The “Business of Making Money” (is there any other kind of business, really?) Local Online Advertising conference held by Borrell Associates in NYC a few weeks ago represented, for me, a turning point in my own understanding of the “local opportunity” and how it will bear fruit. First, a disclaimer: in my experience, novel concepts take a half decade to unfold in this segment of our industry. In 2004, we first started talking about notions like local search, aggregated content, helping consumers with decision making, and user-generated content. These notions, new at the time, took a full five years before they became staples of our products and commonplace themes at industry events. We’re at an exciting point in the evolution of local, and I associate this event with reflecting a set of fundamental shifts in our industry:

From arms dealer to product maker. Servicing the fragmented small business market with any degree of efficiency requires servicing the channel. And servicing the channel too often puts purveyors of online marketing in the awkward position of making decisions that may be good for the channel but not necessarily good for the customer (for example, margin/ROI tension). Until we make the mental shift from arms dealers to obsessively customer-focused makers of product, we’ll be haunted by the twin specters of low adoption and high churn.

From custodians of spend shift to solvers of small business problems. Our collective first principle can not remain that we are mere custodians of the migration of offline spending to online. Defining our opportunity in this way has limited understanding of our real role: to help small businesses solve the marketing problems they face every day. Ironically, we’re still learning that our world is neither analogue of nor replacement to the print yellow pages.

From acquisition-centric marketing services to 360-degree marketing products. According to one metric I overheard at the event, as many as 40 percent of small businesses don’t even need new customers, but instead face the challenge of cultivating their existing client base. And according to more than one graph I saw at the event, word-of-mouth and online reviews and ratings are considered by most small businesses the primary two drivers of their success. Acquisition marketing addresses only a portion of the market need, which more broadly includes: acquisition (new sources of leads), cultivation (communication with customers and prospects) and reputation (managing a small business’s online footprint and leveraging opinion about them).

From selling to the customer to learning from the customer. It’s a painful truth that online marketing services are sold to—and not bought by—small businesses. Part of that self-reinforcing state is supported directly by the notion (see above) that it’s our job to help shepherd offline small business spend to online. Until we have a deeper understanding of what products really solve the day-to-day marketing and communication needs of our customers, we’ll forever be conjuring demand as opposed to tapping into it.

From consumer-focused local search to business-focused local search. To date, our industry has placed powerful local search technology in the hands of the consumer only, the better to lure them in and deliver them to small businesses as leads. But a few of us are actively turning this model on its head: handing small businesses the same technologies, but also giving them an information advantage they today miss and sorely lack. Until small businesses feel empowered over their digital footprint, they cannot be full and active participants in their online destinies; by extension, until our products ground our customers in the full range of online leverage, we can’t fully capitalize on the market opportunity.

Six years ago, it was a Kelsey event that helped lay the blueprint for work we’re all still conducting; I call that the “local search” phase of our industry. I’m calling this year—lead by the Borrell event and coincident with many of my recent discussions with colleagues and analysts, as well as the early product work of some of us—the advent of the “local product” phase of our industry. The opportunity now, for us all, is to rewrite our first principles and start building new small business-focused products that solve a set of real needs (not just spend shift). When it comes to the “business of making money,” at least from local online advertising, that’s when, I believe, we’ll all start having real fun.

Opinions expressed in the article are those of the guest author and not necessarily Search Engine Land.

Related Topics: Channel: Local | Local Search Column

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About The Author: is the Executive Vice President of Product Engineering for Marchex, a leading local search and advertising company that provides innovative online and call-based advertising products and services for local and national advertisers and advertising resellers.

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  • alexgilmore2000

    I have been creating local search strategies since 2004 very successfully. Currently i am the adminstrator for over 3000 websites that are all optmized for local searches. This will be the defining factor for the internet from now on and large companies with single websites will continue to lose traffic due to this phenomonon. In the last six months i have talked with 26 companies about this type of strategy and none of them think it is feasible. Sadly they will find out too late and by that time their window of opportunity will be gone.

  • http://www.MLFSolutions.com mlfsolutions

    Great insight about local search particularly the last point, which focuses on business-focused local search. Can be Great to expand on it.

 

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