On the Various Challenges Facing European Publishers (and Some Solutions)
In this regular Street Fight feature, local marketing gurus David Mihm and Mike Blumenthal kick around some of the biggest ideas affecting the local search ecosystem and the broader industry. Send us an email or leave a comment if you have specific topics that you’d like them to touch on in future columns!
Mike: So you made it back from Spain safely. SIINDA, the former European Yellow Pages association, had a great conference with some great people where we both spoke. What was your sense of the conference and what were your high level takeaways?
David: You’re now a SIINDA veteran, but this was my first one. I came away very impressed by the attendees and a couple of presentations really pricked my attention. And of course, it didn’t hurt that they hosted the conference in such a beautiful, lively city as Valencia.
Mike: Valencia is truly a wondrous place, as is all of Spain these days. I am a fan.
David: From the “opening tip” (sorry, couldn’t resist the sports reference for you!) the content got very meaty very quickly. Neg Norton from the LSA presented some of their latest Cloud Adoption research. Perhaps others had seen that presentation, but it was new to me.
I thought he framed the marketplace for IYPs and media companies incredibly well. On the one hand, their historically-captive audiences are being decimated by Google and Facebook, and on the other hand, their solution sets are under major threat by newer SaaS providers.
As audiences age out, the number of print subscribers will plummet, and as older small business owners retire, old ways of doing business (not to mention the historic brand recognition that many of these companies enjoyed) retire with them as well. While I’ve never liked the segmentation of the “Millennial” business owner, clearly younger business owners are more predisposed to technology solutions, and “Yellow Pages” brands mean less and less.
Legacy media companies that don’t evolve rapidly are going to be left with no audience and no customers.
Mike: Neg’s presentation was new to me as well. Yes and it seems that they like many in the industry here, the YPs in Europe are confronting the question of how to move from advertising into marketing and perhaps even into an even deeper relationship with their small business clients. Some have made the transition but many are still struggling with where they fit and it isn’t clear to me that they will succeed.
David: Companies like DexYP are trying to innovate on the product front (Thryv), but I’m a little skeptical that they’ll be able to build products fast enough in-house to meet evolving market demand in fundamental operational areas like scheduling, point-of-sale, and CRM.
There were actually a number of pure SaaS vendors at the conference offering whitelabel solutions that might be both a better-breed and faster-to-market option for IYPs who haven’t yet started down this path–whether through partnership or acquisition.
Mike: Yes but even some of the SaaS companies might be under threat from the likes of Google. A number of the web platform developers at the conference were shocked to learn from my presentation that Google had built out 750,000 single page websites across the world in just a few months. They were having a certain existential realization that no space was sacred.
David: There’s always that risk, and as we’ve noted in recent weeks, Google is rapidly expanding its SMB product arsenal. But the fortunate thing for both SaaS and media vendors is that the SMB space is so large and so fragmented that the most dominant market player might only have a market share of high single digits.
That’s less the case in the advertising world, though, which is increasingly becoming a duopoly.
David: I won’t disagree, since the word “duopoly” was in the title of my own SIINDA presentation!
One of the points I made, as you and I have discussed in this space, is that agencies whose revenue primarily derives from reselling Adwords or Facebook ads are selling a product with shrinking margins. And one that will eventually be done better, more cheaply, and more easily by Google and Facebook themselves.
Companies have to move into higher-margin areas that are too messy and too service-oriented for Google and Facebook to want to tackle. Stitching together (to use Neg’s phrase) best of breed operational and marketing solutions for busy small businesses is going to be a major pain point–and opportunity–for the foreseeable future.
Mike: For sure, we are seeing some of that now on the very low end of the ad space with the dramatic improvements to AdWords Express. And not only can Google and Facebook create those ads more cheaply, they seem to be able to create enough free products to attract these SMBs into their dashboards so that they can sell them cheaply. A hard combo to compete with.
David: One particular solution I was impressed by was SoLocal / QDQ’s website product. Emilio Plana Hidalgo, their CEO, walked the audience through his company’s solution to both declining advertising margins and SaaS product complexity: a limited 6-template website builder which leverages data from across QDQ’s customer base for automatic Conversion Rate Optimization and a 38% cheaper cost-per-lead.
It’s an elegant model that I haven’t seen North American IYPs execute on; they’d do well to follow QDQ’s example.
Mike: I missed that presentation but the reach of these IYPs certainly offers up opportunities like that in any product that they roll out.
David: One area where Facebook, Google, and the IYPs are all aligned is in their opposition to the new well-intentioned but poorly-designed GDPR (General Data Protection Regulation). Unfortunately I was in a meeting during this SIINDA session, but maybe you can give our readers the Cliffs Notes?
Mike: Yes as I learned at the conference, the IYPs in Europe seem to be facing a real threat with the way that the upcoming GDPR rules are being presented across Europe. It appears that the directories themselves (not the telcos where it would make more sense) are being tasked with the obligation of getting individuals and even businesses to opt into the new privacy regime in order to have their listing shown in the directories. That seems like a crazy and impossible to implement requirement of the legislation that would effectively destabilize the digital marketing efforts of every small business that WANTS to be seen in these very same directories. At least at the business level, it seems like it should be opt out, not opt in for a business to have directory presence.
David: Sounds like it will dramatically reduce the visibility of any business not actively managing its presence online, which could have a real negative impact on Europe’s economy just considering recovery searches alone. It also seems like a regulation that will disproportionately harm small businesses who are far less aware of what their options are than larger brands.
For example, if you can’t find the mom-and-pop hotel on which you’ve already made a booking in Google Maps or Apple Maps or TomTom and have to cancel your reservation because you can’t find it (or even how to contact them), you’ll probably be left with large chains like Ibis or Accor that are managing their listings as a result.
Given that European businesses seem to be about 2-3 years behind the U.S. in their levels of digital adoption, this is an even more acute problem than it would be here.
Mike: Absolutely would be very disruptive. These rulings are still open to interpretation but are being implemented on a country by country basis. SIINDA was actively trying to get that ruling both clarified and changed but they are having to work on a country by country basis to get clarification.
David: My overall take after attending the conference is that while European IYPs are dealing with more headaches than their American counterparts, they seem to have brands that are more meaningful in their home markets, a greater enthusiasm to evolve their businesses beyond advertising, and a customer base whose competition is a bit less sophisticated. Overall, a little rosier outlook for media companies across the pond than I see here.
After more than a decade in local search, David Mihm now runs Tidings, an email newsletter platform for small businesses that leverages their everyday social media activity, and his own weekly newsletter, Minutive. In 2012, he sold his former company GetListed.org to Moz, helping over 3 million businesses get better visibility in Google and other search engines. Along with Mike, he’s a co-founder of Local University.