One of the marks of the local on-demand economy (LODE) is compressing the traditional local search process. We see it with companies like Uber: instead of searching, viewing listings, reviews, calling… you simply press a button and a car shows up.

Of course that’s easier said than done: Ceding the decision to Uber of which driver shows up requires a great deal of trust. Consumers are accustomed to the traditional local search process of choosing their individual driver/cleaner/lawyer, etc.

So successful LODE startups will build that trust over time using technology to match buyer and seller more quickly and reliably than local search. Beyond technology chops, it’s all about building balanced two-sided marketplaces, and network effect.

Meanwhile Google, the king of search, is already building its way into this LODE paradigm with tools like Google Now, and its rumored move into on-demand home services. LODE might be the anti-search, but Google will have a part in its future.

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.

Next week’s excerpt: LODE’s Impact on Local Media.

The New Search

LODE threatens traditional “local search” with a user value proposition that is more natural and natively designed for smartphones. It does this by compressing the supply chain. In other words, it eliminates steps of the traditional process of using a search engine to find local services.

The mobile local search process currently goes something like this:

1. Tap (or speak) words into a search box.
2. See results.
3. Click the most attractive one — sometimes leading to directories with additional navigation.
4. Read reviews or other decision criteria.
5. Choose a business that appears to be the most reliable, proficient or inexpensive.
6. Contact that business to inquire about or retain its service.
7. Schedule service.
8. Fulfill and transact.

LODE’s comparison is:

1. Launch a LODE app for a designated service.
2. Push a button to indicate an immediate need.
3. Service provider comes to or contacts you (paid automatically once approved).

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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The wall between national and local marketing is falling with tech-empowered consumers able to find their information wherever they want it, noted YP‘s EVP & GM of Digital Markets David Lebow during a keynote at Leading in Local: The National Impact in Atlanta. “Traditional media companies are the only ones keeping up that wall.”

YP is very much a company in transition, like Gannett, Hearst and others, noted Lebow, a longtime media and online leader with recent stints at AOL and Internet Broadcasting. Like the others, YP’s real and clichéd task is “to grow the growing side of the business in excess of the declining side of the business. It never changes.”

“The question is: how can we be the Google of local search?” asks Lebow. “In order to do that, we need to innovate at the pace of the market.”

There is no question that YP should be pursuing local search. “We don’t want to be in directory. One is a $2.7 billion segment growing at 3 percent, while the other is a $29.8 billion segment growing at 7 percent,” said Lebow. But it is critical to attack the market in a broad way. YP shouldn’t be a content play within a vertical, like a Zillow or a WebMD, he said.

A core focus of the local search effort needs to be in SMB presence management. “Businesses really need to be found,” Lebow said. And that’s where the convergence of national local comes in. “The SMB says it needs leads and loyalty. National says it needs measurement, analytics and reporting. The needs of national and local businesses” are coming into one.”

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The wall between national and local marketing is falling with tech-empowered consumers able to find their information wherever they want it, noted YP‘s EVP & GM of Digital Markets David Lebow during a keynote at Leading in Local: The National Impact in Atlanta. “Traditional media companies are the only ones keeping up that wall.”

YP is very much a company in transition, like Gannett, Hearst and others, noted Lebow, a longtime media and online leader with recent stints at AOL and Internet Broadcasting. Like the others, YP’s real and clichéd task is “to grow the growing side of the business in excess of the declining side of the business. It never changes.”

“The question is: how can we be the Google of local search?” asks Lebow. “In order to do that, we need to innovate at the pace of the market.”

There is no question that YP should be pursuing local search. “We don’t want to be in directory. One is a $2.7 billion segment growing at 3 percent, while the other is a $29.8 billion segment growing at 7 percent,” said Lebow. But it is critical to attack the market in a broad way. YP shouldn’t be a content play within a vertical, like a Zillow or a WebMD, he said.

A core focus of the local search effort needs to be in SMB presence management. “Businesses really need to be found,” Lebow said. And that’s where the convergence of national local comes in. “The SMB says it needs leads and loyalty. National says it needs measurement, analytics and reporting. The needs of national and local businesses” are coming into one.”

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Local search has taken off in multiple directions, driving commerce and engagement for merchants via enhances listings, maps, video, and even store inventory. At BIA/Kelsey‘s Leading in Local: Interactive Local Media Conference held this week in San Francisco, a panel of experts in the local search area were brought together to discuss the cutting edge in search issues and techniques.

As always with local search, content was a hot topic. “I love when people say content is hard because really it is so easy” says Will Scott, CEO of Search Influence. Getting SMB’s to put all of their content online is often a struggle but social media is a great way to get content out there, according to Scott. Azim Tejani, Chief Revenue Officer of YaSabe, discussed how they “encourage users and others to answer questions that come from the community.” By commenting they access content that is “not very social.”

When it comes to the future of local search, tackling the international market is where GoDaddy is headed according to Raj Nijjer, Sr. Director, Product Management. “It is a huge opportunity and a huge market”. Gideon Rubin, CMO Local Market Launch sees things a little differently. He is looking back to the fundamentals. “We still need to participate in the fundamental activities, the market is still small so we still need to participate in the fundamentals.”

The post At Leading in Local: ILM 2013: The New Local Search appeared first on BIA/Kelsey - Local Media Watch.

Microsoft’s Raj Kapoor mapped Bing’s evolving local search strategy at the SMB Digital Marketing Conference, an approach that begins with mobile, infuses social and is geared toward “consumer task completion.”

Kapoor first noted the ubiquity of digital channels in the consumer purchase process, with more than 90 percent using some mode of online search to find local businesses. The location-aware and intent-capturing features of mobile devices have propelled the trend forward.

For consumers, Bing’s focus is on location extensions that enable task completion, whether that be finding a store (locators, mapping), making a call (click-to-call through Skype integration) or finding/buying a deal (a card-linked offers beta test). Bing is also integrating more social signals into search listings: Facebook posts, Quora Q&A and reviews from Yelp and TripAdvisor.

For SMBs, the key is simplicity with Bing Ads Express. The problem that Kapoor is trying solve: “How can a small business come to us quickly and we take care of everything else?” Part of that challenge is educating small merchants on the value of a mobile presence, and the efficiency of mobile campaigns tied to it. “When campaigns are mobile-optimized, they drive a disproportionate share of clicks and budget utilization.”

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Yellowbook had signed on to a new local ad exchange launched today by Chitika, an ad network established in 2003 that serves more than 2 billion monthly impressions across 80,000 Web sites. The core idea is to apply the ad exchange model to the local and mobile space.

For Yellowbook, the exchange offers a way to better monetize its own  local traffic while offering its existing advertisers broader reach. Yellowbook has half a million advertisers and generates more than 100 million searches per month, according to Mike Wilson, GM and vice president of digital media at Yellowbook.

The new ad exchange also has mobile local and pay-per-call components. Chitika says it already serves 100 million local mobile impressions every month.

Chitika has created a local-oriented mobile ad unit that will detect mobile devices and serve an ad designed for mobile users. The ads also allow visitors who receive a local ad on their phone to call the advertiser with one touch.

“We’re always looking for unique opportunities to extend the reach of our more than half a million clients beyond the traditional distribution platforms,” says Wilson. “The first time we saw what Chitika was doing with LAX, we recognized the incredible impact this synergistic platform could deliver. We believe it meshes well with our overall performance advertising strategy.”

In an e-mail, Chitika CEO Venkat Kolluri offered his take on the deal’s most significant elements. 

He said the idea is to “bring to the table the distribution that we already have in our network. Basically we want to aggregate and re-direct the ‘local’ supply and create an adsense-like network for the search+local+mobile sector. We need to draw the industry’s attention to the intersection of search, local and mobile and build a program with special focus in this sector.”

Kolluri also emphasized the fact that the LAX is an open platform. “To be able to succeed and make this work we need to make the program as open as possible so that all types of players can benefit from the core ecosystem.”

The post Yellowbook Signs On to New Local Ad Exchange appeared first on BIA/Kelsey - Local Media Watch.

Yellowbook had signed on to a new local ad exchange launched today by Chitika, an ad network established in 2003 that serves more than 2 billion monthly impressions across 80,000 Web sites. The core idea is to apply the ad exchange model to the local and mobile space.

For Yellowbook, the exchange offers a way to better monetize its own local traffic while offering its existing advertisers broader reach. Yellowbook has half a million advertisers and generates more than 100 million searches per month, according to Mike Wilson, GM and vice president of digital media at Yellowbook.

Read the rest of this post.

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The latest move is to enter the local search wars, going up against the Yellow Pages; third-party resellers like ReachLocal, Yodle, WebVisible and Orange Soda; and direct customers of Google AdWords itself. The effort, which is a partnership with Clickable, extends earlier efforts that provide SMBs with online payment processing, comprehensive insurance information, and international payment and wire transfers.

According to VP of Business Solutions Rob Ciccone, it is all part of an effort to “provide a portfolio of tools to help SMBs grow revenue. We have excellent knowledge of SMB needs [and] a very large customer base,” he says. Those are supplemented by non-customers who are users of Amex’s OpenForum site, which provides articles and boards and e-mail links for a wide variety of SMB topics.

The Search Manager product itself has some advantages for SMBs, adds Ciccone. Most notably, it uses Clickable to manage search across multiple search engines, including not only Google, but Yahoo, Bing and Facebook as well. The product also includes a daily recommendation feature for improving campaigns. SMBs that don’t want to manage their own campaigns can use Search Manager Assist, although that carries a higher premium of 8 percent to 10 percent per month. The price of unassisted search is 5 percent of ad spend, or $49 per month — whichever is higher.

The search products are initially being promoted at trade shows and to the credit card and OpenForum list. They include a 30-day free trial.

The post Amex’s Rob Ciccone Discusses Entry Into Local Search appeared first on BIA/Kelsey - Local Media Watch.

Philadelphia-based 7Mainstreet cofounder Andy Leff got the idea for his company about four years ago while driving to the grocery store. “I was listening to something on the radio about the success MySpace was having with helping rock bands promote themselves, and I thought no company is doing anything like that for small businesses.”

Leff and his father, Ron, have since worked together to build 7Mainstreet into a platform for small businesses to establish a presence online that doesn’t just present listings content but enables them to sell inventory, interact with customers via social tools like blogs, post video, visual images and so on.

It’s kind of like the old storefront concept married with the modern Internet Yellow Pages. Rather than a business listing or info page, the standard offering for a small-business advertising is a commerce-enabled micro site. Andy Leff says one point to emphasize is that advertisers using a microsite can have total control over their environment, where on some sites, their presence can be cluttered by banner ads for competing or even conflicting messages.

The Leffs are currently trying to convince directory publishers, newspapers, catalogs and business-to-business publishers, among others, to white label their solution as a platform for selling online advertising and services to their small-business customers. In particular they’ve focused on the independent publisher space and to date have announced one client, Illinois-based Eagle Publications.

This is a crowded space, but the Leffs believe they have a key point of difference in their emphasis on enabling commerce, rather than just establishing presence.

We asked how 7Mainstreet drives traffic, which is the main challenge facing any independent publisher trying to build an online presence. The answer is a combination of things — all the sites are listed in a common database so all customers benefit from wider exposure than just the publishers that sold them the microsite. Plus 7Mainstreet is active in link building and other efforts to drive traffic.

Andy Leff also says it’s important to level with small businesses about the role they play in the performance of the site.

“You can buy a gym membership, but to get the muscles you need to show up and do bench presses,” Andy says. “If [SMBs] do not use [the microsites], they will not get full benefit. They need to put as much information in there as possible in order to improve their search ranking.”

The post Bringing Social to Local: A Conversation With 7Mainstreet appeared first on BIA/Kelsey - Local Media Watch.

Gannett has always seemed to be a likely directory player. In fact, the world’s largest newspaper publisher owns a small group of print directories. It also provides a white-labeled online directory product to its media properties.

But as directories, search and user-generated content have become more commingled, Gannett has gone a step further with the launch of FindItNow.com, a new directory product from its Planet Discover division.

FindItNow.com is national, but has been localized for specific markets.  It is currently live in three markets: Rochester, Nashville and Burlington, Vermont. Only local information and content is featured. Key categories include Auto, Dining & Entertainment, Health & Medicine, Pets & Animals and Shopping.

The site is integrated with Facebook Connect, and users can add reviews, photos and business details if they register. In Rochester, 883 people have registered to contribute information; in Nashville, 828 people have registered; and in Burlington, 218 people have registered.

The site, in fact, is a lot like other search-driven directories, such as MerchantCircle, ShopCity, SMBLive’s Cloud Profile and others. As with other sites, local businesses have the option of free or paid tiers. The paid tiers are set at $49 or $99 per month. Depending on which tier they choose, businesses can have preferred search result placement, company logo and dominant photo, extended business description, additional photos and unlimited coupons.

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