Today Telmetrics released data showing that combining a URL displayed within a print Yellow Pages ad increased the overall leads driven by print Yellow Pages by 78 percent. On average, the company reports, URL visits represented 44 percent of leads while calls generated 56 percent of leads. The data highlight the new extended offering Telmetrics now provides to traditional media players in which it incorporates URL tracking with its standard call measurement solutions.

The data were collected from November 2008 to April 2009 among 1,200 unique advertisers in a variety of headings and market sizes in both the U.S. and Canada. Telmetrics President Bill Dinan told me that the percentage of calls vs. clicks was pretty consistent in both large and small markets, but there were some differences by headings. Service categories, for instance, were much more likely to have a higher percentage of phone calls than clicks. Meanwhile, auto headings such as tires and car dealers had many more clicks. One can assume that car purchases and larger ticket items are likely to require a higher spend and more research, hence, more leads via clicks than calls.

Another interesting data point is that unique URLs had a higher conversion rate than domains that essentially are landing pages from a publisher’s Web site — for instance, iyppublisher.com/joespizza. Dinan said that in interviews, consumers seemed a bit suspicious of the latter mentioned URL and typically preferred the simplified direct domain. Just as the phone numbers are unique for the call tracking program, the URLs are unique to the URL tracking program and all URLs resolve back to the advertisers main phone line or Web site. The incremental cost for adding URL tracking, Dinan said, is nominal and the biggest cost factor is acquiring the URL.

Perhaps what’s most interesting about these data is that they give some real insight into how consumers are using and combining local media to make shopping decisions. Telmetrics data confirm the variety of data in the marketplace, including data from The Kelsey Group’s User View research, that show that many consumers still use traditional media as a starting point and that print and online media are complementary.

Much of the discussion on this morning’s ILM:08 panel titled “Localizing the Ad Nets: Display Channels” revolved around discussion of what was to become of the display ad network environment in 2009. Panelists Shawn Riegsecker (CEO of Centro) and Russ Fradin (CEO of Adify) had differing views on this area. Fradin expects the display market to decline in the single-digit range in 2009, while Riegsecker is still optimistic about the display market and is projecting 20 percent growth for his own company in this space in the next year.

Fradin believes we cannot ignore that some industries that have been driving this space, like mortgage or credit companies and auto dealers, are nearly going out of business and that we’re starting to see wholesale pricing drops in CPMs. To that point, the panel, which included Lat49 President and COO Keith Ippel, agreed that CPM rates, which had been holding steady in the $8 to $10 range for the past couple of years, declined to the $6 to $7 range this year.

Ippel, meanwhile, took more of a middle-of-the-road approach, believing that display spend would be stable, helped out by the consumer products industry. Ippel believes we can’t lose sight of the P&G’s of the world as they tend to spend more in a down year as they try to maintain or gain market share.

Another interesting takeaway regarding 2009 was the view from the panelists that ad spending for both social networks and mobile is going to take a hit next year as those media are considered experimental and will be the first to go in ad budget planning.

Attendees at The Kelsey Group’s ILM:08 conference received a multinational view on what is working in the “new” business directory space. The panel included iLocal CEO Pieter Grasdjik (Netherlands); Chris Smith, Sensis’ general manager of online search and directories (Australia); Insider Pages’ Eric Peacock (United States); and My Virtual Paper’s Manoj Verma (Canada).

Here’s a  glimpse at what is working for some of these providers:

ILocal credits its success to an ROI-based guaranteed leads offering that is sold through its own quickly growing field sales force (currently at 75 FTEs and will likely double in the next year.) The company, which expanded from the Netherlands to Belgium in June 2008, is scheduled to hit breakeven by the middle of 2009.

Insider Pages believes there are two factors that have helped it evolve from a cash-flow negative business in March 2007 with 2.5 million uniques and 550,000 reviews to an IAC-owned business that in October 2008 claimed 5.5 million uniques and 1 million reviews with positive cash flow. Those factors are Insider Pages’ pay-for-performance value proposition and Citysearch’s sales force, which Peacock indicated have helped move the firm from one that was burning cash to one that is throwing off cash.

My Virtual Paper, which just today announced an agreement with Yellow Pages Group Canada, has found that it needs to “digitize to monetize.” What Verma talked about is My Virtual Paper’s focus on taking print-ready materials and digitizing them to make them searchable online. Those print materials include menus, brochures and catalogs to give SMBs a richer online experience.

Sensis has been incredibly successful in its last fiscal year not only growing online revenues, but also growing print revenues. Part of the company’s success is tied to its pitch to SMBs in which it tells them to provide the content and Sensis will do the hard work. That hard work (done by a 2,000-person sales force) includes providing a multi-channel approach – IYP, print, GPS, classifieds, mobile and other platforms.

The Kelsey Group’s Matt Booth kicked off the Interactive Local Media 2008 conference here in Santa Clara, California, with a focus on SMBs’ perceptions and actions related to their media spend. To help frame the discussion, Booth used examples from psychology, in particular the “herding effect,” making the point that oftentimes SMBs base their advertising decisions on what others are doing, not necessarily on what appears to be a better or more obvious path.

Booth cited data from The Kelsey Group’s Local Commerce Monitor indicating that the top influencers for SMBs when making a media buying decision are the actions of their business partners or competitors, with media performance following as a close second.

Interestingly enough, however, the same SMBs that say media performance influences their media buying decisions generally don’t track how they received a lead and therefore don’t necessarily track their ROI. For instance, only 3 percent of SMB advertisers in the LCM study indicated that they used a special phone number to track the source from which a lead was generated.

So, with uncertain economic times, what does that mean for media, particularly interactive local media, and how will SMBs respond? Booth believes “this period of uncertainty is the fertile ground for the next set of winners” in the interactive local media industry. He reminded conference attendees that paid search began to emerge during the last economic downturn/dot-com bubble bust and began to flourish a few years after the fact. Based on past events and current conditions, Booth sees the following factors as the next important characteristics of what’s important for this industry:

• Immediacy - no latency and full transparency (i.e., immediate access to performance metrics)
• Lead Tracking - simple and easy to understand (i.e., deep, but straightforward lead generation reports)
• Pulsed Advertising - on/off or by season (i.e., ability to manage and quickly upgrade or downgrade ad campaigns)
• “Conversation & Reputation Management” - tools for dialogue between consumers and SMBs and among SMBs
• A blend of content and advertising that work seamlessly together (i.e., platform to enable “advertorial” paid search)

So, just as SMBs need to figure out during these challenging economic times whether they’ll advertise more or less and where they’ll advertise, Booth essentially prodded the audience to think through how their solutions will encapsulate the above-noted characteristics and determine how their solutions will move the herd.

Web.com has been busy cutting deals recently. In the past two weeks, the provider of Web site creation and hosting services, search engine optimization and lead generation services to small businesses has announced it is working with MerchantCircle (see post here) and, as of yesterday, home improvement icon Bob Vila.

With regards to the Bob Vila deal, Web.com will help drive leads to local home improvement contractors through the following URLs: BobVilaContractors.com, Leads.com and RenovationExperts.com. Essentially, Web.com is enabling these other URLs with the same process that it has been offering SMBs via Leads.com for many years now. Through the deal it is now more visibly stepping into the competitive and increasingly crowded home improvement field with the likes of ServiceMagic.

Web.com’s Tobias Dengel spoke at The Kelsey Group’s DMS ‘08 conference in Atlanta last month on our panel regarding strategic pricing. With all the talk of pay-for-performance in the industry today, Web.com has stayed firm on its decision to offer flat-rate pricing via a solution that bundles numerous products (SEO, search engine marketing, lead generation, Web site hosting, etc.) that are trackable and measurable. The growing company, which has roughly 300,000 paid subscribers, understands that an SMB’s bottom line is generating new business and these recent deals are all about that. 

Among the interesting sessions here at the European Association of Directory Publishers’ annual congress here in Athens, I thought I’d share a few takeaways from a presentation regarding pricing strategy. The speaker was Mark Billige of Simon-Kucher & Partners. The issue of pricing also came up in some subsequent presentations, in particular a talk given by Müller Medien CEO Michael Oschmann on creating efficiencies through sales force automation. 

Billige gave the audience some food for thought on achieving price elasticity in their directory products and encouraged the group to move beyond making “back room” pricing decisions. Moreover, he acknowledged that discounting is very much engrained in the culture of the sales process, but suggested smarter discounting. For instance, providing discounts for rewarding customer behavior such as on-time or upfront payment. Billige’s research indicates that those advertisers receiving the highest discounts are most likely to churn. For instance, advertisers receiving 50 percent-plus discounts have a 35 percent churn rate. So, the argument of “If I didn’t give them the discount we would have lost them” is, per his research, not the best or most accurate defense.   

Billige also made the case for better tools for sales reps, which was highlighted in the Oschmann presentation noted above. Oschmann’s reps at Müller Medien now all carry tablet PCs, which enables them to have advertisers sign contracts on the spot on the PC, move ad copy and alter a current ad design on the fly, update content and the like. However, in the context of pricing and commission, the sales reps can see through the software package immediately what their commission will be from the sale. Therefore, if they decide to give a discount, they can see what that action will do to their take on the sale. The idea is that it is a motivating factor to not discount or discount as heavily.  

Here are a few additional takeaways from the Billige presentation: 

• Establish an environment that requires thoughtful price strategy, price setting and price implementation. 
• Embrace price differentiation, but make it scientific, not gut-based. 
• Use smarter discounts. 
• Use tools that will help show/measure pricing consequences — i.e., sales force automation tools that instantly show the sales reps their commission based on the discount given. This in itself can be a motivator. 
• Get the sales team involved from the start and get buy-in on pricing decisions.

I’m here in Athens this week at the European Association of Directory Publishers’ annual congress. Nice line-up of speakers thus far, many of whom are echoing the themes that we heard emerge at The Kelsey Group’s DMS ’08 conference last week in Atlanta.

European Directories CEO Cornel Riklin was one of the keynote speakers to open the event today. Among his key messages to the group of mostly European directory publishers and vendors was not to look at their businesses as just print or online, but instead to view them as focused on generating leads for their advertisers.

Riklin used a variety of statistics from his company’s operations in eight countries to make the case for his overall key messages, which included the following:

• “Our business is lead generation.”
• Strategy and execution: Good execution can grow print usage/stabilize print growth, and aggressive strategic direction can grow online.
• Directory publishers can compete effectively: Strength and differentiators are the sales force and multimedia product offerings.
• Consolidation will strengthen the industry.

Riklin followed speakers that included David Smith, economics editor for The Sunday Times, and ABN AMRO’s Julian Moore, who painted a less than positive view of the global economy and media industries. Riklin, however, shed some light on how his sales force of 2,500 and total employees of 5,000 are executing on his key messages in eight diverse countries (and Gibraltar) that achieve revenues approaching 800 million euros and EBITDA of about 300 million euros.

Riklin allows print operations to be run locally while online is run from the center or corporate side of things. He sees daily how competition is increasing in key markets such as the Netherlands and acknowledges that “the industry is under siege.” He remains incredibly upbeat about the industry’s prospects even in an environment that he believes has experienced a polarization of share price performance and overall financial performance of directory publishers around the world. Riklin concludes: “It’s all about execution.”

The CEO’s vision includes a 50-50 distribution of revenues by 2011 between print and online and overall revenue growth. In an effort to achieve such growth he has rolled out a more specialized sales force that offers more packages or bundles and does so aggressively. He echoes sentiments we heard at last week’s DMS ’08 conference that get to the heart of a consultative or one-stop-shop multi-product sales approach. Consolidation, too, is part and parcel of his plans, although there were no hints of the publisher’s next target. European Directories, of course, has its hands full as it integrates its most recent acquisitons — Ditel in Poland and Gouden Gids in the Netherlands.

Riklin’s presentation was followed by U.S.-based Local Insight Media CEO Scott Pomeroy, who provided a similar message about his company’s “relentless focus on execution.” As the company’s chairwoman, Marilyn Neal, noted during her presentation at DMS ’08 last week, Local Insight Media is one of the few major publishers in the world experiencing print revenue growth. Pomeroy, too, cited economic forces, but noted key differentiators for his company such as its investment in and management of its sales force. Local Insight Media is trialing new ways of doing business, such as pay for performance, and working with new digital platforms that help set it apart.  

Zillow.com’s founder Rich Barton used the analogy of the explosion of verticals to the storming of the Bastille and the strong desire for consumers to take control of the decisions in their lives, especially those with big financial implications.

The visionary talked about his three pitches to Bill Gates and Steve Ballmer in the 1990s when he was a Windows product manager at Microsoft. He went 1 for 3 on his pitches, including a grand slam with his travel vertical idea, Expedia, which was spun off from Microsoft in 1999. Within a year of being spun out, Expedia surpassed Travelocity as the largest seller of travel online or offline and today maintains that position. Expedia is now responsible for US$20 billion in travel bookings.

The other two pitches that Microsoft passed on were Barton’s idea for a stock tracking/trading service and, conveniently, a real estate vertical idea, which obviously now is his focus at Zillow. Barton joked that Gates’ response to the online vertical concepts in the early 1990s was that they were the “dumbest three ideas” he’d ever heard.

So, Barton knows a little bit about the vertical space and as an investor in a variety of up and coming verticals talked about the need for improvement in other core verticals including mortgages, legal and employment. Mortgages is an area that Barton describes as simply not working right now and consumers want a new way.

Within the past few weeks Zillow launched a Mortgage area on its site and thus far it has generated roughly 19,500 anonymous loan requests, which have prompted 59,500 loan quotes. Unlike other models that require mortgage providers to pay for those mortgage leads and that identify the person requesting a quote, Zillow provides the platform for free to meet the needs of both consumers and businesses. 

A strong believer in the power of “free,” Barton, who claims Zillow spends no money on advertising, provided these takeaways on the vertical/digital media space:

• Consumers crave information and power.
• If it can be known it will be known — by all.
• If it can be rated it will be rated.
• If it can be free it will be free.
• There can be no vertical market without community.
• The digital media business model will rule.

A firm believer in the media business model, of which local is a strong component, Barton believes the age of verticals is just beginning and foresees a huge opportunity for both those Bastille storming-like consumers and businesses alike to benefit.

In an executive interview today with the “Father of IYP,” Pat Marshall, Yellow Book’s chief new media officer talked about his re-entrance to the IYP space and what Yellow Book is looking for new business partners.

In all fairness, Marshall, who was previously head of Idearc’s (the former Verizon) Superpages.com, said he didn’t want to return to the IYP space, but rather wanted to get back into local search. Marshall characterized Yellowbook.com’s current position as more in the IYP business but said the trajectory is gradually moving toward local search.

Yellowbook.com is looking for partners right now primarily in three categories: infrastructure, traffic and inventory. Marshall gave some pretty specific direction on what Yellowbook.com will and will not consider in terms of potential partners and literally offered his e-mail address for the attendees looking to work with one of the fastest growing IYPs in the U.S. today.

More specifically, this is what he said:

1) Infrastructure - A potential partner must bring Yellowbook.com a business plan and provide a compelling argument as to how it can increase revenue, lower costs or provide a more competitive offering in the market.

2) Inventory - Marshall very directly said a potential partner must be willing to “put some skin in the game.” Why will the inventory be good for Yellowbook.com’s customers?

3) Traffic - A potential partner must bring a qualified audience to provide meaningful users to Yellow Book’s customers.

Marshall joined Yellow Book in July 2007 and while he can’t be given full credit for helping the Yellow Book Network grow its unique visitors (per comScore data) 137 percent from Q4 2006 to Q4 2007 and increase its share of IYP searches from 4 percent to 8.6 percent for the same period, he certainly can share in some of the credit. Going forward new advertising campaigns that will debut in the coming weeks will focus specifically on the various digital components of the Yellow Book business and future online growth will be credited to Marshall and his team.

Today we debuted a new polling feature on our Local Media Blog in an effort to provide another interactive way for our blog readers to comment on issues in the local media space. Our first poll asks about your take on SMB videos in 2008.  

The new poll feature ties with the launch of our Chief Executive Outlook brief. Each month The Kelsey Group’s CEO, Neal Polachek, will present a topic and provide TKG’s point of view on it along with relevant data and a related poll question. We hope to generate dialogue with and among you — the members of The Kelsey Group community – on the subjects that are most important to the global local media business. Subscribe to the Chief Executive Outlook and you’ll receive an e-mail notification the last week of each month that a new issue is available. 

With regards to the poll on the blog, we will be changing the topic frequently to get your take on various industry issues – or maybe just to find out who you think will win the Super Bowl. (Go Patriots!) 

It takes just a second to participate and you will receive immediate results on where your opinion fits with our other readers. No registration required! We chose Vizu as our provider for its slick graphical appearance and immediate results. 

Check back often for new poll topics!