HopStop Explores Local Potential of Transit Directions

Local consumers are presumably in buying mode when they are researching where to have dinner, attend an event or go to the movies. How about when they are researching directions to get there?

In fact, mass transit directions in themselves represent a host of opportunities for local services and advertising (along with parking garage info). Companies engaged in collecting, sorting and leveraging mass transit directions include HopStop, Google Transit, and Urban Mapping. Most large public transit agencies have also developed an infrastructure for mass transit and walking directions.

HopStop was the first service out of the gate. The five-year-old, 12-person company is now providing transit and walking directions in 16 metros throughout the U.S. and Europe, and plans rapid expansion in Q3 and Q4.

During HopStop’s early days, its directions weren’t always reliable (note: amassing and normalizing mass transit data is no easy task). These days, however, its directions tend to be very good. A team of us here at BIA/Kelsey recently relied on HopStop-powered directions to get around New York and New Jersey, with excellent results.

Besides mass transit and walking directions, HopStop is also providing information about alternative transportation options, such as car sharing and limo/sedan reservation capability (via partnerships with ConnectByHertz and LimoRes). It also estimates cab fares, which is an especially useful feature.

CEO Joe Meyer, a former eBay and Quigo executive who came on board last April, says the quality of the service and its scalable routing engine are close to where they need to be. He notes that it has been quite an effort to collect data from hundreds of transit authorities — including, for instance, 30 transit agencies in the New York area alone. The service also enhances and improves the data via a user feedback system, with user improvements coming in via Facebook, Twitter, e-mail and SMS/chat.

Roughly half HopStop’s traffic comes directly to its site. Other users come in via local media affiliates, which either work directly with the site or use its open API. Not surprisingly, the highest traffic day part comes during regular business hours, with half the transit queries pertaining to points of interest such as local events, restaurants, museums and tourist attractions.

Other searches pertain to business-centric locations such as office buildings and conference centers. Meyer says they are all highly suited for contextual and geotargeted advertising.

What’s really been evolving rapidly is HopStop’s utility as a mobile service. Over the past two years, HopStop has launched an iPhone app, a WAP site and advanced test messaging capabilities (Desk-to-SMS and SMS-to-SMS). The company has recently recruited Scott Margolis, the former director of mobile for FoxNews.com and FoxBusiness.com, to head up it’s mobile initiatives.

While desktop directions still account for the majority of usage, smartphone usage is growing at a much faster rate. HopStop now has plans to develop mobile apps for Android, Nokia/Symbian and BlackBerry.

In terms of ad revenues, the site provides free listings to local merchants, using a homegrown database as well as one populated by CitySearch. Most of HopStop’s revenues, however, come from national advertisers, including Starbucks, Dunkin’ Donuts, CitiBank, CapitalOne, Duane Reade, CVS, Monster, CareerBuilder, Delta, JetBlue and The New York Times.

These advertisers typically utilize a mixture of display and text ads, which HopStop’s geo ad-server targets down to a street address level. “It is all about hyperlocal” for such advertisers, says Meyer.

Although HopStop asserts rapid growth, Meyer is upfront about the challenge posed by Google Transit (which is tightly integrated into Google Maps). In his mind, Google Transit is an overly rigid solution. For instance, it only accepts data from transit agencies that conform to its specifications. Conversely, HopStop takes more of an open approach, he says. It accepts scheduling and routing data in every format, giving users many more routing options, as well as more accurate directions.

“It’s a double-edged sword having Google as your primary competitor,” says Meyer. He adds that Google’s entrance into local transit navigation validates the need for direction searches, and their commercial viability.