$20 an hour. That’s the price of a HomeJoy housekeeping professional. How big can the market for these services reasonable grow? Will these on-demand companies grow without taking a major bite of the approximately $8.5 billion in revenue from the industries that provide housekeeping services today?

Using the methodology explained in our first Local On-Demand Economy market posting, which examined the market for unpaid household work that is currently performed by the householder, we estimate that the Housekeeping Services vertical represents $57.8 billion in addressable revenue in 2015. The growth of this market depends on increasing homeowners’ and renters’ ability to earn income from some of the labor they do to support their home while spending to have others do household work they want to avoid.

By lowering overhead using digital logistics to match housekeepers and clients, as well as to collect feedback about the customer and worker’s experience, HomeJoy hopes to prosper as less agile companies flounder in employee costs that the San Francisco-based LODE company eschews. This flexibility comes at a cost, as HomeJoy has much more limited control over individual cleaners that contract with it than a firm like Merry Maids, where uniforms and policies are enforced as part of the employment agreement. Regulatory changes at the municipal, state and federal levels will be necessary to resolve the ongoing questions about the legal status of a “1099 worker” with regard to their obligations to uphold corporate standards, but for the sake of this analysis we will simply point out that brand experience will turn on the on-demand company’s ability to engage laborers in delivering a consistent customer experience.

The Housekeeping Services Industry
Housekeeping services are lumped into a variety of labor categories, including janitorial services and traveler accommodations, by the Bureau of Labor Statistics. As of May 2014, more than 70 percent of “maids” worked in hotels, motels and medical facilities. Approximately 260,000 housekeepers work in the home services market and drive approximately $8.5 billion in revenue for themselves, their franchise or housekeeping company. The median hourly wage for a maid in the United States is $9.67 an hour, and the top 10 percent of earners bring in $15.74 an hour.

Existing housekeeping and services companies, such as ServiceMaster’s Merry Maids as well as the Molly Maids franchises, are long-established players who see an emerging fight for their lives as on-demand companies revise the economics of service delivery. The result will likely be the transition of all these companies to on-demand labor models over the next few years, as 86-year-old ServiceMaster has in Europe, where it has launched on-demand home cleaning. However, these on-demand services will compete with their existing franchisees, leading to potentially declining overall revenue. ServiceMaster reported declining revenue in 2014 in its Franchise Services Group, where Merry Maids revenue is reported, of $253 million, down 2.4 percent year-over-year. The trend continued in Q1 2015, when ServiceMaster reported an additional 1.9 percent year-over-year decline in quarterly revenue.

Existing home and commercial services businesses have combined far-flung service businesses to establish their profitable foundations. ServiceMaster, for example, provides home security and insect/pest control services through its American Home Shield and Terminix groups. We anticipate that each of these services can stand on their own in the on-demand market, if the provider masters the infrastructure, marketing and engagement challenges involved.

At $12 to $15 an hour, HomeJoy’s compensation is comparable to the employee-based model of the traditional housekeeping business and slightly higher than the median hourly wage for maids reported by PayScale, $10.73 an hour. These figures suggest HomeJoy runs a topline margin of about 40 percent, higher than the average on-demand company margins at, for example, Uber. This will enable HomeJoy to concentrate on quality experience, which is the keystone to building a competitive offering and growing its market.

Based on our model, the housekeeping industry has converted only 14.7 percent of the addressable market in 2015 — that is, the people who can access and afford on-demand housekeeping services. There is plenty of room for growth, but much of that growth is predicated on the exchange of on-demand labor among household laborers, not simply the existing housekeeping market.

Table stakes
HomeJoy, which has acquired one company, GetMaid, is purportedly in discussions about a merger with Handy. Both companies have anted up to play at the consolidation game, bringing strong logistical and demand-generation tools to potential business relationships. The enduring question for all LODE companies will be “How many services make a minimum viable offering?”

Based on the early M&A activity in the pure-play housekeeping business, which has attracted between $240 million and $290 million in venture investments, it is clear that the appropriate mix of services that will attract both sufficient labor interest and customer attention is still to be discovered. Thumbtack, which also offers cleaning and assistant-like services for the home, reaches far beyond the cleaning category, offering plumbing and yard services, among others may be better prepared to win the share of customer necessary to grow. A combination of HomeJoy and Handy, should it come to pass, would compete more directly with Thumbtack.

But then there is the specter of Amazon Home Services, which promises a wide variety of vetted in-home services and already delivers more goods to directly to American home than any other online source. The bet by Amazon is simple: They can transform consumer attention to products around the house into services revenue related to delivering and using those products, as well as services that were previously found through the paper and online directories. Amazon’s primary competition for labor will likely be the directories and marketing services companies seeking to aggregate services businesses, such as TalkLocal, ReachLocal, as well as individual businesses competing through tools such as BreezeWorks, FreshLime and the recently announced Prompt.ly.

We anticipate intense consolidation by home services companies seeking to find the ideal mix of services and market reach. With the transition to on-demand labor, which we view as a logical and inevitable consequence of network technology, automation and organizational change, existing home services companies will face tremendous margin pressure and a few will certainly die, but none is assured to die from the competition coming from LODE startups. There is ample upside available if the LODE scenario leads to higher incomes for household workers.

The post LODE in 2015: Housekeeping Services Vertical Worth Up to $57B appeared first on BIA/Kelsey - Local Media Watch.

YP has been growing in leaps and bounds since its 2012 launch. The company, formed by the consolidation of the former AT&T Interactive and Advertising Solutions groups by private equity firm Cerberus Capital, unveiled its new corporate signage installation atop its Glendale, CA headquarters on Monday.

“Its about time that Glendale got a pop of color. YP has arrived,” exclaimed YP CMO Allison Checchi to the group of employees and local business community members that had gathered atop a nearby parking structure to watch the unveiling.

YP has been a long-time member of the local Glendale and Los Angeles based technology community, and in the last few years has grown to become one of the largest tech-industry employers in the region.

Company CTO Darren Clark remarked that the executive team has been set on making YP a powerhouse technology brand since its launch, and initiatives like city-wide private employee shuttle services (similar to services Facebook and Google provide in the San Francisco region for employees) and community outreach have helped to make YP a prominent voice in the fast-growing Los Angeles tech scene.

The company’s LA/Glendale-based digital headquarters have been a vital part of YP’s transformation from a traditional print media business to a digital media leader. Over the past 5 years, YP’s digital solutions have grown from 18% of total revenue in 2009 to more than half in 2015 generating more than $1 billion in revenue.

The Glendale headquarters are home to the company’s product, engineering and technical teams of more than 800 people, and it has grown the office by more than 25 percent since 2013, just after it spun out of AT&T.

Due to YP’s growth, it has become the anchor tenet of 611 N. Brand Blvd, occupying 6 floors covering more than 145,000 square feet of office space. With the expansion, YP was granted signage rights on the building, allowing it to prominently showcase its brand in downtown Glendale and to the thousands of commuters traveling on the 134 freeway.

YP CMO Allison Checchi, CTO Darren Clark, and CXO Mark Ploof addressing the audience at the company’s building sign unveiling on Monday

The post YP Now Part of the Glendale Skyline appeared first on BIA/Kelsey - Local Media Watch.

Button, the New York-based developer of mobile deep-linking integration tools for use in local on-demand services, announced the launch of Uber integration into third-party applications. Foursquare used the tools to add a button to its location-based social sharing application to add the ability to book an Uber ride.

When Foursquare members search for a location, Button’s tool passes location and contextual information, such as the name of a restaurant in addition to the address, to Uber. The data is used to generate a location- and customer-specific Uber car ordering button which is placed in the user’s Foursquare interface. It simplifies the user experience substantially and, BIA/Kelsey believes, represents how previously isolated applications on a mobile device can be combined to create new marketing opportunities. Uber, for example, will be providing Foursquare customers a special code for a discount on their ride. Although terms were not disclosed, the Button tool also provides Foursquare an opportunity to monetize its searches for transportation-related services.

“Within mobile, consumers are largely intolerant of ads and other elements that detract from a consumer’s journey,” Button co-founder and CEO Michael Jaconi told us. “You’re seeing an emergence [of] ‘buttons’ from all the titans of industry — seeking to match intent with its fulfillment — and many of these use cases must happen across app borders. That simplicity, that design, and the value that these app connections create is what we’ve set out build at Button.”

Mobile apps are typically “sandboxed” within the mobile operating system, preventing them from sharing any data with other apps. This adds complexity to the customer’s simplest tasks when moving between app screens. For example, iOS assigns completely separate protocols to each app running on an iPhone and all communication to and from the app must be routed through the app protocol. Button essentially scripts exchanges of data between apps, using either the local device’s internal connections or acting as an Internet intermediary between the device and multiple services to deliver integration in the user interface.

“Using Button simplified the process of integrating Uber into Foursquare. With a few lines of code we were able to create a seamless experience when requesting an Uber built directly into our app, saving us time and effort,” said Foursquare SVP of product management Noah Weiss in a release.

______

Button cofounder Chris Maddern will be speaking at BIA/Kelsey NOW: Rise of the Local On-Demand Economy next week in San Francisco. Join us and save $100 by using the discount code “MR100″ when registering.

The post Button Integrates Uber Into Third-party Apps appeared first on BIA/Kelsey - Local Media Watch.

BIA/Kelsey estimates that in 2015 the total addressable market for in-home on-demand services, including shopping time, travel and child/elder care, is 22.8 billion hours of currently unpaid household work, representing approximately 3.5 percent of total household work, according to the U.S. Census Bureau’s American Time Use Survey. Using the reported average income of “1099 workers” from several sources of approximately $17 an hour, the total market this year, if fully engaged, could be worth up to $465 billion. At the current industry standard, a 20 percent share for the on-demand marketplace operators who connect customers and contractors, on-demand companies’ revenues potentially could be worth $93 billion in 2015.

We believe 2015 actual market penetration by on-demand companies appears, based on reported and leaked revenue data from various on-demand companies, to be approximately $18.5 billion, or 3.9 percent of total addressable market. Much of that revenue is captured in transportation, particularly by Uber, which is expected to book more than $10 billion in ride revenue in 2015. Note that Uber ride revenue includes drivers’ reported 80 percent share, giving Uber total fees of approximately $2 billion this year.

In short, there is 96.1 percent of a market unclaimed and it will grow at a compound annual rate of 13.50 percent through 2030 based on projected population growth and an increase in average on-demand earnings of 2.33 percent per year over that time, from $17-an-hour to $24-an-hour.

For now, Uber represents more than half of the revenue of organized 1099 labor. Much of Uber’s revenue comes from business travel, which is not included in the home services market, but it does claim considerable personal travel in cities where it is well known. Its rapid ascent suggests that similar growth could occur in any area where people have access to ad hoc networks of people and resources. Many of the carpools, childcare arrangements, cooking and helping services provided by neighbors to neighbors will be ingested into the formal economy through LODE organizations.

The household services market
Billions have been invested in home services companies in pursuit of work currently performed in the home by household members. In-home services, such as TaskRabbit, HomeJoy and InstaCart, cannot generate revenue if their offerings are too expensive for middle class households to replace with more profitable work in or out of the home. Affluent households can add these services at will, but their adoption of on-demand services will not deliver substantial economic growth, because workers must be able to afford to do contract work while substituting for their unpaid labor at home if there is to be a thriving market for local experience and services.

BIA/Kelsey Projected Addressable Market 2015-2030: Household On-Demand Labor

The rhetoric of LODE paints a vivid picture of on-demand workers busily exchanging services, sharing burdens while doing the jobs they most enjoy — it’s a promise on-demand companies are making to their prospective contractors. For example, a car to take the kids to school cannot cost $17 an hour for a mother making $12 an hour working at another task as an on-demand worker. If LODE home service workers are expected to adopt on-demand services as well as provide them, their earnings must exceed the cost of doing their own work at home.

The U.S. economy produced $16.77 trillion in GDP during 2013, the last year for which complete data is available. However, the calculation of GDP does not include unpaid household work. If it did, U.S. GDP would be several trillion dollars higher than it is reported today. Organizing this labor to bring it into the formal economy at a reasonable price with reasonable wages is the challenge to LODE companies if they expect to profit. That cannot be done while strangling the golden goose of ad hoc skilled and low-skilled labor with lower wages. Ultimately, both unpaid household labor and the work that can be exchanged for other services are essential to the economy, it’s time we counted both.

Household labor projections, 2015 – 2030
BIA/Kelsey has developed a model for projecting the addressable revenue in the home based on the householder’s ability to pay for services that they may forego doing themselves to make time for paid work in another area of their expertise. With reasonable and rising wages, household on-demand work can add up to $3.1 trillion to the U.S. economy by 2030 simply by formalizing transactions.

The long process of recognizing the value of work that contributes to the whole economy has ignored the unpaid work performed in the home by household members, particularly mothers. During the child-raising years, women doing unpaid household work an average of 32.4 hours each week on food preparation, cleaning, laundry, household management, shopping and more than 10 hours caring directly for children or adults. Men, by contrast, average 17 hours of unpaid household work each week, 60 percent of which involves food preparation and lawn care. Many of the questions about the future of work in the face of automation and robotic replacements for human labor will revolve around how to recognize the value of human engagement. Suggestions about a “guaranteed income,” recently floated by author Martin Ford in Rise of the Robots, among others, reflect how contributions to raising productive and engaged citizens will become compensated in the future.

Our research suggests that creating markets can, if they provide genuine incentives for doing great work, catalyze organized work in a variety of niche markets that previously existed in the dark economy, the work and exchanges that are not currently accounted for in a corporate profit and loss statement. Making “1099 labor” a cost within an on-demand company’s books blesses and confirms its value in the market.

Building from the Census’ American Time Use Survey, which describes in detail the activities that Americans do to support their home’s daily needs, BIA/Kelsey estimated the total number of hours of work currently performed without pay in the following categories:

• Food & drink preparation
• Cleaning
• Laundry and sewing
• Household management
• Lawn and garden care
• Maintenance and repair
• Caring for and helping household members (including eldercare)
• Caring for and helping household children
• Grocery shopping
• Travel related to unpaid household work

All these categories contribute to the overall estimated value of the on-demand household market in 2015. In the next posting, we’ll dig into the home cleaning and laundry markets, providing total and addressable market sizes. You’ll be surprised how many billion-dollar companies could be supported, if on-demand labor is given its chance at prosperity, too.

We estimate that 18 percent of the U.S. population can conveniently access local on-demand services today, mostly in the central cores of major metropolitan areas. Based on an April 2015 report by PricewaterhouseCoopers, “The Sharing Economy,” which found that 19 percent of internet users have tried an on-demand service — which we believe overstates the share of the population that can access these services because poor and unemployed people endure much lower connectivity rates — we have high confidence that our 18 percent addressable market estimate is sound.

Additionally, we adjusted the resulting hours of addressable on-demand labor by subtracting the U6 unemployment rate, which includes underemployed and frustrated workers who are highly unlikely to purchase on-demand services, to arrive at the most conservative estimate of LODE hours worked and revenue. Interestingly, when unemployment exceeds 12 percent or wages fall below the exchange threshold at which a worker can trade one form of labor for another form of service, our model produces negative results.

Building on this model, we’ll be delivering the first of our Local On-Demand Economy Insight papers, detailing each of the categories of unpaid work that could be displaced by LODE, as well as sizing existing industries that are threatened by the on-demand approach, shortly after BIA/Kelsey NOW. Join us at the show.

The post LODE in 2015: An $18.5 Billion U.S.Market appeared first on BIA/Kelsey - Local Media Watch.

This is the first post in our new series, Vantage Points. On a semi-weekly basis, it will tap the perspectives of various lookout points from around the local media and tech sectors. Though the format, frequency and distribution will develop, please contact mbolandATbiakelsey if you have insights to share. The views expressed within do not necessarily reflect those of BIA/Kelsey.

In Broadcast Media, Legacy Doesn’t Have to Carry a Curse

By Maribeth Papuga

“We didn’t reinvent the circus: we packaged it in a much more modern way, but basically we took an art form which is known,with a lot of dust on it, where people had basically forgot that it could be something else than what they knew about, and we basically organized for ourselves a creative platform.” — Cirque de Soleil founder Guy Laliberté, 2011

Challenged by an industry that is rewriting the rules while the ecosystem expands, local legacy media must repackage itself in a more modern way. Like other industries, traditional processes and procedures prevail for lack of any viable and collective alternative. Local market broadcast stations have the further burden of regulatory and content restrictions that create complacency and aversion to alter predictable models.

These stations have faced fiscal and competitive entertainment challenges for decades with focused response on improving structural attractiveness through mergers and acquisitions; but long term growth models are dependent on a structure and culture of vertical integrations, hierarchical decision making and risk aversion. Real and substantial opportunities will not prevail unless broader entrepreneurial thought leadership, an open and inclusive business environment and a willingness to shift direction is adopted by all.

Rather than react to headlines or seek answers in a homogenized national marketplace, local broadcasters should concentrate on disrupters in their own markets and their impact on local consumers. These startups create new products and services by thinking unconventionally and expanding their ability to solve problems. With better access to locally sourced data, economic development and demographic shifts taking place in local markets it is unfathomable that the solutions would not come from these centers versus a national aggregator. And yet, this is precisely a direction that many leaders are headed by following nationally driven initiatives.

Its time legacy media concentrate on challenging traditional models, expanding collaborative partnerships and using academia as a key lever for innovation and talent.

Take the Lead

Today’s media environment is flush with new products that elicit both consumer and marketing adoption in lieu of legacy options. This reality has forced traditional owners to find ways to mimic these new offerings with incomparable options by adopting tactics related to impressions and programmatic selling; without fully understanding that the underlying framework will not only make this a difficult comparison but take them further away from the core value they offer their audiences, advertisers and investors.

Think Horizontally

The economics of managing change in today’s divergent marketplace will not enable any one company or channel to create an all-inclusive model. By adopting the practices set forth by local mayors and business development teams through collective problem solving among civic, private, academic and philanthropic resources; broadcasters can build bridges to connect multiple parties to identify shared resources that collectively address their unique market circumstances and promote broader solutions. Underlying these new initiatives is a framework for prosperity that is collaborative, entrepreneurial and network based to drive future focused initiatives Through a more collaborative market structure, legacy media owners can better avail themselves to both nurture and develop a stronger playbook for the future.

Back to School

The role of universities has been significant in feeding broadcast owners talent needs for decades. As technology evolves, the journalism and engineering students are migrating toward new options that appeal to their future forward goals. Much of this interest is born through on campus experience as universities promote inclusive entrepreneurial thought leadership across departments and majors. Legacy vendors should look to universities as the resource lever to help develop and launch innovative solutions against market objectives for more future forward growth targets. Tapping universities in a more disciplined way can foster faster development of new models and solutions to audience measurement, content relevance, device affinity and the interactive value in the local market.

Redefine the Market

A new media ecosystem fueled by entrepreneurial values, new tactics and rules has forced legacy media to become more defensive by following incomparable trends. While entrepreneurial ecosystems take time to develop, that is no reason to retain vertical industry decision making weighted toward an aggregated solution. People live in local markets and legacy media leaders still service these individuals in their own backyard. By following a simple truth that enables the market and its audiences to be the leading source for innovative solutions, the sum of these individual efforts will open up far more possibilities for future growth. If not, legacy leaders could risk further redundancy among consumers, advertisers and investors.

Maribeth Papuga is a 25+ year advertising veteran with specialization in local market media planning and buying. The majority was spent leading the local practice at MediaVest and predecessor DMB&B.

The post Vantage Points: “Legacy” Shouldn’t be a Bad Word appeared first on BIA/Kelsey - Local Media Watch.

This is the first post in our new series, Vantage Points. On a semi-weekly basis, it will tap the perspectives of various lookout points from around the local media and tech sectors. Though the format, frequency and distribution will develop, please contact mbolandATbiakelsey if you have insights to share. The views expressed within do not necessarily reflect those of BIA/Kelsey.

In Broadcast Media, Legacy Doesn’t Have to Carry a Curse

By Maribeth Papuga

“We didn’t reinvent the circus: we packaged it in a much more modern way, but basically we took an art form which is known,with a lot of dust on it, where people had basically forgot that it could be something else than what they knew about, and we basically organized for ourselves a creative platform.” — Cirque de Soleil founder Guy Laliberté, 2011

Challenged by an industry that is rewriting the rules while the ecosystem expands, local legacy media must repackage itself in a more modern way. Like other industries, traditional processes and procedures prevail for lack of any viable and collective alternative. Local market broadcast stations have the further burden of regulatory and content restrictions that create complacency and aversion to alter predictable models.

These stations have faced fiscal and competitive entertainment challenges for decades with focused response on improving structural attractiveness through mergers and acquisitions; but long term growth models are dependent on a structure and culture of vertical integrations, hierarchical decision making and risk aversion. Real and substantial opportunities will not prevail unless broader entrepreneurial thought leadership, an open and inclusive business environment and a willingness to shift direction is adopted by all.

Rather than react to headlines or seek answers in a homogenized national marketplace, local broadcasters should concentrate on disrupters in their own markets and their impact on local consumers. These startups create new products and services by thinking unconventionally and expanding their ability to solve problems. With better access to locally sourced data, economic development and demographic shifts taking place in local markets it is unfathomable that the solutions would not come from these centers versus a national aggregator. And yet, this is precisely a direction that many leaders are headed by following nationally driven initiatives.

Its time legacy media concentrate on challenging traditional models, expanding collaborative partnerships and using academia as a key lever for innovation and talent.

Take the Lead

Today’s media environment is flush with new products that elicit both consumer and marketing adoption in lieu of legacy options. This reality has forced traditional owners to find ways to mimic these new offerings with incomparable options by adopting tactics related to impressions and programmatic selling; without fully understanding that the underlying framework will not only make this a difficult comparison but take them further away from the core value they offer their audiences, advertisers and investors.

Think Horizontally

The economics of managing change in today’s divergent marketplace will not enable any one company or channel to create an all-inclusive model. By adopting the practices set forth by local mayors and business development teams through collective problem solving among civic, private, academic and philanthropic resources; broadcasters can build bridges to connect multiple parties to identify shared resources that collectively address their unique market circumstances and promote broader solutions. Underlying these new initiatives is a framework for prosperity that is collaborative, entrepreneurial and network based to drive future focused initiatives Through a more collaborative market structure, legacy media owners can better avail themselves to both nurture and develop a stronger playbook for the future.

Back to School

The role of universities has been significant in feeding broadcast owners talent needs for decades. As technology evolves, the journalism and engineering students are migrating toward new options that appeal to their future forward goals. Much of this interest is born through on campus experience as universities promote inclusive entrepreneurial thought leadership across departments and majors. Legacy vendors should look to universities as the resource lever to help develop and launch innovative solutions against market objectives for more future forward growth targets. Tapping universities in a more disciplined way can foster faster development of new models and solutions to audience measurement, content relevance, device affinity and the interactive value in the local market.

Redefine the Market

A new media ecosystem fueled by entrepreneurial values, new tactics and rules has forced legacy media to become more defensive by following incomparable trends. While entrepreneurial ecosystems take time to develop, that is no reason to retain vertical industry decision making weighted toward an aggregated solution. People live in local markets and legacy media leaders still service these individuals in their own backyard. By following a simple truth that enables the market and its audiences to be the leading source for innovative solutions, the sum of these individual efforts will open up far more possibilities for future growth. If not, legacy leaders could risk further redundancy among consumers, advertisers and investors.

Maribeth Papuga is a 25+ year advertising veteran with specialization in local market media planning and buying. The majority was spent leading the local practice at MediaVest and predecessor DMB&B.

The post Vantage Points: "Legacy" Shouldn't be a Bad Word appeared first on BIA/Kelsey - Local Media Watch.

BIA/Kelsey continues to engage market leaders in its coverage areas in order to collaborate on research reports. There’s one currently in the works, about optimizing SMB Marketing Efficacy, sponsored by Vendasta and written by our new associate Mitch Ratcliffe.

To preview the paper’s subject matter, we’ve included a teaser below. Stay tuned for the full release sometime next month. Meanwhile, an extended version of the below summary is available in physical form, if you’re at our Leading in Local conference. Stop by the Vendasta booth for a copy.

Measuring SMB Marketing Efficacy: Logistics and Storytelling Will Reshape Local Business Metrics

SMBs are the new frontier for digital services. They will require a new reseller/marketing services layer in local media to spread digital marketing practices to millions of individual stores and business people. For many digital marketers, small business is suspended in time between the Main Street barbershop familiar from The Andy Griffith Show, where folks stopped in and talked even if they didn’t get a haircut, and the high-speed increasingly personalized digital services based on advanced logistics that characterize major global brands. If he were on TV today, Floyd the barber would be studying his web engagement metrics in addition to providing a friendly haircut.

Digital services for local business are about to catch up with global brand marketing and, as with every business that has crossed the digital divide before, measurement of tool performance and tactics will be critical to success. Measuring web promotions; Providing transactional and support services for complex products and services; Facilitating loyalty and customer engagement programs, all these daily digital chores are poised to become business as usual. The losers in the local goods and services race will wander off-course without solid metrics, spending too much to get poor results as others focus their limited marketing budgets with greater precision. The big story in the enterprise over the past decade, the rise of metrics-driven experimentation and marketing, is about to repeat itself at the grassroots on Main Street.

Technical and economic drivers are already reshaping the local media economy. BIA/Kelsey Local Commerce Monitor reports that SMB plus spenders, business that spends at least $25,000 annually on advertising and promotion, 35.2 percent of ad spending will be allocated to digital in 2015, up from 24.5 percent in 2011. 57.7% of these plus spenders pay an average of $7,238 a year to maintain an online presence. More SMBs are also paying for marketing help to tie together their online messaging across Twitter, Facebook, mobile sites, Google and their own websites, as 40.9% of surveyed small businesses reported hiring agencies and staffing to manage their presence, the “Do It With Me” approach.

Our analysis suggests the “Do It With Me” (DIWM) model, collaboration between an SMB and one or more vendors to build complementary messages, which benefit the individual client business and create network effects, such as qualified participants in shared loyalty programs, cross-promotional campaigns and integrated transactional systems that flag cross-selling opportunities for SMBs, is the most viable approach. This phenomenon is visible in the specialization of digital sales teams in iYP markets, the agreement by YP.com to represent Yelp promotions to its customers, and the emergence of vendors that “sell digital arms,” marketing tools and services, in a consultative relationship with the customer, among others. We expect to see Google and Facebook partnering more extensively in this area in coming months.

“A lot of channel partners sell digital only five percent to 10 percent of the time, which is a sin” said Jeff Tomlin, Senior Vice President of Vendasta, a Saskatoon, Saskatchewan-based marketing tools vendor that has adopted the DIWM model. Instead of investing in direct sales, Vendasta seeks value-added resellers who can provide on-site services to complement its own reputation monitoring, presence management, social and mobile marketing optimization services, which are presented in a dashboard for the SMB customer. Agencies that bundle Vendasta services share access to their customers’ dashboards and can take on creative and production tasks on behalf of the SMB.

Recall Floyd’s barbershop. There was no “marketing strategy.” There were two chairs, a phone (where an operator waited to connect the call), some magazines and, perhaps, a television for the customers to watch the World Series in some later years of its fictional life. Floyd did not have to compete with other barbers through media. Compared with the communications wave rolling through the economy today, Floyd’s approach to customer engagement grows more fictional and quaint every passing year.

 

The post Upcoming BIA/Kelsey White Paper: Reshaping Local Business Marketing appeared first on BIA/Kelsey - Local Media Watch.

BIA/Kelsey continues to engage market leaders in its coverage areas, in order to collaborate on research reports. There are currently two in the works that we’re excited about. One is on content marketing at the local level and the other is on the art of optimizing local listings and reviews.

Saving the content marketing topic for tomorrow, listings and reviews optimization is a key area of local marketing. This is especially the case for larger advertisers that compete at the local level and have multiple locations to manage. This raises a lot of unique needs for location based marketing.

The research report in progress is the latest product of that focus, sponsored by SweetIQ. To preview the paper’s subject matter, we’ve included the executive summary below. Stay tuned for the full release in the coming weeks which will be a free download.

Executive Summary

Over the past decade, online and mobile media have molded new forms of cultural and consumer behavior. This has an especially large impact on the way we find things to do, buy, see or eat in our immediate vicinity.

This is important because of the scale of local commerce. Though e-commerce has received considerable attention, it’s often forgotten that it only accounts for about 7 percent of retail spending. The rest takes place offline… and most of that is within 15 miles of one’s home.

But due to the aforementioned consumer trends, an increasing portion of that offline consumer spending — about 40 percent and quickly growing — is influenced by online and mobile media. The name of the game becomes making phones ring and doors swing, not just getting more “clicks.”

It is with this backdrop that a massive opportunity unfolds to influence consumer behavior through optimized online presence. And given the rising prevalence of certain types of digital media, strategies are quickly shifting for local businesses to acquire and retain customers.

Local listing management and review monitoring are effective tools for converting online traffic to offline sales. Reviews for example, have gained prevalence and influence through the democratization of online and mobile channels. This has empowered consumers with a voice, and has given rise to influential sources such as Yelp.

But it doesn’t stop with Yelp. Reviews have become an expected part of many online and mobile local search experiences for consumers. That includes search engines, social networks, blogs, vertical sites, directories and businesses’ own websites.

Local businesses are now the subject of these increasingly transparent and empowered customer conversations. The question becomes how they can join and influence that conversation — amplifying it when positive and resolving it when negative.

SMBs, having a wide range of technical savvy, need help achieving this. Enter local marketing agencies, versed in the workings and latest nuances of online and mobile local media channels. The management of listings and reviews has become a sizeable opportunity.

It’s also an opportunity to serve large multi-location businesses, such as franchised operations, who compete at the local level. They have unique characteristics, such as corporate support and ad budget. These factors can create a large need for multi-location listings management.

This report, sponsored by SweetIQ, defines this opportunity as well as its challenges. What is the state of the art in location marketing? What are its shifting variables and best practices? And most importantly, what are the benefits for businesses that follow those best practices?

The post Optimizing Local Listings and Reviews: A White Paper Preview appeared first on BIA/Kelsey - Local Media Watch.

As part of our ongoing coverage of call monetization, we’re holding a webcast next tuesday to further unpack some of our findings. We’ll also hear from bandwidth, a company positioned at the center of the call tracking and analytics opportunity.

This comes at an opportune time, when call monetization is gaining mainstream awareness in the smartphone age. High intent calls to businesses are conducive to mobile search, and businesses want phone leads. Google this week launched Website Call Conversions.

This also follows a white paper we did with bandwidth earlier this year. Next week’s webcast will drill down on the latest opportunities and best practices of driving phone leads to local businesses.  The webinar topics, themes and takeaways are all outlined below.

Register for the free webcast here.

The post Free Webcast: Phone Calls: The True Business Marketing Lead appeared first on BIA/Kelsey - Local Media Watch.

In the age of Infographics, BIA/Kelsey has decided to add some color to the many data points we devise throughout the year. This has been done to a limited degree over the past year, but we’ve now formalized the effort in a new landing page.  Infographic releases will also be covered here.

The inaugural release illustrates a highlight reel of “flagship” high level data points on Local Media and advertising. It was created in tandem with Balihoo, and you can see it in all its glory below.  In the spirit of infographics, we’ll keep the text to a minimum and let it speak for itself.

Let us know if you’d like to be involved in our next infographic, and special shout out to Balihoo who sponsored and contributed to the production.

(click to expand)

The post Introducing BIA/Kelsey Infographics appeared first on BIA/Kelsey - Local Media Watch.