One of the big themes in local this year is the increased amount of localization in national ad campaigns. We saw it with U-Haul and Progressive Insurance a couple of weeks ago on our podium at ILM East in Boston. Those have been mostly search plays. But we also see it with display ads on national networks developed by local companies, such as Gannett and Morris. And we see it on localized efforts placed via companies such as Centro.

A mainstay in that part of the industry is Media Networks Inc., the Stamford, Connecticut-based Time Warner-owned company that specializes in localizing national advertisers in print magazines and more promisingly — given the decline in the print magazine business — a wide variety of national and local websites.

MNI dates back to 1969, but really began transforming to the digital age in 2006. Today, digital accounts for roughly $35 million, or half of its $65 million to $70 million annual revenues. Key categories include auto, health care, finance and regional banking. Education is also a big play. In addition, the company places smaller regional advertisers that want to broadcast a national-like presence via placement in national publications.

MNI Digital head Michael Nasif tells us the company works in close partnership with agencies. “You need a very specific approach to local markets,” he says, noting that a carmaker might be pushing a family van in one part of the country and a sports car in another.

While MNI is agnostic toward media channels, Nasif says the challenge is to provide more accountability at the local level. National clients are used to greater accountability from print magazines. “The nature of a paid subscriber in terms of brand value and a trustworthy approach is not automatically replicated online,” he says.

Nasif also notes, interestingly, that while tablets have been suggested as the savior of magazines, it is going to take a lot of work, given that tablet penetration is still relatively low, and that media subscriptions on tablets are a piece of a piece of that.

Last week I attended Opus Research’s Conversational Commerce Conference (a.k.a. “C3). The focus of the discussion was mostly on social media and its impact on marketing and customer care, at both the local and national brand levels. While there is a lot of interesting activity using social media for customer acquisition, the biggest surprise for me from the conference was just how much innovation was going on around the customer-care aspect of social.

Pete Blackshaw of NM Incite started out the conference pointing out the “conversational divide” that typically exists between Marketing & Customer Care. Over the past year Marketing & PR have begun to embrace social media channels, but Operations is far behind. As a result consumers are experiencing two different brands. Blackshaw emphasized that to succeed socially the two departments must work together. Often he sees a huge gap between happy employee Twitter profiles and site feedback forms/call center processes. Increased social media activity can create service expectations that customer care is not set to deliver on yet. This challenge can be addressed by realigning incentives for both departments. Blackshaw’s parting advice was that smart players are putting feedback mechanisms everywhere to encourage customer engagement which binds them to the brand.

I was particularly impressed with Spanlink Social Watch, a hosted service that allows customer service people to monitor and respond to social media interactions about their brand. In the demo, we saw how a customer’s tweet complaining about a brand turned into an intricate series of customer-care interactions via Twitter, cellphone and e-mail. Within a minute the customer service person had identified the complaint on Twitter, routed it through to a manager who could respond to the customer via phone and solved the problem. Spanlink (and Cisco) had integrated social media into standard customer-care routines to great effect. For customers who value responsiveness and the personal touch, this blending of call center and tweet center seems like a decent answer.

On the customer acquisition side, I found Marchex’s Call Analytics solution intriguing. The service records inbound calls, transcribes speech to text and provides marketers with keyword analysis to improve conversions. The example Marchex provided was a hotel that found that when a conversation with a potential customer included the words “swimming pool,” conversions doubled. This led the hotel to use the term more in its pitches and to pay special attention to callers that called from ads that mentioned swimming pools.

A panel on the some of the big local deal services, including Yelp, Groupon, MerchantCircle and Pelago (makers of the LBS app Whrrl ), focused on how to bring “authenticity” to conversations with potential and current customers.

• According to Sumir Meghani of Groupon, the daily deals service is putting a lot more focus this year on customer retention for its advertisers. The success of Groupon promotions creates unanticipated demand (although by now they should be anticipating it, right?) and Groupon sees its role as helping advertisers manage the relationship with customers from the point of acquisition throughout their lifetime. Groupon has had great success with customer acquisition, but facilitating long-term social communication between businesses and their customers seems like an even bigger potential home run.
• Jed Nachman of Yelp discussed how businesses can effectively deal with negative feedback on public sites such as Yelp. When a complaint is emotional or experiential in nature, Yelp coaches businesses to send the individual a private message and try to handle the matter offline. When a customer is disputing a fact (e.g., the price of a margarita) that might be more appropriate to handle in a public forum.
• John Kim of Pelago talked about how to use social media in a proactive way. The goal is to keep your customers saying good things about you. He gave the example of how Marie Callender’s identified that its customers (a.k.a. moms) were challenged by how to bring their families together at mealtime. Marie Callender’s built a recommendation service that regularly provided ideas on this theme that created a large amount of social engagement, which Pelago was able to measure at the local store level via activity on the mobile check-in app.
• Doug Kilponen of MerchantCircle talked about how merchants that are taking control of local social media channels have a big leg up on their competition. Kilponen’s example of a New Jersey plumber who spends several hours/day answering questions on MC has led to huge visibility for the plumber in his market — his profile gets 20K+ page views/month. Conference host Greg Sterling dubbed the merchant “The Car Talk of Toilets.”

When the conversation turned to SMBs and social, representatives from Oodle, Closely, Vendasta and Praized Media, left us with some interesting points:

• Social is not for all SMBs. It’s for SMBs that depend on relationship marketing, such as real estate agents. If you already have to be social offline for your business, there’s a good chance that you can benefit from being social online. If your organization is feeling the need to add social media to your kit bag, you may want to consider your the inherent sociability of your target audience (e.g., SMB advertisers) and tailor your products to those niches that would be well-suited to it.
• There is a large amount of potential opportunity being lost from not utilizing social media channels. For example, each day in London there are several people who tweet that they have locked themselves out of their house. Services such as Praized Media’s Needium and other social media monitoring tools are providing ways to engage with these potential customers in non-intrusive ways.
• According to Perry Evans of Closely, social has become a key ingredient in new local businesses launching. The trend seems to be to run a daily deal to stimulate early demand and cash flow, and then utilize social channels to bring the new customers into a network that will help bring in additional customers. I found this to be one of the more interesting factoids to emerge from the discussion. The concept of on-ramping a new business via social deals seems like an entire business model unto itself and is one that is ripe for the taking.

My two big takeaways from C3:

1. Successful users of the medium will be those who figure out how to enlist their customers to do their marketing for them.
2. The advent of social signals marketing’s shift away from the concept of campaigns, which are typically event-driven, toward constant ongoing communication. A lot of the innovation in social/local will be around how organizations can build such a communication strategy in a scalable way.

For further reference you can find my unedited conference notes here:

Beware The Conversational Divide

Where Does Support End & Marketing Begin – And Vice-Versa

Cisco Previews Social Watch CRM Tool

Yelp, Groupon, MerchantCircle & Pelago

Shaping the Conversation: Search, Reputation & P2P

Social CRM for SMBs

Marchex Call Analytics

I also recommend Craig Donato’s Social Commerce & the New Rules for Local Businesses.

If your company is doing something interesting in local conversational commerce, let me know about it.

ValPak now routinely features TV shows within its coupon offerings. This week, for instance, it has a Delta Airlines Sweepstakes associated with promotions for “The New Adventures of Old Christine” and “Mike & Molly.” In San Diego, the sweepstakes promotion is alongside more typical ValPak promotions for Sears Home Services, Alladin Parking and North County Pavers.

Eventful is going a step further and really pushing hard on the games mechanics for multiple social media promotions. The site has always had a “Demand It” feature for users to solicit events to their town. Now, Demand It has been expanded with eight weekly competitions. Each will enable users to “play” various contests, while being exposed to marketing for movies, TV shows, records, new books or even politicians, liquor and deal-a-day sites.

This week, for instance, the competitions include bringing author Ned Vizzini to a school; winning the premier showing of “Paranormal Activity 2,” a scary movie; being one of three schools to host Cox Cable and MTV’s “Challenge Day”; or five others (including Kiss).

CEO Jordan Glazier tells us “the local targeting capability of the Internet and direct e-mail marketing services like Eventful helps agencies appreciate the benefits of local focus. They are increasingly including local as a requirement within their buys.”

Using services like Eventful, Glazier says that “brand agencies have the opportunity to impact commerce for their clients across strategic segments and markets in ways that historically have been restricted to promotional agencies.” He adds that Eventful is capable of targeting by age, gender, presence of children, household income, city and neighborhood, and types of favored entertainment.

We had the opportunity to sit down with industry leader MediaTrust to understand the major changes in the in the performance marketing (pay-for-results) category and the challenges of developing a cost-per-lead (CPL) model.

MediaTrust began as an affiliate marketing company, but was continually challenged by the deceptive practices of many affiliate marketers and publishers. Understanding there was a better approach, MediaTrust began vetting each of its publishers and affiliate marketers to ensure the quality of its network and to better assure brands would get quality campaign results. As this strategy gained momentum, MediaTrust evolved into a software as a service platform to better serve both publishers and brands. Today, the MediaTrust platform empowers advertisers to use e-mail, display, search and social media advertising to deliver a site visit, lead or sale. MediaTrust’s success was recognized by Inc. Magazine, which named them the ninth-fastest growing U.S. company in 2009.

Pay-for-results campaigns rely on understanding average customer acquisition costs and lifetime value of an acquired client to know how to effectively build a cost-efficient campaign. According to Trip Foster, VP of marketing, “our goal is to provide opportunities further down the sales funnel because advertisers are willing to pay more the closer we can get them to the transaction.” Publishers have become more willing to work on a performance basis because they are better able to monetize their excess inventory with known brands and increase revenues on what would have normally been sold on an ad network as remnant inventory. “There is no scarcity of online inventory; the real challenge is uncovering inventory on quality sites where brand value is protected and predictable results can be achieved.”

Foster describes MediaTrust’s performance marketing platform as “trusted outsourced marketing, bringing together publishers and online marketers who can provide quality leads or transactions based on a specific cost per acquisition.” Like most multimedia approaches, MediaTrust is platform agnostic focusing more on where quality leads and transactions come from. “We spend a lot of time testing campaigns to determine how best to drive ideal cost per acquisition and are willing to seek out new publishers or affiliate marketers who can best optimize a campaign via online direct response mechanisms such as search, display advertising, re-targeting or e-mail marketing.” The recent acquisition of Bardon Advisors, an L.A.-based CPC and affiliate marketing firm, allows MediaTrust to serve the full online sales funnel with cost per click (CPC), cost per lead (CPL) and cost per acquisition (CPA).

When asked about the growth of the performance marketing category, Foster said “the majority of online campaigns will move to a pay-for-results model. Even brand advertising is tied in some way to a specific response mechanism for more precise campaign measurement and ROI. The local portion of paying only for results, on the other hand, will be a more complicated scenario given the challenges of a smaller scope of geography, more limited inventory and possibly cost-per-acquisition numbers that might not make sense.”

As marketers continue to move away from impression-based online models, performance marketing is seen as a more direct way of measuring ROI, allowing brands and advertisers to maximize spend and grow their business. While multimedia publishers possess a number of online inventory options within their own ad networks, driving significant and affordable acquisition costs requires more specialized tools and partners to build up this portion of their business. As publishers and even broadcasters look to better maximize their online inventory with brand advertisers, online performance marketing seems to be a smart play.

Plan to hear more about MediaTrust’s views on leads-based products and selling at our upcoming Directional Media Strategies conference in Dallas, Texas, where Foster will provide his views on the category on the panel titled “Leads-Based Selling: Salvation or False Hope?”

EBay is pushing to do more to integrate the flagship auction site and its Marketplaces products with ProStores, its online storefront software company. The effort to integrate ProStores is part of a broader effort to integrate its properties (i.e., eBay Classifieds).

ProStores, acquired by eBay five years ago, currently has “tens of thousands” of customers, who pay either $29.95 or $59.95 per month, depending on the service package. The majority of its customers come from eBay Direct, but the service also works with independent retailers. It competes with the likes of Amazon, as well as several boutique storefront providers that focus on local marketing, such as ShopCity.com.

A new version of the software has just been released that ProStores hopes to boost conversions and order size — the two currencies of online stores. The new version lets store owners “panelize” their content and turn promotions into graphical banners on the fly. Multiple promotions can be run at once.

I recently attended a webinar hosted by SalesBlogcast that featured social media company BizBrag. My reason for attending was to learn how small and medium sized-businesses can take advantage of social media. Based on our Local Commerce Monitor research, 32 percent of SMBs said they plan to use a social site, while 31 percent indicated they plan to place links or ads on social media sites. What previous waves of LCM data have shown is a high desire for social media but lower actual spending, indicating a pent-up demand to spend in this category. My theory has always been that social media is often intimidating to those less familiar with Facebook, Twitter, LinkedIn, blogging and posting news features. All these activities take time and a certain level of technical expertise to manage them while also running a business.

Enter BizBrag. CEO Brian Smith made it his mission to try to develop a single platform where SMBs can manage all their social media activities including e-mail marketing. “With so many social media outlets, with varying ways of inputting data and broadcasting information, BizBrag’s goal was to create an easy to use all-in-one platform. The goal is to help small businesses create ways to draw activity to their Web sites by creating more ways to be found on search engines via blogs, news articles, and social media posts.” Small businesses create a BizFolio that shows all their activity and provides a simple description of the company. The dashboard feature allows the company to create news articles and posts about their company showing them where they can post their information. Enter a news story (Called a Braggit), check a few boxes on where it can be posted, upload an e-mail list, and then hit submit.

BizBrag is two months out of beta and now gaining speed with 1,000 advertisers signed on since going live. Leveraging its social media expertise, BizBrag has been active in working its social media network to get the word out to SMBs. Smith pointed out, “if the pace of inquiries and new advertisers signed on in the last two months is any indication, we seem to have hit the mark with small businesses trying to figure out an easy way to start and manage a social media campaign.”

For the past year and a half, we have been answering questions about and consulting with our clients on sales transformation and consultative selling (see here, here and here). One of the key aspects of many of the questions we receive is “what has fundamentally changed, how has it changed and what do we need to do about it?” A recent article from BNET Insight’s Geoffrey James crystallized some of our thoughts on how the Internet has both changed the sales process and created an even greater need for sales skills and support. According to James:

“Sales reps were valuable to a customer because they knew product details and how to write the order. And they were valuable to their own firm because they could convince the customer to buy today, rather than tomorrow (or from another vendor).

“The Internet changed all that. Customers can now retrieve product information, order product, check delivery status, contact customer support, and so forth, simply by getting online. Because customers no longer need a sales rep to perform these functions for them, some pundits predicted that the Web would ‘disintermediate’ sales, leaving millions of sales professionals out of a job.

“What happened instead was that the Internet made the sales function more important, even while changing its nature. While the Internet made the traditional sales function obsolete, it also wreaked unintended consequences. The Internet created what social psychologists call a ‘tyranny of choice’; customers have access to so much information that it can become more difficult to make a buying decision.”

Understanding this juxtaposition between making sales transactions easier and complicating the process with an overwhelming number of choices explains the need for consultative selling to help local advertisers understand and navigate complicated media choices. While consultative selling has been a “nice to have” sales process, broader media portfolios, and, as James coins it “the tyranny of choice,” local advertisers need more insight and assistance to make sense of all the new options and to assure them they are making wise use of their media budgets.

Many sales organizations are seeking new ways to train their sales people, focusing on frequency of contact, proper discovery and fact finding skills, more listening skill development, and local media education so salespeople understand all forms of local media. The goal — enabling salespeople to guide SMB media choices and advise on appropriate investment levels. Salespeople are now expected to be educators, problem solvers and above all local media consultants who can best match media options with budget and business objectives.

This change in sales process expectations has already occurred, but sadly sales organizations have been slow to adapt due in part to the economic slowdown leading to a lack of investment in training and sales strategy development. Adapting quickly means less of an interruption in sales revenue growth and reduced sales staff turnover. Cutting back on capital investments can only take an organization so far, the time is now to invest in transitioning the sales process, fully embracing consultative selling, and developing new sales strategies that make sense in a connected world where information overload is creating new sales opportunities. Welcome to the new world of sales.

One of the recommendations we have been supporting and talking about over the past year is the need to look at the print directory differently. For the past 100-plus years, the directory has been viewed as a distribution media vehicle — “we deliver to every resident in a city.” In recent years, with distribution declining and local media fragmenting, people in our industry are still hung up on getting more books to more people rather than trying to view a directory as a series of verticals that reach different audiences, with different needs and varying levels of spending power.

Enter Larry Small, research director for the Yellow Pages Association, who supports one of our major views that demographics are an often ignored factor when considering the value of a print directory. While the industry has been concerned with the 18-25 crowd and how directories will adapt to attract and meet the needs of this group, Small points out that the real factor is not only age but disposable income.

He goes on to say: “One other metric to keep in mind is disposable income. The Yellow Pages industry has positioned itself as the best source for generating qualified leads. By definition, a qualified lead is one where people are ready to make a purchase — in other words, they have the need AND the resources to complete the sale.”

Small also shares this chart from CNNMoney.com that shows median net worth of individuals by age group:

With higher usage rates in the 35-65 age groups, the print directory has the capacity to reach more affluent spenders who have high discretionary spending in categories that are meaningful to a directory because of the life stages these age groups are in. Users in these age groups are spending on home renovation, financial services, house wares, cleaning services — all key directory headings. According to BIA/Kelsey’s research and U.S. Census data, those in the 35-65 age groups control nearly 80 percent of spending power in the US.

CRM Trends, which tracks changes in demographic trends points out: “Compared with the big-spending Baby Boom generation, these new spenders (18-30) will be less attractive as fewer will have reached their big-spending life stages. They will not only have less buying power, they will also be more fragmented into niche interest markets and will demand more personalization and be harder to reach with conventional marketing.”

Because a directory is essentially made up of a series of verticals, directory publishers would be well advised to look at these categories to determine if they have the appropriate content, editorial support and navigation for the age demographic the category attracts. Taking this approach might signal the need to redevelop different sections of the book rather than the entire directory, integrating more print to mobile or online products like SMS codes or QR Codes, rethinking distribution, or adding more unique/relevant content not generally found elsewhere or found in one location.

Freeing up the minds of print product managers to think in new ways about the directory and its varying target markets may indeed create greater innovation and product reconfigurations rather than simply offering more cosmetic changes.

In the second “installment” of its quarterly report “State of Small Business Online Advertising, Search Edition,” WebVisible reports that its SMB clients increased their online search spending to an average of $2,149 in Q4 2009, an increase of some 30 percent over the Q3 level, and 111 percent over the level of Q4 2008. In addition, it reported that other related metrics, such as conversion rates and keyword, increased. (Note that the SMBs surveyed are WebVisible’s customers, which are already using online search, and are more “evolved” than a broad cross-section of SMBs.)

Perhaps one of the more interesting trends identified in the research (to the extent to which one year can reveal a trend) is the increase in conversion rates (defined as the percent of search clicks converting to Web site actions or calls). This metric stood at 26.6 percent in Q4 2008, and has increased to 35.3 percent in Q4 2009.

Also notable is the explosive growth in video, from 5.2 percent of advertisers with video on their sites in Q4 2008 to 19.2 percent in Q4 2009.

The report also includes interesting findings on SMBs in the U.K. Not surprisingly, their behavior patterns for online advertising are very different. For example, the average U.K. small business spent only $183 for online search in Q4 2009 — about 9 percent of their U.S. counterparts.

Finally, the report contains information on the distribution of SMB advertisers by business category (for the U.S. and the U.K.), as well as an insightful approach to segmenting the unruly SMB marketplace.

CityGrid is Citysearch’s answer to taking more control of the local online space for the benefit of its partners. Citysearch’s goal is to transition from a Web site to a local online media company with a content ad platform. CityGrid offers local businesses unprecedented reach across CityGrid’s network of 100-plus Web and mobile partners, complete with search engine optimization and marketing. CityGrid Complete was created through a strategic partnership and investment in OrangeSoda and other partnerships to create a comprehensive network of high-traffic sites. CityGrid aggregates uniform profile pages across its entire network. Citygrid’s standard profile page approach helps publishers know how to drive more content, which helps bring more organic traffic.

CityGrid Complete is the online advertising solution that gives local businesses the ability to reach millions of consumers monthly by building customizable content ads that are distributed across the Web. In addition to content ads, CityGrid Complete includes SEO services designed to drive consumers from all the major search engines directly to their own Web sites. CityGrid Complete customers also receive access to an integrated Web-based dashboard allowing advertisers to actively monitor and manage their campaigns, ensuring they receive the highest quality leads for their advertising budgets.

“Whether it’s driving new customers to our advertisers from major search sites or mobile applications, CityGrid Complete is about delivering local businesses the highest quality leads for the best value,” said Herratti, “giving advertisers and publishers access to a one-stop local advertising solution with SEO strategies and tactics that historically required a large dedicated team of experts.”