The Yext IPO and the triumph of local SEO
The global market for local listings management may be worth up to $50 billion.
Yext’s successful IPO several weeks ago represents a kind of triumph for local SEO. Despite the fact that Yext now calls itself a “Knowledge Engine,” the company is essentially doing local listings management. It recently added reputation management.
Yext began in roughly 2006 as a next-gen pay-per-call network. The company’s growth and evolution is a product of some smart decisions by CEO Howard Lerman and his management team. It also speaks to the power of marketing and branding. There are numerous companies that do what Yext does, yet it has been able to rise above the competition with some savvy marketing and heavy spending.
But more broadly, the Yext IPO stands in for the importance of presence or listings management as a foundational tenet of digital marketing for omnichannel brands and businesses.
For roughly 20 years, various digital marketing pundits have been predicting the death of SEO. And despite a dramatic migration away from traditional SERPs to more “answers” and structured data, SEO (especially local SEO) has not only remained relevant but grown in importance. (One could argue that SEO is now effectively data optimization.)
Local SEO was often a sideshow in the search world. But with the rise of mobile (post-iPhone), the increasingly clear link between digital research and offline buying, the value of local listings management has become obvious to brands and marketers. Enterprises that never paid much attention to location or local search are directing more effort and resources toward trying to “rank.”
Among a growing range of digital channels and marketing tactics, small businesses are most interested in social media, SEO and email. According to 2016 small business research from the Local Search Association (LSA), SEO emerged as the top category that SMBs would spend more on if they had twice their current marketing budgets.
LSA also recently hosted a webinar on the Local Search Ranking factors. More than 1,700 people registered, showing the intensity of interest in local SEO.
In its S-1 filing to go public, Yext said the following about its perceived market opportunity:
We believe that the market for digital knowledge management is a large and mostly untapped market. As a subset of digital knowledge, we estimate that there are currently over 100 million potential business locations and points of interest in the world that could benefit from our platform, representing an estimated addressable market, solely with respect to locations, of approximately $10 billion annually for our existing platform in 2016.
There are people who believe that this 100 million locations figure underestimates the global opportunity — that it’s conservative. But using this number and some modest annual spending projections, we quickly arrive at a roughly $50 billion global opportunity. So the potential value of the local listings market is $10 to $50 billion. Beyond this, analyst firm Borrell Associates has projected that companies (large and small) will spend roughly $19 billion in the US on listings management by 2020.
Even as someone who has been writing about local search and location-based marketing since roughly 1998, I’m kind of stunned by all this.