Mom and Pop Still Not Advertising Online

As reported on AllThingsD.com those small business/mom-and-pop shops still aren’t flocking to the Web with their advertising.  According to a new survey conducted last fall by the Boston Consulting Group only 3 percent of small-business ad dollars are going online.

The numbers come from a survey of 550 small companies, and shouldn’t come as a complete surprise to anyone who has watched the struggle many US based publishers have had trying to break into the digital ad market for many, many years.

As the article author Peter Kafka notes:

“..With the notable exception of Groupon and other daily deal companies, most of the Internet guys like to advertise their advertising on the Internet. And their platonic ideal for a transaction is the self-serve model, where humans never have to talk to each other. Meanwhile lots of traditional business still gets done in analog form, via phone calls and feet on the street”

and even those “no-one-uses-them-anymore”print Yellow Pages which continue to see increased call tracking volume year over year.

Granted that when small businesses do spend their money, Google is drawing the majority of it (according to BCG), with the popularity of other sites ranked this way:

• “Other” search engines,
• Yelp,
• Facebook,
• Yahoo! Local,
• YP.com (formerly yellowpages.com),
• Twitter,
• LinkedIn, and
• Superpages.com

Does this mean that many Yellow Page publishers are chasing a digital mirage, or is it a tsunami just waiting to happen????

My take: 

1. Print is still faster (do a test to find an emergency plumber in your town who provides free estimates on weekends, has been in business at least 10 years, and has a Better Business Bureau rating),
2. Easier (no Internet or mobile connection needed)
3. Print ads provide greater context especially for products/services you buy infrequently (e.g. a replacement roof) – you find out a lot more from a full page ad than an in-column ad.  It sends a message to the consumer

Don’t get me wrong – love the Internet and mobile.  They are great for research.  But when it comes to a real local buying decision — print does more, and better.  Over time, things may change.  But first Mom and Pop need to see that more business is coming from digital before they will make the leap.

Yellow Pages = print, online, and mobile

BIA/Kelsey SMB Kicks Off Busy Fall Conference Schedule

We are entering a busy industry conference season starting next week with the BIA/Kelsey SMB Digital Marketing 2012 conference, which takes place Sept. 17-19, in Chicago.
 Time is running short to join the digital marketing community, which is gathering to discuss the incredible SMB marketing opportunity for media, commerce, and engagement solutions. As of this point BIA/Kelsey has assembled an impressive lineup of nearly 50 speakers from across the SMB digital marketing space, including keynoters from Demandforce/Intuit, Constant Contact, Dex One, Facebook, Groupon and ReachLocal and featured speakers from Google/Wildfire, Deluxe, Yelp, Angie’s List, Belly, and many more.

YP Talk is looking forward to a conference program which is designed to provide valuable takeaways with topics that include local sales strategies, merchant outreach, SMB engagement/promotions, local search, social media and mobile strategies.   This conference historically offers the rare opportunity to meet with leaders in the SMB digital marketing solutions space.  Organizers are expecting more than 400 senior executives from over 150 companies at the conference.  To see the current list of companies attending go to: http://www.biakelsey.com/SMBDigital/companies.asp.

Save some money:  LinkedIn members who are also BIA/Kelsey group members can receive an additional $200 off the registration price by using the promo code SMBIN when registering.

SIGN UP TODAY. The registration price increases Sept. 17. Register today with promo code SMBIN at for greatest savings.

For a more international flavor, consider attending the 2012 ADPAI Annual Conference in Bangkok on November 5-6, 2012.  This event being run by the Asian Local Search and Media Association (ADPAI) will have major players in the local search and media space for the

The agenda is focused on the regional opportunities arising from the explosive growth that the social, local and mobile spaces have been experiencing in Asia.  We can verify there is a lot of action in Asia as we found in our interview with ADPAI Chairman – Oscar Sousa Marques, the CEO of Directel Macau yellow pages (full interview here).

Session discussions will also include how to re-train and reorganize your sales force so to effectively sell digital media, how to identify and make the most of opportunities that lie in mobile advertising, how regional companies can use social media as a tool for acquiring and maintaining customers, and much more.

Confirmed speakers include:

• Neal Polachek
• James Sanders, Google
• Charles Laughlin, BIA/Kelsey
• Peter Buxton, Yellow Search Today
• Mattias Wedar, Eniro, Sweden
• Trevor Nadeau, Turkey Yellow Pages
• Pavel Dolezal, SEO/SEM/SMM Specialist, Czech Republic

All the information is available online at www.adpai.com including the registration form and the sponsorship packages.

The ADPAI event is then followed by the Yellow Search Today!  Annual Conference which will be held November 14-15, 2012 in Hamburg, Germany.  Peter Ch. Buxton of Buxton Independent Consulting and Jesper Simonsen of J.S. Consulting ApS, who combined more than 30 years of operational and practical experience in the directory markets of Europe, have changed the events focus somewhat to the broad market of operators offering online, digital and mobile advertising services to the small and medium–sized business.

This event will have a theme of how to drive revenue by effective customer segmentation:

• Which products do we offer to which  segments?
• How does segmentation increase the salesperson’s credibility?
• How do we put segmentation into action?

It is also an event which provides attendees with a great opportunity to meet fellow industry colleagues and develop new relationships.

Keeping the news in perspective…

I’m back from a week’s vacation and have a collection of news tidbits accrued during my travels that further highlight why this industry needs to take a step back and sort through all the recent noise about how Yellow Pages is really being viewed by consumers and small business owners.

The first data point actually has nothing to do directly with the Yellow Page industry, but in another way, does.  This comes from Hollywood — reports indicate that ticket sales at North American cinemas declined an estimated 3%, to $4.28 billion, for the period from the first full weekend in May to Labor Day, compared with the period a year earlier (source).  The culprit – it is the economy, stupid.  This recession/depression/high unemployment (or whatever you want to call it) economy continues to just drift along like a boat without a rudder or engine.  So while a lot of “experts” are pronouncing the end of the Yellow Page industry due to declining revenues, in reality many small business owners are still suffering and fighting through lower sales from prior years.  In the case of consumers, when incomes are down and unemployment is up, things like spending on going to the movies are one of the first casualties.  Yet I don’t see “experts” viewing that as a sign of the imminent collapse of the movie theatre business.  But somehow slow Yellow Page advertising sales in this down economy are consider the start of a death knee.  Really?

Data point two is a similar economy indicator and industry comparison point.  FedEx has just issued a profit warning due to weak global economy (source).  The company slashed its FQ1 EPS forecast to $1.37-$1.43 from an earlier estimate of $1.45-$1.60 and the current period could represent FedEx’s first quarterly decline since 2009.  In its comments, the company indicated that “…weakness in the global economy constrained revenue growth at FedEx Express more than expected in earlier guidance.” Once again, I don’t think any “expert” is viewing this dip in earnings as a signal of the demise of express mail services due to what FedEx said.  Simply put, the economy just plain sucks right now.  There are some bright spots out there, but overall the economic funk continues.

Data point three has two parts – the first is the realization that the value of Facebook has now dropped some $40 BILLION since its IPO.  Let’s combine that with the news that more bad news from digital “experts” darling Groupon where several of the  co-founders of CityDeal, the Samwer-backed European clone that was acquired by Groupon in 2010, have decided to depart the company.  These aren’t the first defections of senior management from the company.    The key question for this data point — if all of these new digital advertising media are such great deals for SMB’s, shouldn’t these flagship digital providers be raking in the cash, and not be looking like sinking ships listing badly to port?

Which brings me to the next data point – the continuance of bogus Yellow Pages billing.  Rarely does a week go by that I do not see at least one warning about bogus Yellow Page billings being sent to small business owners.  For example, here is one in San Francisco, and another in Amarillo just this past week.  What I find interesting about these schemes is that if SMB’s are so disenchanted with Yellow Pages advertising results, how could they be so naïve to then pay an incoming bill, just because it has a Yellow Pages logo of some type on it?  Despite what online and social media “experts” say, could it be that those old fashion print Yellow Pages still bring leads/business to their doors?

The answer to the last question is still a resounding “YES”.  Here is another recent study initiated by Haines Publishing, which found that 80% of residents in Ross and Pickaway Counties, Ohio use the print yellow pages first when looking for local business information (source).

When you add all of this up, it indicates that right now, this crappy economy is affecting all advertising.  And it also indicates that SMB’s should not give up their print Yellow Pages positions just for a less expensive (sometimes), sexier (perception vs. reality), new digital platform, especially without verifying that the new digital advertising effort is going to yield the same quality leads that print still generate.  Perhaps the solution lies not in a print OR digital discussion.  Instead, it should be a print AND digital solution for SMB’s.  Sure, get a nice website up, play with Twitter, Facebook, Groupon, or whatever.  However, don’t give up your core position in print Yellow Pages, not when we are seeing call tracking results up over 15% YOY.  Why would any SMB want to take the risk of losing any business in this current economic climate?

 

News U Can Use – May

These news items are brought to you by Kuk & Baldwin.  Use this information in your account prep efforts:

AIR CONDITIONING UPGRADES.
In some parts of the country, air conditioning (AC) contractors are seeing an uptick in business, due in part to an available tax credit for upgrading to more efficient systems.   Central AC systems typically last 15 years, but heavy users may want to upgrade sooner – and even if an AC system is only 10 years old, switching to more energy-efficient equipment will cut the cost of running it by 20% to 40%.   In most cases, homeowners who want to upgrade a central system would leave the existing ductwork in place but would still have to spend $2500 to $4000 to replace the condenser and compressor.   Window units are typically
replaced every 7-8 years (Money, 5/11).

RINGS AND WEDDINGS.
Diamonds are still a girl’s best friend and make up 30% (and $55 billion) of all jewelry bought in the US in a year – but although the average engagement ring price is now at $5392, over 44% of engagement ring buyers spend $2500 or less.   The number of marriages in the US, while declining in the last three decades, seems to have flattened at about 2.1 million a year – and the majority are formal weddings that carry an average cost of $26,984.   That includes an average of $1099 spent on the wedding dress, typically at a bridal shop (Parade, 5/1/11; USA Today, 4/28/11; Smart Money, 5/11).

GARDENS AND FLOWERS.
The average US household spends about $180 a year on flowers, of which
$63 goes for flowering plants.   Regarding the latter, a garden industry rule of thumb is that for every $1 spent on flowering plants, $3 more is spent on accessories like hoses, garden gloves, and shovels.   All those dollar signs are why chains like Home Depot and Lowe’s are ramping up their flower plant ventories, along with accessories.   For example, Lowe’s has been testing flower plants for the last few years and typically picks 10 a year to sell.   All that big box activity means small local garden stores need to find ways to differentiate themselves – and then get the word out (Personal Journal, 4/27/11).

Find out how to be at the top of your sales performance by
clicking on www.kukbaldwin.com.

 Other recent media/advertising news:

Media Results:  Recent news about advertising media and general has been active.  Here are a few key examples:

 ZenithOptimedia Reduces Global Advertising Forecast

When you add up rising energy prices, the Japanese earthquake/tsunami, and political upheaval worldwide, ZenithOptimedia has decided to scale back its prediction for global ad spending for 2011 from a 4.6% increase over 2010 to a 4.2% increase, with total spending pegged at $470.8 billion. U.S. ad spending is pegged at rising 2.5% to total $155.2 billion this year. Source

Advertising Comeback Seen in Hard-hit Michigan
While overall global ad spending picked up last year from the depths of a recession in 2009 in a modest recovery, even in the state of Michigan,
one of the hardest hit Midwestern states by the downturn. “If the first
quarter of 2011 is an indication of the remainder of the year, we’re going to
have a great year,” said Bob Blanchard, CEO of Hanon McKendry in Grand
Rapids. Source

Local Radio sales Up 3.7% in 2011
Ad revenues at local radio stations will increase 3.7% this year
for a total of $15.1 billion, BIA/Kelsey forecasts. That follows a 5.4%
increase driven by political ads in 2010. The firm expects local ad sales,
including online ads, to hit $18 billion by 2015. Source

Weekly News Magazines Seeing Advertising Gains (except Newsweek)
With the notable exception of Newsweek, U.S. news magazines posted
gains in ad pages for the first quarter, with growth of 36% at the relative
upstart The Week and 49% at Bloomberg’s redesigned Businessweek. Newsweek, however, saw a 31% drop, signaling work still to be done for new owner Sidney Harman and Editor Tina Brown. Source

Digital Out-of-Home Advertising Putting Up Solid Gains
Digital out-of-home media emerged as the biggest percentage gainer among all media in ad revenues for 2010, with a 24.5% jump in spending to $1.1 billion, according to the Digital Place-based Advertising Association. The DPAA notes the ad gains in this particular sector were largely unaffected by political spending, which adds long-term significance to the results.   Source 

TV Ad Dollars Coming Back to Pre-Recession Levels
Don’t look now but TV ad revenues are on track to return to pre-recession levels over the next year, even despite strong growth in online marketing, this according to eMarketer. In fact, television is currently leading the way in the US traditional ad market among other media, most of which show some recover, but just not as quick. Source

Internet Advertising Surpasses Newspapers For First Time

Following up on the prior story, which noted that media other than TV are not recovering as quickly comes the news that spending on U.S. Internet ads rose 15% to $26 billion last year.  This gorw means online is still outpacing traditional media and has now surpassing newspaper ad revenue for the first time.  Source

Online Media News:  Discussion about online advertising is always active.  Recently, that hasn’t changed.  Here are a few key examples:

Digital Magazine Sales Count Towards “Paid Circulation
It all depends on how you count them.  We’ve noted that iPad and digital-edition sales of magazines are officially being counted towards circulation guarantees made to advertisers, per a new guideline from the Audit Bureau of Circulations.  But one twist is that the digital editions and the print editions may have different ads, raising some confusing among media buyers. Source

Google, Yahoo! and others offer ad opt-out icons
With some very vocal concerns coming out of lawmakers in Washington about consumer privacy online, Google and Yahoo! are introducing ad icons that link to tools that allow users to opt out of tracking. Likewise TRUSTe and DoubleVerify are launching similar services that first link to an ad information site. Source

Facebook Testing Ads Based on Real-Time Social Chatter
Facebook is testing an ad-targeting system that is supposed to monitor user chatter and serve up ads in real time related to the most recent conversations. Hmmm.  Analysts say the system could help marketers get through to users who say they find much of Facebook’s advertising irrelevant, but that the system’s success or failure will ultimately depend on its ability to provide pertinent content. “You might have the potential of seeing some unfortunate ads if not targeted correctly,” Debra Aho Williamson says. Source

Mobile Media News:  No topic is hotter now than anything related to mobile, especially mobile marketkng.  Here are a few key examples:

Borrell — Mobile Will Play a Larger Role in Local Advertising
Borrell Associates believes that advertisers will allocate nearly 18% of their online budgets to local media in 2011, compared with about 15% last year. The firm notes that mobile advertising is helping fuel the growth in local advertising and could account for up to two-thirds of local spending within just five years. Revenues at Groupon and Autotrader.com already exceeds online spending at newspapers, TV and radio stations in about 20% of local markets. Source

Cheaper Kindle Come With Ads
Amazon plans to launch a Kindle e-reader that sells for $114,  about $25 less than the lowest-priced version of the popular gadget. But, but,  but — users of the new Kindle with “Special Offers” will have to  view advertising on the home page as they’re choosing which digital books to read. General Motors’ Buick brand, P&G’s Olay line and Visa are reported to be interested in being the first Kindle advertisers, according to Amazon.  Source

Media Research:  It has been an active time for research data especially regarding newer media and social networking.  Here are a few key
examples:

Marketers Missing  The Real Keepers of the Purse Strings
Did you know that women control 80% of  spending in the U.S., and businesses don’t effectively market to women are “leaving millions of dollars … on the table,” according to Susan Fabry.    In this article she offers five tips to help “make this consumer feel understood.” Marketers should acknowledge women, join their circle (especially on the Internet), understand their similarities,  respect their differences and be prepared to grow with them. Source

Study: Almost all U.S. Homes Will Have Access to Broadband by 2016
Interpublic Group’s Magna Global has reported that the number of U.S. homes that are expected to rise from 84.7 million at the end of last year to 99.4 million by the end of 2016, while households with broadband will go from about 76 million to 97.9 million.  For the record that is less than the percentage of homes that receive print Yellow Pages.  Source

Nielsen Says Groupon Users Less Affluent & Educated than LivingSocial’s
Ok for all you social media fans, LivingSocial users, compared with those who use its bigger rival, Groupon, tend to be wealthier and younger and are better educated, according to  Nielsen. LivingSocial users are 49% more apt than the typical American Web user to earn $150,000 or more (which is closer to a typical print Yellow Pages user than Gropon), vs. 30% for Groupon, and are more apt to be under 35 and possess bachelor’s or graduate degrees. Source

Research Say TV is a Major Influencer in Buying Decisions?
Hmmm.  According to a survey by Deloitte, 7 in 10 Americans rank TV viewing as their top media activity, and more than 8 in 10 say TV ads have the biggest influence on what they buy. I’m curious about this since the same study indicated that three in four Americans also multitask during their TV time, with 4 in 10 spent online, 3 in 10 talking on mobile phones, and about one in four IMing or writing text messages.  Seriously?  Source  

News U Can Use – March

These news items are brought to you by Kuk & Baldwin:

REMODELING REPORT. As you’d expect in this post-housing-bubble period, figures for cost recoupment of remodeling jobs are significantly lower than in 2008 – e.g., only a steel entry door replacement gets a 100% recoupment within 2 years, while a garage door replacement recoups 84%; siding replacement recoups 74% to 80%, depending on materials; and window replacements average about 72%.   Most everything else runs 45% to 65%.   Note that the highest recoupment projects add curb appeal to make the property more saleable (Journal of Light Construction, 1/11)….Remodeling growth for 2011 could be as high as 9% – ending at an annualized dollar figure of $124 billion (Remodeling, 2/11).

HOME SECURITY. The US residential security market is worth $21 billion a year, and that includes everything from complex monitored electronic systems to simple deadbolts.   According to the Uniform Crime Report, there are now nearly 10 million property crime offenses a year in the US – with burglary accounting for 25%, of which 67% (1.7 million) are residential.   The average loss is close to $2000.  But if the economy stays flat, the numbers could get worse.   While the vast majority of households won’t be buying an elaborate system, many are spending up to a few hundred dollars with locksmiths for basic protections like deadbolts, window locks, garage locks, and door viewers (Locksmith Ledger, 2/11).

MARKET BRIEFS. A recent survey of restaurant owners showed that 70% expected their 2011 sales to be better than 2010, while 28% felt sales would be about the same, and only 2% thought 2011 would be worse than 2010 (Restaurant News, 1/10/11)….Some 89% of brides-to-be are considering a small wedding to save money, with 45% planning to spend less than $10,000 (Research Alert, 1/21/11)….In a recent survey, a bare majority (51%) of small business owners said that “weak sales” was their biggest problem and that it reflected the effect of declining household wealth on consumer buying (World, 2/12/11).

Find out how to be at the top of your sales performance by clicking on www.kukbaldwin.com.

Other recent media/advertising news:

Kantar Media: U.S. ad spending increased 6.5% in 2010
Research firm Kantar Media indicated that the overall US domestic advertising sector grew 6.5% last year.  TV (including broadcast and cable) was up 10.3%, online display rising 9.9%, radio up 7.6% and outdoor up 9.6%.  Yellow Pages were not specifically mentioned but the newspaper sector was the only down sector, coning in down 3.5% from 2009. The total U.S. spend was estimated at $131 billion. Looking deeper at which vertical market segments drove the gains, automotive was the largest climbing 19.8%.  (source)

More Bad News for Newspapers:   Classifieds aren’t coming back
The estimates presented in the above research by Kantar are consistent with an industry that has seen steady losses over the past five years.  Why?  “Fundamental shifts in consumer and advertiser behavior” to use the Web for help wanted, auto and real estate ads, according to  Alan D. Mutter, a professor at the Graduate School of Journalism at the University of California, Berkeley. The drop in classified advertising has accounted for 58% of the nearly $23 billion in lost newspaper ad sales from 2005 to 2010, according to Mutter. (source)

Interactive ads engage readers better than print
A new study finds that interactive advertising via digital magazine platforms (such as Apple’s iPad) are better at engaging  readers and have stronger purchase intent than the same ads featured in print magazines according to research commissioned by Adobe.  The study did not measure actual purchases though.  (source)

Webvisible: SMB Search Spending Down, But getting More Efficient
The “State of Small Business Advertising” report, conducted by online advertising firm WebVisible found that sSmall businesses actually spent less on search advertising during the final three months of 2010, and they spread those dollars across more keywords.

The new report indicated that the average small business spent $2,126 on search in Q4 2010, a 1.1% year-over-year decrease from 2009. The average keyword count was 87 root keywords per advertiser over the last three months of the year — a 30% increase from the same period in 2009.

WebVisible suggested that the numbers suggest smaller advertisers are becoming more efficient with their paid search strategies, but didn’t make any comment that the down economy might have also contributed to the reduction.  (source)

Yodle introduces local display ad product
Yodle is moving beyond its core search and online directory ad products with a new display ad tool. The tool is oriented at giving local businesses, especially franchises and those with multiple sites, the ability to place contextual and targeted display ads.

Since its creation in 2006, Yodle has primarily focused on helped local businesses attract prospective customers by facilitating search and online yellow pages campaigns. Now, according to company execs, using the new Yodle Display product allows local businesses to run contextual- and even behavioral-targeted display campaigns.

While the company’s other products are aimed at every range of small business—from pizza places to plumbers—Yodle Display is primarily geared for franchise and multilocation businesses.  To date, the company has yet to show a profit.  (source)

Skype launches front page advertising
Skype is opening its video calling service to advertisers.  In an effort to develop a new revenue stream ahead of the company’s much anticipated public offering, the site will begin showing large-format ads on its front page from companies including Visa, Universal Pictures and Volkswagen. Windows users in the U.S. and the U.K should have already seen the first ads by now. (source)

Twitter more popular among small businesses

From a survey by BIA/Kelsey and ConStat, about 20% of small and midsized businesses use Twitter, and about half are using Facebook. Twitter use more than doubled for small and midsized businesses between the third quarter of 2009 and the fourth quarter of 2010, the survey found. (source)

Groupon Sued

A Minnesota man has sued Groupon, alleging that expiration dates on the company’s discounts are “deceptive and illegal.”  The lawsuit filed in U.S. District Court in Minneapolis said federal and state laws prohibit companies from selling or issuing gift certificates with expiration dates. Groupon of course had no comment. Instead they rolled out a new ad campaign of short, mild TV commercials. Groupon also dismissed its ad agency, Crispin Porter & Bogusky, following a poorly-received set of Super Bowl commercials.  (source)