Posts Tagged ‘on-line advertising’

People are putting down the Yellow Pages. Literally. They are going online to locate the merchants and services they need. The Wall Streeet Journal is predicting the extinction of printed business directories.

Restaurant owners Claude and Uli Melchiorri own and run a successful bistro in Hilton Head, their hometown for the last twenty years. As small business owners, their marketing is very important to their business’ growth. It’s important that their advertising be affordable and trackable. For many small businesses advertising options preferred by large businesses are often not within easy reach. The Melchiorris have found that online advertising is affordable and current. Hilton Head’s Santa Fe Café owner Marshall Sampson confirms what the Melchiorris know, “Interactive search on the internet is what our customers use to find us.” “We can reach more people and be more expressive,” says Uli.”

The backbone of small business advertising used to be print Yellow Pages and newspaper ad placements. According to a March 2008 report from Bloomberg News Service, “U.S. newspapers suffered their worst drop in print advertising sales since industry record-keeping began 57 years ago, hammered by the housing-market slump and competition from the Internet.” While newspapers’ print circulations are down, forty-one percent of all website visits in the third quarter of 2008 were to newspapers’ websites; an increase of sixteen percent over 2007; clearly demonstrating that viewers are using digital news sources on Internet. And these Internet readers want localized news. According to John Kimball, The Newspaper Association of America’s chief marketing officer, “make sure you’re doing well in local news coverage.”

Some of the largest gains in ad placement spending have been in the category of online directory portals, such as the new Hilton Head located U.S. start-up YellowMarketing.com. Evidence for this move to the ‘Net is found in a recent report from The Kelsey Group which states that interactive global advertising revenues will reach $147 billion by 2012 and represent 21% of global ad spending. “It’s no surprise that the global advertising industry is experiencing a full-scale shift to mixed-media platforms, with interactive driving a significant share of overall industry growth,” said Matt Booth, senior vice president, Interactive Local Media, The Kelsey Group. During the forecast period (2007-2012), the United States will see interactive advertising revenues grow from US $22.5 billion to US $62.4 billion, 22.6 percent compound annual growth rate (CAGR). Internet Yellow Pages (IYP) revenue will grow from $3.7 billion to $9.2 billion (20.1 %) (Kelsey Group).

What the Melchiorris and Sampson know first hand is confirmed by a survey of executive marketing officers. Online/mobile marketing is not only cost-effective, but instantly changeable, viral, current, and measurable (who is looking, who is forwarding, who is clicking through). Advertisers want more metrics and tracking of their ads. They also find that the lower cost of online advertising is easier to bear than the annual cost of thousands of other advertising vehicles.

Not only are traditional print Yellow Page ads expensive, they provide the customer little brand interaction. Print directory publishers have traditionally viewed their online directories as an adjunct to their publications, not as the primary vehicle. With this world view, the market is open for the development of a designed-from-the-ground-up-portal that is local; built for online, not vice versa.

YellowMarketing.com offers advertisers the opportunity to post videos about their businesses that are relevant to their potential customers. According to Michael Boland of The Kelsey Group, “That’s where the beauty of the local video comes in. Like a lot of other broad internet trends (social media, mobile search, etc.) video has made its way to local in its own little way. In other words it’s become an attractive way for small and medium sized businesses (SMBs) to start advertising.” ClickZ writer Andreas Roell noted, “Advertising on dedicated, specialized sites allows advertisers to fine-tune their messaging and offer users a message that will resonate. Users who are visiting these niche online destinations are also likely to be further down your purchasing funnel, so why not fish where the fish are?” Boland makes the point, “But unlike the national video ad formats … that require inserting ads with content, local video advertising is the content. In other words, an SMB video lives and breathes on the … IYP listing, City guide profile, or search results. There it serves a user-centric purpose of assisting buying decisions and giving color (literally) to a listing, where a user has intent to find something locally.”

At a recent gathering of local business owners, the advantages of using online video advertising in a local directory portal were clear. Jack Ryan of Lowcountry Mosquito Control Systems, Inc. said “my videos on YellowMarketing allow me to explain my products and my service in a way that customers can understand” and Mike DeSimone of Elite Pools and Spas/Property Preservation Inc. offered, “videos let us show the customer what we can do for them.” Sampson observed, “You can update when you need to and not wait a year until a reprinting” and Ryan continued, “I can update at any time with new ads, videos and promotions.” Others added that their listings have maps and still photos too.

YellowMarketing.com was established in 2007. The company plans to grow nationally through other partnering arrangements with local publishers, phone companies, and radio and television stations in medium to small markets. Peter Buonaiuto, co-founder of YellowMarketing.com, knows the company’s service provides a web based, multimedia experience traditional print and internet yellow pages cannot offer. Because they’ve purchased a business listing database for their marketing area, local businesses are already listed in the directory, free of charge. Buonaiuto says, “For less than half of what businesses will pay for a print and online Yellow Page listing, they can expand their ‘profile’ to include photographs, product information, a video, a link to their website and coupons, all of which are updateable at any time.”

Dennis Geraghty, co-founder, Vice President of Operations and COO says, “Business owners with a YellowMarketing listing enjoy the added benefit of getting indexed in Google, Yahoo and other major search engines as well. These benefits offer the opportunity to drive more traffic to their businesses.” He adds, “We even have plans in the works to optimize the site for Smartphone technology, allowing searchers to navigate from their current location directly to the location they are searching.” Buonaiuto continues, “One of the most desirable features of YellowMarketing is the ability for the business owner to track activity on their profile: to see who is viewing it and what they are looking at.”

Buonaiuto and Geraghty are veterans of the telecom industry. They co-founded Send2Fax, LLC an internet fax services company in 2001. Send2Fax grew profitably to serve tens of thousands of customers around the world until 2006 when the company’s customer base and other selected assets were acquired in 2006 by the leader in Internet fax services.

Prior to the founding of Send2Fax, both had senior level executive careers directing telecom companies with revenues from $100-300 million. They both have been involved directly with a variety of technologies that we now take for granted including pre-paid long distance phone cards and fiber optic networks. In each case, their leadership helped establish these technologies as a way of life.

With their golden background and insight into the telecom business, their “voices of experience” and insight into small business marketing, it’s clear that they know where they are going with YellowMarketing.com and their advertisers agree with them.

DeSimone sums it up when he says, “YellowMarketing is very cost effective compared to most advertising I’ve tried in the past. I really feel that I am getting a great return on my investment with YellowMarketing.”

Today’s news includes a story regarding the calamitous decline in print revenue for U.S. newspapers and the rise in on-line ad revenue which cushioned the fall. The story further details that classified ad print revenue also fell. This should be no surprise. As I posted yesterday, the revolution is over. The newspaper reading habit is not catching on with those younger than 45, and even those who read newspapers read less. It’s interesting to see who reads the newspapers.

Where I believe the analysts are incorrect is stating that the declines are due to the implosion of the housing industry. I was a vice president of marketing for a southeastern volume builder. Prior to that, I counseled national volume homebuilders such as D.R. Horton in South Carolina and Charlotte, North Carolina on their advertising and marketing. As such, I stayed out of newsprint, except for high end luxury properties and age targeted properties.

First time buyers and move up home buyers don’t turn to the dailies for their information. However, if I wanted to sell a new drug to some greater than 65 years of age with a greater than $75K income, I’d advertise that drug in my local daily.

Where did the classified revenue go? Why to Craig’s List? Why pay when you can post for free? Google, Trulia, Yahoo!, and Zillow all allow the user to list specific properties for sale or rent.

It’s a one-to-one world now.