SMB Marketing Organizations Need to Add ‘Business Services’

Business processes cvita

At the 2013 LSA event in Las Vegas I participated in a session called “State of the SMB Union.” One of the points I tried to make was that directory publishers and others offering marketing services to small business owners should diversify into transactions and business processes. So far that hasn’t really happened.

It’s starting to happen in Europe. Last week at the SIINDA conference in Munich a number of local media publishers discussed integration of scheduling and other transactional tools into their sites (or subsidiary verticals). Scheduling and appointments were the most common and are the obvious first step into this arena.

I’m frequently told by Europeans that US market is seen as “two years ahead.” However in terms of these transactional/operational services, this is not the case.

It’s very true that in the US market there are a many startups and vertical “marketplaces” offering scheduling, payment processing and other types of services for SMBs. However most of the larger SMB sales channels have not yet embraced or integrated them.

The full post is at the LSA blog.

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Inside, Outside, In-Between: What’s the Future of Local Media Sales?

I’ve just completed a report with Neal Polachek on the future of local media sales: Local Media Sales 2020 — Platforms, Profits or People?

Local media sales

Based on interviews with executives from Google, Yellowbook/Hibu, Dex Media, Web.com, Hearst, Buzzboard, ReachLocal, Yodle, newspaper sales executives and others, it looks a few years into the future and tries to engage in a conversation with some of the challenges in the local market today.

Here’s the paradox or dilemma facing traditional media sales organizations:

  • Audience fragmentation and the loss of major distribution/traffic has forced newspapers and YP companies to become “agencies” for their advertisers buying lower-margin digital media from third parties
  • This creates “structural” pressure that makes it harder to support an outside salesforce. Accordingly many are calling for a major migration to inside sales to reduce costs
  • Inside sales are cheaper but generally lose the benefits of in-person, face-to-face contact with advertisers
  • In addition lots of companies are using inside sales. That combined with similar-sounding product lineups makes differentiation increasingly tough in this market where SMBs are getting as many as 20 sales calls a month
  • Traditional media companies can no longer afford all their outside sales reps. But you can’t sell all accounts with inside reps
  • What’s the right balance between premise sales, technology and t-sales?

Local Sales Report TOC

The 27-page report is free but you have to register to get it. Read it and see whether you agree or disagree with its assumptions and conclusions.

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Beaconpalooza: Macy’s to Deploy iBeacons in All 4,000 Stores

Macy's appUsing Shopkick as its vendor Macy’s has decided to roll out iBeacons in all its 4,000 US locations. This follows a limited test of the technology 2013 and marks the largest retail beacon deployment to date.

The news appeared as part of a larger release about various “omnichannel” initiatives at Macy’s.

The beacon rollout cements the status of Bluetooth beacons (and iBeacon in particular) as the leading indoor location technology. Ideally, beacons are combined with other indoor technologies for a more complete solution.

There’s still widespread ignorance and misunderstanding about the limits and capabilities of beacons. I wrote a report about these issues earlier this year while I was at Opus Research.

For example, beacons currently cannot be used to identify precise user location and thus cannot be used for indoor navigation. (This may change in time.) Macy’s had previously worked with Meridian (now part of Aruba) using WiFi to provide that functionality in a couple of stores though its app. It’s not clear whether the Aruba relationship will continue.

While there are some limited indoor analytics that can be obtained from beacons, they’re not very rich or deep. Beacons merely broadcast messages/offers to nearby users who have relevant apps installed. An app is a prerequisite to receiving beacon-based notifications.

Here’s what Macy’s said in its press release about how it will work with Shopkick and iBeacon:

In what will be the largest implementation of iBeacon technology at retail stores to date with more than 4,000 devices, shopBeacons, an enhanced mobile location-based technology built upon Apple’s iBeacon Bluetooth Low Energy (BLE) protocol, will be placed within various departments at Macy’s locations, allowing for users of the shopkick app to get more personalized department-level deals, discounts, recommendations and rewards. Installation of shopBeacons is expected to be complete by early fall 2014, with activation beginning shortly thereafter.

Once live, as shoppers enter any Macy’s nationwide, shopBeacon will remind those shopkick app users who’ve opted in to receive notifications to open their app. During the initial phase of the program, customers will receive the currently available Macy’s promotions, deals or discounts. In early spring 2015, these Macy’s offers can be even more precisely tailored by departments in the store. This enhancement in Macy’s mobile technology arsenal will allow for increased consumer engagement and promotional and marketing relevancy that will benefit customers nationwide.

Macy’s is silent on whether the functionality will be integrated into the Macy’s own app, beyond the Shopkick app. I suspect the answer is yes over time.

One of the major challenges that individual retailers face with indoor location is getting users to download their apps. They haven’t done a good job to date giving users more than just a small-screen e-commerce experience. Thus a majority of smartphone owners currently don’t have retailer apps on their phones — despite the increasing time spent with apps.

Retail aggregators such as Shopkick or Retailmenot may thus turn out to be instrumental in the process of educating consumers about indoor location. Survey data have also shown that despite privacy fears, consumers will share location with marketers in exchange for tangible rewards and benefits (e.g., offers).

The Macy’s rollout is supposed to happen this year in time for holiday 2014. It’s smart for Macy’s to get ahead of the curve and learn how consumers interact with indoor location now for more effective marketing and a better customer experience tomorrow.

Perhaps most importantly, Macy’s move validates indoor location/beacons in a way that no other retail deployment has so far been able to do. Accordingly we should see an acceleration of indoor location adoption at national retailers over the next several quarters as they start to feel some competitive pressure.

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More than Half of Top 25 Google AdWords Spenders Sell Mostly Offline

AdAge published a list, based on multiple sources, of Google’s top 25 AdWords advertisers in 2013. Together they spent $1.34 billion on paid search in the US according to the analysis.

There’s no breakdown of how much of this is mobile.

Amazon is the single largest spender. However, what’s interesting is that roughly half or slightly more than half of this list, depending on how you count, are brands and advertisers whose revenues overwhelmingly come from offline sales.

Here’s the list:

Top 25 AdWords Advertisers

Retail is a huge-spending digital category. Last year, according to IAB figures, retailers were the single largest category of digital advertisers. While some of this is e-commerce, most retail (93%) is still fulfilled offline.

IAB retail spending

There may not be much IP or other geo-targeting going on in this spending, undoubtedly there is some. However, the offline sales dimension makes this an instance of online-driving-offline revenues.

According to my prior calculations, that “O2O” digital marketing influences at least $2 trillion in consumer spending in the US across products and services categories on an annual basis.

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Demise of the Click? Store Visit Metrics Extended to Desktop Ads

Placed logoI’ve been arguing for some time that the new “offline analytics” capabilities that smartphones enable would eventually make offline measurement a requirement of online (not just mobile) ad campaigns. In that direction, this morning location-analytics provider Placed and Dstillery announced a partnership “to deliver cross-channel measurement solutions for brands.”

In a test of the partnership technology integration, Placed and Dstillery measured the in-store impact of a PC ad campaign for major department store. Smartphone owners who visited the retailer’s locations (captured by Placed’s panel) were tied back to PC ad exposures using Dstillery’s “CrossWalk multi-device technology.”

I’m speculating but it probably works not unlike what I described with 4Info: correlating smartphones, homes and PC IP addresses.

The test campaign reportedly “boosted in-store sales by five percent and increased the likelihood of consumers visiting the retailer’s brick and mortar store by 34 percent.”

There are a number of ways to measure offline impact/in-store lift. Facebook, Google and Twitter all work with Datalogix for example. But that methodology relies on loyalty card data and may not capture the full impact of ad campaigns on store visits. Indeed no method of offline tracking is totally accurate or comprehensive.

These new mobile-based tools and metrics didn’t even exist a couple of years ago. Now they’re quickly being adopted by smart brands and agencies to get a more complete picture of the online-to-offline effect, which is where most transactions take place. One day, if these offline measurement tactics continue to proliferate and mature, we may even see the demise of CTR (except in search).

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4INFO Gains Patent For Matching Smartphones to Household Location

4info logo 2Mobile marketing and data provider 4INFO announced last month that it had been awarded patent No. 8,792,909 (“Systems and methods for statistically associating mobile devices to households“). This is at the core of 4INFO’s value proposition: the company knows where your phone lives and can unlock significant amounts of associated data for targeting and retargeting across platforms accordingly.

If the patent holds (over time) it’s a big deal. Most mobile platforms, data vendors and networks now are using smartphone-household location to draw numerous inferences about users and what segments they belong to.

As an aside, 4INFO says that its methodology is privacy complaint and that there’s no “PII” involved (though it sounds as though there is). The company says its only looking at data and audiences in the aggregate not individuals.

4INFO’s database has connected “152 million mobile devices to 101 million U.S. households.” This unlocks all sorts of targeting and attribution scenarios for the company and its partners.

Here’s the patent’s abstract (it’s more accessible than most):

Embodiments of the invention relate to methods and systems for associating a mobile device to a household. In various embodiments, a plurality of latitude-longitude pairs is received for a mobile device during a time period. The latitude-longitude pairs are organized into a plurality of clusters corresponding to geographic regions visited by the mobile device during the time period. For each cluster, a score is calculated that represents a likelihood that a user of the mobile device resides in a household within the cluster. The cluster with the highest score is identified as being the location of the user’s household. The computation is preferably conducted recursively over time periods. The mobile device is then associated with the user’s household.

Basically 4INFO (like others) watches a device over time and decides, based on statistical analysis, where it “lives.” Once the census and clusters of other associated data are released by that finding users can be targeted on mobile devices wherever they may be based on their audience status and buying patterns.  (Similarly PlaceIQ’s deal with Rentrak allows TV viewing habits to be associated with smartphones based on household location. So you can then target House of Cards viewers who also shop at Macy’s, etc.)

This methodology also allows a mobile device to be associated with household PC-IP addresses for cross-platform attribution and targeting. Thus an ad served on a PC (identified by IP address) can be associated with a smartphone tied to that household location. That smartphone might go into a store in response to that PC ad, which can be tracked back probabilistically to that earlier PC exposure and compared with a control group that didn’t see the ad to determine store-visit lift.

This is yet another example of how mobile-location functions in multiple ways to support audience discovery and segmentation, targeting and online-to-offline analytics — almost entirely in the background.

It’s a brave new world.

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HomeAdvisor’s Mhelpdesk Buy Reflects SMB-Operations Push

HomeAdvisor Mhelpdesk

Last week IAC-owned HomeAdvisor acquired a majority stake in a company called Mhelpdesk. The latter is described as “a cloud-based workflow application that helps small to medium-sized field service businesses streamline their operations.”

HomeAdvisor is the rebranded ServiceMagic, a lead-gen marketplace for home services professionals.

The Mhelpdesk product is a CRM tool that helps SMBs with field-service professionals or technicians better monitor and manage their operations. The software includes “scheduling, work orders, job tracking and invoicing.” The companies said that the software will be part of a HomeAdvisor “membership package” starting in January 2015.

What’s very interesting about this is that it plays into a larger trend: providing SMB services rather than pure marketing solutions. In a forthcoming report for the Local Search Association on the future of local media sales (co-written with Neal Polachek), I discuss the central problem of too-many “one stop” SMB marketing packages that are undifferentiated.

This is not that.

By offering this “vertical” field-service management software HomeAdvisor is gaining an operational foothold at the center of the business. Existing HomeAdvisor clients/members that adopt this will be more likely to continue working with HomeAdvisor for marketing and lead-gen. And a new group of prospects will be attracted to HomeAdvisor via Mhelpdesk.

Accordingly it helps with acquisition and retention. It’s much hard to displace a company that offers a key operational tool or service that is used in the daily management of the business. That’s a much different proposition than a vendor who offers to deliver SEO, SEM or even reputation management.

Scheduling, broader CRM and payment processing are parallel services that similarly qualify under this analysis. These operational tools become differentiators for the providers that offer them. They can also support and supplement a package of pure marketing solutions.

SMB sales channels that hope to thrive and retain customers over the long term will seriously consider moving into these operational services as a complement to what they’re already doing. But you can’t offer the “bad version” however.

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Taxis vs. Uber: To Beat Them, Imitate Them

Flywheel

As I waited on a Berlin street corner this evening for a cab I wished UberX were available in Germany. It’s not. Black Car Uber is here but under legal attack.  I’m also told its pricing is not competitive with regular cabs and so it’s not widely used.

In several countries, including the US, cab companies are trying to block Uber (and similar companies) from operating. If not block they’re trying to contain or restrict their operations (i.e., not allowed at the airport). However that approach, at least in the US, is destined to fail.

The thing that will “save” the taxi industry is adopting Uber’s methods, including a mobile app and mobile payments. Not having to fumble with money or change — even a real-time credit card payment in the back of the cab — is the real benefit of Uber. You get in and get out and there’s no monetary exchange involved.

Notwithstanding the unethical competitive and recruitment practices of the company itself, Uber drivers are friendly and the cars are clean, unlike many cabs. But more than that, the convenience of the app and its payment system are the key variables that differentiate Uber from the less satisfactory traditional cab ride.

With Uber there’s also no need to deal with an abrupt or surly dispatcher or wonder if the cab will actually show up.

Similar apps for cab companies do already exist (e.g., Hailo, Flywheel). And the taxi industry either needs to get behind one or more of these or build apps itself to compete.

With sufficient inventory (cabs on the street) and a well-functioning app that incorporates payments cab companies could blunt or slow Uber’s rise. Too often however vested interests use the courts or lobby legislators to legally prevent a competitive challenge, which is almost always a bad approach.

You need to compete on the “disruptor’s” turf or be disrupted. In the case of Flywheel the company imitates the Uber value prop but implies that traditional cab drivers are more trustworthy than random citizens (Uber hasn’t quite established high levels of drive-trust yet). The following is a public transportation ad in San Francisco that I captured a week or so ago: “Hail a real taxi driver . . .”

Flywheel 2

This is one case where the response to a disruptor is very clear to me — cabs need to duplicate the user experience of Uber. There will be many who argue they cannot. But they must find a way to do so or their will find their businesses shrinking.

In most instances a “me too” experience won’t be sufficient. However in this specific case I think it would because cabs still “own the brand” and direct experience of Uber remains relatively low except in certain urban centers. That may not be true a year or two from now.

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YP Gains Enhanced Content from Goodzer

YP homepage

YP and Goodzer this morning announced a partnership that brings “Goodzer’s local enhanced services data for more than 3,000 categories of businesses” to YP’s desktop and mobile properties.

Goodzer started as a source of local retail inventory data but recently expanded the content it’s capturing to include enhanced local merchant content of all kinds, emulating SinglePlatform and Locu’s models (both were acquired). The company previously announced that it’s aggregating “full service lists, detailed merchant-provided descriptions, and pricing when available.”

Goodzer CEO Mike Wilson provided me with some updated information about its data/content in email last night:

  • 500,000 store locations, 2.5 billion inventory items, 100 million unique products
  • Custom data from top 500 national retailers via crawling and direct feeds
  • 2+ million enhanced service provider listings, including more than 30 of the top-level headings/categories (breaking down into 3,000 sub categories)

Goodzer is also becoming a local marketing/advertising platform. More on that in the future.

For YP, this is part of a larger effort to continue to build content breadth and depth and remain relevant to consumers in the face of greater changing consumer expectations.

YP’s MyBook is another very interesting strategy to differentiate through personalization and utility. Here are some previous posts on MyBook:

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What Are the Most Interesting, Important, Challenging Issues in Local?

MapI’m giving an opening presentation in a couple of weeks at the SIINDA conference in Munich. SIINDA, the search and information industry association, is the merger of the former EADP (yellow pages) and EIDQ (directory assistance) trade associations.

I’ve got a number of things I could talk about but they’re all too familiar. I feel that I’ve lost perspective.

Here are some of the things I’ve been thinking about:

  • Ongoing chaos and confusion for SMBs in trying to figure out all the channels
  • New segmentation approaches to SMB market
  • Continuing impact of mobile on local lookups and search
  • The rise of the multi-screen user and the cross platform internet
  • Evolving role of location in mobile advertising
  • Location is the new cookie
  • The marriage of online and offline commerce and the rise of local “marketplaces”
  • Verticalization of local (consumer and advertiser)
  • Structural and sales challenges of traditional local media trying to generate more digital revenue
  • Google’s algorithm changes and their impact on local listings
  • Social media (i.e., Facebook) and its emerging role in local search and SMB marketing

Which of these are most interesting and relevant to you? Which ones would you be most interested in as a member of a conference audience?

Are there other questions or issues that are more pressing or provocative? I’d be interested in your input.

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