Talking Local at SES San Jose

At a pair of TKG-run sessions at SES San Jose, the value of good local data was a pervasive theme. This relates to the ongoing online-offline challenge in local media and search. The problem basically comes down to the inability for search engines to inherently track the convoluted process that starts with a search query and ends with a drive to Best Buy to pick up your new flat screen television.

This issue exists to varying degrees across local categories — services, for example, where a transaction invariably happens offline. In some cases tracking phone calls can get you closer to the transaction, but there is still a drop-off in tracking an actual conversion through to completion. Taking it a step further, the feedback loop is often left blank in the steps beyond the fulfillment of a service or product purchase — in other words, repeat business or reviews.

This is all underscored by the simple reality that though more and more users are researching products and services online, the majority of purchase behavior still takes place offline. In U.S. retail activity, for example, more than 95 percent of dollars are spent offline (compared with e-commerce transactions).

So what is being done about this? We heard from a few different companies that are trying to bridge the offline gap and take this purchase behavior to heart. One is Krillion, written about here many times, which has worked mostly in home appliances and flat screen TVs (items that are more likely to be bought in-store because of visual requirements and weight). The company last week just branched into 96 other product categories and we expect to see this continue to grow.

With respect to local data, Krillion has also pushed its content to other product search destinations such as TheFind (whose iPhone app was demoed in our mobile session). Expect these data to become more pervasive and grow in demand as consumers get used to the idea of finding out how many products are on the shelf and reserving them before they get in their car. In this way, good local data will be paramount.

MoLo Heating Up

The same goes for mobile. As mobile local search query volume reaches greater levels, ad models will increasingly join the local apps we’ll see developed on the iPhone, Android phones and smartphones (growing rapidly in use).

Through that, local data providers like Krillion, NearbyNow and others that focus on local product data will be increasingly in demand. This was one theme that carried through to our subsequesnt session that demoed five mobile local iPhone apps, including UrbanSpoon, Yelp, TheFind, NearbyNow and Skyhook Wireless.

iPhone penetration is still less than 1 percent of the overall U.S. cellphone market, so the actual impact is less about phones sold and more about the bar it has raised for mobile search standards and the influence this will have on the market. Breaking in the market by opening things up to third-party application developers will also represent a game changing move. Over time, this will all cause iPhone market share to grow, and better mobile local search standards, and adoption, will reach the mainstream.

As this happens, the mobile device could be an answer to our famous online-offline dilemma. Given that the phone is present at the point of purchase, greater mobile local search use could lead to a day when the mobile device becomes one effective communication device to bridge the gap.