Predicting What Consumers Want to Buy

Ok.  A bit of a think piece for you.  I have a ‘hypothesis’ on where a lot of local advertising dollars are going to be spent.

The big missing link in local advertising is that a large number of local businesses still don’t have a properly designed and optimized website.  By ‘proper’ I mean one that has decent design, follows basic (local) search engine optimization principles and has at least some level of monitoring and optimization happening on it.  For bonus points, they might have dynamic content like blogs or twitter feeds and do some online (search engine marketing) as well (again, with proper optimization principles in place).

Right now, many people are trying to sell SMB’s lots of other products (clicks from a Google Adwords campaign for example) that are usually pretty useless to them because they don’t have a website that can ‘receive’ them.  And the problem just gets further confounded when you take in to account that these SMB’s really need to be thinking about how these websites appear on mobile devices as well.

This market is ’sort of’ being served today, but very poorly.  The various services (graphic design, web design, seo, sem, etc.) tend to be purchased a la carte or they are too complicated and expensive for smaller businesses.  Most small business owners don’t know what SEO means or they are intimidated by it.  They fear (rightly so in some cases) being ‘ripped off’.  At the other end of the market are various ‘packaged’ websites that are too ‘toy’ and don’t go far enough in offering a real ‘digital presence’.

So, eventually, some people are going to make a boatload of money by getting the right ‘recipe’ for creating, managing and optimizing the ‘digital presence’ of small and medium businesses.  I like to call this Digital Presence Optimization.  And this management will extend in to things like ‘reputation management’ where you monitor and respond to reviews at various sites — this will become increasingly critical.  SMB’s will need help and guidance on how to participate in the social conversations.

This could be a service offering provided by existing market players like Yellow Page publishers.  It could be done by one of the many new entrants — though I believe most of the current ones are too narrowly focused.  In the absence of a catalyst, it’s likely that this market will be served by lots of boutique, regional providers – existing providers of web services, SEO and SEM who figure out how to package and deliver their offerings in more ‘SMB’ friendly packages.

Two reports released today by Adquants provide illuminating insights in to the local advertising ecosystem.  Not surprisingly, the largest participants are resellers — accounting for up to 30% of the local advertising.

But, more fascinating is that more than 70% of local advertising campaigns are NOT being managed by large players.  This means the local businesses are managing these campaigns themselves or these campaigns are being managed by a long tail of smaller players doing it for them.

For these large players, their biggest competition may not be the other large players or even the even bigger players where they buy the traffic.  Instead, they probably need to be looking over their shoulders at the increasing number of Do It Yourselfers and a growing number of small businesses in the business of helping small businesses market themselves in the digital domain.

via Greg Sterling.

Thanks to @deandonaldson for alerting me to this kerfuffle: Why Advertising Is Failing On The Internet. It seems some (ok – like 600 judging from the comments) have taken umbrage.

Always dangerous to boil a complex argument down – but I’d summarize it (in a mobile, local search context) like this: If I can quickly, easily and accurately find all the local information I need does that eliminate the need for advertising?

If you accept Eric Clemons’ definition of advertising…

Advertising is using sponsored commercial messages to build a brand and paying to locate these messages where they will be observed by potential customers performing other activities; these messages describe a product or service, its price or fundamental attributes, where it can be found, its explicit advantages, or the implicit benefits from its use.

… then I suppose it might.

But, I don’t think this is the right model for local advertising. Instead, I think of local advertising as more like a dating service that wants to find the best fit between a consumer (and their current situation, needs and preferences) and a merchant (and their skills, ability, price and availability among other things).

Here’s a couple examples to illustrate the point.

—

Finding a Plumber in the Print Yellow Pages

We had a minor plumbing emergency. My wife went to the print yellow pages and scanned the display ads. She was looking for a plumber that was happy to handle a small emergency in a timely manner. She sought advertisements that explicitly referenced this need.

She was surely reading ‘advertisements’. But they served an important role in the ‘dating process’ by allowing the advertiser to describe the kind of business they are looking to serve.

—

Search Engine Optimization (SEO) as Consumer Dating and Advertising

I suppose most people don’t think of SEO as ‘advertising’ because it’s ‘free’. You don’t pay anyone to bring traffic to your website.

But of course, it’s anything but free. To do it well, you have to pay a lot of attention to what you write and how to describe your business in a way that allows people to find it. You want people with a need you serve to be able to find you. And you are either paying a specialist to do this or spending a significant amount of time doing it yourself. Either way this is an investment a business makes to be found by people it can serve.

—

So, in the end, I think regardless of whether you call it ‘advertising’ or something else, local businesses want to be found and will continue to spend significant money on making it happen.

What do you think? Would perfect search eliminate the need for advertising?

RELATED:
The follow-up debate between Eric Clemons and Danny Sullivan.
Dean Donaldson weighs in.