-- Local search gets specific and becomes "better than the Yellow Pages."
One of the big reasons that local search has not hit its stride in a more
timely manner is that consumers were not able to search for anything
specific, and had to rely on searching for store names. As recent as last
year, consumers would type in "Seven for Mankind jeans San Jose, Ca" and
they would get zero results. As a result, it was left to the consumer to
translate in their head "I think Bloomingdale's carries Seven for Mankind,
so maybe they will have the pair of jeans I'm looking for" and then -- she
would search for Bloomingdale's. To date, it has not been much better than
the Yellow Pages.
Thanks to a number of companies getting their local inventory online
(Wal-Mart, Circuit City, etc.) and a host of new companies (such as
NearbyNow) making it easy to search inventory data -- consumers can now
search for a specific product. This is going to make local search explode
in 2008, as consumer begin to expect instant information based on localized
search. Homes with broadband connections will begin using the Internet more
frequently in place of the Yellow Pages, because it has the current
up-to-date info. Local search, considered by some experts to be as much as
30% of all current searches, will continue to grow and enable the search
industry to keep booming. The advertising dollars will follow.
In a recent article written by columnist Mark Walsh of MediaPost
Publications, he made the observation that "paid local search is expected
to remain the fastest-growing ad category, nearly doubling to $1.8 billion
and accounting for almost a quarter of local online ad spending. Local
e-mail will climb by 54 percent to $233 million, while local banners and
listings will increase 18.4 percent to $5.6 billion."
-- Internet and Mobile Convergence paves the way for Search/Purchase
Experience
Mobile devices are becoming an integral experience with Internet and
in-store experiences. Find it online, send the information and directions
to a cell phone, and go to the store.
Nearly all retailers who currently allow consumers to get an SMS receipt
from a "buy online, pick up in-store" capability will see 30-40% of
consumers use it. The concept is the beginning of the experience that
connects the Internet and mobile (and the store) into a seamless
search/purchase experience. This is going to force a lot of
retailers/brands to think about mobile as a necessary part of a larger
experience.
In a report from the Forrester Group titled: "US Mobile Commerce 2007: Low
Reception - The State of Retail's Newest Channel," "More than half of
online consumers who research products online before buying them offline,
influence in excess of $126 billion of offline sales. Now, retail's newest
sales channel, mobile, promises to change the dynamics of shopping yet
again." *
-- Multi-Channel advertising goes live on Local Search
Everything goes multi-channel as Internet and mobile ads become the
measurable extension of local TV, print, and radio. In 2007, the
advertising industry experienced a consolidation of Internet ad agencies
which came about due to advertisers demanding that ALL media become more
measurable. As a result, the next trend entails using the Internet to
understand how effective mediums, including TV and radio, are at raising
awareness, driving purchases, building brand equity, creating customer
loyalty, etc. By the end of 2008, we will most likely see a majority of ad
campaigns that will include Internet or mobile as part of the combined
advertising mix.
All advertising will be multi-channel. Mobile (text message) will become
standard protocol for measuring print, outdoor, and radio. Internet and
mobile will be used for TV and other rich media.
Additionally, there will be some form of local advertising platform that
emerges in 2008. Quality UGC and validating the source of the content will
be a critical component. The breakout leader in the online local space
will be the company that provides the best user experience and has repeat
users. Ideally this will occur without consumers being bombarded with
national ads when they are looking for a local retailer, who carries a
specific brand in a specific size -- rather they will receive localized ads
customized to the consumers' desires and behavior.
-- Location-Based Services -- The Trifecta for 1:1 Marketing
The reason everyone gets so excited about location-based services is
because "place" may be the single most powerful context for advertising,
short of keyword. And keyword + place + now is the trifecta for 1:1
marketing. How much would a jeweler pay to target someone in the mall
looking for a $20,000 necklace? "Local CPC (cost-per-click) display" will
evolve to be a major factor in 2008 within the next 12-24 months will be
when we will see the beginning of the words "near you" included in the
marketing vocabulary like never before.
According to The Kelsey Group**, research indicates that there were six
times as many keywords with a CPC of more than $1 in January 2007 than in
the same period the year prior -- CPK (cost per click) rose an average 33%
each month in Q1 2007 compared with the same respective months in 2006.
-- Online-to-Store Shopping will bring Instant Gratification
"Get it now" becomes the killer application. One thing that local
search/shopping has that online shopping does not -- consumers can get the
purchase right now. Over two-thirds of NearbyNow requests are to pick up
items the same day. This is also reflected in the Forrester report on
Online-to-Store written by senior analyst, Tamara Mendelsohn -- "want it
now" is the top reason to buy locally, followed by "want to try it first"
and "no shipping charges." Convenience is king for consumers and
applications like "get it now" can propel local search and shopping into a
whole new stratosphere. In 2008, we will begin to see more and more online
stores create "buy online, pick up in store" capabilities for this very
reason.
Dunlap added, "These are a few of the key topics we think will be
consistently discussed during the conferences and industry events in 2008.
We look forward to engaging our industry peers and business partners in the
discussion; and to the ways these shifts and innovations will impact the
next phase of local search."
About NearbyNow, Inc.
NearbyNow, Inc. provides a unique online service that allows consumers to
search all products, brands, and sales currently available at local
shopping centers using the Internet or mobile phones. Working with shopping
centers and retailers across the United States, NearbyNow enables consumers
to easily access local information both before and during their shopping
trips. The company also creates an efficient marketing tool for retailers
to target nearby consumers, helping to drive sales by turning online
shoppers into in-store buyers. NearbyNow is headquartered in Los Altos, CA.
Additional information can be obtained by phone at (650) 947-1300 or via
the Web at www.nearbynow.com, or try our service at a shopping mall near
you by texting to NEARBY (632729).
* Forrester Research, March 14, 2007 "US Mobile Commerce 2007: Low
Reception - The State Of Retail's Newest Channel" by Tamara Mendelsohn with
Nikki Baird, Carrie Johnson, Christine Spivey Overby
** The Kelsey Group, From NearbyNow: Part Deux, Kelsey Group Blog, August
25, 2006, by Michael Boland
Contact Information: Media Contact: Beth Trier Trier and Company for NearbyNow beth@triercompany.com 415-285-6147