In the afternoon session at the BIA/Kelsey DMS conference on Wednesday afternoon, two players in the local search industry talked about the growing local display market and the use of display by SMBs. Moderated by Matt Booth of BIA/Kelsey, Tyler Bosmeny from PaperG and Warren Kay from iPromote spoke about the increasing use of display advertising by SMBs. Specifically, these industry participants talked about the improved efficiency that is occurring as this industry matures.

According to the most recent BIA/Kelsey Local Commerce Monitor survey, 11% of all SMBs use online banner or display advertising. Both Tyler and Warren agreed that it is an incredibly growing method for SMBs to get information out about their product or service.

One reason for this growth has been the significant increase in the inventory of display advertising that has been generated by social networks. This increase in inventory has naturally led to lower prices for this advertising, making it a more “doable” buy for many SMBs. An additional benefit of the increased inventory has been the ability to better able “dice and slice” this inventory either geographically or by different demographics. Having a more targeted audience for display advertising makes it much more desirable for SMBs.

What’s the future for display? Will it be larger than search for SMBs? Of course, that will be seen. But, the feeling of the panelists was clearly that local display will become an even more important vehicle for SMBs to attract and retain its customers.

While this news has been out for a little while, we thought it was interesting that a company with powerful TV assets would initiate a deal with a company that provides high-quality, affordable video commercial content for local advertisers. After all, isn’t this what TV has been doing since the ’40s. What gives?

Anyone who’s ever sold or sold against TV operators knows the costs of commercial production can be a deal killer. TV sales executives try their hardest to find ways to bury the costs of production in their schedules, but that doesn’t always work. Other media reps also understand the process and sell against TV by scaring local advertisers about those production costs. It’s been going on forever. 

So, what’s new? TV stations are now involved in many more multiplatform selling opportunities than ever, and Fisher Communications is no exception. Video is a critical and highly seductive element in the minds of most advertisers and an enormously effective advertising tool whether used on air or online. Simply put, local production houses are not equipped to scale to meet the new demand for on-air and online video. The turnaround time and costs associated with doing local production are burdens for both the station and advertiser. The Fisher deal with SpotMixer allows their sales teams to put commercials together on their connected devices right in the showroom of the advertiser, if needed. 

For years, newspaper and radio reps have always been instructed about the power of the spec ad to close a deal. With this arrangement, TV and online reps working for Fisher have the same power at their disposal without costing the station thousands of dollars in time and effort, while providing a video that any business owner would be pleased to have carry his or her brand and identity.

Further, this lower cost option allows Fisher to extend the power of video to a lot of smaller local clients that might have had “video envy” over the years. Other local media companies have also been tying up with video providers over the past few years, but this is clearly local TV’s space to defend.

AT&T Interactive announced this week the launch of in-app ads on its mobile ad network, an extension of YP Local Ad Network. In-app local ads are served within mobile apps based on a user’s location. Earlier this year, AT&T Interactive piloted in-app advertising and reported generating more than 750 million local ad impressions in three months. The goal of in-app local ads is two-fold: offer participating mobile publishers an enhanced way to generate revenues and help advertisers increase potential reach.

“We’re taking advantage of the power of local advertising and the proliferation of location-aware mobile handsets,” said AT&T Interactive President and CEO David Krantz in a statement. Krantz briefed BIA/Kelsey that mobile now makes up a third of AT&T’s local search.

Last month we predicted in our mobile local forecast that local mobile advertising will grow from 51 percent of total mobile advertising to 70 percent by 2015.

Mobile ad networks will be in the spotlight at BIA/Kelsey’s DMS ’11: The Summit for Small-Business Advertising Solutions, Sept. 21-23, in Denver. We’ve got the following session on deck, with BIA/Kelsey’s Mike Boland moderating:

Mobile Ad Networks: The Stakes for SMBs
Mobile brings new customers in different parts of the purchase funnel. How should SMBs engage? The emergence of local mobile ad networks is a major step in bringing volume and engagement to SMBs. We’ll hear from industry leaders.

Dan Gilmartin, VP Marketing, Where
Craig Hagopian, COO, xAd
Greg Hallinan, CMO, Verve Wireless

Over the past year, American Express has embarked on a series of initiatives centered on digital advertising intelligence for SMBs. These include SearchManager (via Clickable) for SEM and multiple social media experiments with Facebook and Foursquare. Now, its small business-focused OPEN division is rounding out the suite with AdManager, which utilizes AdReady’s dynamic display capability to enable merchants to more effectively leverage the format.

Amex OPEN VP Rob Ciccone told BIA/Kelsey that the platform aims to solve the two chief problems that prevent SMBs from actively and effectively incorporating display: It’s “too complex and too expensive.”

AdReady has simplicity in mind with the dashboard it is furnishing to address these problems. Businesses can choose from hundreds of ready-made templates that can be quickly customized. Once the creative is in place, they can then pick from multiple forms of targeting and select media sources for placement across established networks (Yahoo Network, Google Network, DoubleClick Exchange and more). Facebook campaigns will also be included. Banners ads with video and animation are available as well.

The goal is a self-serve vehicle that any SMB can feel comfortable using. And, as Ciccone emphasized, the basic AdManager tool is available to all SMBs, not just OPEN cardholders. Premium tiers, with dedicated advisers for more complex campaigns, are also available.

The jury on the future of display is still in deliberation, with some retailers decrying its static and hard-to-track characteristics, while others, such as Google Chairman Eric Schmidt, extol it as a booming opportunity (Schmidt’s market forecast: $200 billion).

We see display in the throes of an evolution that ultimately could prove revolutionary to its long-term relevance. This can occur as creative, formatting and targeting all push forward by incorporating more dynamic rich media forms and leveraging the social graph for deeper consumer insights.

BIA/Kelsey moderated a panel on “the Out-of-Home User Experience” (click on image for link to streaming video) at MediaPost’s Digital Out-of-Home Forum (DOOH) in New York. DOOH is the third-fastest growing ad medium after mobile and online video.

Paul Lindstrom, senior VP, Nielsen OnLocation, kicked off the panel with data showing video engagement is about 80 percent correlated to advertising recall. Andy Stankiewicz, executive VP and chief communications officer, Akoo International Inc., and David Veckerelli, co-CEO, Digital Displays Network, spoke to how their systems engaged users in unique ways to create video-based user experiences that could drive point-of-purchase sales.

In Akoo’s case, its model is to have large displays in food courts and college student unions playing music videos. Users can interact with the videos using their mobile phones (text, browsers or apps) to select content and make other choices which increases dwell time and user engagement. DDN built and operates the 7-Eleven network of video displays and uses a strategy of mapping content, dayparts and featured products to drive sales lifts.

Generally, the mood of the DOOH Forum was quite positive. The technology has matured into a more capable, cost-effective and efficient buying platform that bridges the physical (i.e., place-based) world to both traditional and digital media. Planning and buying has become easier within vendor platforms but there are still a lot of vendors. Video screens that are connected with an Internet Protocol (IP) address can be interactive, targeted and provide engaging content.

DOOH leverages social context, physical location and user passion (health clubs, bars other places where users select to be based on personal interests). The challenge now is for buyers to become educated about how to understand how their brand strategies can be served by DOOH media in combination with other media. This is a matter of multiplatform planning, buying and creative execution that leverages DOOH’s many digital and interactive capabilities to drive user engagement with compelling experiences.

“A media powerhouse like CBS has deep relationships with small business advertisers,” said Neil Salvage, executive vice president of advertising at CityGrid Media.

The listings will appear across hundreds of websites and mobile apps through CityGrid, including search engines Google and Bing. The directory will include general business info, editorial and user reviews, insider tips, videos, photos and links to the businesses’ websites.

BIA/Kelsey’s Matt Booth first highlighted CityGrid in February 2010, stating that the company provides local content and local monetization in one package for large and small developers. CityGrid reaches more than 140 million unique users across 250 website and mobile sites. This step is one of many the network has made recently to expand its content offerings. Earlier this year, BIA/Kelsey reported on CityGrid’s move into the deals space.

CBS Local Media is CBS’ local broadcasting business segment. It aligns resources between more than two dozen CBS television stations and over three dozen CBS news, sports and talk stations with a focus on competing in the local marketplace. In August 2010, CBS Local Media launched CBS NewYork.com, the first website in the tri-state area to combine the best brands in local media and offer visitors a “local” New York experience. After debuting sites in 23 more markets, CBS Local is among the top 5 most visited local properties on the Web (comScore, February 2011).

Ezra Kucharz, president of CBS Local Digital Media, said, “By delivering to local advertisers cost-effective and efficient solutions for their marketing and sales needs, CBS is able to reach the active consumer interested in utilizing local search to make purchase decisions.”

In the first of many possible partnerships with local media companies, Centro has teamed up with Morris Digital Works to create a network that allows advertisers to place geo- and vertical- based ads across a broad spectrum of local and national sites. Other local media partners are likely to team with Centro on similar networks. The effort echoes earlier efforts of vertical players such as Cox’s Adify, which is now known as Cox Digital Solutions.

Centro’s network enables advertisers to place follow-on ads on other sites after they hit a consumer with an impression on one of the Morris sites, such as Augusta.com. The network can also be used when a local media site’s geo-impressions are sold out, but more local consumers are sought.

The network includes 16 prepackaged geo and vertical categories, such as sports, travel, real estate, seniors, etc. Custom categories can also be created (i.e., hunting, running, military).

Morris, as the local partner, participates in healthy markups in the 60 percent to 120 percent range, said Morris Digital Works President Michael Romaner, who was speaking at the recent Borrell conference in New York. As a secondary effort, Morris and Centro are also creating The Spectrum Network, which is limited to high-quality news sites.

The Scandinavian directory and local search player Eniro has unveiled a pay-per-click advertising network, which it calls Scandinavian Ad Networks. The product leverages traffic from Eniro’s own properties (including eniro.se, gulesider.no, krak.dk, and kvasir.no) as well as third-party partner sites to feed the network.

This launch is part of Eniro’s strategy of becoming a dominant player in digital advertising in Scandinavia. Eniro once had pan-European ambitions, but now is focused largely on three markets — Sweden, Norway and Denmark — where it hopes to solidify its place as the leading homegrown player in local search and online advertising. Eniro has largely divested its operation in Finland, though it maintains a voice (DA) business there.

A key partner in this effort is Amdocs, which provides the platform for Eniro to offer a pay-per-click advertising that is competitive with Google AdWords.

The new ad network is part of a clear effort by Eniro to be the dominant player in online advertising in the Nordic markets. From the press release:

The advertising platform is based on an open and user friendly interface where advertisers, either with the help of Eniro’s editors or by themselves, can design and publish pay-per-click advertisements in local search results and on branch-specific websites. The new platform can also be integrated smoothly into existing media agency systems for increased efficiency.

The pay-per-click market is growing rapidly and we will be a clear and relevant alternative. We have grown in the market are during 2010 and are planning for a continued growth rate, says Mathias Hedlund, Eniro’s SVP for group products and services.

Just days after consolidating Adify and Cox Cross Media into the integrated advertising network Cox Digital Solutions, the company is making waves again. This time, it’s acquiring in order to expand scale by scooping up IB Local Network from Internet Broadcasting Systems, which serves more than 2,200 Web sites.

Internet Broadcasting already directs many of its clients to Cox’s digital network, which includes newspapers, AutoTrader.com and Kudzu. COO Jeff Kimball told BIA/Kelsey that divesting the ad network was a logical way to offload an adjacent business and focus exclusively on the company’s core: building audience and revenue solutions for media companies. Plus, he acknowledged, “we realized that we couldn’t get the scale to compete in that crowded business.”

IBS will continue to push its three-pronged “think digitally” solution with media clients (local TV, radio, newspaper, magazine, cable): scalable technology, content engagement and monetization. This includes content management and publishing systems, original journalistic content and an array of advertising tools to empower local sales forces. 

Cox Enterprises originally purchased Adify in 2008 for $300 million. The white-label technology platform enables publishers to build vertical ad networks, which Cox did by creating AutoTrader Access for in-market car buyers.

As my colleague Jed Williams has previously written, Yext’s Tags initiative is a big one, going up against Google Places with a broad (and “open”) network of 20 participating Internet Yellow Pages and online directory sites, including AOL’s MapQuest and Patch, Citysearch, Superpages, Yahoo and Yellowbook.

Yext CEO Howard Lerman describes Tags as “full-time, real listing information” that will eventually go beyond simply updating text promotions. Future versions will also include deals and photos. “You can do a lot of things,” says Lerman.

All these things require businesses to take it into their own hands to update the tags. It won’t be a problem once SMBs see how easy it is to do, says Lerman. “It is a myth that SMBs won’t self-service.”

As for pricing, Lerman explains that the $99 monthly fee has been designed to be split between Yext, as the host, and participating publishers. The fee, of course, is considerably higher than Google Tags, which are priced at $25 a month. Lerman believes they are being deliberately under-priced in order to position an upsell with Google Boost.

But the network reach will be greater, and the ease of adding new publishers easily justifies the fee. If Google wanted to join the Tag network, all the merrier, says Lerman.

Meanwhile, the royalty share for publishers is based on “a complex model of usage,” with three tiers. A well-used Citysearch tag, for instance, might be in the first tier, while some smaller affiliates might be receiving third-tier revenues. Any publisher that brings in the advertiser will also get a chunk of Yext’s host fee, adds Lerman.

For Yext, Lerman emphasizes that the tag initiative is an especially important one. The company’s business today is largely based on pay-per-call services, which remain robust, he says. But revenues from tags should surpass pay per call “within six months.”