Conference Notebook: Rethinking the Local ‘User Experience’ | Street Fight

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Conference Notebook: Rethinking the Local ‘User Experience’

0 Comments 05 March 2013 by

borrell-associates-logoAfter four years of slowed growth, local advertising spend has finally rebounded to pre-2008 levels with digital revenues up 31% in 2012. Speaking at the Local Online Advertising Conference in New York Monday, Gordon Borrell, CEO of Borrell Associates, said that local online marketing spend will reach $24.5 billion by 2016, driven largely by growth in non-advertising marketing services. In a recent study, Borrell’s research found that 72% of local advertisers invested in ancillary marketing products like SEO, website management, and social in 2012.

“Local advertisers are beginning to see the Internet as their own medium, and they’re pushing more and more marketing dollars into things like SEO and web development,” said Borrell during his introductory remarks. “They’re doing a lot in this area that doesn’t look like classic advertising.”

Media companies like Gannett and Gatehouse have invested heavily in marketing services, building out 360-degree marketing solutions through acquisitions as well as partnerships with white-label providers — and those investments have started to turn a profit. In an analysis of the pool of (mostly) traditional publishers for which it tracks revenue, the research firm found that companies, which generated $5-$60 million in revenue from online ventures in 2012, saw an average gross margin of 49%.

The jury is still out on whether an agency model will help ease legacy media into the digital economy, but the trend draws on a wider convergence within the local marketing services market. Pure-play companies like LocalVox, Yodle and ReachLocal have pushed toward a marketing-as-a-service model recently, including new services like social marketing and relationship management into their monthly subscription packages.

Now, these companies are rethinking marketing as well. In a presentation Monday, ReachLocal founder Nathan Hanks decoded the company’s newly launched marketing-as-a-service initiative that bundles relationship management software with its tradition lead generation tools.

“Local business are going to move away from working with individual providers to working with a single provider that gives them a single system to automate the customer life cycle,” said Hanks. He added that the future will lend to systems that allow for “the best of high touch local businesses with an Amazon-like experience.”

Meanwhile, Autotrader is using that logic to disrupt the automotive marketplace. During a keynote on Monday, Chip Perry, CEO of Autotrader, outlined an ambitious plan by the company to move deeper into the transaction, adding key financial services as well as information resources like Kelly Blue Book, which the company acquired in 2010, to provide deeper transparency into the car buying process. That means using software to replicate key services like pricing and loans, and implicitly, cut the dealerships out of the process.

Whether it’s through a marketplace strategy (Autotrader and eBay) or a business services approach (ReachLocal, Yodle etc) , we’re seeing technology companies touch more of the local buying experience than ever before.  In a sense, the focus is shifting from a discussion about digitalizing specific tools — lead generation, loyalty programs, point-of-sale systems etc — toward a conversation about the broader “user experience” in local.

“Local commerce is consumer led,” said Hanks. “To make our offerings better for SMBs, [we need to] think about how to make SMBs more effective for their consumers.”

Steven Jacobs is deputy editor at Street Fight.

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