Universal McCann has been the definitive word in advertising forecasts for more years than most of us have been alive, and team leader Bob Coen has been consistently conservative yet accurate. In December, he predicted that Yellow Pages would come in at about $14.6 billion for 2007. In his recent update, his prediction for Yellow Pages is essentially unchanged. This is notable because his overall forecast anticipates less growth than originally expected (+3.1% expected in June 2007 vs. +4.8% in December 2006). Only the Internet advertising component is showing strong growth (+17%) with the largest medium – Direct Mail – growing at +5% to account for 21.2% of total ad spend predicted for 2007.

In case you missed any posts this week, here is the TKG blog highlight reel. Click below to read each post in full.

Newspapers and Home Pages: Getting Personal
Business 2.0’s Erick Shoenfeld writes an exclusive on his blog on the next version of the Pageflakes personalized home page. It looks to be a compelling and elegant product that should meet the rising demand for personalized features online. It also has a nice set of widgets that can be personalized and planted on other Web sites blogs or social networks to gain stickiness and viral marketing. This is in line with (or inverse to) Facebook’s astute strategy to break down its walls to the widgetization and third-party application development that will add value to its network. (read more…)

Free DA to Improve Video Search?
The NewTeeVee blog has some interesting thoughts following comments made by Google’s Marissa Meyer at the Searchonomics conference going on today. Google’s free directory assistance product Goog-411 (past commentary here), will assist in helping Google develop speech to text ability, which will in turn help it sharpen its ax when it comes to video search. (read more…)

First Impressions of AT&T U-Verse
After a five-hour installation job – apparently, many are longer – I am now among the first in San Diego County to have AT&T U-Verse, a new fiber-based service with a node down the street. They are definitely not calling it “IPTV.” The service provides cable modem-like speeds for Internet, a wireless router and 400 channels of video, including 25 HD channels. A free Digital Video Recorder is also thrown in. After one day, I can report that the picture looks great on my new HDTV, and the Internet speeds are good, too. (read more…)

iPhone: The Reviews Are In
A handful of official iPhone reviews from professional product reviewers came out today. The verdict: It lives up to the hype. There are still lots of possible flaws such as slow speeds on AT&T’s EDGE data network, but the overall picture is that this device does things that no other device before it could do. (read more…)

Marchex Officially Launches 100,000 Local Search Sites
Local and vertical online search company Marchex today announced the rather bold move of launching 100,000 local search sites. Yes, that’s right, 100,000. The move represents the culmination of years of work in assembling a portfolio of URLs and companies that will come together to enable the ongoing content population and generation of such a massive base of sites. These URLs consist of locally and vertically oriented sites such as bayareahotels.com or newyorkdoctors.com. They also, importantly, include ZIP code sites (i.e., 94123.com) that cover 96 percent of U.S. ZIP codes. (read more…)

Ingenio Releases Mobile Data
Pay-per-call provider Ingenio and market research firm Harris Interactive released results of a survey (n=4,123) today that includes interesting data about consumer preferences for mobile devices and advertising. These are important data, as any embryonic area requires knowledge of consumer preferences as a leading indicator of product development. Nowhere is this more appropriate than mobile search, where we are very much in a wild west phase of experimentation, speculation and product development. (read more…)

Blinkx Releases AdHoc, Forms New Partnerships
As reported last week, Blinkx today officially unveiled its new contextual ad matching technology for video content, known as AdHoc. The company has also partnered with both Lycos and InfoSpace to provide its video search technology as an additional feature to these sites’ search interfaces. (read more…)

Watch Out! Local.com Patent Covers Local Crawling
We can argue somewhere else whether the U.S. Patent Office is helping to foster innovation in 2007, or hinder it. But the bottom line is that yet another wide ranging, fairly obvious patent has been issued – this time to Local.com – and local media and local search companies can ignore it only at their own peril. Local.com’s patent basically covers all crawling of local businesses on the Web It was written by Xiagwu Xia in January 2005. Xiagwu now runs Local.com’s R&D. (read more…)

The Future of Local Search in Europe
The Kelsey Group and AMR International joined forces to hold a summit in London on the Future of Local Search in Europe. It was an invitation-only affair, which is why you probably didn’t hear about it. Not surprisingly, most of the attendees were from Europe and the event was co-sponsored by AgendiZe, Call Genie and Macquarie. This was the first time that TKG has strayed away from its natural venue of Hyatt or Marriott, and the Natural History Museum was a wonderful backdrop for an outstanding half-day conference that ended up going well into the evening. (read more…)

New West is a different concept from other community sites. Started two years ago by Jonathan Weber, the former editor of The Industry Standard (the dot-com era trade bible), the seven-person site covers all of the Rocky Mountain region from its base in Missoula, MT. It has multiple revenue streams from Google AdSense and ads, and it also earns revenues from custom publishing, conferences and events. The site raised angel money in the high six figures to get going and will soon be profitable.

Weber has published a FAQ for “What Works in Community Journalism.” Within his comments, he notes that a differentiating aspect of the site is that it has a real mission covering the West’s dramatic growth and change. The multiple revenue streams, he says, “are a lovely thing. It remains difficult to make money on online advertising alone unless and until you have boatloads of traffic, and it is especially difficult to achieve that with a local site.”

Good editorial and basic SEO has been helpful for getting people to the site. But “we have however also found there are limits to what you can achieve in small local markets” with viral marketing, he says. “We intend to be more aggressive with marketing in the next phase.”

Competition-wise, Weber notes that “newspapers still dominate the local news and information business, especially outside of the major metro areas. There are various small, independent local sites that are competitors on some level but few that have any real traction. TV station and yellow pages Web sites are also becoming bigger factors in the market.”

Business 2.0’s Erick Shoenfeld writes an exclusive on his blog on the next version of the Pageflakes personalized home page. It looks to be a compelling and elegant product that should meet the rising demand for personalized features online.

It also has a nice set of widgets that can be personalized and planted on other Web sites blogs or social networks to gain stickiness and viral marketing. This is in line with (or inverse to) Facebook’s astute strategy to break down its walls to the widgetization and third-party application development that will add value to its network.

Personalization is quickly becoming a tenet of whatever is the amorphous concept of “Web 2.0.” (My favorite quote of late comes from Tim O’Reilly: “If a company advertises themselves as ‘Web 2.0′, that means they’re probably not.”) Though the term is vague and often peppers the marketing-speak that clouds realistic analysis, it has taken some realistic form to signify social features, Ajax functionality, media-rich capability and personalization. Just be wary of the term Web 3.0 that is starting to rear its ambiguous head (though some claim that this has legitimate connotation to the “semantic Web“).

Anyway, there are only a handful of personalized home pages out there, such as Netvibes. These join the longstanding My Yahoo!, which is a great tool (full disclosure: I’m a dedicated user) and frankly an under-marketed asset by Yahoo!. Still it holds the lion’s share of RSS subscribers. Both Pageflakes and Netvibes meanwhile have sleek interfaces and lots of personalization tools to bring in news feeds, weather, sports, even e-mail and IM, through their own Web-based clients for each.

Newspapers: Time to Get in the Game

As we point out in a White Paper that will be released this week on newspaper online strategies, the opportunity exists for newspapers to maintain their readers that have migrated online by building these types of personalization tools on their Web sites.

Though the pulling in of content (even from competing papers) goes against the walled garden mentality that has ruled their offline model for over a century, this can create stickiness in a set of features that keeps readers coming back to a home page that has utility in a one-stop shop for national news, weather, sports and e-mail. But, importantly, it also maintains the local relevance of hometown paper. The New York Times (My Times) and LA Times (MyLATimes) and a few others have started to do this to a certain degree.

Bring in local news, classifieds, directory content, video, hyper-local social aspects and high school box scores, and you just might have an edge on the online pure-plays. The best part is that this brings the comprehensive experiences available with online news aggregators and personalized national news feeds, with something that the Googles and Yahoo!s of the world can’t replicate: local flavor and trust.

The trust issue is clear in the branding that newspapers have developed for decades in their local markets. If they can just back this up with solid online functionality a la Pageflakes, they have a clear marketing advantage over a company that sounds like a new kind of breakfast cereal. True, they don’t have the technical chops to pull it off, but I can think of a few companies that do.

The NewTeeVee blog has some interesting thoughts following comments made by Google’s Marissa Mayer at the Searchonomics conference going on today. Google’s free directory assistance product, Goog-411 (past commentary here), will assist in helping Google develop speech to text ability, which will in turn help it sharpen its ax when it comes to video search.

This makes a lot of sense if you think about it. As we explored in a recent White Paper and in a past blog post, video searchability is an important challenge right now that is getting a lot of attention from the likes of Blinkx, Google, Adap.tv, ScanScout and others. The challenge comes down to the fact that a piece of video isn’t inherently searchable the way text is.

So efforts have surrounded everything from indexing closed captioning transcripts to meta tags, to the current state of the art, voice recognition. The first two are limited and will have even more trouble passing as a solution, as the corpus of online video content continues to expand at a frenetic pace. A reliable automated solution is required, in other words.

This will also go a long way in the searchability of small-business local video ads that are likewise growing in number on local search sites, most notably Citysearch.

And once this searchability problem is solved, the next step – video monetization and contextualized ad placement around videos – becomes easier. Google clearly has its eye on this prize, and we’ve recently seen developments from Blinkx and Adap.tv on this front.

Indeed, video search and video contextual ad placement have the same core challenge, and Google’s speech to text capability will work toward addressing both.

Free DA: A Means and an End

It’s also interesting to see Google’s free DA product – a strong avenue for the company in itself – seed other efforts. We’ve seen this before. As we wrote about last month, the product is also being used to push mobile mapping solutions.

Free DA, mobile mapping, and video; it’s great to see the interplay between them. These will be exciting areas to watch, not to mention the fact that the potentially game-changing iPhone will feature, enable and accelerate each of them.

On the iPhone, it will be interesting to see these factors develop, especially given the third-party application development through the bundled Safari WAP browser, which we expect to be robust enough on the phone’s sleek interface to inspire the degree of third-party application development that we have yet to see in the mobile environment. Get ready.

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Related: Red Herring today writes about Digitalsmiths, a new entrant to the video search space.

After a five-hour installation job – apparently, many are longer – I am now among the first in San Diego County to have AT&T U-Verse, a new fiber-based service with a node down the street. They are definitely not calling it “IPTV.”

The service provides cable modem-like speeds for Internet, a wireless router and 400 channels of video, including 25 HD channels. A free Digital Video Recorder is also thrown in. After one day, I can report that the picture looks great on my new HDTV, and the Internet speeds are good, too.

For AT&T, U-Verse is considered critical to its future in media and communications. Accordingly, the company’s vision isn’t just confined to TV and Internet. This spring, for instance, AT&T showed off a TV version of Yellowpages.com (although it isn’t expected to be widely deployed for several years).

That’s basically it for the local connection – although home shopping efforts, launching down the road, are probably going to be tied in with the Yellow Pages service and might have some local capabilities. Three colorful buttons in the middle of the universal remote have been expressly reserved for shopping.

Beyond local, there will also be voice services. Today, I found out (by reading my instruction manual) that AT&T plans to introduce a full line of U-Verse voice services – just like Time Warner, which competes against it locally. (The current absence of a phone tie-in is actually kind of strange.) AT&T will also be introducing the ability to show your Yahoo! photos on TV.

My friendly pair of installers – AT&T employees, not freelancers – told me the company provided them with three weeks of classroom training but nothing in the field. So they were pretty much learning on the job. But they were good.

AT&T followed up on the installation with a college student, who came around to show my wife and me how to use the DVR features, etc. For instance, I learned that I can program the DVR directly from My Yahoo!. That is cool – especially when I am travelling. Their excellent care made me kind of melancholy, because I am not used to getting such good service from AT&T.

I’ve got the complete package for two months for just $74, and there is no contract. And I get $50 for every neighbor I refer. I think there will be several. Let’s see how Time Warner competes against it. This is one war that I am looking forward to.

A handful of official iPhone reviews from professional product reviewers came out today. The verdict: It lives up to the hype.

There are still lots of possible flaws, such as slow speeds on AT&T’s EDGE data network, but the overall picture is that the iPhone does things no other device before it could do. Furthermore, this is Version 1.0, and we can expect a great deal of improvement (including an eventual switch to faster 3G networks). As we pointed out in the past, look at the current line of iPods compared with Version 1.0.

Other proposed drawbacks, including the lack of a physical keyboard, were largely dismissed as non-issues by the review corps. Most notable is the write-up of my (and most people’s) favorite reviewer, Walt Mossberg. I won’t attempt to paraphrase him but rather let you read him do what he does best. His column is here (sub req.), while you can also read Newsweek’s write-up.

Summary

Local and vertical online search company Marchex today announced the rather bold move of launching 100,000 local search sites. Yes, that’s right, 100,000. The move represents the culmination of years of work in assembling a portfolio of URLs and companies that will come together to enable the ongoing content population and generation of such a massive base of sites. These URLs consist of locally and vertically oriented sites such as bayareahotels.com or newyorkdoctors.com. They also, importantly, include ZIP code sites (i.e. 94123.com) that cover 96 percent of U.S. ZIP codes.

Analysis

Marchex’s broad library of local search sites mostly fall under the category of direct navigation sites – those whose URLs users generally recognize and can type directly into browser navigation bars.

Though direct navigation sites have a legacy of largely lacking content and features, the difference in the veritable bomb Marchex has dropped on the local search world today is that these sites will have rich content that the company has spent months building. Specifically, the 100,000 sites will comprise a total of more than a billion Web pages and 15 million business listings across 20,000 categories.

This strategy will make good use of OpenList, the company Marchex acquired in May 2006 for $13 million in cash. OpenList’s ability to automatically scrape, aggregate and summarize (Open View) local ratings and reviews information will be a valuable asset in executing this content-centric strategy.

“Anyone can create a local destination built around local listings data,” said Marchex President and Cofounder John Keister when I had the chance to sit down with him last week. “It’s the user-generated reviews that are the hard part, which everyone wants because they are scarce. But a technology like OpenList brings them together, and the sources of those reviews are happy to give them up because it’s added distribution for them.”

Marchex has already owned a collection of tens of thousands of local sites that attracted about 31 million unique visitors in March. Today’s news mostly covers the unveiling of the entire library of sites, with new features including OpenList-supplied ratings and reviews. The difference in today’s announcement also represents the move to also open up these sites to search engine crawlers for the first time, according to Keister.

“We haven’t opened up to spiders yet because the sites weren’t ready,” he says. “In terms of marketing, we also hadn’t pushed the button yet.”

It’s All About the Content

One of the benefits of the company’s site development and content deepening strategy is, in fact, that good SEO tactics are created as a byproduct, according to CTO Cameron Ferroni. This essentially means the direct navigation on which such URLs sometimes rely will be augmented by backdoor traffic from organic search engine results.

The breadth and depth of this strategy, and the volume of content Marchex hopes to continue building on each site, is in fact analogous to the SEO strategy being employed by product information and search site Krillion, which has virtually planted search engine lightning rods all over the Internet with millions of individual product pages chock-full of content.

An interesting thing with Marchex’s ZIP code sites in particular will also be to see how well they surface in organic listings, when users engage in the local search practice of typing in ZIP codes as geographic modifiers for local product or service queries.

A study done by WebVisible and Nielsen on local search user behavior in fact showed that more and more users are becoming sophisticated in search tactics and are indeed typing in ZIP codes to search boxes when looking for things locally. The ZIP code-centric content strategy of Marchex sites could as a result ensure a great deal of organic traffic in combination with this trend.

Increased traffic could in turn combine with the specific and highly targeted content across these local and vertical sites to make them more attractive to advertisers. Scaling this attractiveness across such a massive base of sites could likewise have clear financial implications for Marchex.

Data Improvement: The Never-Ending Challenge

Building and improving data will also be an ongoing mission for the company as it constantly chases the strategy to improve the integrity and veracity of its data. This will involve user-generated reviews that can be contributed directly to the site, in addition to those aggregated by OpenList.

It will also soon integrate the ability for businesses to contribute and correct information about themselves such as hours of operation and other standard attributes that will make them more searchable and SEO friendly. This is a strategy recently employed by Google’s Local Business Center as well as ZipLocal and other local search start-ups we’ve talked to recently.

Along these lines, the company has intelligently chosen functionality and data integrity over bells and whistles such as 3-D mapping and video. These features are all on the company’s road map, but it wishes to let others figure them out and improve their economies, while it focuses on the integrity of its data and core functionality local search.

This strategy is very much in line with findings from The Kelsey Group’s latest User View survey (Wave IV), which showed the top attributes users look for in local search destinations to represent core data such as the correct phone number and address (click chart to expand).

Once more sophisticated technologies such as video reach saturation in the marketplace to the point where users expect them as standards in local search, the company will likely partner to bring in such content (this could happen soon).

Until then, as we’ve said in the past, data is paramount, and answering the question of “will it find what I’m looking for,” is Marchex’s modus operandi, which will exist in perpetuity.

“Our goal going forward is to continue to iterate on data,” says Ferroni. “My main objective has been the quality of data, and what I’ve started to realize is that we are going to be in the quality of data business for the rest of the life of this business.”

Avvo CEO Mark Britton posted today on the Avvo blog about a change the site will make to its flagship rating system, which we wrote about here.

The automatically generated rating system was getting questioned by many lawyers and users alike about some, well, questionable ratings (”why does Harriet Miers have a 6.1 out of 10?”); not to mention the class action suit against the company which Britton largely discredits in his blog post.

The rating system, in brief, is meant to rate based on experience and disciplinary action that users (potential clients) should be aware of before choosing a lawyer. So it has eliminated the rating system for those lawyers that haven’t claimed their profiles and instead put in place a binary rating of either “Attention” or “No Concern,” the former being a red flag signaling users to look deeper and be cautious.

Those lawyers who claim their profiles by comparison get the standard numerical rating and can also add data about themselves that can boost their profile on the site and, in turn, raise their ratings. This is part of the site’s strategy to incentivize participation from the legal community, which can add value (content) to the site.

The change to this binary rating system conversely isn’t a huge hit to the company, because it maintains the core value proposition it was founded on, which is to provide an easy-to-use online tool to find a lawyer. The social aspects of the site are meanwhile a value-added layer of content meant to differentiate it from current legal search sites such as Findlaw.

Britton also mentions other enhancements to the site in his blog post as well as some early growth metrics, such as reaching 100,000 visitors. More on the company’s model is in our past writing.

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Update: It was brought to my attention that this explanation for the new rating system is incorrect. The new binary rating only applies to lawyers for whom Avvo has found information from public records alone. Others, whose information is obtained through third-party sources – such as their own Web site – may have a numeric rating, even if they haven’t shown up to claim their profile, as stated above.

Summary

Pay-per-call provider Ingenio and market research firm Harris Interactive released results of a survey (n = 4,123) today that shows interesting data around consumer preferences for mobile devices and advertising. These are important data, as any embryonic area requires knowledge of consumer preferences as a leading indicator of product development. Nowhere is this more appropriate than mobile search, where we are very much in a wild west phase of experimentation, speculation and product development.

Analysis

In this survey, there are lots of takeaways that are telling of consumer preferences and are encouraging for mobile advertising and anyone who plays in this space, including Ingenio. Though mobile search and advertising are different from the PC environment, Ingenio Chief Marketing Officer Marc Barach contends that there are similar opportunities to build ad models. This is qualified, however, by the need to adapt ad formats and delivery methods to the specific needs of mobile users – which these data attempt to discover.

A few high-level data points are:

• Sixty-three percent of respondents claim their cellphones are very personal to them, while 49 percent indicate that they use their phones for more than just calls, including sending and receiving text messages (36 percent), and taking, sending and receiving photos (24 percent).
• Breaking this down by age group, 74 percent of those 18 to 35 use their cellphones for more than just making phone calls. This compares with 20 percent of those ages 55 and up.
• Over the next three years, 57 percent of respondents anticipate using their phones for more than just making and receiving phone calls. More advanced phone use will again skew heavily in favor of those aged 18 to 34 (75 percent) vs. ages 55 and up (33 percent).
• Eighty-five percent of adults own a mobile phone compared with 71 percent who have a landline. Among those ages 18 to 34, 89 percent own a mobile phone, while only 57 percent have a landline.
• Among mobile ad formats, 26 percent of respondents favored sponsored text links that appear as a result of searches (ads relevant to a search query). Twenty-one percent favor audio ads that play instead of ringing while waiting for a call to answer, followed by 20 percent that find text message ads acceptable.
• In each category, younger generations found ads more acceptable than their older counterparts (i.e., 28 percent of mobile phone users ages 18 to 34 find text messages from companies to be at least somewhat acceptable, compared with only 14 percent of those ages 45 and up).
• Among those who call 411 from mobile phones, commercial (74 percent) and restaurant (72 percent) phone and address listings are the most frequently searched categories.

So what does this mean for strategy development, ad placement, and the development of mobile search and advertising in general?

First, it’s interesting to note that the data are in line with previous Ingenio data that show impulse local searches (including restaurants, entertainment and hotels) representing two-thirds of mobile pay-per-call ad volume. The remaining third is for more considered purchases such as real estate and debt management.

What these new data tell us, according to Barach, is that combined with steady growth in financial and real estate categories, mobile users’ intent to use their phones for more than just calls in the future will equate to an increasing portion of searches in these more considered purchase categories.

These data are also generally important to begin to discern user preferences, around which to develop products and ad models. In the mobile space in particular, no clear and prevailing ad model has emerged.

“What we didn’t realize was how open the model is from a monetization perspective. What hit us on the side of the head here was that only 30 percent of users could recall seeing an ad on their phone,” says Barach. “People view their cellphones as a communication device that strengthens their personal relationships that they use all the time, yet the ad model has yet to find itself in this environment if so few people can ever recall seeing an ad.”

The Distance Left to Travel in Mobile Local Search

There are likewise lots of technologies and business models whose developments hinge on one another. Current standards in hardware, for example, restrict the consumer experience (small keypad, screen, etc.), which hinders mainstream adoption and, in turn, is detrimental to ad advertiser adoption. In the other direction, slow to develop content and ad networks hinder user adoption, and you end up with a classic chicken-and-egg scenario. Add to this the carrier control that has stifled a great deal of innovation in mobile search, and you have an industry that is trying to break free of the early adopter stage where it has been stuck for some time.

The iPhone could solve some of these problems such as hardware restrictions and third-party application development for the WAP browser (safari in the case of the iPhone), which will be decidedly more robust than the WAP experience of cellphones to date and as a result possess possible killer app status in finally pushing mobile search into the mainstream (these dynamics were explored in a post last week). It will likely take the iPhone a few years to have this effect, during which time the price point will have to come down.

It’s clear in the meantime, based on these data and others we’ve seen, that a sizable opportunity exists with mobile advertising in standard and universal formats such as voice and SMS. And generally speaking, users’ need to find local information and act on it is presumed to be greater with the mobile use case than with online search. This environment also lets advertisers reach users at vital decision points when intent to buy is at more desirable levels.

Targeting advertising effectively, in a way that satisfies user preferences shown in this and in other studies, is where the strategy will lie on a tactical level. There are lots of implications in the demographic segmentation of these findings and the stated threshold for enduring different formats of mobile advertising. Multi-modal search and ad serving technologies being developed by the likes of Tellme currently show a great deal of promise in having the user-centric qualities highlighted by these data.

Meanwhile, pay-per-call in particular could have a great deal of relevance for the mobile search environment – even more so than online where, by comparison, there is a physical barrier between the PC and the phone. When you’re dealing with mobile technologies, “it is, after all, a phone,” says Barach.

More data points from the survey are available in two different press releases, which cover consumer and advertiser metrics.

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Related: Call Genie announced a partnership with Verizon today to provide enhanced directory assistance. Details to come later.