The final day of The Kelsey Group’s Drilling Down on Local conference featured a keynote by Merrill Brown of MMB Media. Brown is an industry guru with a history of developing groundbreaking media strategies and operations. Among other things, he has been editor-in-chief then SVP of MSNBC.com. He also created Court TV along the way.

Brown’s comments served as a fitting capstone for much of the conference – or given his morning time slot, perhaps I should say a prequel to the conclusion.

Brown thinks the various “revolutions” that are shaking up online market-making and marketplaces are in their early stages. Specifically, he believes:

• The newspaper industry is just beginning a period of wrenching restructuring (of its content strategy and business model).
• Verticals will continue to grow apace, to the point where online vertical markets will play a vital part of our quotidian online experience.
• Web 2.0 capabilities (e.g., social networking, video) will become closely woven into online markets.

What was most interesting about his remarks, however, was his overall tone. Brown spoke with the urgency of someone (a guru) who senses we’re in the early stages of a real revolution, and we need to be aware of the magnitude of the changes to come.

Wave V of The Kelsey Group’s annual consumer tracking survey, User View, was just completed in March. The survey asks online consumers about 30 questions, covering topics such as information sources used for local shopping, level of Internet usage and participation in “user-generated content.”  The findings from this survey of about 1,000 online consumers, show some clear developments:  

• Continued migration to various online media as information sources for local shopping.    

• In rating online information sources for local shopping, consumers give the highest value to transaction-related information (such as price and product availability).    

• 30 percent of consumers say they use the Internet “considerably more” than a year ago, and another 32 percent “somewhat more.”    

• In general, search engines generated a surprisingly strong showing as a tool for local shopping.    

• 30 percent of consumers have submitted some form of user-generated content within the past six months – ranging form a numeric rating all the way up to uploading a self-produced video to YouTube.   

• Over half (56 percent) of consumers have watched online (or downloaded) a video, movie or TV program within the past month. 

MediaNews Group, the fourth largest newspaper publisher with titles such as The Denver Post and The San Jose Mercury News, has teamed up with TauMed to launch a video-centric health vertical. The vertical launches this month at four of MNG’s smaller papers. It will eventually be incorporated across the chain. Other local media partners are also being lined up.

TauMed, which is privately funded and has 12 employees, is the brainchild of Tauseef Bashir, a former executive with FAST Search and Transfer, the search company recently acquired by Microsoft. FAST’s influence is readily apparent in the service’s intent to make every action searchable. (MediaNews Group is also a FAST client.) “All the information is search driven,” says Bashir.

As with other health portals in the marketplace, the service isn’t focused on local information other than directory content featuring doctor and hospital search. More local content will come in a second phase, says Bashir. The local effort will be aided by the promotional, sales and editorial capabilities of the local syndication partners. Ratings and reviews are probably the core of the local experience, he notes. The site will also be mobile enabled.

Yelp announced a series of tools today for businesses to interact with local reviewers and have more of an active voice.

New features for SMBs include:

• Message customers who have reviewed their business
• See how many prospective customers viewed their business page
• Update business information instantly (i.e., hours of operation, categories)
• Receive new review e-mail alerts

Yelp and other local social search sites have always had elements of local reputation management engines for small businesses. The new tools make it easier for SMBs to utilize Yelp in this way. Like a lot of other local marketing tools for SMBs, Yelp’s offering will face adoption challenges in its requirement for businesses to self service (registration required). But Yelp’s local traction and sheer volume of reviews will make it an easier sell. The company is meanwhile stepping up local sales efforts with recent funding.

By getting more businesses involved in using Yelp in this way, the company hopes they’ll realize its value as a local ad medium — especially given the analytics features. In that way, these features could be a hook for the various placement upsells, on which Yelp’s monetization scheme is largely based. Though the messaging happens behind the scenes, this could also give businesses more of a sense of control over how they’re portrayed on the site — the lack of which could have previously scared them away from being paid advertisers.

We’ll see if these features have a financial impact for Yelp. This is a step in the right direction and essentially throws a bone to businesses after the site’s history of being mostly user-centric. Now it’s more of a two-way street.

The market to produce, distribute and/or enhance small-business videos has intensified in recent months, as TurnHere, Denver MultiMedia, DMC, Spot Runner, Mixpo, BuzzSpot, EZ Show, Spotzer and others have competed (often via third-party Yellow Pages and city guides) to land accounts. Now comes Redwood City, California-based SpotMixer, which has raised $8 million from Kleiner Perkins and others.

Launching next week at Kelsey’s Marketplaces event in Seattle, SpotMixer provides a combination of production tools and distribution capabilities that allow small business to easily make videos on an “all you can eat” basis and distribute them. The service is launching with a subscription “plan” that ranges from $59 to $79 per month, with fees declining with longer commitments. Additional link fees are up to the media partners.

SpotMixer has been developed on the back of One True Media, a consumer-oriented video service aimed at families and young adults since its launch in February 2005. That service, which cost $3.99 per month, simplified the process of producing a video and sending it to other platforms. It has attracted 3 million registrants since launch.

The new service was developed by company founders Mark Moore and John Love, who noticed that a number of SMBs were piggybacking on the cheap tools to create their own videos, and embed them on YouTube, e-mail, their own sites, etc. Moore and Love speculated that SMBs probably needed something a little more “heavyweight.” The founders have since been joined by Yahoo! Search Marketing veterans Kathleen Farley and Brett Gardner, among others. There are 20 people at the company.

A fairly unique aspect of the service is that its reseller partners, such as Yellow Pages and city sites, can “seed” their sites with generic but category-specific videos for each listing, in hopes of upselling them to a specific solution. This approach has been tried a few times with Web sites, but video is a new frontier.

It’s an attractive offering and well-priced. The questions we ask ourselves are whether small businesses will make their own videos, even with easy to use tools; whether they will ever want to produce more than one or two, even producing holiday specific videos; and whether they will develop an aggressive media program if left to their own devices. The transferable, cross-channel approach is also an interesting question mark. AgendiZe and Mixpo have been pushing hard on this front.

I suspect what we’ll see evolve is a segmented marketplace, with different SMBs using different kinds of services at different price points. It seems likely some resellers will soon be pitching fully produced videos and media plans by TurnHere, Denver MultiMedia and Spot Runner, and a second, non-conflicting tier of video enablers, such as Mixpo, BuzzSpot, EZ Show, Spot Runner (again) and now SpotMixer. Eventually, the gap will fill in, right?

Matt Booth and I had the chance to meet with Topix at its Palo Alto headquarters last week to unearth some of its user data, as well as some heretofore unannounced content partnerships.

Late last year, the site redefined itself as an aggregator of ZIP code level news and community forums. As recently argued from the ups and downs in hyperlocal sites, the right formula has to be found and sometimes it’s out of your hands as a function of the direction users take it. Topix has mostly found the right formula in its new model, as evidenced by a 2x year-over-year increase in page views in March.

Meanwhile its forum posts also doubled during the same period, and the site is averaging 100,000 posts per day across 20,000 U.S. towns (see heat map below). ComScore also puts it in the top five trafficked online news brands. To further qualify this traffic, it has proved to be relatively engaged, shown by 3x page views for forum users compared with news readers, and 5x session lengths (per Google Analytics).

Local Forum Activity (Click for larger, live, map)

Quantity + Quality?

Another important qualifier is that the forum content is mostly original and non-overlapping with newspapers or other hyperlocal sites. The company now gets somewhere in the neighborhood (bad pun) of 60 percent of its total content from user-generated posts. It’s seeding this activity with sticky features like user-generated polls, of which there were almost 9,000 created in March, generating almost half a million votes.

So forums essentially amount to ad inventory with engaged local users, which on this scale is somewhat rare in the local space. Others such as Marchex and Local.com have done a good job building valuable local inventory, albeit not as focused on community forums. Meanwhile there is some debate over advertiser interest in UGC content, which CEO Chris Tolles addresses here and here.

Previously Topix’s ad revenue stream was primarily text ads via AdSense, but VP of Sales Mike Linton is on a charge to bring in more display ads from national advertisers that wish to target locally. This is a growing opportunity given the realization among some brands and agencies that conversions are taking place locally and offline. We believe more agencies will come to see this, though the majority currently don’t.

Beefing Up and Beefing Out

To further attract this advertising and grow user levels, the company is pushing hard to augment UGC content with feeds in certain classified verticals. These include autos, tickets, pets, roommates, relocation services, events, new home builders and personals.

This has been the department of VP of Business Development Dave Galvan, who in the past few months has signed on (previously unannounced) Apartments.com, Oodle (autos & tickets) White Fence (relocation services), Informa (mortgage leads) TinBu (horoscope & lottery data) and PA Sports (sports stats). These join existing content deals with Trulia, and SimplyHired, among others.

On the other end, Galvan has been working hard to find distribution partners to take in Topix’s Local news feed, and has recently landed OurTown, AccuWeather and ESPN. These join AmericanTowns, CNN, Ask, and others that have shown interest in ZIP code level news feeds that basically aren’t available on this scale from anywhere else.

Meanwhile, it’s getting a fair amount of distribution for its forums by feeding into parent sites including Tribune, MediaNews Group and NBC Universal. Some of this will be discussed next week during the Drilling Down on Local conference in Seattle, where Galvan will join a panel discussion on classifieds. Stop by if you’re at the show.

BuzzLogic has been generating some attention for its buzz tracking technology that pinpoints where conversations are happening throughout the blogosphere on certain topics. As we’ve written, this can be an attractive tool for PR professionals or online marketers to home in on the right places to target their messages. Integration with AdWords’ work flow recently brought this capability to the next level.

The company has announced that it will acquire blogging software company Activeweave. I got to speak with BuzzLogic CEO Rob Crumpler at AdTech last week after his panel discussion/debate on Web 2.0. He contends this acquisition brings BuzzLogic the capability to more effectively track where people are going and what they are doing with blogs, to better qualify users and target ads. According to the release:

The acquisition will add new dimension to how BuzzLogic’s algorithms analyze online influence, enabling the company to strengthen and grow its Conversation Targeting advertising solution. Launched in the fall of 2007, Conversation Targeting surfaces connections between influential blogs and other social media as a means of predicting where to target online ad campaigns for its customers.

Blogs often see a very specific and qualified form of online viewership, which opens up lots of opportunity for targeted ad placement. The acquisition should help BuzzLogic continue to build this capability using Activeweave’s BlogRovR browser plug-in that passively tracks users’ blogging habits as part of a recommendation engine for relevant content.

Activeweave’s core product, the BlogRovR browser plug-in, was launched in 2007 and allows users to view relevant content from their favorite bloggers as they browse the Internet. The application works as a personalized search engine; every time a user views a Web page, BlogRovR fetches content from a list of pre-selected bloggers. If those bloggers have written about something similar, relevant content is displayed via collapsible tray within the browser. BlogRovR currently counts more than 180,000 registered users and monitors approximately 200,000 blogs.

Opportunities for local also start to come into focus when you consider local blogs or forums (Topix, Outside.in, Placeblogger, etc.), as well as community or user-generated content that happens around local listings (Yelp, Angie’s List). The company isn’t going down this road just yet but in the past has expressed to me that it could be of interest, given the increasing amount of user-generated chatter in the local space, and the size of market that surrounds it.

Hyperlocal community site FatDoor has shut down and reopened as Center’d, an event planning and neighborhood search site with the tag line “people, places, plans.” This follows last week’s fall of Grayboxx, rise of Angie’s List, and birth of OurTown.

Like FatDoor, the company is in stealth mode with not much more than a landing page offer to join a private beta. After attempting to join, I received an email saying that that my request was being reviewed. But past the front door, more details emerge (per Erick Schonfeld’s sleuthing at TechCrunch):

At Center’d, we’ve been thinking about how to solve the challenges that exist in making plans. From the smallest get together, where you just can’t decide on where to eat . . . to the large fundraisers and school activities that require signups and hundreds of emails and weeks of meticulous planning

Hear us out. We can give you the tools you need to easily organize people, places, and times. Using the latest space-age technology, we have concocted features such as:

Polling tools: Enable your guests to take some of the burden of coming to consensus on the place and time to meet.

Task Management and Volunteer Sign-up : Now you can easily get the team you need to do the stuff you need.

Connection management and calendar sharing : Now that you are suddenly so organized, and ready to pull off the perfect girls’ night out/summer camp/grandparents day/birthday party/first date/last date, let’s make sure those who are important to you can view your calendars. But not everyone, and not every event. We can keep a secret.

Explore neighborhoods : We’ll even help you out with finding other places and events. How would you like a view of your world filtered by the recommendations of people you trust? How would you like to be at the center, and have the people, places, and plans you care about revolve around you, just waiting to be experienced? We like that idea. In fact, we like it so much, we built it.

This sounds like a mix between evite, Yelp and Google Maps. It also comes with some of the social recommendation aspects of Loladex, but without piggybacking on an existing social graph. There are some attractive features, but launching a destination strategy in local is a tough proposition, as the company likely learned with FatDoor.

But there are also some mashup possibilities that come to mind with local sites that already have a lot of content and traffic, such as Yelp. We’ll talk to the company soon, test out the product more comprehensively and give it the chance it deserves. Stay tuned.

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Screen shot courtesy of TechCrunch.

I am always leery of reports that point to a “Scandinavian miracle” (or a “Massachusetts miracle” or what have you). But a December 2007 NAA Growing Audience report has some valuable details about how Schibsted Media, the Scandinavian publishing giant with additional properties in France, Spain and Switzerland, has begun to remake itself for the digital age.

The report, by David LaFontaine, says Schibsted sees up to 60 percent of 2008 revenues might come from interactive — vastly higher than the 8 percent to 10 percent contribution made to U.S. newspaper revenues (and perhaps overstated, or concerning just one or two markets). Key to its online revenues is its ability to keep its newspapers as destinations, rather than relying on Google. Ninety percent of the traffic to VG.no, for instance, comes directly to the site due to its hosting of a robust search engine and addition of video, social media and mobile apps.

About 38 percent of adults read the print edition, but almost 50 percent of the Norwegian market uses a VG product — print, online or mobile — every day. “Our target is to pass 60 percent,” CEO Kjell Aamot told LaFontaine. “We call that building an audience, even though we’re slowly, slowly eroding our print audience.”

Local community and recommendation site Angie’s List received $35 million in funding today from Battery Ventures. This comes a day after local rating site Grayboxx sold its assets after failing to get enough traction around its more automated local ratings (”preference scoring”).

Together these probably say something about the importance of personal touch in local niches that are based on community. It also in some ways symbolizes the ups and downs we’ve seen in the local social segment, where some companies make it and some don’t (Judy’s Book, Insider Pages, etc.).

Why this happens seems to involve a complicated formula, partly based on the whims of a crowd mentality in your target audience (as it goes in social media). Picking the right target audience has proved imperative, if you look at Yelp’s success — hinged on targeting the twenty- and thirty-something urban foodie hipster.

Part of the formula is also the right match of content for that audience that lends itself to viral exchange and community. The soccer mom demo has proved to be one that has these qualities for all things home & garden or child raising. Or, like Yelp, tap into a subject area and a demo where people like to hear themselves speak (who doesn’t want to be a restaurant reviewer?).

There is of course a lot more to it, but a great deal of the formula for success in this segment seems to be “learn as you go” with lots of hard work put in meanwhile. We’ll provide more later and find out where Angie’s List could go with the money.