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May 24, 2007

Palore: ‘Forget Listings, I Want Just One Thing’

We’re all guilty of feature creep. A lot of the stuff isn’t especially useful. Now comes Palore. When it comes to directory listings, Palore believes hardly any of the info is useful. In fact, consumers want to know just one thing

It isn’t much different than what LongTail author Chris Anderson said at the YPA show a few weeks ago (per Ken Clark’s YP Talk). “Consumers are saying ‘I don’t care that the dry cleaners hasn’t chosen to list the hours they are open, it is the information I’m looking for, and without it, your products may be considered inaccurate or a failure.’

My gut reaction is to just pile on the copy points and keep adding features (like user reviews). There are, after all, a number of reasons why a consumer chooses a business. But Palore co-founder Hanan Lifshitz says that a survey of a couple hundred of users shows they’re more in line with Anderson’s thoughts.

“The interesting thing was that they all wanted just one thing and didn’t care much about the rest.  It was all about users wanting to see something very specific and personalized to them when making a local search,” says Lifshitz, an Israeli who had previously started a banner exchange network.  “They didn’t want more reviews or better maps. They wanted to know things like:

* The size of a restaurant’s wine list
* Does the business have handicap access?
* Is the business sustainable / vegetarian / organic etc.
* Is there free wifi access?
* Did the restaurant win any award?

With such results in mind, Lifshitz launched Palore in Israel a year ago. The service quickly got 100,000 – quite a landmark in a small country – capped it there, and has been working on bringing it stateside since then. He’s raised $1 million from angels to do so, and has set up shop in the Bay Area.

“People are going to still use Google and Yahoo. But we want to enhance the user experience.” What Palore is doing is providing a plug in that rides on top of a Google Maps or a Yahoo Maps search. It crawls the web and summarizes related information about a business. Users can click on site icons to get more complete information.

In San Francisco, for instance, Palore will add related information for coffee houses from coffeeratings.com. The summary includes rating points, espresso makers used, etc. Going back to the site, by clicking on Palore’s coffee bean icon (a new feature), will tell you what the reviewer thought and add additional information. Similarly, a Vegan site, with related info, will be marked with an icon;  sites that allow dogs, etc.

“There are endless amounts of information. There are hundreds of attributes per business,” says Lifshitz, who notes that the business model is to sell contextual ads around searches, place referrals, and rank advertisers on top of searches. The service may also set up user groups and other social network features.

For sure, Palore is an interesting and fun service to use, and it is likely to become richer to use as more vertical content develops.  But like many vertical sites, I think its searches will prove the exception, not the rule. When people are searching, I think they ultimately want the whole enchilada.  And if someone is willing to go deep enough to look at fringe data, they’re likely to pore over dozens of listings, not just the top ranked ones. But don’t you like the innovation?

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IAB Releases 2006 Ad Revenue Report

Summary

The Interactive Advertising Bureau (IAB) and PricewaterhouseCoopers (PwC) released their annual Ad Revenue Report yesterday. Though there were increases in many online ad categories compared with 2005, it’s interesting to note that nearly every one declined in percentage of overall online ad revenues. In fact, the only segments that increased as a percentage from 2005 are lead generation and display advertising. This has interesting implications for the direction of local online advertising, and investments being made throughout the marketplace, as related to yesterday’s post on online consolidation and revenue diversification.

Analysis

The high level results of the IAB report showed search advertising representing 40 percent of the $16.9 billion total U.S. online advertising pie in 2006. This search ad revenue category totaled $6.8 billion for the year, up 31 percent over 2005, and includes pay-per-call, search ads, contextual text ads, paid inclusion and SEO. Online Display advertising was the second largest category in 2006 at $5.4 billion, (32 percent of total online ad spending); followed by classifieds, at $3.1 billion (18 percent of overall ad revenues).

Despite these increases over ‘05, every category dropped in percentage of overall ad revenue; except for display and lead gen. The former is critical to the search giants that have paid rather large premiums to bolster their display ad capabilities (see yesterday’s post); and these figures are affirming for their ROI potential with these purchases. Second, increased percentage of lead gen advertising is consistent with Kelsey Group data that forecasts growth in ROI oriented ad formats.

iabchart2.jpg
Source:IAB (2007)

As search growth slows due to an increasingly crowded and competitive landscape, online ad providers will push lead gen products more and more. This suggests we could see more lead models start to take hold, and more specialization in lead forms. Pay-per-call will particularly see growth as its value proposition will gain more exposure as alternatives for paid search are sought. The wild card in all this could also be Pay Per Action, which is being developed in different ways throughout the marketplace — most notably by Google (and earlier this week by job search aggregator Indeed).

Video Joins the Mix
Lastly, It’s also interesting to note that video dropped as a percentage of total ad market spend but increased in real dollars. This is a small segment but very much a growing one, as examined in the TKG white paper released earlier this week, “Online Video: A New Local Advertising Paradigm”. The executive summary can be found here.

newer-chart2.jpg

The growth in video will partially be driven by user interest and acclimation with video (as popularized by YouTube and others). User View Data (wave IV) presented in the video paper shows that 59 percent of survey respondents (n=501) claimed to watch online video. More important is what users did in response to video ads they watched. More than half of respondents engaged in some sort of response activity such as visiting a website, going to a physical location, or making a purchase.

In terms of quality exposure this sample group can also be arrayed against the overall demographics of broadband users, in order to extrapolate the favorable likelihood of reaching attractive and buying empowered consumer groups.

More coverage of the video report can be found at WebProNews, MediaPost, and USAToday. The press release is here. And the IAB report can be viewed here.

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Blog: Display Advertising, Local Media Blog, Paid Search, Video, online
Posted by: Mike Boland at 1:44 pm - Comments (0)







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