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Published In: LocalOnliner

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Dec 16, 2009
ILM:09: SMBs Benefit from More Competition to Google, Search Preferences
December 14, 2009

Yodle CEO Court Cunningham says that a major shift is occurring in SMB marketing as Google starts to give preference in rankings to merchant sites rather than to directory listings. “There are many, many more merchant sites” than there were a year ago, he noted on a panel at ILM:09 that also featured WebVisible CEO Kirsten Manger and LA Times Senior Director of Sales Andy Vogel. “That’s a potential threat to people who are directory oriented, while it is a boon to people producing rich media like Yelp and others.”

It is also shows a shift to third party sales sites as possible substitutes for directories – or so third party sites hope. It is especially important as small businesses shift a disproportionate amount of their spending on marketing from traditional media to the Web as the economy recovers.

The sales challenge, however, is that many SMBs don’t always fully understand what their expectations should be and continue to churn at uncomfortably high levels. WebVisible CEO Kirsten Mangers cited an “inflection point” in month four of a contract. Once an SMB reaches it, their churn level is likely to dramatically reduced among SMBs.

Mangers also noted that SMB sales is positively impacted by the diffusion of Web-based technologies. “Whatever happens in national will make it to local in the next eighteen to 24 months,” she said. Video, for instance, has arrived in a major way. SMBs get a five to thirty-five percent lift in conversions by including video with their website.

Yodle’s Cunningham echoed Mangers on churn issues. “After six months, people are very, very loyal. Customer lifespans may be three or four years,” he said. And they should be loyal, he says, since third party sales groups do so much for SMBs. “They need the power of our ten person marketing department,” and so forth, he notes.

Cunningham and Mangers also said the search environment is getting more competitive and probably cheaper, as Google gets more competition from the likes of Yahoo and Microsoft Bing. Mangers noted that the efficacy of Yahoo is up 123 percent from last year as better technology has been applied. With relevance up significantly, “we can spend more money on Yahoo,” added Cunningham.

Money can also be spent on other marketing products. “It is not a one size fits all approach,” said Cunningham. Search advertising doesn’t make sense for every restaurant, for instance – especially is acquisition ends up costing $30-$50 a pop. If they’re smart, they’ll take a restaurant.com coupon-like approach, he said.

The LA Times’ Andy Vogel, meanwhile, said his paper has been making a different kind of pitch to SMBs, mostly focused on its broad, increasingly involved, 92 percent reach, which includes the flagship paper and its related verticals, as well as The Tribune’s other area radio stations, ethnic media, community papers and local blogs. Vogel noted that ten of the 50 most read blogs in the U.S. originate from a LA Times Media Group Brand.

“We produce tons of hyperlocal content,” he said. Tribune’s community paper in Newport Beach, for instance, produces more content and has a higher level of readership than any other local media.

On a sales level, that will be reinforced in 2010, as the sites integrate advanced mapping and geo-spatial applications. A new iPhone app, for instance, allows users to create programs and sell ads on specific streets, all nicely plotted for advertisers. “Small things like that can help customers absorb it better,” he said.. The site has leveraged this capability by adding a “geo-proximity celebrity” watch that users can tap into to report sightings of favorite stars.

Vogel also says that Tribune sales efforts are triply reinforced, thanks to a recent restructuring. “We have a sales force that includes ‘hunters,’ ‘farmers’ and ‘customer service reps,’” he says. That means “we have three people always thinking about your business.”

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