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.

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The Local On-Demand Economy (LODE) will be all about transactions. The ease of transaction between buyer and seller will need to match the lowered-barriers and “immediacy” of the on-demand service and experience itself. Otherwise, LODE’s promise won’t be fulfilled. It’s all about the money.

Fortunately, lowered barriers is exactly the trend we’re seeing in payments, starting years ago with Paypal and extending to today with things like P2P transactions (Square Cash) and enterprise/ecommerce (Stripe). There’s also payment giants like MasterCard innovating for a LODE-centric world.

We held a webcast last week to discuss where this is all going. Led by BIA/Kelsey analyst Mitch Ratcliffe, the conversation included MasterCard and Flint Mobile. They both had lots to say about payments’ importance at the center of the LODE equation — not just the why, but also the how.

See the full webinar replay embedded below.

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Flint will be speaking at BIA/Kelsey NOW: Rise of the Local On-Demand Economy next Friday in San Francisco. Register here (Inside tip: Save $100 by using the discount code “MB100″).

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Though “mopocalypse’s” impact didn’t live up to its hype, mobile website optimization remains critical. That’s particularly true for multi-location businesses that compete in several different markets at once. It’s all about getting data cleansed and organized.

That plays out in lots of ways, which we examined with Placeable during a session at BIA/Kelsey NATIONAL. The company has a good perspective as it works directly with lots of brands to get their location data and localized marketing strategies in order.

You can see my interview with the company embedded below, as well as chapter links that take you to each of the five “tips” we went over for optimizing multi-location campaigns. Stay tuned for lots more conference video footage.

Video chapter links

Multi-location marketing: who’s doing it best
Tip #1: Create landing pages for every location
Tip #2: Ways to make sure landing pages are complete and accurate
Tip #3: Make sure offers and promotions are refreshed often
Tip #4: Include comprehensive reviews and sources
Tip #5: Mobile landing pages: how to navigate mopocalypse
Conclusions & takeaways

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One of the many attributes of the local on-demand economy (LODE), is it’s potential to flip local advertising models we’ve known for more than a century. It will do this in some cases by replacing marketing with a commerce engine; or as we’re calling it, the “logistical last-mile” to the consumer.

This all results from a more direct linking of buyer and seller — and the systems in place to achieve that marketplace transparency in a more compressed way. With Uber, for example, instead of searching, viewing listings, reviews, calling… you simply press a button and a car shows up.

So the key to many LODE apps we’re seeing is to match buyer and seller more quickly and reliably than local search. That involves lots of performance and location tracking. Beyond technology chops, it’s all about building balanced two-sided marketplaces, and network effect.

A related excerpt from our LODE white paper is below. Consider it a primer for the discussion we’ll have on stage at BIA/Kelsey NOW. Let me know if you’d like to participate (mbolandATbiakelsey.com) and stay tuned for lots more coverage.

Flipping the Model

LODE’s departure from local search has important ramifications for marketers. Stepping back, consumer behavior has evolved from print directory lookups to search engines and even social networks to find items or services that fulfill specific needs with varying degrees of urgency.

These models have progressed towards more of a user pull and less of an advertiser push. The trend has also moved towards more targeted advertiser placement, to establish positioning in front of consumers at strategic times and places of explicit commercial intent.

In a print directory context, this means physical positioning — through size, color and heading priority — to capture that coveted phone call at a time of consumer need. For search engines, it means formulating the right keywords and ad groups to likewise capture high-intent clicks.

With search came certain efficiencies in reaching high-intent consumers in a more cost-efficient way than traditional media. LODE continues down that evolutionary path by aggregating real time consumer demand in a given service category, allowing nearby providers to respond accordingly.

So instead of a consumer search for a business — requiring a previously devised marketing plan where a message is placed in front of that user — LODE flips the model. User demand is captured and revealed for service providers to react in real time to a marketplace now made transparent.

“There’s no advertising in these apps, it’s purely a grossed-up transactional value,” Comcast Ventures Partner Michael Yang told BIA/Kelsey. “Local isn’t reviews anymore, it’s on demand… The business model is consumer pay, and the merchant is being aggregated into a network.”

Put another way, the need for advance advertising to stay competitive is eliminated in some cases. Service providers thriving with LODE don’t need to market themselves proactively to generate demand. They’re now given an operational tool to capture demand reactively.

This is analogous to the Just in Time manufacturing principle. A Japanese innovation popularized in the U.S. by Harley Davidson, and more recently by Tesla, inventory is produced much closer to its sale. This improves cash flows and reduces capital requirements for cost of goods sold.

In LODE services, capital requirements for customer acquisition are likewise reduced. Demand generation at the app level creates marketplace transparency to deploy inventory — for example, a service provider’s finite set of appointment slots — exactly where it’s needed in real time.

“What we’re seeing is yield optimization,” MyNeighbor CEO Brendan Benzing told BIA/Kelsey. “Uber in early days had a brick business which was town cars, but it was all the time in between rides that was the mortar. That’s the value that technology is finally extracting due to mobility.”

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All eyes are on Facebook when it comes to localized marketing. This was pronounced in the company’s recent revelation that 40 million SMBs now have active Pages (2 million advertise). And BIA/Kelsey’s own survey data indicate that social is the most prevalent marketing channel.

The biggest drivers for this according to Czaja are reach and targeting. More than 1 billion people use Facebook daily, the vast majority via mobile.  As for targeting, it’s more accurate on Facebook than most other digital media he asserted. This involves lots of granular audience profiling.

“We’re talking about real people and not cookies,” he said, adding that businesses can enhance targeting by “bringing their own data onto Facebook” for retargeting. FB can also target look-alike audiences with similar characteristics to a brand’s existing customers or target audience.

The full session video is below.

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Content and intelligence drive results in social media marketing according to SOCi founder and CEO Afif Khoury. He presented findings during a segment on social media at BIA/Kelsey NATIONAL (video below). This takes form in an actionable six-step process.

Social media continues to come in proximity with localized marketing, shown most recently by Facebook’s announcement that 40 million SMBs now have active Pages. And BIA/Kelsey’s own survey data indicate that social is the most prevalent marketing channel.

But the opportunity is greater among national advertisers that are increasingly localizing campaigns. National entities are generally more adoptive than SMBs when it comes to emerging media like social. And their size makes branding (conducive to social media) critical.

The why has largely been made evident, per the above and lots of evidence in the marketplace for social’s collision with local. The remaining question is how, and that’s where we’re seeing lots of experimentation and standards development from companies like SOCi.

“Most national brands seem to think they can capture a national audience with a single page,” said Khoury. “What they’re leaving behind is the hundreds of local pages that are getting reviews, getting comments, getting activity, but there’s nobody there.”

The session clip is embedded below and stay tuned for much more conference video and highlights.

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Wearables, smart homes and trying not to be creepy… these were the topics of a fireside chat with PwC’s Daniel Eckert. Stepping back from the day-to-day tactics of local content and ad delivery, we invited the big thinker to BIA/Kelsey NATIONAL to discuss the macro trends driving tech & media (video below).

As PwC’s Emerging Technology Group CTO, his role is to do just that — spot emerging trends and historical cycles to triangulate where under-recognized pockets of innovation and wealth will sprout. As market watchers ourselves, we love this discussion and had the chance to riff on stage with Eckert.

The video is embedded below: Part two of the series that covers the fireside chat that followed his keynote (part one is here).

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The Local On-Demand Economy (LODE) is dominating tech headlines and VC funding, not to mention our own coverage. But what does it mean for existing local media companies and to BIA/Kelsey’s decades-long sphere of local influence?

It’s a key question considering that LODE could displace local marketing to some degree. But we see it as more opportunity than threat. As we’ve examined, LODE’s lowered barriers for SMBs and “micro-entrepreneurs” makes its addressable market considerably larger than the existing local ad market.

Is it therefore a greenfield area? And if so, are existing local media companies better positioned than LODE startups and pure-plays to capture it? So far the latter are winning, but the play for local media companies will be to bundle LODE offerings to diversify and find new sources of SMB spend.

Following a roundtable discussion on this financial outlook last week (video embedded after the jump), a related excerpt from our LODE white paper is below.

LODE: What Does it Mean for Local Media?

— Companies currently selling media or advertising to small businesses should gain an advanced knowledge of LODE — both its fundamentals and ongoing evolution.

— Best practices, current and evolving, will develop quickly and require a keen eye to learn winning strategies. This education by immersion is the first step towards devising and deploying LODE products.

— Given the possibility discussed in this report that LODE services could displace marketing in some situations, an early lead for local media companies could offset any potential losses to core products caused by new LODE entrants.

— If LODE is indeed a threat, media companies who embrace it can own their destiny, versus those who ignore it and are forced to realize too late that it is causing attrition to core revenue streams, such as SMB-oriented ad products.

— Similar lessons have been learned by industries facing disruption; and faced with the decision to embrace a new — albeit threatening and potentially cannibalistic — channels.

— Moreover, LODE should be viewed more as opportunity than threat. This can come about by embracing it and uncovering its potential sources of new business growth.

— For example, LODE’s customer acquisition efficiencies make it tenable for service providers who can’t afford traditional marketing. Therefore, its addressable market could exceed local advertising’s current boundaries to a larger SMB universe.

— LODE’s potential for new business growth is coupled with potentially increased average revenue per advertiser (ARPA) among existing SMB advertisers.

— It can also boost retention, given that many LODE services also fulfill SMB operational needs (demand aggregation, scheduling, payment processing, etc.). These have higher switching costs for businesses than advertising and marketing.

— In incorporating LODE into service bundles, local media companies have an advantage over LODE pure plays. This is due to existing sales channels, economies of scale, and compatibility with existing advertising and marketing offerings.

— There is also a one-stop-shop appeal in that SMBs and 1099 operators can save time with a single provider for both marketing and LODE-based customer acquisition tools.

— Early integration of LODE services by traditional media companies can establish familiarity and education. This will be required during LODE’s beginning stages when an early mover advantage can be gained in building knowledge, brand, and network effect.

— Media companies should carefully consider the pros and cons of building versus partnering. The former requires greater investment and reward. The latter, via API integration, can involve little risk and utilizes best or breed functionality in a given area. The cost for this fast-tracked functionality is a revenue share with the API’s owner.

— Based on the speed at which LODE is moving — a component of the speed and nimbleness of app development environments — any LODE strategies and product rollouts will need to happen much faster than is typically done by local media companies. The innovation cycle will be a function of weeks, not months.

The post Local On-Demand Economy: What Does it Mean for Local Media Companies? appeared first on BIA/Kelsey - Local Media Watch.

What are the top things you need to know about the exploding local on demand economy (LODE)? We tackled that question on Friday during a live analyst roundtable, and the video replay is embedded below.

We touched on many LODE subtopics including its supply and demand drivers, unit economics, points of entry, and examples of best practices. The full video is below, along with chapter links that jump right to several of the topics within the video.

Stay tuned for lots more on LODE as we build up to BIA/Kelsey NOW, taking place in just one month (June 12) in San Francisco.

Video Chapter Links

LODE Fundamentals: Supply & Demand
LODE Economics
LODE Verticals: Where’s it Going Next?
How Big is the LODE Market, and Who Will Benefit Most?
Whom Does LODE Threaten?
What is the Downside/Darkside of LODE?
Conference Preview

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What are the macro factors driving our new favorite topic: the local on-demand economy (LODE)? Smartphone ubiquity is one, as are the algorithms to quickly match local supply and demand. There’s also an urbanization trend that creates healthy LODE marketplaces. And needy Millennials fuel the fire.

We examined these colliding trends in our recent white paper. They’re important for perspective of where LODE opportunities will emerge in the coming months. Beleive it or not, there’s still lots of unchartered territory, even as mainstream media cover LODE — usually a sign of any maturing sector.

A related excerpt from our LODE white paper is below. Consider it a primer for the discussion we’ll have tomorrow in our live analyst roundtable and of course on stage at BIA/Kelsey NOW. Let me know if you’d like to participate and stay tuned for lots more coverage.

LODE’s Driving Factors

Drilling down into LODE’s dynamics and drivers, it’s important to view the macro trends that are aligning to create fertile ground for its growth. These are a combination of technological, cultural, and economic. Here is summary, before we detail each factor in subsequent pages.

Mobility: The starting point for LODE, as with many other tech trends, lies in hardware innovation. Mobility and the smartphone revolution have created high-power computing to go. This has shaped user behavior and expectations for immediately fulfilled needs. This trend will accelerate with the impending age of wearable technologies like smart watches.

Cultural: Consumers have been conditioned by the computing capacity in their pockets to expect immediate needs to be fulfilled in an on-demand fashion. This general urge and expectation to have the world delivered on demand is further accelerated by parallel trends in media consumption such as, VOD platforms like Netflix, Hulu, etc.

Generational: The Millennial generation — emerging as a key component of the buying-empowered adult population — has a well-documented sense of entitlement and immediacy that provides a receptive environment for on-demand services. The generation’s characteristic aversion to ownership of physical goods is also conducive to several LODE services (i.e. relying on Uber versus auto ownership).

Economic: High unemployment has created a steady supply of service providers to fill the ranks of LODE’s workforce. Millennials — in addition to being avid consumers of LODE services — also possess work habits that are conducive to the flexibility that LODE service providers enjoy. These factors will further accelerate as LODE services move up market to higher-end professions, such as professional, creative and technical fields.

Geographic: Balance in any two-sided marketplace is always hard to achieve. The above factors are creating growth on both supply and demand sides of many LODE services. This is further accelerated by the overall societal trend of more individuals living in cities. This general orientation creates a network effect that assists marketplace growth.

Technological: Lowered barriers to entry in the app economy have created an explosion of startups that build LODE marketplaces and extend into new verticals and feature sets. Authentication technologies (such as Facebook Connect), facilitate reputation as a form of security and enforcement that keep LODE marketplaces safe and attractive. LODE will also be the environment where mobile payments finally take root.

(more…)

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