Marchex announced a new partnership with CityGrid today that will expand the Seattle company’s call advertising business to local websites such as Citysearch, Urbanspoon and Insider Pages. CityGrid Media will place Marchex’s national and local advertisers in relevant call placements across its ad network. CityGrid owns and operates Urbanspoon, Insider Pages and Citysearch. The new arrangement will connect Marchex to consumers when they are looking for products or services.

Through Marchex’s technology platform, advertisers pay for the live customer connection on a performance pricing model. Ultimately, advertisers will use the call analytics to help them better understand the value of each call. We reported Marchex’s acquisition of Jingle Networks earlier this year. After a revenue increase of 81 percent in its second quarter, Marchex is also hiring more staff.

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“A media powerhouse like CBS has deep relationships with small business advertisers,” said Neil Salvage, executive vice president of advertising at CityGrid Media.

The listings will appear across hundreds of websites and mobile apps through CityGrid, including search engines Google and Bing. The directory will include general business info, editorial and user reviews, insider tips, videos, photos and links to the businesses’ websites.

BIA/Kelsey’s Matt Booth first highlighted CityGrid in February 2010, stating that the company provides local content and local monetization in one package for large and small developers. CityGrid reaches more than 140 million unique users across 250 website and mobile sites. This step is one of many the network has made recently to expand its content offerings. Earlier this year, BIA/Kelsey reported on CityGrid’s move into the deals space.

CBS Local Media is CBS’ local broadcasting business segment. It aligns resources between more than two dozen CBS television stations and over three dozen CBS news, sports and talk stations with a focus on competing in the local marketplace. In August 2010, CBS Local Media launched CBS NewYork.com, the first website in the tri-state area to combine the best brands in local media and offer visitors a “local” New York experience. After debuting sites in 23 more markets, CBS Local is among the top 5 most visited local properties on the Web (comScore, February 2011).

Ezra Kucharz, president of CBS Local Digital Media, said, “By delivering to local advertisers cost-effective and efficient solutions for their marketing and sales needs, CBS is able to reach the active consumer interested in utilizing local search to make purchase decisions.”

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In his keynote address at DMS ’10, Yext CEO Howard Lerman pointed to the imminent release of a tags product in response to Google Tags and emphasized that tags could grow into the standard local advertising unit. Sure enough, the company will officially unveil Yext Tags in January across more than a dozen locally oriented partner sites, including AOL’s MapQuest and Patch, Citysearch, SuperPages, Yahoo and Yellowbook. And no, Google is not taking part.

Many will assume that Yext Tags is launching to combat Google’s continued migration into local advertising. Some have even termed this an “anti-Google alliance.” For the non-conspiracy theorist, perhaps it is about integrating online advertising for merchants into a single buy and a central distribution engine. Whatever the case, the key to breaking through with SMBs that have found search engine marketing to be a confusing experience will be simplicity, which is at the core of the new platform.

Pricing is flat rate for advertisers ($99 per month), to be split evenly between Yext and the partner sites where the tags appear. From Yext’s dashboard, businesses can create, distribute and modify tags across a local network that reaches more than 100 million UVs each month. No keyword bidding — these are natural search results, not sponsored ones.

For Lerman’s New York-based start-up, tags broaden the overall value proposition that Yext can offer the 30,000 businesses that are currently using some combination of its pay-per-call and reputation management tools. Initially, Yext will market the product, but will soon allow partners to resell it. Another “next step” will be enabling clients to update their listings and tags from partner sites (not just on them).

While Tags can be messaged any number of ways, many merchants will seize on it to promote deals and offers. This could appeal to national retailers seeking to drive local store traffic in particular areas (a theme that sprouted in 2010 and will only gain stream in 2011). Gold’s Gym, for instance, has been experimenting with localizing offers across the partner network as part of a Tags beta test.

Google first pushed out its Tags offering in June at a flat rate of $25 (seemingly its new magic number, with Google Boost also being peddled at this rate). The search giant recently enlisted at least 100 telesales reps to market Tags and Boost to businesses that have claimed their Places page. Now it is offering $100 million in AdWords credits to SMBs that enroll in Places. Funneled together, these initiatives have many online search and Yellow Pages companies wondering if Google is trying to take their turf.

This isn’t the first coordinated effort to push back against Google. IAC’s CityGrid Media developed over the past year to connect sellers and publishers through a targeted ad engine that optimizes placement for businesses across the network. At BIA/Kelsey’s Marketplaces conference this past March, CityGrid CEO Jay Herratti described the network as an alternative “scale player” to Google.

Sample Yext Tags Listing

Yext Tags Dashboard (courtesy: TechCrunch)

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Citysearch officially rolled out its CityGrid publisher network this week. The network moves Citysearch away from an exclusive focus on its individual sites (“Citysearch.com,” “Insiderpages.com,” “Urbanspoon”). Instead, it works on a distributed basis with partners (i.e., “SuperPages”) to marry local content and advertising.

In the short term, CityGrid represents the new face of Citysearch and the next evolution in the local market. It allows the company to leverage its existing infrastructure and content, and reach down into the distribution channel with a more automated and cost-effective option versus a focused business development effort. For its publisher network, and its 500,000 local advertisers — projected to jump to 750,000 by year-end — it also represents a real alternative to Google.

Overall, our enthusiasm for the product is as high as it was when we were first walked through it some 14 months ago. Here’s why we like it. The local market fundamentally suffers from two broad problems. First, it’s hard to make money without a substantial investment in sales. Even then, success is not assured. Second, content is expensive to create. Yes, user reviews can be acquired, but there are still large swaths of categories that still lack deep engaging content.

In theory, CityGrid addresses both problems. It gives small and large developers local content and local monetization together in package. The power of this cannot really be underestimated since both of these are hard to come by, not to mention expensive. Urbanspoon used this to great success and eventually was acquired by IAC (Citysearch’s parent). Nearly every review and ad on Urbanspoon was from Citysearch.

We have seen some reports that this product is a reaction to other companies in the field entering the space. It’s not. If anything, it simply takes the winning strategy of opening up an API to developers and letting them build products on robust infrastructure. Think Google Maps, for example.

To our knowledge, there is no one else doing this model with the same scale and focus. Indeed, 100 developers signed up to work with the API within the first two days of its release. We expect, however, that more people will enter this market quickly. But not before Citysearch gets a major head start, if Citysearch CEO Jay Herratti gets his way.

“My vision is [that it will become] the leading content and ad network for local,” he told us, adding that it is no longer just about Citysearch.com as a destination site. “This is Citysearch,” he says. “It isn’t distributed in one place. It is part of many places, all around the Web.”

The result also provides an alternative to Google. “We look at what Google is doing with local as a major competitive threat,” says Herratti. “It controls access to the Internet.

“Last year, we were building and rebuilding,” Herratti notes. “This year, we are very, very focused on execution.” Still, the current product is relatively primitive and will be rapidly evolving. “Right now, we are talking about version 1.0” he says. “Twelve months from now, there will be new geotargeting solutions, new ways of creating content. We’re taking all of these pieces and putting them together. The next thing is to optimize, and optimize.”

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