Archive for the 'publisher' Category

The Challenge of Fine Segmentation in Local Advertising

This post is the first in a series on Improving Local Ad Performance.  My perspective is primarily that of local information publishers and application providers.  In this post I lay out one of the fundamental challenges of local advertising: the need to finely segment it by geography and business type.  I’m going to focus on local searches, but the principles apply to other types of local information and advertising as well.

Local Searches: Sliced Very Thinly

Local searches are highly targeted.  This makes  makes them both an advertiser’s biggest fantasy and their greatest nightmare.  It presents a number of unique challenges.

As a minimum, local searches are distributed across many different geographies and types of businesses — and this is only the tip of the iceberg since you can also take in to account the user’s context, behavior and preferences.

Local Searches are Thinly Sliced

Local Searches are Thinly Sliced

These thin slices have implications for both publishers and advertisers:

  1. Each category/locality combination receives a small percentage of all traffic.  So publishers need large volumes at a national level or they have to specialize in particular geographies, vertical categories or demographics.
  2. These highly targeted searches are often most meaningful to small and medium sized businesses serving the niche but acquiring the necessary mass of these smaller advertisers is extremely challenging.
  3. National or even regional advertisers have to find ways to make campaigns truly meaningful at a hyper-targeted level.

Like for Like Targeting Alone Won’t Get You There

Most people approach targeting of local advertising by having the advertiser define the category and location they want to target.  Then, the advertisement is presented when a user performs a search in that category and location.  This frequently takes the form of offering the user alternatives to their request.  I’m going to call this ‘like for like’ targeting.

While easy to understand, this approach has a number of lmitations.

In high value categories, demand exceeds supply.  Businesses in categories like Locksmiths or Attorneys are often willing to pay a large fee for a lead.  Unfortunately, searches in these categories are rare, so while the inventory is very valuable and sells quickly and at a premium price – you just don’t have that much of it!  In fact, as the diagram below illustrates – the value of a category (from an advertising perspective) has no relationship to the volume of searches it experiences!

Search Volumes and Value by Category

Search Volumes and Value by Category

Unless you have a huge number of advertisers, for the (vast?) majority of local searches you won’t have a like for like match on the basis of category and location.  At least not one that’s truly relevant.  Providing a user with alternatives that are too far away or always providing them with the same small number of national advertisers undermines the credibility of advertising suggestions.

And the flip-side of the above, is that for many truly local advertisers you won’t have enough traffic to give them a meaningful set of leads.

Finally, in many local search use cases, users aren’t open to substitution.  A true category search – where a user is  open to suggestion and recommendation (and thus relevant advertising) is a relatively small – albeit very valuable – part of a publisher’s search inventory.  Instead, the most frequent use cases result from a user trying to complete a transaction with a business they’ve already selected.  They are most often looking for a phone number or directions.  In these cases it can be better to provide them with an ad that complements their current choice and context rather than trying to get them to substitute their choice.

Tackling the Like for Like Challenge

There are several possible – largely complementary – ways to approach this problem.  I’ll be exploring these options in some detail in future blog posts as part of the Improving Local Ad Performance Series.  Follow me on Twitter, subscribe with an RSS reader or subscribe by email so you don’t miss any of the series.  A quick summary of some of the approaches:

  1. In addition to like for like targeting, target local advertising based on context, behavior and preferences.  With appropriate analysis and targeting models it is possible to deliver relevant and complementary advertising in a way that results in a better match between available inventory and available advertising.
  2. Focus your efforts on being the ‘go to’ destination for the higher value ‘category’ or ‘research’ type searches – either broadly or within verticals.  Yelp is an example of a company that has done this by focusing on creating a community of reviewers making it a destination for people seeking opinions.  The advertising Yelp provides is primarily of the ‘like for like’ type – which is appropriate given that most people viewing review pages are in fact open to suggestion.
  3. Participate in some sort of exchange or market where you can buy traffic (i.e. by using AdWords for example) or gain access to advertisers (i.e. by working with a Yellow Page publisher for example).
  4. Focus your resources from both a publication and advertising perspective on specific verticals.

The Challenge Becomes Even More Acute in Mobile

Increasingly, local searches are occurring on mobile devices.  On the one hand, mobile devices offer the promise of even richer context information (where you are right now).  On the other hand, the more limited screen real-estate means that providing the most meaningful suggestions (or advertisements) becomes even more critical.

This post is part of a series on Improving Local Ad Performance.  To receive future installments you can:

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Call Tracking is Not Pay Per Call

Whenever I talk to people about call tracking in local advertising, they immediately assume that I’m also talking about Pay Per Call.  I’m not.  Or at least not necessarily.

If you want to charge the customer on a pay per call basis, then of course you must have call tracking.

But just because you support call tracking DOES NOT mean you have to charge customers on a performance basis.  It is perfectly reasonable to continue to charge a customer, such as a small business on a subscription basis.  In fact, many small businesses prefer to pay this way – they can budget for it and they don’t get any nasty surprises.

But those advertisers still expect to know that the advertising is performing well and they will get the Return on Investment promised to them by the sales rep.

The combination of call tracking and subscription is actually a best of both worlds scenario for most small businesses.  Why don’t more people provide it?  It seems like a big missed opportunity to me.

Two great reasons for local publishers to value usage data

Two more arguments in favour of local publishers paying attention to the capture and utilization of traffic data:

  1. Google is taking disruptive action to gather more usage information.
  2. Publishers can utilize usage data to take control of their advertising destiny.

I’m really just providing a local interpretation for two great blog posts from Jonathon Mendez – a push and a pull.  Part of my ongoing effort to highlight the importance of usage information to local publishers.

(And by my definition, usage includes both clicks and calls generated from print, online and mobile sources.)

The PUSH: Google Wants a Deeper View of Usage

Mendez reports that Google is running some experiments where they are stripping the referring URL when passing traffic to sites.  I assume they are doing this to encourage sites to use Google Analytics instead.  Why would they do this?  Because they get a much deeper (and more accurate) view of the compete user transaction when they able to track (through Google Analytics) what happens to the transaction on the destination website.

So Google is taking what seems like fairly dramatic action to get access to more usage data.  Local publishers take note.

The PULL: Publishers Can Control Their Advertising Destiny

Mendez followed his post on Google with Transcendence: The Power of Publishing is Marketing.  For local publishers, I’d summarize this as follows: by analyzing the historical usage of your content you can improve the performance of advertising on your site.  This increases your value proposition to advertisers and puts you in control of your own destiny.

For Yellow Pages isn’t proof better than research?

The Yellow Pages Association just finished their conference in San Diego — sorry I missed it. There was a healthy degree of focus on measurement:

One key objective of future research is to demonstrate print’s strong usage, and Internet Yellow Pages growth, as compared to other local search tools. It’s important that we have reliable data to communicate about our significance in search.

from the YPA blog.

Right on.

But here’s the thing I don’t understand. Rather than treating measurement as a research task wouldn’t it be better to think of it as a tracking task? That is, replace the all phone numbers and URL’s with appropriate tracking numbers and tracking URL’s. The technology is certainly available to do this. And the data had incredible value to both the publisher and the advertiser.

Is there a reason we aren’t all thinking of this as a tracking task? Leave me a comment with your thoughts.

Thanks,
Eric

Yellow Page national advertisers loyal because of tracking

According to a panel at YPA09 (as reported in a post by Peter Krasilovsky) national advertisers remain loyal to print yellow pages. And they remain loyal because of tracking:

Boorink added that it was “all about the tracking. A good CMR (Certified Marketing Rep) will be able to show local advertisers the opportunities that they may be missing out in the local marketplace. (For instance), what books are we not in that we are missing out on? We had an agent in Denver who didn’t know what was out there in the marketplace. By overlaying data, we were able to show which regions we were not covering, even though leads were coming in. That’s a great success story.

They use it because it works and they can prove that it works. Yellow Page publishers could be providing tracking services for all of their advertisers and prove the ROI to them as well.

Link: newspapers deliver for advertisers – more proof please

Just read this article about newspapers delivering for advertisers.  In my local newspaper.  (I still thoroughly enjoy and read several printed papers most days.)

From the article:

“We see it works. We’re able to track the results,” said Penny Stevens, president of Toronto-based media buyer Media Experts. “We’re very lucky with a bunch of our clients that allow us to see sales on a day- in-day-out basis so we get a very strong sense of what is working and what is not working.”

That’s the key point isn’t it – being able to demonstrate tangible proof that it’s working.  Newspapers need to publish actual metrics.  And do more to help advertisers gather them.

Publisher strategy: your usage logs are more valuable than your content

As local information publishers – whether you are a dedicated review site, an online map provider, a yellow page directory, a directory assistance provider, a newspaper or a local search engine – you have a valuable asset in your content.  Users visit your site to find and access it.

But the information they can collect about how user’s interact with your content will be even more valuable.

First of all, the content itself is being rapidly commoditized.  Information wants to be free – and so it will be.  So over time users will migrate to the sites that do the best job of helping them find the information they actually want and need.  There are many factors that will influence this – including the quantity and quality of data and the quality of the user interface.  But utilizing knowledge about how users interact with the information – and being able to take in to account their needs and situation by analyzing this information – will be a key differentiator.  And whoever has the most users will get the most usage data.  And with more data they will be able to do a better job of serving their users.  It’s a virtuous circle.

And secondly, since this content is usually monetized with advertsing the ability to utilize this usage data to improve the relevance and performance of your advertising will be critical.  Perhaps the single most critical skill a publisher can have.

What it means: If you’re a publisher, make sure you maintain a healthy stream of your own traffic – and please, please, please make sure you’re tracking and recording all that valuable information.  And then, learn how to analyze and exploit it to improve the consumer experience and the advertising performance.

And think about this – if you’re syndicating your data how about negotiating for getting back the information on how it’s used?  The reaction of your syndication partner to this request might give you a pretty good indication on how valuable THEY think this data is.