A central theme emerged this morning at SMB Digital Marketing. It began in the Focus on Profits session, where former BIA/Kelsey analyst and current Yellowbot CEO Matt Booth declared, “In ten years, this conference will be all about software and services.”

Matt’s point was simple. Selling advertising to local SMBs is a tough business. Renewals are getting harder and competition is fierce. Selling cloud based services (presence management, CRM, reputation management) offers the opportunity for that coveted “lock in” that ensures a long-term high-value customer relationship because the SMB depends on your service to manage its business. Think Demand Force or Open Table.

“I couldn’t agree more with Matt that it will all be in SaaS in the future,” said ReachLocal President Nathan Hanks during his keynote presentation following the Focus on Profits panel.

Hanks took Booth’s prediction a step further by predicting the move to a SMB marketplace built around SaaS is closer to five years away. The big opportunity is in marketing automation, and ReachLocal is moving aggressively in this direction.

Part of Hanks’ thesis is that the purchasing process for local merchants is broken.

“It is not fun to do all you have to do to get and keep customers today,” he said. Sifting through the entire basket of point solutions and providers, getting leads, following up, and fulfilling orders adds up to a draining process.

Software is going to dominate local because it makes life better for the merchant. “Software is the answer for what ails us in local, and for what takes us to the next level.”

No doubt a large sales force is an asset. However, it is not a requirement for success in local, particularly as the local space moves toward more of a data- and software-driven paradigm. Hubspot, Hanks points out, uses technology to bring in leads, and sales to close the leads. “You don’t to have to have a big sales force to win in where local is going,” Hanks said.

Hanks leads a company that will drive about $500 million in revenue this year, with 2,000 employees and 23,700 active advertisers. Hanks replaced Reach’s CEO and co-founder, Zorik Gordon as keynoter. Gordon resigned last week, for reasons that were not immediately disclosed. The company did reaffirm guidance for the year, in an effort to reassure investors that Gordon’s departure wasn’t tied to the company’s performance.

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Universal Business Listing first launched as a “list once, be found everywhere” label to enable SMB listings to comprehensively populate the “fragmented Web.” However, with social media fueling an even more fragmented Web, UBL is now coupling listing enhancement with presence management — a move that puts it in competition with such players as Marchex, MerchantCircle, Yext Rep and ReachLocal (through its acquisition of SMB Live).

It is also expanding beyond the U.S., with operations set to begin in the U.K. and several other European countries. European operations will focus on “business ID management” — not just getting SMBs distributed and discovered, but also enhancing, monitoring and modifying their online storefronts.

Inner Balloons founder Robin Allenson has been recruited to serve as managing director of UBL Europe. He told BIA/Kelsey that moving into the U.K. and Europe represents a natural business extension because of the “awareness of the need” for similar products internationally that transcend simply being found and “encapsulate” the diffuse Web.

The European launch is under way in 10 markets in the U.K., with expansion into Germany and the Netherlands this year, followed by Austria, Switzerland and Belgium in 2011. Further U.K. market penetration will pivot on partnerships, as the majority of UBL’s business comes from white labeling platforms for SEO, CPC and other search providers to utilize for their SMBs. 

While some would believe that UBL competes with listings companies, Allenson insists they are valuable partners with existing advertiser relationships that can build off UBL’s platform to achieve wider distribution for their clients. 

Pricing ranges from 30 pounds ($46) per year for bulk purchase to 35 pounds ($54) for a smaller number of listings to 45 pounds ($69) for a la carte. Partners receive a one-two punch of services that begins with universal platform distribution and widens to presence management. 

UBL CEO Doyal Bryant emphasized that while there is pressing need for presence management, standard listing enhancement also requires more detail and texture than ever. SMB profiles now have numerous rich media and sharing capabilities, from video and photo uploads to blogging to social media connectivity. Mobile and GPS accuracy are also vital for listings to be discovered. Altogether, these features can improve SEO and empower online sellers to use pay-per-action (PPA) models for higher conversion.

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