DMS ’10: Yext CEO Howard Lerman’s Top 10 Predictions
Yext CEO Howard Lerman, in the first of several keynotes at BIA/Kelsey’s DMS 2010 in Dallas, says that “dozens of winners” will emerge in the local marketplace. Noting how fast technology has swarmed around local marketing, “it is basically the Jetsons we are looking at right now.”
Lerman used the keynote to throw out 10 predictions. Among them: Directories will continue to drive the highest ROI for phone calls. He noted that Yext’s analysis shows that of 562,000 calls made in January 2010, 113,198 resulted in transactions, for a ratio of 20.2 percent. IYPs such as SuperMedia’s ratio was the highest at 23.4 percent, which makes it 25.2 percent more likely to close than Google, he says. Google delivers a lot of volume, but “has the lowest likelihood of phone calls resulting in transactions,” he said.
Another of Lerman’s prediction was that CityGrid will become the most important local advertising exchange. Its growth in phone calls in the past six months has been huge, he said. The average transaction ratio has been about 25 percent.
Lerman’s other eight predictions:
1. MapQuest will become a key local discovery resource, leveraging off its 50 million unique visitors.
2. Patch is going to explode, and will have enormous synergies off of MapQuest, which is also owned by AOL. Patch already has 105,000 high-quality listings.
3. Impulse buying will be hotter than ever, and Yellow Pages will seize a piece of the group buying pie.
4. Yelp will become the most important consumer resource tool and will continue to spar with Google on how its content is used.
5. YP sales forces will grow revenues beyond advertising, with AT&Ti especially well positioned. Mobile Web site, rep management and video will lead the way, making up for the fact that “SEM is not high margin.”
6. Microsoft’s Bing will become the second most important primary source of local advertising inventory.
7. The number of advertisers buying performance is going to peak. This growth won’t come from new advertisers; it will come from extracting more dollars from existing advertisers. The dollars spent will rise. Eventually, 1 million advertisers will buy performance advertising, but we’re already at 600,000 to 700,000, he estimated.
8. Google tags will become the standard local advertising unit — a prediction that fits well with Yext’s imminent launch of low-priced YextTags. It is ironic that the company most responsible for performance-based product will roll out a flat rate product. But Google sets the standard for advertising products.