Google VP of ad products Susan Wojcicki told IAB’s Leadership Meeting yesterday that “the display industry is one of the most innovative parts of the Web right now,” and “will be one of the largest ad markets, if not the largest. It has to be,” she added. “Everything is moving online.”

Video, social and mobile will each play a major role for the growth of display ads in Wojcicki’s vision. “Every campaign will have desktop, mobile, video and social elements,” says Wojcicki, a core member of the Google leadership team since the company’s inception, and a leader behind the integration with DoubleClick, which was acquired two years ago for $3.1 billion. She also noted that all display should be integrated with other ad types across the board to boost yield management.

“Video….will be one of the largest industries for us,” adds Wojcicki. “It could be one of largest segments for display. And social too. Over time, everything is social. We haven’t even figured out how social will play in different ad segments across [the] Web.”

Indeed, Wojcicki notes that “ad models aren’t clear in the new online world.” But she expects volume for display to grow astronomically, in part, as Google moves buying to its auction process. Using auctions have boosted display sales by 130 percent, she claims. Ad syndication will also be vital for publishers, as we have seen with projects such as Citysearch’s CityGrid. “Rather than having everyone come to your site, it will be your content and your ads everywhere.”

Google is also working to create a seamless purchase process. “The buying process for display and online inventory is really difficult,” she notes. “Inventory should be frictionless when you are buying it. Everything should be online. All creative should be checked automatically. With these principals in place, “there should be hundreds of thousands of display advertisers,” she says.

Along those lines, DoubleClick has rewritten its buying program for publishers using Google technology. “It is one of the largest integrations between Google and DoubleClick,” adds Wojcicki. “It is faster and fixes a lot of issues.” The program has also been well tested, with more than 500 hours of User Interface time to “get it right,” she says.

EveryScape, a Massachusetts-based company that offers an immersive local search experience, has secured a new $6 million funding round. We see this as a sign of confidence that the model EveryScape is pursuing — creating a virtual local search experience where you can find a local business, walk in the door and virtually browse and purchase inventory — is a significant and immediate opportunity.

The lead investor in this round (EveryScape has raised $16 million to date) is SK Telecom Co., South Korea’s primary carrier and a major Web portal. The venture capital firm Draper Fisher Jurvetson also participated.

EveryScape operates in a space that is increasingly on the radar of local search and directory players. In Europe, publishers that include PagesJaunes, European Directories and Seat all offer various flavors of immersive search, often using internally developed solutions.

EveryScape has deployed its solution with a number of partners to date, including such local search or tourist destination sites as Philly.com, HarvardSquare.com and others.

Schools aren’t always appreciated as the linchpin for new media adoption. But Apple successfully focused on the education market to gain a foothold. So did AOL. In our view, an understanding of new media adoption by schools is critical to getting the big picture. That’s why we watch the annual PBS survey of schools and technology very closely.

This year’s survey, conducted by Grunwald Associates, found that K-12 schools are  rapidly integrating digital media into the classroom — including instruction, lesson planning, communications and teacher professional development.

It also found that online access of video and the Web is on the rise, and is second only to DVDs in terms of penetration. Social media also is gaining, with communities of interest and expertise widely said to be enriching the education experience beyond geographical boundaries.

The survey, conducted since 2002, found that 65 percent of K-12 teachers regularly use digital media in the classroom. Ten percent use it every day, 20 percent use it three or four times a week, 15 percent use it two times a week, and 20 percent use it once a week.

In terms of Internet access, 81 percent said their classrooms have computers with Internet access, up from 77 percent in 2008. Seventy-three percent of teachers report streaming or downloading content from the Internet.

“A lot of marketers haven’t understood the role of education as a gateway to the home media market,” notes survey leader Peter Grunwald, president of Grunwald Associates. “We tell clients that education is not just an important industry itself, but it is also a key driver of consumer media decisions. ‘Learning’ is an increasingly important marketing message for families.”

The folks at Mixpo have posted some of the performance metrics they’re seeing from their online video ad product. Just yesterday, we heard from Brownbook that listings containing video were showing 5x to 9x response rates (CTRs) over those that don’t.

With a decidedly larger sample (thousands of ad campaigns and tens of millions of video ad impressions), Mixpo reached similar conclusions. From Mixpo’s blog:

“Taking a sample of our case study work for advertisers in automotive, travel, events, and sports we’ve seen how VideoAds help advertisers reach their advertising objective driving average engagement rates (ER) 5X that of the clickthrough rate (CTR) of regular display ads and brand exposure (represented by average view time) where viewers on average watch more than 70 percent of the total video.”

Mixpo drills down a bit further with a few case studies (PDF downloads) for individual campaigns such as Major League Baseball (7x CTR increase), an auto dealer and a ski resort. Mixpo’s bottom line is that video garners quality engagement, so there aren’t just higher CTRs; these clicks can also have higher conversion rates.

Though this is mostly a look at online video compared with banner ads, another relevant comparison could be online video versus television advertising. Both media can attract a similar or overlapping set of advertisers. Generally speaking, online video offers more measurability and targeting components, not to mention cost advantages over television spot advertising.

SMBs, Video and the Economy

These factors went into the online video ad forecast we released last summer. Incidentally, I had a conversation earlier this week with a top company in the local video space that was wondering whether the economy will affect these video revenue projections.

We’re examining that question now. While we aren’t issuing any formal restate of the numbers, there are two ways to examine this. Like our recently released mobile forecast, the steep percentage of growth can be justified if you look at the fact that it is growing from a very small base.

Second, our Local Media Ad Forecast just released sees declines in many traditional media such as newspapers, television and radio. Mobile and search are the only categories growing and will see some share shifts from traditional media due to their measurable components and stronger ROI picture.

As that happens, online video could see some of the dollars coming out of television. Based on the difference in scale from television revenues to online video, it will require only a very small share shift to cause the growth rates in our online video forecast.

Even still, we’re going to take a closer and more empirical look. So far, we’re hearing strong SMB video sales from the major U.S. publishers that have begun to sell it over the past 12 to 18 months.

In February, Charles Laughlin and I toured western Europe to meet with interesting mobile and local search companies. One of the more memorable meetings was with Brownbook, the U.K.-based site that is lowering the barriers for SMBs to establish a presence and advertise online (see past write-up).

This morning, I received a note from CEO Dave Ingram about a new video ad product the company is bundling in with its suite of services (one of the main discussion points of our London meeting). This will offer SMBs a range of video styles such as pan and scan, interview, etc., from 30 seconds to three minutes.

The price point at the low end will be GBP12 a week, including distribution on Brownbook, 50 online video sites and classified site Friday Ad (Brownbook’s corporate parent). On an annual basis, this roughly equals the $1,000 sweet spot at which many U.S. local media publishers are selling video. Brownbook is also letting SMBs keep the videos for their own use.

Interestingly, Brownbook claims that the presence of video in ads or SMB profile pages increases response rates by 5x to 9x, and increases conversions 2x. This is similar to performance metrics we’ve heard from North American companies selling video such as Weblocal.ca and eLocalListing (both claim 3x increase in clicks or calls).

This measurability and lower cost versus comparable offline media (i.e., television, radio) has been a big driver for online video demand at the local level. This was examined in our video forecast released last summer.

Brownbook will offer video initially in Sussex and Hampshire, U.K., with plans for deployment across the country over the next few weeks. As it has a footprint in the U.S., Canada, U.K and Australia, the company will be looking for localized video production partners to expand to each of these regions.

You can watch the promo video from Ingram here. Also check out an example of one of its videos here — a Sussex grocer specializing in, among other things, “fresh local quiches and pork pies” (mmmm).

McKinsey & Co. consultant Ali Keshavarz, speaking at the NAA Annual Convention in San Diego, said he believes newspapers can add 20 percent to their online revenues by pushing harder on small-business accounts. McKinsey has been working on an SMB project with seven newspaper companies since last fall.

The primary challenge is for newspapers to reconfigure their sales efforts to effectively touch SMBs. Newspapers only sell about one-third of their SMB customers; more than two-thirds initiate their own sales by calling the paper. Keshavarz points to ReachLocal as an example of a company that is effectively beating newspapers to local SMBs. He asserts that ReachLocal is grossing $100 million per year.

One advantage that newspapers can deploy is the ability to reach advertisers more frequently. Thirty-four percent would like to be contacted monthly, 16 percent would like to be contacted weekly, and 30 percent quarterly.

But advertiser touches don’t need to be in person. Sixty percent of SMBs surveyed by McKinsey say they actually prefer a combination of phone and email while 20 percent would like “in person” as part of the mix. Keshavarz also says that many are willing to try self-serve sales solutions.

McKinsey’s research additionally shows that SMBs are more sophisticated about the Web than commonly thought, and are ready to be sold. Fifty-one percent have Web sites, and 43 percent of these are marketing beyond their Web site. Forty-one percent of an SMB’s online marketing dollars go to its Web site, while 13 percent go to paid search, 9 percent to display ads, 13 percent to e-mail marketing, 13 percent to online video, and 11 percent to “other.”

At the end of the second day of Marketplaces 2009, my colleague Matt Booth made a statement and then asked a follow-up question. He said, “most of what I’ve been hearing from the podium is optimistic. Don’t people realize that this is a challenging business environment? Is this optimism my imagination, or is it real?” It is a fair question to ask whether the people who are able to attend Marketplaces this year are those who are doing well. It is also fair to say that most people aren’t going to sit at a head table and be negative. Still, the overwhelming mood was upbeat.

The morning keynote address was given by Citysearch CEO Jay Herratti, who is clearly bullish on the digital marketplace. He sounded a theme that many of the speakers followed up on: To win in this market, you need to be more local, more mobile, more social and more balanced (with a mixture of users, merchants and experts participating). This theme was repeated throughout the day.

The last session focused on The Directory Play in Marketplaces. Given the negative news surrounding the Yellow Pages industry, you would not expect that this would be a terribly optimistic group, but it was to this panel that Matt raised the issue of optimism. Every speaker was positive. Andrei Uglar is general manager of Weblocal.ca, which is a partnership between the giant Transcontinental Media and YellowBot, a local search site for finding and reviewing local businesses and services. Launched only four months ago, Weblocal.ca has more than 2 million unique visitors and over 3 million page views monthly. Its strategy is to keep the sale simple. It leverages Transcontinental Media’s 400 newspaper sales reps and facilitate sales by offering only one package that offers a full range of services. There is a onetime set-up fee of $200 and the cost is $89 per month regardless of market size or category. Most importantly, it is able to build on the long-standing relationships between its newspaper reps and their customers.

Emad Fanous, cofounder of YellowBot, was equally bullish on the business saying that the key to success is a good tag team that can put this together and Weblocal has this team.

Michael Oschmann of Germany’s Müller Medien echoed the other panelists in saying that his business was strong despite Google’s dominant market share in Germany.

When asked about the trends they see, the panelists came back to the same points  Citysearch’s Herratti had raised at the beginning of the day: local, mobile, social and increased user participation. The one point that they added was another that speakers talked about during the day and that is the importance of video.

Neal Polachek commented about the number of deals that people had told him were being done at the conference. I heard the same thing from exhibitors. The bottom line is that, at least at Marktplaces 2009, the mood is overwhelmingly optimistic.

Online streaming video provider Ustream is making a stronger push into mobile. The recently released iPhone app we wrote about now has almost a million downloads. This isn’t pure mobile television because it’s pulling from Ustream’s online feed (via Wi-Fi) as opposed to a broadcast signal, but it’s showing the way for mobile video delivery and user experience.

Now Ustream is taking it a step further with a new business unit that will focus solely on mobile applications. Its first initiative? An application for a series of devices (iPhone app pending) to shoot and broadcast video. This has clear social implications and will come with lots of tie-ins to Twitter and other ways to alert users and friends to watch live video. It will also kick off with some celebrity Ustreamers (Josh Groban, Lil Wayne) that will shoot video from their mobile devices.

But for the rest of us, there are local implications as well. Some of the local search players we talk to are looking for ways to stay ahead of user trends, behavior and expectations. Some, like Yelp and Qype, are talking about video production: evolving their local business reviews and community interaction to include user-generated video. The capability for this exists already because it involves shooting then uploading a video file.

But we’re starting to see the development of more real-time local video broadcasting capability on the mobile device. Ustream is pushing this with the software apps and back-end capability. It will also require hardware penetration, and more widely spread cultural adoption of shooting and sharing video via mobile.

This will be partly a generational thing but we are moving in these directions, thanks to people like 26-year-old Lil Wayne, who Ustreamed the Grammys from his handy mobile device …

Local Insight Media announced today that its subsidiary The Berry Co. (formerly an AT&T property) will expand its reseller agreement with AT&T’s Yellowpages.com. Under the new terms, the number of markets in which Berry reps will carry YPC in the sales bag grows from roughly 500 to 820, covering 34 states.

Berry reps will be authorized to sell the full YPC solution, including online video, and gather local content to populate the site. The Berry reps are in contact with roughly 300,000 local advertisers. The combination of Berry’s estimated (ballpark) 2,000 reps and the roughly 5,000 existing AT&T reps gives Yellowpages.com arguably the largest sales force of any Internet Yellow Pages site in the world.

From the press release:

“This expanded agreement creates opportunities to extend the value of YELLOWPAGES.COM to more local businesses in additional markets” said David Krantz, president and CEO of AT&T Interactive. “Collaboration like this allows The Berry Company to offer exposure through one of the industry’s most recognized local search brands, YELLOWPAGES.COM(TM) – and complements the coverage of AT&T’s existing and unparalleled 5,000 plus sales professionals.”

Netherlands-based Spotzer has launched its online video product in Sweden with partner Lokaldelen i Sverige AB, which is a local print and online directory player that competes with the market leader Eniro. Lokaldelen is a unit of European Directories, which is an investor in Spotzer. European Directories also operates in Austria, the Czech Republic, Denmark, Finland, the Netherlands and Poland.

Spotzer, which offers a range of video options, including prepackaged ready-to-air inventory as well as custom-made videos, has established itself as a leading player in Europe and hopes to make further inroads in the competitive North American online video market. Last year, Spotzer brought on Yellowbook veteran Gordon Henry to lead its sales efforts in North and South America. Spotzer has had some initial success in North America with MerchantCircle and White Directory.

In announcing its latest launch, Spotzer is pushing the SEO benefits of online video.

“From our activities in 10 countries, we know that merchant profiles accompanied by video experience 30 percent more clicks than static profiles while video is more than 50 times more likely to appear on the first page of search results compared to text-only content,” said Spotzer CEO Andy Klein.