siinda conference: local digital media ecosystem
DESCRIPTION
Presentation on the state of the US Local Digital Media Ecosystem at the the May 2014 SIINDA Conference in Budapest, Hungary.TRANSCRIPT
The Local Digital Media Eco-System
A view from across the pond
1
Presented by Doug Meeker, May 15, 2014
2
The Doug Bio
Marketing digital products to SMB’s for majority of career
18 years in Local Digital Media via AOL, Examiner, Gannett
Built and led large scale sales efforts for display, directory, social and daily deals.
GM of AOL YP and Local Search
Investor/advisor to local digital media start-ups
Small Business Marketing
YP/ Local Search
City Guides
Daily Deals
Social/
Crowd-
Source
Operator
3
What does local digital media mean?
For Consumers Geo-based content
Query – search, directory Context – news, info.
For SMB’s Marketing targeted at a
specific geo-targeted audience
For National Advertisers Marketing targeted at an
aggregation of geo-targeted audiences
Geo-C
en
tric
Con
textu
al
Pers
on
aliz
ed
4
How Did We Get Here?
To view video, click on the image above or paste this link URL into your browser: https://www.youtube.com/watch?v=WxsuxaHTVLg
5
A Timeline of Local Digital Media
1996
2000 2004 2008
CraigslistYahoo
AutobyTel
Digital City
Nynex YP
Monster
CitySearch
Sidewalk
MapQuest
Careerbuilder
Autotrader
Yellowpages.comVerizon Super Pages
Angie’s List
Service Magic
ReachLocal
Yelp
Yodle
Yext
Living Social
Groupon
Patch
201
4
6
Timeline
1996
2000 2004 2008
CraigslistYahoo
AutobyTel
AOLDigital City
Nynex YP
Monster
CitySearch
Sidewalk
MapQuest
Careerbuilder
Autotrader
Yellowpages.comVerizon Super Pages
Angie’s List
Service Magic
ReachLocal
Yelp
Yodle
Yext
Living Social
Groupon
Patch
Web 1.0• Portals• Dial-ups• Cityguides vs.
legacy• AOL, Netscape,
Microsoft
Web 2.0• Search• Broadband• Local search vs.
YP• Google, Yahoo,
Amazon
Web 3.0• Social• Mobile• Apps vs.
desktop• Facebook,
Twitter, Apple
201
4
7
The local digital media eco-systemSales &
MarketingInfrastructu
reContent
Digital Marketing Services
Platforms
Analytics
Search
News & Information
CommerceAd Networks
Social
8
Look what’s coming ... 2,200+ start-ups on
Angelist have SMB’s and localized audiences as their targets.
Trending on AngelList
SevaCall
9
To view video, click on the image above or paste this link URL into your browser: http://vimeo.com/41472479
1010
11
Constant Contact
Headlines of Note
13
Trends
14
http://www.businessinsider.com/mobile-will-eclipse-desktop-by-2014-2012-6
Mobile is rapidly overtaking desktop
Source: comScore
Number of global users in millions
15
Time spent online is exploding
http://www.businessinsider.com/were-spending-a-lot-more-time-online-thanks-to-smartphones-and-tablets-2014-4
Source: comScore
Consumers prefer mobile apps vs. mobile web
16
Source: Flurry Analytics
http://static3.businessinsider.com/image/533ae0846bb3f7443c56bb68-1200-900/2014_04_01_time.jpg
http://blog.flurry.com/bid/110166/the-rise-of-the-mobile-addict?source=Blog_Email_%5BThe%20Rise%20of%20the%20Mobi%5D&utm_source=Triggermail&utm_medium=email&utm_term=Tech%20Chart%20Of%20The%20Day&utm_campaign=SAI_COTD_042414
Mobile “checks” per hour also increasing
17
Source: Flurry Analytics
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http://www.brightlocal.com/2014/02/14/traffic-changes-local-directories-iyps/
Traffic to directories dropped 22% in 2013
Source: Bright LocalTotal aggregated traffic for top 40 directories
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http://www.brightlocal.com/2014/02/14/traffic-changes-local-directories-iyps/
Who’s gaining – who’s losing?
Source: BrightLocalAll directories – Best Performing Directories of 2013
http://www.brightlocal.com/2014/02/14/traffic-changes-local-directories-iyps/
Yelp 2-3x vs. the rest of the pack
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Source: BrightLocalAll directories – Best Performing Directories of 2013
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http://www.businessinsider.com/newspaper-advertising-collapse-2012-9
Newspaper death spiral
22
Local US Ad Market
Newspapers17.0%
Direct Mail27.0%
TV15.7%
Radio11.2%
Yellow Pages5.8%
OOH5.5%
Cable5.1%
Magazine2.4%
Online / Interactive8.2%
*ERPM1.2% Mobile
0.9%
2014 U.S. Local Media Revenues — $142.5 Billion
*ERPM = Email, Reputation and Presence Management
Digital revenues associated with traditional media (e.g., websites associated with local TV stations, local radio stations, news-papers and magazines) are included in the revenues for the traditional media. Revenues for Internet Yellow Pages that are as-sociated with print Yellow Pages are included in the overall Yellow Pages media category.
Source: BIA Kelsey
Steady shift to digital
23
2011 2012 2013 2014 2015 2016$0.0
$20.0
$40.0
$60.0
$80.0
$100.0
$120.0
$140.0
$160.0
$111.5 $112.2 $110.7 $111.4 $110.7 $112.7
$21.2 $24.0 $27.4 $31.1 $35.0 $38.5
Traditional Online/Digital
US
$ B
illio
ns
Note: Numbers are rounded.
2011-2016CAGRs:
Total MediaCAGR 2.6%
Traditional Me-dia
CAGR 0.2%
Online/Digital Media
CAGR 12.7%
$136.2
Note: Numbers are rounded.
$132.8$138.1 $142.5
$145.7 $151.3
Source: BIA Kelsey
Media usage by SMB’s is fragmented
24
Face
book
Pag
e
Newsp
aper
s
Incu
mb.
YP
Direct
Spon
sors
hips
Email M
ktg. IY
P
Video
Web
site
Giveaw
ays
Mag
azines
Spec
Prin
t Dir.
Radio
Twitt
er
Direct
Hom
e
Spec
Online
Dir.
Inde
p. Y
P
Other
Soc
ial
Blog
Face
book
Ad
0%
10%
20%
30%
40%
50%
60%55.0%
38.7%36.8%35.7%34.7%34.5%
31.5%28.2%27.2%
22.5%22.3%22.3%22.0%21.7%21.0%20.7%20.5%20.2%20.0%
Source: BIA Kelsey
The time spent vs. spend gap persists
25
http://www.slideshare.net/kleinerperkins/kpcb-internet-trends-2013
Source: Kleiner, Perkins, Caufield and Byers
Challenges
27
SMB Landscape
Overall Challenges Tepid economic recovery Time strapped and resource
short – not inclined to hire. Lack expertise – digital
media can be complex
Vendor Inflicted Damage SMB’s avg. 20-30 cold calls
per mo. from DMS vendors “Me too” products hard to
differentiate Transactional sales approach
Economic Challenges
Resource Constraints
Business Complexities
Differentiation
28
Vendor Landscape
Cost of Sales Conundrum Rise of low margin products – SEM Decline of high margin products –
print, display, sponsorship Price wars - to meet volume
quotas Churn – endemic at low price
points
Changing SMB Expectations Demand for performance based
products – CPC, CPL, CPA Perceptions about digital – market
“numb” to current pitches Confusion about what to do in
Social
Margins
Fragmentation
Commoditization of Ad Inventory
Performance Product Demands
Expertise
Changing Consumer Interests
29
Innovation in Local
30
Solocal - Minitel
31
AOL Digital City
Free Photo
Scanning
Online
Chats
Reaction News Model
32
Google Maps
33
Yelp
34
ReachLocal
First to offer “shrink-
wrapped” SEM!
35
Intuit – Demand Force
36
Groupon
37
Facebook Lookalike
Targeted Ads
38
Closely - Perch
39
Misfires
40
Daily Candy – Local Shopping
41
Patch – Hyper Local News
42
Kudzu – Local Search
43
Outside.in
What Happened?
45
Common Traits
Large media conglomerate √ √ √ X
Major $ invested to build/acquire $168M $200M N/A $14.4M
Innovative product vs. me too? √Newsletter
XHyper-local
News
XLocal
Search
√
Original monetization model Display (CPM)
Display (CPM)
YP Listing fixed price
Display (CPM)
Multiple monetization strategies √ √ √ √Management turnover √ √ √ √Topline impact on mother ship X X X N/A
Shut down/absorbed into the mother ship √ √ √ √
46
Demand POV
47
Demand = radio signal strength
Outside.inKudzuDaily Candy
Patch
48
Demand Stages
49
Suggested process
Pre-productConcept
ProductConcept
User Conversations
Search Analysis
Competitive Analysis
Observed Behavior Refine
Going forward
51
Key Drivers
Mobile
Big Data
The Feed
Platforms
Commoditization Not just for brand
marketers
The rise of native advertising
Point of sale meets marketing
Falling prices
52
The Feed
53
Platforms
54
Commoditization
55
Key Drivers
Mobile
Big Data
The Feed
Platforms
Commoditization
56
What’s Missing - Innovation in Sales
Challenges
Quantity vs. quality lead generation SMB call fatigue Outbound sales efficiency Low success rates = low morale
Selling products vs. solutions Don’t fit Don’t need Don’t want
Churn/burn vs. grow/elevate Metrics don’t do context Lack of credible career paths Minimal back end support De-valued Sales leadership
Solutions
Quality vs. quantity lead generation Target by projected spend - $1,500+? If below, bypass/outsource Build culture of connect/success
Sell solutions vs. products Package by vertical Avoid/monitor over selling Create basis for ongoing relationship
Go consultative vs. transactional Evaluate performance holistically Create credible career path tiers Invest in back end support Dynamic Sales leadership
57
Sales organizational choices
Flat Tiered
Clie
nts
/Pro
spect
s
Clie
nts
/Pro
spect
s
58
How to approach
Professional Sales Force•Consultative in nature•Focused on long term relationships•Solution oriented – media and platform
Solution Marketing•Highly targeted by spend levels•Vertical orientation•Leverages product innovation
Innovative Products•Addresses current and drivers•High margin, unique, value proposition•Addresses demand horizon
59
Summary
1. Here come the big guys!
2. Startups chipping away – One APP at a time
3. Product innovation - focus on the demand horizon
4. Organization wide innovation – not just products
5. It’s almost not too late
