The rise of Web-oriented behavioral targeting and the tough economics and unwieldiness of user diaries and phone calls have pushed radio rating giant Arbitron to focus less on radio station ranking and more on providing qualitative data about specific local businesses. The shift might have ramifications across all media, especially in smaller markets.

Leveraging its ownership of Scarborough Research, Arbitron’s new effort will focus on sending out extensive media usage booklets to consumers on a shared cost basis. Studies can have smaller bases, and will be done once, rather than four times, a year. Costs will be shared among local media participants.

Arbitron’s position is that people’s habit’s “don’t change that much” quarter by quarter.

The consequences are that stations won’t be able to use Arbitron data to assert their ranking in the marketplace. Bankers need that data to value radio stations. But advertisers don’t really. In fact, the qualitative data about local media and advertisers may be more effective in station pitches. With the new approach, radio sales pitchers can note,: ‘I have some market data in Charlottesville about your customers,’ including gender, married and Internet access modes.” It is a more specific guide to buying media and targeting consumers than putting out balloons on Saturdays.

The studies will also have more impact than behavioral targeting, which can be overly generic and not provide information about retailers.

One of the most significant announcements in the past year about the Yellow Pages business was made by PagesJaunes. In order to get in front of the faster migration from print to online that is occurring in France’s major cities, the publisher reduced print advertising rates in Paris by 20 percent in 2008. Overall print directory revenues in France were essentially flat in 2007, while online service revenues grew 15.1 percent. This traces primarily to Pagesjaunes.fr, which averaged 10.7 million unique visitors per month in 2007, an increase of 22 percent, the sixth most visited site in France.

One notable figure here is that print Yellow Pages and White Pages together account for only about 61 percent of total PagesJaunes revenues in France. We expect print to increase in coming years due to an announcement that was made this week under the headline, “Lawyers are allowed to advertise in the Yellow Pages, says the French Supreme Court.”

From Advertising|France (Tues. 25/03/2008):

“In a judgment of 6 December 2007, the French legal Supreme Court (”Cour de Cassation”) has recognized the right for lawyers to advertise in the Yellow Pages. This has been done against the judgment of the Appeal Court from Bourges (second instance court) who had stated that “an advertisement in the Yellow Pages, be it on paper or on the Internet, was contrary to lawyers’ professional rules.

“The judgment of the Cour de Cassation paves the way for new possibilities for advertisements for regulated professions in the Yellow Pages.”

In the U.S., the attorney category accounted for 9 percent of publishers’ total print revenues in 2005. The opportunity for other “regulated professions” to begin advertising both in print and online offers PagesJaunes strong potential for growth. At the same time, the company anticipates its online share will continue to grow and projects that its margins will also be higher.

It appears that Yellow Pages in France continues to be a very healthy business. In the past two years, PagesJaunes’ number of total advertisers has grown 7.5 percent, and its retention rate is strong at 86 percent. PagesJaunes, like Yellow Pages Group and other Yellow Pages publishers, has shown that this can be a growth business.

One big takeaway from the NAA Marketing show last week in Orlando was that newspapers are ready to build up a zillion niche products that allow them to leverage their editorial talents. But not much progress, or even attention, is being paid to local search. It makes you wonder if newspapers are really serious about reaching out to the high volume of small businesses in their communities that have previously relied entirely on Yellow Pages.

The Seattle Times Co., however, is definitely an exception to the rule. Today, it launched “Network Search” across all its newspaper and vertical services, including Seattletimes.com, SeattlePI.com, NWsource.com, NWJobs.com, NWautos.com, NWapartments.com and NWHomes.com. The new search — which is not unlike the “Federated Search” solutions available from Harvest Info and Gannett’s Planet Discover – also incorporates some blogs and other sources.

Developed with FAST Search and Transfer (which is being purchased by Microsoft), Network Search bites the bullet with a single search box.

Many papers have been reluctant to go in that direction because the results would be too generalized. But the end result is that some papers have a dozen or more search boxes. And nobody ever thinks to look for anything on the site. They just go to Google.

One immediate advantage of The Times’ Network Search is that it opens up sponsored search advertising in a big way — something that has been largely hit or miss using third parties. In my limited testing, it works well.

A search for “Dungeness Crabs,” for instance, returns news stories on the harvest and restaurants where you can get them. It also has helpful sponsored search results for several excellent mail-order houses. A search for “Marqueen” has all the reviews and news to the nice boutique hotel in Queen Anne. And helpful sponsored searches for the competition.

A search for “Maria Cantwell,” on the other hand — the only senator I know since she used to do business development for Real Networks — returns her office’s latest news releases and news stories. And then also sponsored links for “Cantwell Hotels” and other things that probably have nothing to do with her. That’s probably the way it should work.

Seattle Times Interactive head Patricia Lee Smith says she believes the site has unmatched local content and “a uniquely local lens” that non-native search engines probably can’t hope to match in the foreseeable future. “This will also be the first of many advertising trials to connect local businesses with online readers via targeted search advertising,” she says.

Smith also promises that the search initiative is going to go deeper and deeper. The search box, for instance, will eventually be introduced on each of the Times Co.’s marketplace sites.

As I noted in a blog about The Kelsey Group’s Local Online Media event in London last week, analysts, speakers and the audience were positively upbeat about the Yellow Pages business. The feeling by all was that the stock market has overreacted to some negative information about Yellow Pages. This has been exacerbated by bloggers and journalists, most of whom spend all day at their computers or on their Blackberries and wouldn’t want to admit doing something as old school as looking up a business in the printed Yellow Pages.

The Yellow Pages Association published its new 2007 usage data yesterday that says print directory usage was stable in 2007 and online directory references climbed 15 percent, so that overall there was a 3 percent increase in U.S. directory lookups. My guess is that the numbers are similar in other countries, only the online component most likely grew even faster than it did in the United States. As my colleague Charles Laughlin commented in his blog on the YPA numbers, “the fact that online is growing gives publishers a good story to tell, assuming advertisers, investors, the media and other audiences are receptive to the multi-channel argument.”

Cornel Riklin, CEO of European Directories, asked at our London conference what the industry can do to improve its perception among both advertisers and consumers. The Kelsey Group believes in the increasing importance of public relations, in particular press releases. SES London keynote speaker Fred Marckini, chief global search officer for Isobar, made the case that press releases will play an increasingly important role in the search world as video, social networking and the growth of universal search can make a story reach a huge number of people and have a long shelf life.

The worldwide Yellow Pages industry has a compelling value story to tell. But publishers won’t get that message across piecemeal — company by company, even country by country — in an increasingly global world. And they don’t have the money to do it in an advertising or promotional campaign. In my view, the solution is through an organized public relations effort that uses the growing power of universal search. The industry needs to revisit the concept of working together to put up a united front about the benefit to consumers and advertisers of print and Internet Yellow Pages.

This is not a complicated message. It can be done with leadership. The industry needs to counter the messages of journalists, bloggers and commentators who are too quick to dismiss Yellow Pages as a dinosaur based on little evidence beyond their own habits for finding information on local businesses.

As Charles Laughlin wrote, “Publishers can affect the outcome by investing in their products, maximizing their visibility and content and improving distribution.” In their own territories, Yellow Pages publishers should fight for every advertiser, encourage usage, and compete wherever and however necessary.

But the worldwide industry needs to use an old tool (public relations) in a new vehicle (next generation Web search) to reach a broad market. Otherwise, the false perception that revenue migration is moving from print to Internet overnight could become reality.

This is a serious and urgent issue. A unified offense is a better course than a disorganized (or nonexistent) defense. It is time for the global Yellow Pages industry to fight back.

MediaNews Group CEO Dean Singleton is well known within the newspaper industry as one of the least sentimental businessmen among all the publishers. He’s taken a hard line against journalistic “excess,” resulting in products that have been highly profitable but not critically acclaimed. At the same time, in search of new revenue streams, he’s been a leader in online and niche experimentation.

At the Newspaper Association of America’s Marketing Conference this week in Orlando, Singleton gave a clear-eyed view of where he sees the industry’s challenges, and how he thinks it can recover its footing, especially on Wall Street, where newspaper stocks have taken a brutal beating.

Singleton noted that online has got to become a big part of the revenue picture, but that the core print product remains central to the industry’s future. Five years from now, for instance, he hopes to see MNG getting 20 percent of its revenue online, up from 8 percent today. Since online has higher margins, he would expect online to account for half the company’s operating cash flow.

The core product, meanwhile, will drop from 85 percent to 65 percent of revenue, and account for 35 percent of the company’s profit. Niche products, meanwhile, would get around 15 percent.

“We have to be very aggressive to get to 20 percent” for online, he said. “Especially since a lot of online is based on employment” and needs to become more diversified.

But he believes the target is achievable. “Some newspapers are close to that now, “ he said. Two MNG titles, for instance, get 15 percent online and 17 percent niche. “That’s not a bad business. That’s the kind of business that Wall Street can applaud. We’ll have core readers, and online, there will be niche, targeted consumer groups.”

Singleton’s bottom line is that while the new revenues will be valuable, supporting the core is job No. 1. Consequently, sales hiring and retraining is a core part of the company’s credo. He will also continue to spend on maintaining circulation levels so his newspapers remain the No. 1 source of geotargeting.

“The new world we’re in … it is restructuring time,” he said. “We have a pretty tough deck of cards right now.”

While Singleton anticipates new revenue growth from online and niche, he personally believes the newspaper industry will get its biggest boost from something that produces almost no revenue today: wireless. “Wireless is the biggest opportunity in 20 years,” he said. “Consumers pay for relevant information 24/7. It is tailor made for newspapers.”

Quick, what industry gets the highest customer service quality ratings from U.S. adult consumers, according to an August 2007 Harris Interactive poll? No. 1 is supermarkets with 92 percent giving them a good rating, No. 2 is online search engines (84 percent), and tied for No. 3 (78 percent) are computer hardware companies, hospitals and banks. My personal opinions are irrelevant, but I must admit that supermarkets would not have been at the top of my list. What is interesting to me is that 84 percent of respondents said search engines provide good customer service. This piece of wisdom came from eMarketer Daily, which ran a fascinating story on “Search Marketing’s 800-Pound Gorilla.” EMarketer is an expert on giving you enough information to make you hungry for more and then offering the whole report for a fee. In this case, Search Engine Marketing: User and Spending Trends is worth every dollar to anyone who is interested in the search engine business.

The author, David Hallerman, senior analyst at eMarketer, writes:

“However, the term ‘customer service’ is likely used broadly here, since one would guess that the vast majority of people who have used a search engine have never actually spoken with or e-mailed the people running that engine. Most probably, these results imply that people like what they get from search sites.”

Imagine that. There’s no greeter at the front door, nobody to bag your purchases, not even a smile from a candy-striper or a teller. All you get is what you, yourself, are able to pull out of a search engine. I have never built a boat in a bottle, or even attacked a complicated crossword puzzle. But I have done a lot of searching, and when I find what I’m looking for, often on a local search, there is a great deal of satisfaction. In a blog tomorrow, I plan to see if there is any way to compare satisfaction of using a search engine with other ways of finding products and services, such as Yellow Pages or newspapers.

Mr. Hallerman’s article refers to the huge number of people in the U.S. alone who used search engines last year. It’s at least 155 million and that number will rise by 25 million in 2011. Search advertising spending continues to grow, even if it is at a slower percentage pace than in previous years simply because the absolute number is already high. As the chairman of a company that spends a fair amount of money on paid search marketing every year, a key issue to me has been whether I’m getting my money’s worth. People don’t report to us that they are coming to a Kelsey Group conference or buying a report because of a paid search or contextual ad. Forrester’s Research, according to this eMarketer report, would reinforce this. Fifty-nine percent of respondents say they don’t pay attention to search ads, and 36 percent don’t trust them. Meanwhile, eMarketer is predicting that U.S. search advertising spending will grow from $8.6 billion in 2007 to $16.6 billion in 2011.

Consumers are happy. That’s good. And advertisers are continuing to pump more money into search advertising, despite the fact that consumers report they’re not paying much attention to the advertising, or worse. Some of this is clearly the novelty effect and the fact that advertisers want to be on the leading edge. Still, the bottom line is return on investment. This suggests that at some point, perhaps sooner rather than later, Yellow Pages and other traditional media are going to look pretty good compared with some of the new media options.

Jonathan Weber started his career in traditional media as a writer and editor at the Los Angeles Times, but the new media bug got hold of him. He was the cofounder and editor in chief of the Industry Standard, which more than any other publication reflected the rise and fall of the dot-com boom. In his remarks as opening speaker on the third day of The Kelsey Group’s ILM:07 conference this morning, Weber said he jumped at the opportunity to leave the hectic life of California to teach in Missoula, Montana.

In 2005, Weber launched New West Publishing, an online independent local media company designed to serve the “culture, economy, politics, environment and life style of the Rocky Mountain West.” He told the audience that the concept of citizen journalism where you “get people to do stuff for free and sell ads around it” seemed like a low risk business proposition. Indeed it quickly moved to “a pro-am model” with a mixture of paid and free folks. The idea is to “promote a conversation that helps us understand and make the most of the changes sweeping our region.”

Today NewWest.net is structured as a regional publication that also focuses in on seven local markets. He reiterated what several speakers throughout the conference have been saying about the difficulty of selling local online advertising. Success requires patience and persistence, the blocking and tackling of the online local media business. At the same time, you need talented players and a good strategy. These could be described as great content and local authenticity.

Not surprisingly, newspapers in the area have been hostile as Weber has had to bridge the gap between the two fundamental groups in his market area — environmentalists and business interests. For 15 years, The Kelsey Group has been encouraging newspapers to deliver their content interactively. It is no wonder that local papers resent another entity coming into their market and doing what they could have done if they had recognized the online opportunity.

What I find most refreshing about New West is that Weber resisted the forces encouraging him to replicate his platform in other markets (New South, New China, etc.). Unlike most other entrepreneurs in the city guide and free DA business, Weber said let’s do this right in one market area and then, and only then, consider expansion.

Those were the words of a Network Communications Inc. CEO Daniel McCarthy as he announced that “we will have a deal with Zillow in the next 14 days.” McCarthy made this statement during an executive interview, The Leading Edge: Real Estate in Transition, at The Kelsey Group’s ILM:07 conference today. Other panelists in this session were Niki Scevak, president and founder of Homethinking, and Jorrit Van der Meulen, vice president of partner relations at Zillow.

NCI is the largest national publisher of local print and online magazines for the real estate market. It distributes more than 13 million magazines each month, representing more than 650 markets in the U.S. and Canada. Several years ago, McCarthy recognized the need to migrate his listings to the Web at no additional cost to the advertiser. Today NCI distributes its content through a proprietary online network of more than 18 Web sites.

“There is an insatiable appetite for information about real estate,” according to McCarthy, who told the audience about a series of focus groups NCI recently held in 10 markets to determine how people find out information about real estate. With the exception of Zillow, there was no “brand resonance” for any particular source. However, he said, when the NCI shoppers were shown to participants, people nodded and said, of course they use those, indicating the ubiquity of the shoppers and the fact that people take them for granted. His conclusion was that there will be no category dominance by one information source in real estate.

Note: This same thinking might very well apply to Yellow Pages when people are asked what their source is to find a product or service.

Last week Bebo, the global social network, announced its new OpenMedia platform partnerships. The network has partnered with major media brands to deliver premium content to its 40 million users.

Partnerships include CBS, MTV Networks, ESPN, the BBC, Channel Four, ITN, Yahoo! and BSkyB, as well as emerging media companies like Music Nation, Next New Networks, Crackle, Ustream, Last.fm and JibJab.

The launch of OpenMedia allows users to create libraries of their favorite content. Users can then rate, post and forward it to friends.

As audiences have started to demand higher quality programming online, this move will satisfy the crowds while providing partners with an opportunity to reclaim their fragmented audiences.

With regard to advertising, many brands look to align themselves with premium content especially when trying to reach the elusive teen (Bebo attracts the 13- to 24-year-old target audience). This move will make it easier for major national brands to make the leap toward advertising on the social network.

Interestingly, the partners will not be charged for access to the platform and are able to distribute their content using their own video players, which can carry their own advertising and allow them to retain 100 percent of the related ad revenues.

Interactive Local Media: 07 is ready to roll Nov. 28-30 in L.A. That’s next Wednesday through Friday!

The show, which is being produced in partnership with SES Local, has attendees from all over the world. One exec told me he is coming on Wednesday, taking the red eye to New York that night due to a prior commitment, and flying back on Thursday night for the final day.

Attendance-wise, we have the biggest sign-up list for a Kelsey event since the mid-1990s. Almost everyone that we have slotted will actually be there. While the agenda has been tight for some time, with 70-plus speakers, here are some last minute adds:

• Christophe Maire, a cofounder of Nokia’s Location-Based Experience Development, is set for Day 3. HOT DISCUSSION TOPIC: Nokia’s $8.1 Billion purchase of NavTeq.

• Laurel Gilbert, from Microsoft’s Atlas division, is speaking on our localizing national advertising panel. HOT DISCUSSION TOPIC: How Microsoft will use Aquantative to transform itself into a true Web advertising giant.

• Doug Kilponen from MerchantCircle is speaking on the localized shopping panel. MerchantCircle just received a $10 million cash infusion from IAC and others. HOT DISCUSSION TOPIC: Best Practices for Signing up Small Businesses.

• Claudia Poepperl from mobilePeople is set to provide a demo of the London-based company’s cutting-edge social mobile technology.

We are also expecting a drop-in from a top executive of a company that’s been in the news, but we can’t say much more about it. And speaking of news, there are lots of interesting news announcements that will drop around the show as well. So, will we see you in L.A.? Here is the registration page.