Declaring that deals have officially “jumped the shark” could well be an overstatement, considering that revenues are still on the uptick (BIA/Kelsey forecasts that the U.S. market will grow to $5.5 billion by 2016) and hundreds of companies continue to invest in the channel. However, the broad deals market is clearly evolving and segmenting in new ways, a topic explored during an ILM West superforum.

Merchant loyalty programs are seen as the next “white space.” BIA/Kelsey estimates that independent loyalty and transaction-based platforms have raked in $222 million in investment capital since 2008. One early leader is Five Stars, which CEO Victor Ho says will integrate with 95 percent of point-of-sale systems (a major value proposition, if true, in the fragmented POS landscape). Through the card issued to merchants across Five Stars’ network, participating businesses can see all transactions that go through “down to the line item.” There are integrated marketing components as well, with auto-posting to Facebook and e-mail and SMS campaigns driven by the transaction data.

Perry Evans at Closely is working on a full SMB dashboard product that includes promotions, loyalty and competitive intelligence. The latest rollout, Perch, gives a “birds-eye view of what’s happening in your marketplace,” showing a live feed of how a business and its competitors are posting and engaging across several social networks and local sites (Yelp, Twitter, Facebook, Foursquare and others). This starting point provides SMBs with a “frame of reference for their participation” through promotions, offers and other forms of customer contact.

Following the adage “what’s old is new again,” another sector seeing uptake as the luster of deals subsides is online couponing. DataSphere SVP Gary Cowan calls coupons ‘deals’ before there were deals, and positioned them as a strong option because the content is the ad and exists down in the decision funnel.

Valpak, which has long controlled massive volumes of rich local coupon content through its well-known direct mail brand, is now pushing this asset progressively across platforms with several mobile initiatives, including Apple Passbook integration. What was once a traditional direct mail company is now “transforming into multi-media distribution,” according to President Michael Vivio. Meanwhile, Valpak’s acquisition of Savings.com layers national coupons on top of its existing local content assets.

But don’t forget about deals. The original “daily deal,” with its massive discounts and huge margin splits, is evolving into more merchant-friendly models. Constant Contact’s SaveLocal, for instance, gives merchants full control over their deals and only collects a couple of dollars, says GM Dave Gilbertson. Meanwhile, with inevitable market consolidation and sales force contraction (e.g., Groupon pulling feet-on-street sellers to manage costs), Second Street President Matt Coen sees benefits for media companies with brand advantages that can offer full, long-term solutions. “Those that diversify will be strongest.”

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BIA/Kelsey Senior Analyst Mike Boland began the ILM West mobile superforum by sizing the magnitude of the mobile-local advertising opportunity (while also noting its current shortcomings): $5.8 billion by 2016, or 58 percent of the total mobile market.

Much of the early mobile ad trial that carries the hope of driving higher premiums (and thereby closing the mobile supply/demand delta) begins upstream with national brands ‘locationizing’ their messages and offers to convert local consumers. Brand experimentation is quickly migrating to dynamic location targeting and deep ‘place profiling,’ with ad networks, platform providers and distribution networks all introducing new location capabilities.

Local ad network xAd offers a ‘smart fence’ that dynamically changes geo-fences around campaign criteria in specific locations. Greg Hallinan, CMO of Verve Mobile, described its Location Service as combining location data with geo-aware data to customize the ad execution and creative to maximize relevance.

National-local network JiWire produces a Location Graph that connects locations and audiences. President David Staas says this can “reveal the relationship between locations,” and the audience segments that align with those locations. Locu, meanwhile, focuses on mobile content distribution – specifically menus – rather than targeted ad placement.

For SMBs, the challenge can be more rudimentary, starting with optimizing a mobile presence (website, landing page and/or app). Duda Mobile’s Itai Sadan noted the confusion that SMBs reveal in mistaking their traditional website for mobile compatibility. Tobias Dengel of WillowTree Apps reminded the audience that many brands still struggle to optimize for mobile platforms, even with larger budgets, bigger marketing teams and dense destination traffic.

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In considering mobile strategies, small businesses are focused on being found, but there are very different issues than simply searching on Google. Telmetrics’ CEO Bill Dinan, speaking at ILM West in Los Angeles today, noted that small business owners all have smartphones, and they are using them in a very different scenario from mobile just a few years ago.

The impact on their engagement with users, and conversion rates, is palpable. Yet business owners still are not maximizing mobile to their best advantage.

“One size doesn’t fit all,” notes Dinan, saying mobile now takes its place fully in a multi-platform world that includes smartphones, tablets and other channels. If a service requires a lot of research — such as reviews –they should be focused more on tablets, he notes.

Travel is an extreme example of a research heavy vertical. Restaurants, in contrast, are smartphone heaven. “Eighty percent convert within a day, and 60 percent convert within an hour,” adds Dinan.

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Leveraging social media models to drive more traffic and sales is one of the “works in progress” in the local ecosystem. At ILM west, we had a special session dedicated to exploring the innovation in the space. Panelists included Payvment’s Darren Waddell (formerly of Merchant Circle), Moon Tide Media’s Todd Klawin and Social’s Mark Gilbert.

Waddell said his company is a social discovery platform, not a storefront. It is “really in the engagement of business owners and fans, and people who ultimately buy from them.”

“When you help them interact with shoppers, that is when the magic happens,” says Waddell. He notes that engagement is a small percentage of ‘likes,’ but it is all gold.

Some of Facebook’s recent features adds, such as Timeline, have been especially helpful. “It is much more about engagement,” notes Waddell. “That is what we have shifted our business around.” We are really creating around the content. You get 2-3X “times engagement in a news feed compared to a like.” But wanting to own “is a different experience than saying you like it.”

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Our flagship event, ILM West, is next week in sunny Los Angeles (weather forecast: in the 70s). We have a bulging attendee sheet, and 47, hand-picked thought leaders on stage. Here’s my personal cheat sheet on some of what’s happening:

Innovation: We’ll leave that up to IdeaLab CEO Bill Gross, our opening keynoter. Gross invented the auction system for buying search advertising, and as head of IdeaLab, the industry’s first incubator, has come up with one winning idea after another. We will also hear a lot about innovation from an investors point of view from former TicketMaster CEO Sean Moriarty.

Next Steps for Media and Directory Players: Digital is here and the impact on traditional media has been felt. The question we have: how big a role are the traditional leaders going to play? We’ve picked YP CEO David Krantz, NAA Chairman and Dallas Morning News Publisher James Moroney III and UT San Diego President Mike Hodges to share their insights with us.

Sales Transformation: Arguably, the hardest part of local is reaching local businesses. That’s also where the growth is. We’ll be looking at new directions for sales and services in keynotes from CityGrid Media CEO Jason Finger — his first major appearance in his new role. Finger, the founder of Seamless, is one of the industry’s deep thinkers. We’ll also have deep discussions with ReachLocal Chief Product Officer Kris Barton; LocalEdge CEO Jeff Folckemer, ex Berry exec Kathy Geiger Schwab; and SmugCloud CEO (and former Yell CDO) Mark Canon.

Social’s Impact on Local: Social is grabbing time share from other media. But how is it best leveraged at the local level? It is a surprisingly unanswered question. We’ll get some meat on it in several ways at ILM. There is obviously the keynote from Facebook’s Global SMB leader Dan Levy. We’ll also dig deep into driving local consumers in a top session with Universal Studios SVP Doug Neil and Eventful CEO Jordan Glazier New ways to leverage social will be heard in discussions with three top innovators: Hearsay Social VP of Product Mark Gilbert; MoonTide Media CEO Todd Klawin; and Payvment SVP of Marketing (and former MerchantCircle exec) Darren Waddell. We’re expecting to really learn something about social/local at ILM.

Deals (And Loyalty) Act II: New customer acquisition has always gotten the lion’s share of marketing resources. But the rise of big data and card linked programs has pushed loyalty to the fore like never before. Now we have a blend of promotions, including coupons, deals and loyalty. A lot of it merges in the new “offer cloud.” We’ll hear from a number of top players in the space at ILM West, including FiveStars CEO Victor Ho; Closely CEO Perry Evans; ValPak President Michael Vivio; Savings.com CEO Loren Bendele; DataSphere SVP Gary Cowan; Constant Constant/SaveLocal VP David Gilbertson and Second Street Media CEO Matt Coen.

New Directions for Local Search: It isn’t just about keywords anymore. Search has been fully integrated into broader advertising programs, and is also a key driver of mobile and maps revenue. And with the development of Product Listing Ads, it has become a major force in retail. We’ll have a keynote interview with Google Channel Partners GM Todd Rowe; and in depth discussions with retail search leaders, including Wanderful Media CEO (and former MerchantCircle CEO) Ben T Smith IV; Kenshoo Local Director Paul Wicker; and Where2GetIt CEO Manish Patel. And you won’t want to miss some real insights presented by three top search experts “Before the Bell” on day 1: Local SEO Guide’s Andrew Shotland, Search Influence CEO Will Scott, and eLocal Listing CEO Tim Judd.

All this just scratches the surface. Here’s a link to the whole agenda. For those of you that haven’t registered, here’s a link to the registration page.

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In the great tradition of ILM keynotes, we have landed one of the best yet: Bill Gross, CEO, IdeaLab. It is definitely fitting to have THE premier Los Angeles tech leader and visionary to start things off for us at the conference, which is Dec.4-6.

Gross heads up an ILM West keynote schedule that also includes Google GM of Global Channel Partners Todd Rowe; YP CEO David Krantz; CityGrid Media CEO Jason Fingers; and Facebook Director of Global SMB Dan Levy.

Gross is in the Internet Hall of Fame as the inventor of the auction system for selling contextual advertising (later adapted by Google). He has, in fact, had a tremendous career in software, search, media and multimedia.

After working at Lotus for six years, Gross founded Knowledge Adventure, which made educational software for kids, and sold 20 million CD ROMs. In 1995, French media giant Vivendi bought K.A. for $90 million.

In 1996, Gross founded Idealab, a pioneering incubator which was what he called “a company that makes companies. Seven of the original 10 companies survived for the first year, including four that later went public. Among them: Overture and CitySearch. IdeaLab also has been home to InsiderPages and currently, PunchCard.

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Google has experienced five times growth in mobile search during the past two years, according to Google Mobile’s Surojit Chatterjee, who was keynoting our SoLoMo Morning at ILM West in San Francisco.

Mobile usage generally complements the desktop, with huge spikes on the weekend and in the evening and at lunch, said Chatterjee. “When people go out for lunch, people are searching more on their mobile than on the desktop.”

Chatterjee said vertical segments have been especially high with mobile. Almost 17 percent of auto related queries are mobile, 17 percent of travel and car rental, and 32 percent of restaurants.

Mobile also is very strong for converting searchers. Seventy-seven percent of mobile searchers contacted a business; 44 percent led to a purchase and 59 percent led to a merchant.

Proximity and location, in fact, have become important criteria for Google search ranking. Make your ads location aware and help users make a decision quickly,” said Chatterjee.

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Venture capital leaders at ILM West in San Francisco today expressed optimism about the environment but said there are some challenges coming up.

“It is a great time to start a company and fund a company,” said Michael Yang of Comcast Ventures. Yang noted that entrepreneurs have a jump on getting money from venture. “There isn’t vibrant Mergers and Acquisition” right now as the banks are tied up with issues and unstable economies. “There is surplus cash coming into the market.”

Hot areas include things that involve retention and loyalty, he adds. Tablets are also changing things. “We are two years into the IPad cycle,” he notes. “The iPad is permeating all walks of life, in both leisure and corporate settings.”

But it has all led to froth, Yang warns. “Private markets is where you are seeing a bubble.”

Gregg Johnson of our sister company BIA Digital Partners concurred with Yang about the limited role of banks. “I don’t think we will see in coming years any meaningful returns by the banks. There is a need by companies to create meaningful capital sources.”

Private investor Rick Blair, former CEO of Examiner.com, said that it is about more than money. “I like to get involved with the companies I work with. It is imperative that I feel like I can add value.”

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The idea of an online marketplace has continued to evolve dramatically in 2011. With the emergence of deals, we now have full-fledged interactive local commerce in place, in addition to advertising.

It seems that everyone has jumped into the pool. Where Marketplaces had previously been dominated by players such as AutoTrader, eBay and OpenTable, everyone from Facebook to Foursquare to Visa has developed non-advertising (or advertising +) Marketplaces strategies. As we approach our year-end ILM West conference, what can we expect for 2012?

Here are some of our topline “predictions”:

1. Amex, MasterCard and Visa along with banks will seek to differentiate themselves from others by making key acquisitions in the vertical and mobile space during 2012.

2. Smartphones will increasingly be seen as transactional tools for food ordering and other services. In many cases, transactions will prove to be the real road to mobile adoption, more than apps and content.

3. Point and rewards/membership programs will evolve for local shopping, with more companies trying to rope-in frequent, high-value buyers as members that have minimum purchasing requirements. The prototype, followed by LivingSocial and others, are credit card promotions and Amazon Prime.

4. EBay will continue building its international classifieds business, and will extend into local retail via Milo. But inventory (or eBay) won’t reach deep into the SMB space in 2012. They’ll mostly focus on larger retail sites.

5. Review sites such as Yelp are currently one size fits all. But they’ll be increasingly differentiated by targeting and social technologies that better personalize reviews and other content, and move into transactions/reservations as well.

The post Topline ‘Local Marketplace’ Predictions for 2012 appeared first on BIA/Kelsey - Local Media Watch.

For newspapers, the 1/3 circulation/1/3 display/1/3 classifieds revenue model of the print days hasn’t made the transition to online, and there doesn’t seem to be enough time to right the ocean liner. But as a local media channel, newspapers have been written off before their time. Newspapers, of course, remain the single largest source of local content. As analysts, we like them as a giant laboratory for online services, with hundreds of different tests in different markets.

David Carr’s must-read Sunday profile on MediaNews Group and Journal Register Co. CEO John Paton in The New York Times showcases an industry executive as “change agent.” The profile of the ILM West Dual Keynoter (along with Deseret Media CEO Clark Gilbert) shows Paton on a mission to capture the best of the newspaper model that still works, and to abandon what does not. In his first year at Journal Register, notes Carr, Paton’s efforts boosted digital revenues by more than 200 percent.

It helps that Paton hasn’t always been an ink-stained wretch (that’s what we used to call industry people). While he started in newspapers, he also worked as the leader of Canoe.com, a large news site, during the first dot-com bubble, and then invested in Hispanic media, buying El Diario La Prensa in New York and other Spanish-language properties, eventually forming (and running) impreMedia in 2003.

“Mr. Paton has become something of a darling among media thinkers for putting his business where his rhetoric is,” notes Carr. “He issued Flip cameras to all the reporters at Journal Register papers, helped create a newsroom cafe that’s open to the community in Torrington, Conn., and has been pushing to dump ancient proprietary newsroom software in favor of free, Web-based publishing tools. He has financed a lab to foster employee innovation, and the company has formed partnerships with a number of Web companies to provide news and information.”

As Carr notes, what began as a tidy little experiment has become perhaps the single biggest bet in the whole newspaper business: “The Journal Register and MediaNews are now in 18 states, with over 800 print and digital products, with revenue of over $1.4 billion and 10,000 employees. The second-largest newspaper chain in America is now being run by someone who thinks that print is, if not exactly dead, dying a lot faster than anyone thought. “

Carr also note that Paton isn’t talking to himself, having added sharp-tongued new media advocates (and newspaper critics) such as Emily Bell, Jeff Jarvis and Jay Rosen to an advisory board.

“Mr. Paton hears all sorts of clocks ticking. His newspapers are mostly owned by hedge funds and investment banks, which are not known for patience, and part of the reason that the percentage of digital revenue is rising so fast is that the print revenue that it is compared with is dropping so precipitously,” notes Carr. ”Although he is something of an evangelist, he says he is also a pragmatist.”

We’re honored that John Paton and Clark Gilbert are doing back to back keynotes at ILM West, which takes places Dec. 12-14 in San Francisco. You can register here.

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