biggest things that hold up marketing efforts for any company. So if you leave that to the advertisers to figure out, you are leaving money on the table. Not only are you leaving money on the table but you are also assuming that the advertisers ads are so good they will see ROI and spend more with Facebook. This is not a good strategy. Google recently launched templated display ads where users can simply pick out the ad they like and fill in the text right in the Google UI. This increased both user involvement and the number of ads made.

Facebook could come up with ad content and ad pictures that captivate their audience and encourage users to click through. This obviously would be done for each vertical and eventually specific verticals within geographic areas. Now we won’t stop there, after the ads are made we will help distribute them to our advertisers; letting them know we have completed tons of market research, design, and testing on there behalf, for free. We will then let the audience determine which ones they like best by analyzing click through rates and if they became a fan of that business on Facebook. The more hands on and easier it becomes for the advertisers to take advantage of the jump start that Facebook has provided the easier it will be to implement A/B tests internally without relying on the users to do so.

A/B Testing
A/B Testing is something that every company should do for every part of their marketing, but they don’t. So what does that tell us? We should not rely on customers doing this. Once companies utilize the tool above we will have a large enough amount of ads being used that are based on the same template framework to where we can now calculate internally which ads are performing best (i.e. Computer ad #1a or Computer ad #1b) without having customers individually run these A/B tests themselves.

This same type of internal testing methods can be used across all aspects of the advertising campaigns, not just the ads. It can tell what geographic areas respond to specific industries best, which education level becomes fans of businesses the most, and so on. With this testing being done and the amount of users Facebook has, they can easily become the smartest advertising platform around, and dare I say even smarter than Google once implemented .

Math doesn’t lie
The data really does go much deeper than click through rate and fan conversion rates. When referring back to demographics, population sizes, and economic data we can determine that in situations like 22-35 year old mothers with an average household income of $150,000 ads with a coupon offers are not necessarily the best, but where the median income is $75,000 it actually is the top performing ad based on click through rate. Math will not lie to us. Math is not opinionated and it is not emotional. Facebook will soon be able to say they provide the maximum amount of ROI possible to each user because Facebook will continue to grow and learn itself as advertisers spend more and more on Facebook. With the combination of best possible Maximum ROI, ease of use, and a built in marketing expert (the new system that is created) the question won’t be will advertisers spend money on Facebook, but how much.

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Local Search in '09: Going Mobile

Wednesday, December 31st, 2008

If you go by the predictions heard during the last ten years of industry conferences, mobile search’s tipping point is perpetually 18 months away. But now we’re in a stronger position than ever, thanks to quickly evolving device standards and open source mobile platforms that welcome third party innovation.

This of course was ushered in with the iPhone, but will continue with a second wave of devices and the continued death of the carrier-controlled environment that has caused a sub-par set of products to dominate the market over the last 10 years.

And though the iPhone only represents about one percent of the global cell phone market, sales have been ramping up quickly. It’s now the top selling cell phone in the U.S. according to NPD group (beating out the Motorola RAZR V3) with 6.9 million phones sold last quarter.

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This trend will continue as prices drop and as it becomes more of a mass market device. A big step was taken in this direction this week when iPhones began selling in 2500 nationwide Walmart stores.

All You Can Eat

The key point here is that the iPhone’s user-friendly interface will cause the growth of mobile data consumption to correlate with this market penetration. iPhone users map to greater data consumption, supported by Net Applications data that show iPhone web browsing share ramping since the June ’08 release of the iPhone 3g.

ComScore VP of Marketing Brian Jurutka meanwhile presented data at The Kelsey Group’s ILM:08 conference that showed mobile data subscriptions up 37 percent in June (year over year). Unlimited data plans account for nearly all of this growth and the use of mobile browsers has grown in step.

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But it’s not just iPhone penetration causing the rise in mobile data consumption; smart phone penetration has also outpaced the market overall. Going forward, it will be less about the iPhone’s direct impact on data consumption than the device’s influence on the rest of the market.

Copycat devices that compete on price will continue to flood the market, driven by evolving consumer expectations and competitive pressures. As this happens, iPhone-like features will essentially become commoditized and will become standard issue for the mobile mainstream.

We could even see a touch screen-based smart phone with mobile browsing, GPS, games, local search apps, etc. for under $100 this year. loxitane

Think Mobile, Act Local

Local will be the big winner in all of this. There is a strong correlation between local search and the mobile use case, which will cause a good portion of the explosion in third party app development to focus on local.

The touted location awareness features (GPS, etc.) of the iPhone and other devices will push this. But it will be more about local search’s ties to the immediacy and geographic relevance inherent in mobile search.

Think of it this way: If 20 percent of online searches have local intent, my hypothesis is that local will represent an even larger stake of search activity on the mobile device. Many other search categories like product research, reference, image search, will conversely make up smaller shares of mobile search — due, again, to the form factor and basic mobile use case.

Already, about 15 percent of iPhone apps are local. The Kelsey Group’s Mobile Market View (MMV) survey also reported in October that 15.6 percent of mobile users searched for local products and services, up from 9.8 percent the year before. This will continue to grow.

Meanwhile, social media could buttress the apex of mobile and local, as a consumer use case continues to develop around finding things to do and buy locally, while connecting with friends (i.e. Yelp, Loopt, WHERE, etc).

Supporting this, MMV shows that the number of mobile users who access social networks tripled to 10 percent from the previous year. eMarketer also projects mobile social network users to go from 82 million in 2007 to 800 million in 2012.

This will be about 20 percent of overall mobile users, but will constitute an “influencer” segment which will represent a disproportionate share of the marketing opportunity

Now, the Hard Part

So how will all of this be monetized? That’s the 12 billion dollar question (literally).

As with online search, we’ll see lots of shapes and sizes of advertising develop that mirror advertisers’ goals (i.e. clicks, phone calls, branding, foot traffic, conversions, etc.). In this sense, mobile marketing will have some limiting factors compared to online (small screen, etc.). But it will conversely have unique opportunities tied to the mobile device’s portability and location awareness.

Mobile’s proximity to the point of purchase (i.e. in your pocket), for example, opens up possibilities that haven’t really gotten off the ground in online search. These include transactional or cost-per-action models such as mobile coupons or product reservations. Picture standing in front of a store shelf and being able to find cheaper items at another store.

And since the device is, after all, a phone, there will be lots of opportunity to serve local content that is tied to pay-per-call models. Voice search will grow in’09 for the same reason. This will come from continued growth of early movers in the space such as Google (goog411), Tellme (Microsoft) and Vlingo. Each has extended its reach with on-deck voice search applications for the iPhone and others.

More so, voice search could be an opportune area if you consider the majority (86 percent) of the 228 million consumers in the U.S. who are non-smartphone users. For many of these users, voice will continue to outweigh browsing as a preferred search input; thus representing a more immediate opportunity.

Reality Check

Before we get too far ahead of ourselves, it should be acknowledged that we’re not quite there yet.

Mobile advertising was a 2.7 billion industry in ’08 (Gartner) and it will remain relatively flat in ’09. Volume isn’t where it needs to be to attract advertisers on a wide scale. More so, mobile’s experimental nature combined with a down economy will keep many advertisers away.

So mobile marketing’s real opportunity is further off. It could begin to take tangible form in 2010 as the economy improves, mobile technologies continue to improve, and mobile data consumption continues to increase. As all of these factors come together, advertiser interest/adoption will slowly follow, as it often does.

That said, now is the time for anyone interested in this space to start to develop a mobile brand. This lead time will be required to not only build a user base, but to also gather intelligence and learn what user and advertiser proclivities will be in this quickly evolving medium.

This will be vital for mobile search product development. In other words, you’ll have to be ready with a certain degree of momentum when the fabled “tipping point” arrives; when mobile local search becomes a mass market medium and marketing channel.

When will that be? 18 months. We mean it this time.

Michael Boland is an analyst with The Kelsey Group who focuses on mobile and local search. For more TKG reports, data and analysis, contact Michael directly at mbolandATKelseygroup.com.

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