What makes this the all-but-ignored elephant?

• Only 13 percent goes to digital/online media
• Although co-op spending is already about $55 billion, about twice this amount is actually allocated for co-op advertising, but remains unspent (for a variety of reasons)

Google now has a major initiative to move this large budget into the digital era, and get a higher percentage of the allocation actually spent. This was the driving takeaway from a presentation by Jon Sofield, Google’s VP of Business Development, at this week’s Street Fight Summit West in San Francisco.

A key aspect of this initiative are partnerships with service providers, such as marketing automation and programmatic media purchasing. Google now has about 170 such partnerships, many of them focusing on 8 priority verticals. (For example, one of these is B2B high tech, where co-op digital ad spend is much higher than typical, at 50 percent of total co-op ad spend.)

This represents a shift in Google’s traditional framework for reaching the SMB market, which has been focused on partnering with local sales forces and (some) direct merchant relationships. But that was when the world was still focused on the conversion from print to online.

This is now: Most of the action is now is already digital. In fact, it’s moving quickly to mobile. Sofield pointed out that Google searches crossed over into “mobile dominance” about 5 weeks ago. We chronicled that shift as well.

The emphasis has also moved from simple online presence to message-driven conversions. That means an eye towards online content, formats, and marketing initiatives that drive action. Sofield underscores the need for experimentation — and patience — with this transition. Especially with the famously-late adopting SMB set.

The post What’s the State of Co-Op Advertising in the Hyperlocal Era? appeared first on BIA/Kelsey - Local Media Watch.

What’s the $55 billion elephant in the room? That would be the gross spend on co-op advertising annually in the US. For those unfamiliar, co-op dollars are typically funds earmarked by national brands for “market development” — local advertising or marketing campaigns on behalf of that brand (e.g. by local retailers, franchises, etc).

What makes this the all-but-ignored elephant?

• Only 13 percent goes to digital/online media
• Although co-op spending is already about $55 billion, about twice this amount is actually allocated for co-op advertising, but remains unspent (for a variety of reasons)

Google now has a major initiative to move this large budget into the digital era, and get a higher percentage of the allocation actually spent. This was the driving takeaway from a presentation by Jon Sofield, Google’s VP of Business Development, at this week’s Street Fight Summit West in San Francisco.

A key aspect of this initiative are partnerships with service providers, such as marketing automation and programmatic media purchasing. Google now has about 170 such partnerships, many of them focusing on 8 priority verticals. (For example, one of these is B2B high tech, where co-op digital ad spend is much higher than typical, at 50 percent of total co-op ad spend.)

This represents a shift in Google’s traditional framework for reaching the SMB market, which has been focused on partnering with local sales forces and (some) direct merchant relationships. But that was when the world was still focused on the conversion from print to online.

This is now: Most of the action is now is already digital. In fact, it’s moving quickly to mobile. Sofield pointed out that Google searches crossed over into “mobile dominance” about 5 weeks ago. We chronicled that shift as well.

The emphasis has also moved from simple online presence to message-driven conversions. That means an eye towards online content, formats, and marketing initiatives that drive action. Sofield underscores the need for experimentation — and patience — with this transition. Especially with the famously-late adopting SMB set.

The post What's the State of Co-Op Advertising in the Hyperlocal Era? appeared first on BIA/Kelsey - Local Media Watch.

Google has been launching lots of products to carry its search dominance into a mobile world. Given that 4 out of 5 mobile minutes happen in-app, this sidesteps the very place where its dominance has been established: the browser. We recently had the chance to talk to Google about its vision (video below).

This ties in with things we’ve examined recently such as deep linking and push notifications. Google Now is also a key product the company is building for app-based local discovery and commerce. Many of these products were advanced and clarified during last week’s I/O conference.

Google’s Brendon Kraham is close to all of this, as the guy in charge of “building and developing Google’s next $1 Billion+ ad businesses.” That’s is obviously a big task and Kraham is examining lots of ways to extend Google’s capabilities, data and search dominance into this new mobile-oriented world.

In addition to the above products, this involves carrying forward Google’s legacy of innovation in performance-based local ads. In mobile, that translates to offline attribution, a la Estimated Total Conversions. This is just one way Google is planting its flag in the next decade’s ad equation.

“It’s still early, but I can see the future that is coming and even now we have the proxy metrics of ‘did somebody go into a store’,” Kraham told us, “and actually closing the loop with third party data partners for a store transaction. It just takes a bit more heavy lifting to get those insights.”

The video of his presentation and fireside chat is embedded below.

The post What Does the Next Era of Local Search Look Like? (Video) appeared first on BIA/Kelsey - Local Media Watch.

Ad attribution is one of the most challenging analytic problems in marketing today. Who saw which ads, and what purchases resulted? It’s a sticky challenge, especially in an increasingly multi-screen world. As a result, many advertisers use simplified models for attributing customer response. For example, the last click model attributes conversions to the last message a consumer saw.

But smartphone penetration and the age of big data are coming together to create an environment where deeper ad attribution is attainable. This includes the traditionally elusive area of offline ad attribution — connecting the dots between digital engagement and real world (read: local) conversions. The mobile device now provides that link (see our white paper on this topic).

The discussion surfaced again at ad:tech last week. Microsoft data scientist Lin Huang outlined the company’s keyword assist model wherein “the data drives the attribution.” In other words, there’s no pre-existing template about how attribution is assigned. Instead, Bing data (not to be confused with Big Data) determines what search terms naturally cluster together, and what activities they drive.

If a Hyatt property in Hawaii runs a display campaign, impressions resulting from a search cluster could include terms like “Hawaii vacation” or “Hawaii trips.” The attribution weighing of those terms can be measured against a subsequent search for “scuba Hawaii” that directly resulted in a click to book at the Hyatt property. So the earlier — and sometimes more influential — search can get its due credit.

Google and several others have their own flavors of full-funnel attribution. Lin Huang believes the Microsoft’s keyword assist model is “beyond parity” with Google’s latest approach, but of course his inherent bias should be noted. And his examples are mostly around e-commerce transactions, which are of course notable. But offline attribution is where it gets interesting… and very local.

This is important for any advertiser targeting local markets, given that offline is where 93 percent of U.S. commerce happens. Connecting the dots between digital and analog worlds will be the holy grail of local advertising (cue: John Wannamaker quote). And mobile is the key to unlocking that famously illusive challenge, given that it physically goes to the store with you.

So what do these offline attribution models look like? Many extrapolate by creating ad-exposed control groups and measure geographic sales lifts among those groups. There are also ways to measure ad effectiveness by linking social identity to purchase method (see Facebook/Datalogix partnership). Mobile payments will ultimately clarify the path to purchase, but we’re still very early there.

As with most new technologies, initial adoption for all of the above will be with national and brand advertisers. SMBs will adopt through agencies, media companies, and other intermediaries. We expect that SMBs with the greatest economic incentive will move first to sophisticated attribution. Think: high-consideration / high-value purchases like legal, financial, medical and automotive.

__________

Steve Marshall contributed original reporting and insights to this post

The post Local Advertising: It's all About Full-Funnel Attribution appeared first on BIA/Kelsey - Local Media Watch.

Google has made lots of waves in tech and media worlds with last week’s revelation that mobile search volume now outweighs desktop. That goes for several developed markets including the U.S. This follows recent LSA data that show mobile has surpassed desktop for local-intent search.

These are two different measures but directionally similar. With mobile local queries, the point at which they surpass desktop was bound to be earlier than overall mobile search, given that local’s share of mobile search (about 50 percent) is higher than the desktop equivalent (about 20 percent).

We’ve been saying for quite some time that 2015 would be the year that mobile local query volume surpasses desktop local query volume, which turned out to be on target. Here’s our projection from April 2012.

We now believe based on lots of evidence and inputs that the intersecting point actually happened late last year. Adjusting to that reality and looking forward from the current period. Our forecast released last month projects mobile local search query volume as follows.

Google’s announcement last week shows that the growth of mobile search is even more pronounced. That intersecting point of mobile and desktop search isn’t just happening with local queries as shown above, but in overall search too. This is huge.

This is of course a milestone in the continued growth of mobile content. But it’s really only one indicator. As I often say when presenting mobile data, search is only one format through which mobile content and ads are distributed. It’s currently the biggest… but it’s only one.

Discovery Channel

In the relatively short history of the smartphone, search has been in a battle with discovery-based content such as apps, push alerts and social sharing. The latter, as it grows in organic usage, is likewise increasingly becoming an ad vehicle — starting national but very much moving local.

Meanwhile Google, with a commanding search market share, has the most to lose from this. Impressively, it’s not showing signs of succumbing to the classic innovators dilemma in terms of embracing “discovery” based media. This can be seen in Google Now and lots of other things.

Google knows that the future of search is both active and passive. For the latter, apps like Google Now will perpetually search on users’ behalf to proactively push “results” when pre-defined relevance thresholds (such as geofence) are triggered.

Watch Carefully

The passive discovery format will only grow with the (still questionable) advent of wearables, where the user experience is even less conducive to typing search queries (voice search will find a home). So it will be all about discovery a la Google Now, and push notifications.

It will be interesting to watch (pardon the pun) this unfold with respect to user tolerance levels. Push notifications will require a careful balance given that the nuisance risk is greater on the sacred territory of one’s wrist, as opposed to the ignorable phone in their pocket.

This is all being built as we speak, and requires lots of experimentation for pinpointing the right delivery formula that resonates with users. No one has found that yet. But we do know, as always, that wide-scale changes in form factor invite volatility and entry points for disruption.

The post The New Era of Search Has Tipped appeared first on BIA/Kelsey - Local Media Watch.

A few weeks ago, I went a little further, and bought a Rachio, a lawn sprinkling system that integrates with the Nest. It tracks the weather via the Web, and adjusts my backyard watering stations based on precipitation and heat. And then I jiggered it, so that I can use its iPhone app to turn on the lights on my stairway when I am arriving home after dark.

I don’t have a self-driving car yet, or keyless home entry. And I don’t get too close to the military’s drone program. But those are all in the family, too. As are the Apple Watch and Google Glasses.

The Family, of course, is known as “The Internet of Things.” What it consists of are devices that combine tools with automation and radio sensors and data from the Cloud and the Web.

The Nest story became especially interesting to us in business when Google bought it for $3.2 Billion last February, and its leaders became the head of Google’s new Internet of Things division. At the time, it seemed like a stretch. But the Nest division keeps growing (Carbon Monoxide detectors, etc.) IoT might just be driving the next generation of efficiencies. Intel and other tech giants have similarly-named divisions.

Samuel Greengard, a writer for CMO.com and other thought-leader publications, has penned a handy new book for MIT Press called “The Internet of Things.” It nicely covers the history of IoT’s development from the Industrial Internet to the Internet of Humans to the Internet of Everything. The book connects the dots on where IoT can go, and also provides fair warning on the things that can go wrong (and we aren’t just talking about Google car crashes in San Francisco).

The 210 page paperback ($15.95) has a good glossary, a nice bibliography and is a fast read. And you’ll see why BIA/Kelsey conference speakers in coming years are perhaps as likely to come from Honeywell and Rain Bird as they are from NBC-U, Comcast, Google, Facebook,Intel and Microsoft.

(Here’s a question: If you worked for Google, would you rather work for Nest or AdWords?)

The post BIA/Kelsey Bookshelf: 'The Internet of Things' appeared first on BIA/Kelsey - Local Media Watch.

What is Google’s Mopocalypse really all about? Is scheduling the new centerpiece of SMB platform players? And what are the biggest drivers of the local on-demand economy? These are a few topics we tackled over the last week, curated and aggregated into the Local Media Watch newsletter.

LMW has recently doubled its frequency to weekly, so we’ll also be posting it here. Entire issues are available on the web in addition to email. So you can get it here every Friday or subscribe (free) to get it in your inbox during its regular Thursday circulation. Click below for the latest issue.

The post LMW Issue 19: Google's Mobile Web Strategy Unpacked appeared first on BIA/Kelsey - Local Media Watch.

Today is the day. Mopocalypse has been the subject of tech world chatter for the past few months, and even PSA-type articles in mainstream media like USA Today: “Make sure your mobile site is ready.”

For those unfamiliar, Google in February uncharacteristically announced an algorithm update that will de-rank sites in mobile search that aren’t optimized. Mobile-optimized means no horizontal scrolling, zooming or unplayable content (i.e. flash). It won’t apply to tablets, video and local search for now.

Google has taken steps in this direction with incentives to clean up mobile websites or use responsive design. So this isn’t the first time site-friendliness is a ranking factor, but it’s a bigger tough-love moment where Google stresses consequences for bad behavior. It used the carrot; now it’s time for the stick.

But the question that reveals its larger mission is ‘why?’ Google is currently fighting a battle with the app world, and is behind if you consider that that 80 percent of mobile minutes are spent in-app, versus browser. The browser is where Google is the front door; not so much in apps.

The biggest reason apps are winning this battle is that they are often slicker and more functional than the relatively wonky mobile web. So making the mobile web less wonky — to put it bluntly — is Google’s biggest driver for today’s algorithm shift. A more user-friendly environment will boost traffic.

Meanwhile, to live in this app-centric world, Google also provides tools — both paid and organic — for developers to “deep link” to apps from search results. That way Google can become that front door to the app world, or a sort of app search engine to boost utility and revenue (app download ads).

Google Now is another play. It’s not only app based, but in-tune with the developing mobile use case of passive discovery as opposed to active search. So in some ways, Google is trying to beat the app world and in other ways it is trying to join it. This is to increase winning probability by placing several bets.

Bottom line: as mobile takes over, protecting Google’s place at the front door to all content is critical. Google NOW and Mopocalypse are central to that, though in very different ways. We’ll see many more efforts as there’s too much on the line ($60 billion in search revenue) for Google not to keep innovating.

The post Mopocalypse and the Eternal Battle Between Apps and Mobile Web appeared first on BIA/Kelsey - Local Media Watch.

The Google Fiber Team announced that it will be launching a trial of local television ads as part of its Google Fiber service in Kansas City, MO and Kansas City, KS. The locally targeted ads will appear “during existing ad breaks, along with national ads, on live TV and DVR related programs.”

The Google Fiber TV ads will be delivered in real time and will be matched to households based on factors including geography, type of program shown and viewing history. Viewers will be allowed to opt out of seeing ads.

Google says that local advertisers on the Google Fiber service will only pay for ads that run and they can limit the number of times an ad is shown to a particular TV set.

The post Google Fiber Testing Local TV Ads in Kansas City appeared first on BIA/Kelsey - Local Media Watch.

Building ecommerce, promotions, search, social and same day delivery services around store inventory is one of those high concept ideas that always make so much sense but have been tough to build around. Key players in the space currently include Google, Retailigence and others. Others, such as eBay, have pulled out or shrunk their efforts.

We’ve been especially interested in Walmart’s decision last week to pull its feeds from Google’s Local Inventory Ads (formerly known as Local Product Listing Ads). Launched in 2013 to complement Google’s e-commerce oriented Shopping ads, the ads allow stores to highlight local inventory and prices, and point shoppers to specific stores. Macy’s, REI and Office Depot are among users of the Google service, but most top retailers are still not participating.

Some of those that do apparently have been holding their noses. To participate with Google, they need to provide comprehensive inventory information. Walmart and others have apparently worried this information could be used against them, showing retailers where they can compete on price against it in different parts of the country.

Perhaps more importantly, retailers are worried that their feeds are infrequently updated and can contain inaccuracies and steer shoppers down the wrong path. Such feeds also may freeze the ability of retailers to engage in variable pricing strategies (i.e. “one hour afternoon specials”). In our view, Walmart’s pull out doesn’t mean that Google and others can’t succeed. But it does mean that it will need to make adjustments to work with dominant retailers that have a lot at stake.

Are there better strategies to collect and leverage inventory at local stores? We?ll be talking inventory strategies with retail expert and former Krillion CEO Sherry Thomas-Zon at BIA/Kelsey NATIONAL in Dallas March 25-27.

The post Analysis: Walmart Pulls Out from Google's Local Inventory Ads appeared first on BIA/Kelsey - Local Media Watch.