siinda conference: local digital media ecosystem

The Local Digital Media Eco-System

A view from across the pond

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Presented by Doug Meeker, May 15, 2014

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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

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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

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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

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A Timeline of Local Digital Media

1996

2000 2004 2008

CraigslistYahoo

AutobyTel

Digital City

Nynex YP

Monster

CitySearch

Sidewalk

MapQuest

Careerbuilder

Google

Autotrader

Yellowpages.comVerizon Super Pages

Angie’s List

Service Magic

ReachLocal

Yelp

Facebook

Yodle

Twitter

Yext

Living Social

Groupon

Patch

201

4

6

Timeline

1996

2000 2004 2008

CraigslistYahoo

AutobyTel

AOLDigital City

Nynex YP

Monster

CitySearch

Sidewalk

MapQuest

Careerbuilder

Google

Autotrader

Yellowpages.comVerizon Super Pages

Angie’s List

Service Magic

ReachLocal

Yelp

Facebook

Yodle

Twitter

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

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Look what’s coming ... 2,200+ start-ups on

Angelist have SMB’s and localized audiences as their targets.

Trending on AngelList

SevaCall

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To view video, click on the image above or paste this link URL into your browser: http://vimeo.com/41472479

1010

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Constant Contact

Headlines of Note

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Trends

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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

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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

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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

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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

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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

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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

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Face

book

Pag

e

Newsp

aper

s

Incu

mb.

YP

Direct

Mail

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

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http://www.slideshare.net/kleinerperkins/kpcb-internet-trends-2013

Source: Kleiner, Perkins, Caufield and Byers

Challenges

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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

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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

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Innovation in Local

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Solocal - Minitel

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AOL Digital City

Free Photo

Scanning

Online

Chats

Reaction News Model

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Google Maps

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Yelp

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ReachLocal

First to offer “shrink-

wrapped” SEM!

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Intuit – Demand Force

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Groupon

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Facebook Lookalike

Targeted Ads

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Closely - Perch

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Misfires

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Daily Candy – Local Shopping

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Patch – Hyper Local News

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Kudzu – Local Search

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Outside.in

What Happened?

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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 √ √ √ √

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Demand POV

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Demand = radio signal strength

Outside.inKudzuDaily Candy

Patch

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Demand Stages

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Suggested process

Pre-productConcept

ProductConcept

User Conversations

Search Analysis

Competitive Analysis

Observed Behavior Refine

Going forward

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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

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The Feed

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Platforms

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Commoditization

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Key Drivers

Mobile

Big Data

The Feed

Platforms

Commoditization

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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

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Sales organizational choices

Flat Tiered

Clie

nts

/Pro

spect

s

Clie

nts

/Pro

spect

s

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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

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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

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Thank You!

Contact info: Email: DCMeeker@aol.com LinkedIn: Doug Meeker Web: http://dcmeeker.com