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.

In 1996, one of our keynote speakers at a Kelsey conference was Greg Riker, who was vice president of technology at Microsoft and responsible for “wearable technologies.” A lot of what he did sounded like science fiction, but what he was testing has now become part of our daily lives.

In that vein, every year we conduct a session that we call The Next Wave Interview at ILM. Mike Liebhold, senior researcher at The Institute for the Future, was kind enough to take a break from a conference his organization was running on “Blended Realities,” or how our ordinary lives are becoming increasingly digital, to share some of his thoughts on the future. Liebhold has a biography that could easily fill two full columns in The New York Times. He has been a researcher at Intel Labs, developed large-scale IT services and IP networks for rural and remote regions of the world, been a senior consulting architect at Netscape, served as chief technology officer for Times Mirror publishing and a senior scientist for Apple Computer, essentially serving as John Scully’s right-hand man for technology.

The Institute for the Future is a 40-year-old not-for-profit organization spun off from the Rand Corp., and Liebhold’s job is to study the impact of communications on society. He helps enterprises think systematically about the future. “I don’t spend much time on what’s happening today; I tend to look out at what will be available in five years.”

In his discussion with conference organizer Peter Krasilovsky, Liebhold went on to say that we are becoming an urban planet — soon 50 percent of the population will live in a city. We are passing through a very important inflection or tipping point where phones aren’t just phones, they are computers. (During ILM, we heard several speakers say that the iPhone was a game-changer, and Michael Boland held a fascinating session on local iPhone demos.) Prices on smartphones are coming down … Liebhold said there are some subsidized smart mobile phones available for $79. As a result, he predicts “in five years, everyone will be able to afford a mobile computer.”

What is of equal importance is the opening of the mobile Web. Today the carriers still control the networks, but these “walled gardens” will fade fast. Liebhold is a strong proponent of open systems, and he believes it is just a matter of time before “our environments are going to talk to us.” He said that in most every talk he gives that kind of statement makes people nervous about privacy, but he cautioned that location tracking has to be done on an opt-in basis, and he believes that people will opt in. An important element of this is geoRSS. This is a grass-roots development of location-based data that most major companies have adopted as a standard to make sure it works across the board.

It appears that Riker’s wearable technology is fast upon us and Liebhold underscored the theme of Interactive Local Media 2008: Extending Local Channels.

The phone is quickly advancing as a means of pushing out ad-sponsored content that mimics some of the popular mobile advertising features.

Greg Webster of VoodooVox, at ILM:08, debuted some of the new features of the company’s In-Call Media group, demonstrating additional marketing opportunities via on-hold messages, “pre-call” messages when using calling cards, and distribution over a network of telephone audio outlets such as 1-800-FREE-411, radio stations and major call centers. Many of the major functions include sending information to your mobile phone and being able to push a button to get extended information beyond a typical :09 message now utilized on the network. The ICM interface allows advertisers to set up their own campaign, direct it to specific states and even defined DMAs.

Two case studies clearly showed the power of this emerging media. One study involved the promotion of an event aimed at Hispanics by Food4Less, which utilized “pre-call” messages on calling cards used in identified Hispanic communities. The net result of this campaign was a 40 percent increase in awareness, a 15 percent increase in attendance and a 35 percent increase in new customers. Another approach used by Buena Vista International targeted radio station on-hold messages to promote a limited release movie aimed at teen girls.  The real aim of this new media approach is to take advantage of lost sales opportunities while customers are on hold with messages that are more relevant and appealing rather than simply playing “Muskrat Love” or “your call is important to us.” Much like mobile phone advertising, in-call media aims to provide a more intimate connection with customers to drive specific actions or to raise awareness. 

The partnership between Yahoo and the Newspaper Consortium is an ambitious effort to bridge the gap between the online and print worlds. The two leaders of this partnership presented at the Interactive Local Media 2008 conference this morning, in a panel moderated by Peter Krasilovsky.

The panelists were Lem Lloyd, VP Newspaper Consortium at Yahoo, and Mike Silver, executive director of the Newspaper Consortium. They talked about how their two organizations are playing ball in the online space. As Lloyd put it, “This is just the first or second inning of [Yahoo] working with newspapers.” (Note that Yahoo is the primary partner of the Newspaper Consortium, but not the sole partner.)

This is a multifaceted relationship, in which newspapers:

• Adopt Yahoo’s new Apt platform (”unifying digital advertising platform”). (The target is for 500 newspapers to be on Apt by the end of 2009.)
• Participate in Yahoo’s HotJobs employment classifieds network.
• Mingle ads placed by Yahoo with ads they’ve sold themselves.
• Can target audiences using behavioral targeting tools provided by Yahoo.

Lloyd and Silver provided lots of solid reasons for this relationship:

• There are some 800 newspapers in the consortium, with a total of about 15,000 local sales reps.
• Although local newspapers have deep roots in their markets, Yahoo typically has a much larger reach.
• Local is made out of “hundreds of verticals,” each with its own buying cycle. Yahoo is experienced in selling to verticals (e.g., real estate).
• Although Yahoo has a huge number of users (500 million uniques per month, worldwide), it isn’t fully monetizing its potential ad impressions.

Silver acknowledged the “elbow grease” and “determination” that Yahoo is putting into this relationship. The ultimate goal, in Silver’s words, is for newspaper sales forces to become the “local digital marketing agency” for SMBs. (Maybe by the fifth or sixth inning?)

The “New Takes on Local Audience Targeting” panel this morning at Interactive Local Media 2008 demonstrated how the technology for identifying and targeting audience segments is growing by leaps and bounds.

Moderator Bobbi Loy-Luster kicked off the session by introducing comScore’s Brian Jurutka, vice president of marketing solutions at comScore (who we congratulate on his recent promotion). In his data-filled presentation, Jurutka started from a top-line perspective for online media spending. He said that although the growth rate for online media has slowed due to unfavorable economic conditions, it will still be above 10 percent.

Jurutka then discussed the audience segmentation approaches supported by comScore’s data, which include:

• Channel (or platform)
• Behavioral
• Attitudinal
• Geo-demographic

In addition, Jurutka highlighted comScore’s mobile data capabilities, pointing out that in the U.S., the 228 million mobile phone users outnumber the 189 computer users. With its recent M:Metrics acquisition, comScore M:Metrics is well-positioned to provide detailed user information on the mobile space. (For representative data from Jurutka’s presentation on the rapid growth of the mobile market, see the blog post by Michael Boland.)

Next up was Joshua Herman, Acxiom’s InfoBase product manager, who described the many features of InfoBase, which generates very detailed performance data on a variety of advertising in multiple media.

InfoBase provides a consistent data framework across multiple marketing channels. It works in conjunction with another Acxiom product, the Personix demographic profiling system. Personix has 70 predefined demographic group profiles (or clusters). Using these two systems together, advertisers can see how their ads are performing with any of these clusters.

The end game for this data and analysis is to keep the consumer ENGAGED with the advertiser. As Herman said, “It takes a village of media to connect to the consumer.”

Two real success stories in the home services category shared the stage this afternoon on the “Home Services Visionaries” panel, offering two different perspectives on how to make money from creating a local home services marketplace, built on a foundation of credible consumer reviews.

Angie Hicks, CMO and cofounder of Angie’s List, described how she has built a successful business based on charging consumers for access to small businesses that have been rigorously reviewed by their peers. Angie’s List also generates revenues from the sale of advertising on its site and in print magazines.

Rodney Rice, cochairman and cofounder of ServiceMagic, built a business based on charging home services businesses for leads, while offering consumers access to small businesses that are highly rated by their peers. As Rice pointed out, ServiceMagic (now an IAC company) is one of the survivors from a wave of home services marketplaces sites that emerged before the 2000 Internet bubble. Other sites raised tens or hundreds of millions in funding, only to go under or be sold for peanuts, in all likelihood to ServiceMagic.

Rice colorfully described his company’s base of operations in Denver, rather than Silicon Valley, as one reason for its survival amid so much carnage nearly a decade ago. “We were not sucking the Internet exhaust.” In other words, ServiceMagic focused on delivering a solution that didn’t kill SMBs with technology but put “technologies that made sense at the time” into the market. Today, ServiceMagic has a $120 million revenue run rate, and has about 500,000 verified ratings posted.

Angie’s List currently has 450,000 reports on local businesses in the top 125 U.S. cities. Angie’s list pulls in about 40,000 reports a month, and runs regular campaigns to gin up higher volumes of reports, or reviews. Recently Angie’s list held a drive that produced 80,000 new reports, giving out flip cameras to those who produced a given number of new entries. Angie has expanded beyond its core home services categories, most recently adding health care.

One key issue overhanging the prospects for both businesses is how the economic downturn will affect their businesses. Moderator Matt Booth shared his hypothesis that as consumers stop tapping home equity to fund home improvements, home trade service businesses will find themselves needed to generate new lead sources, where before, most businesses in this category had more jobs than they could handle.

The two panelists suggested they are beginning to see evidence supporting this hypothesis.

“We are seeing more demand on our services side, in an economy where ad prices are going down,” Hicks said. “Companies that were [highly] rated, who used to say they were too busy, now need to invest to shore up leads.”

“We are seeing slight pickup,” Rice said. “They are getting slightly hungrier. Next year, we expect them to be significantly hungrier.”

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.

This just in. Canada’s Yellow Pages Group has announced a deal with My Virtual Paper, a start-up that has developed a process for extracting and indexing deep content from SMBs’ offline business papers — brochures, fliers and so on.

CEO Manoj Verma is speaking on a panel this afternoon at Interactive Local Media 2008 in Santa Clara, California.

The ‘New’ Business Directories: Reaching (and Satisfying) Small Businesses
Everyone is jumping into the business directory and listings space, once dominated exclusively by Yellow Pages. We’ll see what is going to work, and get a glimpse of where things are going – in the U.S., and around the world.
Pieter Grasdijk, CEO, iLocal (Netherlands)
Eric Peacock, GM, Insider Pages (a Citysearch Company) (United States)
Chris Smith, GM, Online Search and Directories, Sensis (Australia)
Manoj Verma, CEO, MyVirtual Paper (Canada)

This morning’s session at ILM:08 on Leveraging Traditional Media Online was an eye-opener in many respects. It was striking, for example, how aggressively NBC is embracing the idea of following the audience wherever it can get its attention — at the gas pump, at the gym, as well as on the couch with a soda and a bag of potato chips.

BIA’s Rick Ducey, one of the moderators of this panel, teed off the discussion when he said, “the future is what you make of it.” The three panelists responded to this challenge by showing what future they are creating, and what their companies are doing to integrate traditional media with various forms of new media.

Larry Olevitch of NBC Local Media listed the many venues where his company is reaching people — taxis, supermarkets, online gaming, fuel pumps and soon commuter trains — enabling them to offer a multiplatform campaign for their advertisers. Additionally, working with other companies in this traditional media space, even direct competitors, has led to very interesting and successful campaigns. NBC along with CBS Radio along with Comcast put together a successful Great Used Car Sale Campaign in Chicago utilizing the different forums these competitive firms offer. Olevitch noted the 10-day event generated 26 million impressions. He didn’t say how many cars were sold.

Comcast is also constructing its future with different media acquisitions. Comcast has purchased Fandango, Vehix, Plaxo and other companies, all with the intent of allowing its customers (advertisers) to more easily plan and execute campaigns. And, of course, the company is partnering with other media companies such as NBC to further this goal.

Meredith Papp from Google talked about how the search giant is making its future by providing many more analytical tools to make it easier for advertisers to buy multimedia. Through some experiments, Google has been able to increase the revenues of advertisers with these analytics and planning.

One specific innovation Papp discussed was the idea of using a “consumer response tag” to develop a standard location on print ads for call to action data (800 numbers and so on) based on the notion that if consumers are trained to look in a set location for response information, response rates will grow.

What will the future of these companies be? Clearly, they are acting and making very serious acquisitions and partnering with many companies to try to make their futures their own.

Thanks and credit to my colleague Mark Fratrik of BIA Advisory Services for contributing to this post.

In-game placement is getting to the point where it’s more than just early adopter advertisers that can target gamers, according to Larry Olevitch, NBC Local Media Group’s senior vice president of local media sales. The benefit, as we’ve mentioned, is that it’s targeted marketing in front of key demographics that in some cases get repeated exposure with the media (read: hours a day).

Combine that with the fact that more gaming consoles are online and more gamers are playing online, and you can drop in ads on a dynamic basis that is targeted down to the DMA level, says Olevitch. An example he gave was a big Obama sign placed in the background of the stage in Guitar Hero during the month of September.

An even cooler example: During a game of NBALive, taking place at Denver’s Pepsi Center, Coca-Cola can launch a guerrilla marketing campaign to drop in ads throughout the virtual stadium. Pricing wasn’t mentioned but I bet it’s a heck of a lot less than Pepsi paid for the real life stadium sponsorship.