Consumers want more: cable, internet, website and app subscriptions and mobile access. And local media companies would love to acquire more of that “more” but most are failing to do so. Why? Many companies view the internet as a means to promote their existing products, e.g. newspapers, TV and radio; they define their business model by their legacy products despite the data on those mediums being dismal.

The data , two of the three largest yellow page companies are bankrupt, radio listeners are down, TV primetime viewers are down and viewers are switching to Internet viewing instead. The reality is: consumers are getting the information they need but from other sources. Local media companies aren’t selling products that get the job done for consumers. And as a result, these companies lost their majority share of all local online advertising in 2005 to pure play internet companies.

In an interview with Harvard professor and author Clay Christensen, Gordon Borrell asks “how can local media survive?” The answer is provided in his book, “The Innovators Dilemma” which proposes that the next phase of local media innovation will be by companies that “get it” and retool: they’ll need to put dollars and strategy into new people, systems and processes.

As it is now, many local media companies believe that their current staff can translate their offline experience into new media but it’s not working. The result is that they’re supplying a product with a declining audience: they integrate the wrong elements into their traditional-converged products and fail to supply what the consumer really wants. Instead, they need to develop better user experiences that will set them apart from the competition.

A good example was provided in an interview with Christensen, where he mentioned the  home furnishings brand Ikea. There is no clear competitor to Ikea’s unique customer experience. In the furniture business, companies generally focus on a specific customer segment and product segment. But with Ikea, it’s about the experience. You can furnish an entire apartment in an afternoon with one stop and get lunch while you’re at it. Customers want the experience that Ikea offers and they keep coming back.

If the “more” that consumers want is essentially more information delivered in the form that they want it, local media companies will need to scrap the old paradigms (numbers of viewers, readers, listeners) and build a new model around the consumer experience.

Learn more information about Vortaloptics’ local media focused advertising solutions.

The economic downturn has decreased revenues in nearly every sector of business, including digital advertising. Yet, because of the shift, the digital sector has quickly become a haven for more traditional ad budgets.  The Internet is viewed as the most measurable medium and its performance-based ad models are becoming increasingly attractive for offline campaigns that lack the deep metrics and engagement factor that digital media provides.

Local advertising deserves ample attention in this shift since it accounts for 55% of all ad spending. The total ad market in 2009 was over $235 billion; more than $130 billion of that was spent on local ads, as reported by BIA/Kelsey in its new report: “U.S. Local Media Annual Forecast.”

By 2014, local advertising is predicted to account for 25 percent of all digital media advertising.  A “steady shift toward digital media” will cause online spending to increase to $37 billion by that time, up from $15 billion in 2009. While local will grow, the BIA/Kelsey report also foresees larger than previously forecasts declines in newspapers and direct mail.

Mobile will drive a good deal of the local advertising growth. Most people now have Internet access via their mobile devices and when we’re on the move, we’re thinking and engaging at a local level. Thus, cohesive mobile campaigns will not only help businesses, it will serve the mobile subscribers directly or indirectly seeking local products and services. As more mobile ad formats are delivered, the mobile ad market could see even greater gains.

To follow up on my last blog post and illustrate just how much strangers now influence our opinions and decisions, I thought I’d post some revealing findings about the importance of worldwide input via social media.

In Universal McCann’s recent report, “When did we start trusting strangers?” in the “Proliferation of influencer channels” section, it is posited that the web is encouraging trust among strangers the world over. This trend does not correlate with the societal assumption that strangers are out to get us. Rather, we see the web as an equalizer; a readily accessible platform for expression of all peoples. Tapping into that global authority expands our knowledge boundaries and allows us to shape our opinions based on the widest range of (assumably) unbiased, unsolicited and candid information. If knowledge is power, then it seems that we’re craving the power of that collective voice so much that we now hold stranger’s opinions in nearly as high a regard as the people we personally know.

• We trust strangers online almost as much as face to face recommendation
• The top four trusted forms of recommendation are all direct conversation – significantly two of these are now on internet channels: email and Instant Messenger
• We would much rather trust a stranger than a celebrity, by a long way
• We trust a stranger over any paid-for communications or advertising
• We trust a stranger more in a regulated environment like reviews in a retail site such as Amazon or an auction site like eBay
• Blogs are becoming a trusted form of opinion, blogs from people you know rank at number 7 and those by from professionals or micropublishers, number 15.
• Blogs are almost as trusted as their written word counterparts, magazines and newspapers
• Not everything online is trusted: emails from companies are only marginally more trusted than celebrities

(Source: “When did we start trusting strangers?” page 35.)

Those in our “strangers” sphere might not be our BFF just yet, but from the looks of this report and others cropping up weekly, it seems that they’re quickly becoming PGF (pretty good friends).

When you’re looking to purchase, what mechanisms drive your opinion and finally form your decision? As media changes, so do the channels that we rely on for information and the weight we give to those channels.

Word-of-mouth has always been a major influencer, with friends and family topping the trusted list. But it is the advice from strangers with experience in what we’re seeking that has nearly doubled in value in the past 10 years.

Other influentials include teachers, religious leaders and then media such as newspapers, magazines, radio personalities, TV news reporters, followed by bloggers, advertising and finally, telemarketers (from eMarketer’s chart, “Trusted Sources of Information according to US Consumers, 1997 & 2007″). But a revolution is well under way: we now trust the opinions of strangers whose material we read or view online as much as our friends!

So when did strangers become such a heavy influencer of our decisions? The boom of social media has given us access to billions of ratings, reviews, videos, blogs and micro-blogs, from people we don’t personally know. This state of affairs has been referred to as the “democratization of influence to the masses.”  This is a serious call-to-action for all marketers. Social media is now key in our hierarchical decision-making processes and must be recognized as a tool to meet your audience on the new communication grounds.

So how do we come to trust Stranger X’s opinion more than Stranger Y and Z? What strangers have to say is obviously important, but perhaps as important is strangers’ ability to identify with us that makes the difference.  As we look at avatars, read profiles, skim comments and blogs and view video clips, we look for clues that help us decide whether this is an opinion we’d trust. It might be abstract, but it’s the little things that influence whether we identify with that someone in one way or another.

It might be their work or life experience, notoriety, social life, family situation, appearance, personality or their style of communication that help form our “online” opinion of these strangers. As we gather those clues, we filter them through our own prisms of experience and knowledge. Does their opinion add up? Can we supplement our knowledge base with the views expressed by Stranger X? We’ll count or discount these influencing factors, and move onto the next review, comment, tweet, chat message, email or video until we’ve reached our own decision-making comfort level. And, we’ll add in a dash of traditional media opinion if applicable, and wrap it all up into our defendable decision.

You may be a little ahead or a little behind this curve, but the reality remains that the opinion of the masses is increasingly important in our lives. Its wise to join the conversation but don’t jump in without some preparation.  Transparency and good user experience are essential ingredients if your goal is successful viral marketing. Consumers want to know what makes your company tick, they want to see the faces behind the image and most importantly, they want a great product or service.

Vortaloptics, the provider of WeAreNetwork’s search software, has obtained its first patent. David Gosse, CEO of Vortaloptics and co-author of the patent, assigned the patent rights over to Vortaloptics shortly after it being officially awarded on October 21, 2008 by the U.S. Patent Office. He explains how a genuine need for controllable search software prompted him to invent the software: “I wanted to create search engine software that could be controlled. The search engine that I wanted to embed into my websites and client websites needed a way to administer the results and change them so that they were more relevant for the site. So I co-invented a controllable search algorithm.”

The unique control mechanism provides flexibility to customize each URL in a search database and thus, every keyword assigned to that website.

Search results returned to users are prioritized based on relevancy (keyword match) and the total relative score of the search terms used to conduct the query. Additional relevancy and priority controls are provided via the administrative interface.

SearchIgnite reports a 33% increase in retailer’s ad spending over last year illustrates that retailers are likely pouring more dollars into search campaigns which can be monitored and tweaked in real-time.

Roger Barnette, president of SearchIgnite notes: “Advertisers are shifting more dollars to paid search and digital media. Retailers want media they can buy on a performance bases to track and measure.”

Despite a decline in overall consumer spending, people are steadily purchasing goods over the Internet. Observationally, retailers are offering more incentives earlier in the season than is typical,  likely incentivizing consumers to go ahead and make necessary and discretionary purchases.

The social media hype continues and is enticing companies of every shape and size to dabble in creating new networks. To facilitate the craze, dozens of open source social networking platforms have launched. Jeremiah Owyyang’s blog lists over 60 brandable software platforms that can plug into your existing domain, allowing you to create your very own social network.  But should any company build a social network?

In a Deloitte study of 100 businesses with online communities, Ed Moran found that 35% of these communities have less than 100 members and less than 25% have 1000 members. 6% of the businesses studied spent over $1 million on their social networks. Sadly, all too many fail at their attempts to connect customers to their brand because instead of focusing on the community itself, businesses are focusing on the value that social community could provide for their business.

Despite the failures, there are definitely industries that DO have ready-made communities with well-established brand alliance, and have a greater chance of building successful online communities. These verticals might include: local television networks (daily news watchers), radio (listening audiences), niche hyperlocal local communities and education (school districts, private schools, universities).

Clark County School District, the 5th largest school district in the nation with nearly 300,000 students, was a few years back, reportedly the largest user of bandwidth in the Las Vegas valley. Schools are instant communities – not just in the “will you be my friend” sense of students, but in the student to teacher, student to parent and teacher to parent and relationships. Because they already have distinguishable groups in these necessary and long-standing relationships, Clark County can foster those relationships through a community network, which they’ve begun to explore with the CCSD website.  Feedback mechanisms aren’t yet extant, but Homework Hotline, a public television program, gives students an outlet during the week to call in and ask teachers their tough homework assignment questions. Their content management system, my.CCSD.net reach the three main constituents in these ways: 1) teachers can create personalized websites to communicate with students and parents; 2) students can access to homework resources and assignments; 3) parents can locate their children’s classroom and assignment information online without involving the child or teachers. A cursory look at some teacher sites didn’t provide a lot in the way of content or personalization, but it is summer after all – the start of the school year should light this online community back up.

Another example where community exists is the multifamily industry. Most multifamily companies have a couple clear-cut missions in life (e.g. collecting rents and driving occupancy rates), and one of those is to establish and promote their brand for longer-term connection with an increasingly transient population.  Before signing a rental contract, an individual needs to identify with what that apartment provides. Thus, the rental market is now driven by amenities. “Lifestyle” is the buzzword for providing more than a roof over people’s heads at the right price and location. Now, apartment companies need to provide online services ranging from rent pay to pet sitting to VIP concierge services and customized local search while hosting real live social activities such as community pool parties, golf instruction classes and more. While it may sound exhausting (and it probably is), apartment companies are finally optimizing their built-in community of residents and finding creative ways to connect the residents together, along with meaningful lifestyle amenities that cement the value of their brand, while gaining loyalty in the minds of renters.

Riverstone Residential, the nation’s third largest apartment management company representing around 340,000 residents, offers a moving program, Riverstone-to-Riverstone. This amenity helps transfer residents to another Riverstone community within a metro or across the country, sans application process and deposit fees. Combined with their Living Made Easy features, including “Your Neighborhood Directory,” a local search engine launched in three metros, where users can find “just down the street” local businesses via a true search results format (e.g. not just Yellow Page data), residents benefit from buying into the Riverstone community and the value it provides to their daily lives.

Morals of the story:

• If you don’t have a pre-existing community, don’t assume that you can create one (and don’t spend a lot of money trying to create one).

• If you do have a pre-existing community (and they already visit your website regularly), focus on the value that your social network will provide to your users.

Online Ad Revenue Grows 38% Over 2006 Levels,
Quadruples Over Just 5 Years

Toronto, ON. July 3, 2008 – The Interactive Advertising Bureau of Canada (IAB) today announced that 2007 Canadian Online Advertising Revenues climbed to just over $1.2 billion for the year — a 38% increase over 2006 actuals.

Publisher revenue from Online advertising in Canada has more than quadrupled over the past five years — building from $237 million in 2003, to the $1.2 billion mark in 2007 — and is quickly closing in on more established mediums.

Of the $1.2 billion, approximately $260 million or 21 percent of ad revenue was received by French Canadian Online properties, representing year-over-year growth consistent with the rest of the Canadian market.

In response to a variety of shifts in the industry (including a high level of merger and acquisition activity in the Canadian media market, and the continued penetration of Online Ad Networks into the Canadian Online advertising space), IAB Canada’s 2007 Revenue Survey process was revisited, with the objective of assuring the elimination of any past and ongoing duplication of ad revenue from these sources.

Canadian Online Publishers obviously had no difficulty in adjusting to the revised ask, as IAB Canada’s 2007 Canadian Online Advertising Survey garnered a response rate of over 90% for companies with anticipated revenue of over $5 million. “The industry can feel confident about all past and present numbers,” says Martin Lundie, Partner, Technology, Communications and Entertainment Assurance and Advisory Business Services for Ernst & Young LLP (who analyzes IAB Canada’s Survey data), “Firstly, because the factors we adjusted for in the 2007 Survey were not present prior to 2006; and secondly, because of the extremely high rate of response. Surveys with a high response rate from respondents of the most significant size, have a very high degree of accuracy and reliability.”

Publishers applied the improved methodology to both 2006 and 2007 numbers, and as a result, the actual Canadian Online Advertising Revenue for 2006 has been revised from $1.0 billion to $900 million, with all segments revised accordingly below.

2007 Canadian Online Ad Revenue by Advertiser Category was also tabulated, and was as follows:

* Automotive – 16%;
* Media + Entertainment (Music, Film, TV) – 8%;
* Financial – 11%;
* Leisure (Travel, Hotel, Hospitality) – 7%;
* Packaged Goods – 6%;
* Retail – 9%;
* Technology – 10%;
* Telecommunications – 7%; and,
* Other – 26%.

IAB Canada’s projected total for 2008 Online Advertising Revenue in Canada is estimated to be $1.5 billion — a full 25% percent more than the 2007 actuals of $1.2 billion.

“The current and continued projected growth in Online advertising in Canada speaks volumes about how important the medium has become to marketers in terms of its ability to reach, target, engage and dialogue with consumers,” says Paula Gignac, President, IAB Canada. “The sky’s really the limit for Online, as new developments in targeting technology, creative (it’s great to have our first Video advertising revenue number), and integrated strategies are happening on an almost daily basis — all with the goal of helping marketers capitalize on Online’s ever-growing and engaged audience. Online advertising is no longer below the line in any way — it’s now an essential component of any marketing mix.”

And while Online Advertising is growing at an enviable pace compared to advertising growth in other media in Canada, the industry is not without its challenges. “When asked to identify possible business constraints for 2008, Publisher respondents to IAB Canada’s Survey identified hiring and retaining qualified staff, as well as the current economic climate, as the two biggest challenges they will grapple with for the remainder of the year,” says Martin Lundie, Ernst & Young LLP.

“The industry has indeed been resource-challenged as a result of its own success,” says Paula Gignac, President, IAB Canada. “In response, IAB Canada has developed a robust strategy to educate, attract and retain talent within the industry as we go forward. To date, over 2,500 professionals across various media and advertising sectors have been educated via IAB Canada Courses in Interactive Marketing + Online Advertising and Social Media Marketing; the organization is actively assisting its members with both off- and Online recruiting initiatives; and, has recently embarked on a Digital Salary Survey in association with Marketing Magazine, designed to help HR departments within Publisher, Agency and Advertiser operations determine the proper compensation for their most-advertised positions.”

“As far as the economy is concerned, I think Canadian Online Publishers are being appropriately prudent in identifying this as an important factor to monitor in 2008. But, if U.S. Online advertising results for the last two quarters of 2007 and first quarter of 2008 are any indication, Online advertising’s inherent accountability is a strength that becomes even more valuable to marketers in the midst of troubled economic times. South of the border, Internet advertising is still growing at a record pace — despite a prolonged economic downturn — so, we would expect Online advertising in Canada to show the same sort of resiliency, should any prolonged economic dip materialize here as well.”

About IAB Canada’s 2007-08 Canadian Internet Advertising Revenue Report
The 2007 Canadian Internet Advertising Revenue and the 2008 estimated Canadian Internet Advertising Revenue were reached after a comprehensive survey of all major Online Publishers in Canada. Revenue data was compiled and analyzed by Ernst & Young LLP.

A more comprehensive analysis of IAB Canada’s 2007-08 Canadian Online Advertising Survey results, along with an updated description of the Revenue Survey methodology, will be published by IAB Canada and Ernst & Young LLP in September 2008.

For more information about the IAB Canada 2007-08 Canadian Internet Advertising Revenue Report visit www.iabcanada.com.

Is making online marketing mainstream the answer to helping small businesses increase their exposure and profits? Sam’s Club seems to think so. But does that make it so?

Sam’s Club’s LeadConnect offers online services packages starting at $25/month that include adding a local business’ profile to search engines and Yellow Page directories.

Those in the search industry know that good search engine optimization and marketing techniques include a substantial education cycle and far more action than “hand submissions” to the major search engines and directories. While we’re all for local businesses giving online a chance, it probably isn’t in their best interest to market this type of service without educating on what will really drive results.

Even pay-per-click advertising isn’t the end of a dedicated SEO campaign. Your website has to feature relevant, well-organized content that speaks your customer’s language and provides a 2-way feedback loop between business and customer. Being found because you submitted to the search engines is a long shot, and even if searchers do find you, you still have to engage and support their discovery process.

What local businesses need is education – not a laborious SEO university education – but some cursory knowledge of what constitutes a results-driven online initiative. Then, they need help in taking the appropriate actions for their budget and specialty.

It’s not just about submitting listings or buying placement – it’s about how you represent online and whether your online presence is as worthwhile to visit as your offline location. And if SMBs don’t understand this, they’ll spend that $25 or $100 a month and not see adequate results. They could become bitter about the Internet and search marketing in general.

Making SEO mainstream sends a message that brands are built by hands-off methods. Truth is, it’s going to take more than $25/month and a one-time web form to make it online. Education and a little manageable action are the keys to using the power of the online community to a small business’ advantage.

If ever there was a time to engage and reach out to your customers, it’s now. There are so many ways of letting your good customer practices shine. Yes, social media and customer-centric practices can be uncomfortable to step into, but the end product can mean loyal customer partners for life.

Take in this real-life story about a company with heart – and get some inspiration for your own sincerely driven efforts to positively impact the lives of your customers. Zappos’ uncalled for sympathy, as reported by Zaz Lamarr in her personal blog, “Writing, Cooking, Life,” has sparked a lot of publicity online. We doubt that was the end intention of Zappos, but rather that it was a random act of kindness. There were people at the company thinking from the heart rather than the head who went beyond the rules to let a customer know they really care.

I Heart Zappos

I really do.

One bright, extraordinary note in all of the sad stuff of the last few weeks – in May we had ordered several pairs of shoes from Zappos for my mom. She’d lost a lot of weight, and her old shoes were all too big. She had a whole new wardrobe of clothes in pretty colors, that fit, so I wanted her to have some pretty shoes that fit, too, when I took her up to Oregon to stay where her sister is. Out of seven pairs, only two fit. Not bad considering she’d never been this thin, so I was winging it, and the return shipping is free.

The rest were here waiting to be returned. Because of various circumstances – lost label, my mom being hospitalized and me being away, the shoes were never sent back. There’s a time limit on the return of 15 days. Remember this. When you do a return to them, they pay the shipping, but you have to get the shoes to UPS yourself. Remember this, also.

When I came home this last time, I had an email from Zappos asking about the shoes, since they hadn’t received them. I was just back and not ready to deal with that, so I replied that my mom had died but that I’d send the shoes as soon as I could. They emailed back that they had arranged with UPS to pick up the shoes, so I wouldn’t have to take the time to do it myself. I was so touched. That’s going against corporate policy.

Yesterday, when I came home from town, a florist delivery man was just leaving. It was a beautiful arrangement in a basket with white lilies and roses and carnations. Big and lush and fragrant. I opened the card, and it was from Zappos. I burst into tears. I’m a sucker for kindness, and if that isn’t one of the nicest things I’ve ever had happen to me, I don’t know what is. So…

IF YOU BUY SHOES ONLINE, GET THEM FROM ZAPPOS.

With hearts like theirs, you know they’re good to do business with.

You’ve inspired us all, Zappos. We encourage all companies to think outside the sometimes stuffy lines of corporate-to-consumer relations and think like a human, with heart.