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April 26, 2007

Tactical Search: Local and Mobile Search Engines

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Stay with me, friends. It’s time for this afternoon’s Local and Mobile Search Engines session with moderator Kevin Ryan (Motivity Marketing) and speakers David Herscott (MEA Digital), Warren Kay (Yahoo! Search Marketing) and Ian Leuchars (24/7 Real Media).

Kevin starts with two math equations. He states:

Maps + Mobile phones = Dollars
Brands + Mobile devices = Dollars

That’s math? Apparently.

David says there are two issues with mobile. First, the user experience has been less than satisfactory, and second, the number of handsets that are mobile enabled is limited.

Warren says the early experience on the mobile device was simply a reflection of what was being delivered on the PC. Advertisers thought they could just export what they had developed for the PC Web and use it on mobile. However, like with most things, repackaged goods don’t work. Mobile is vastly different than the PC. The intent is different. On the PC, consumers are in a comfortable environment doing research. On mobile, they’re either at a destination or going to a destination. They need quick information.

Warren says Yahoo has a lot of assets that are valuable to the mobile phone. /plug.

Kevin asks if mobile is very category specific? Who are the early adopters and advertisers? What are you really doing with the advertisers?

Yahoo has two different ad models – a traditional graphical ad in its OneSearch and a traditional sponsored search ad. Is Yahoo ever going to break away from the "traditional" stuff and create something mobile specific? Warren says Yahoo’s seeing a lot of good momentum. They don’t expect a huge jump in ’07 but they see the light at the end of the tunnel, maybe in 2008. They’re getting advertisers like Lexus, Pepsi, Orbitz, choice hotels, etc. on board. Volume is low, but conversions are high.

On the marketing side, you need to really understand what a consumer is trying to do. They’re on a mission. If they had time to browse, they’d wait until they were near a PC and do it then. You need to figure out how to help them and give them a good user experience. Users use mobile as a conduit to start a conversation.

David says that whenever there is a new advertising medium, there are three types of early adopters: Big brands trying to test the waters, direct response folks on the hunt for ROI, and the porn folks. Heh, Kevin thanks David for bringing the conversation to a higher level. Apparently, porn generates 50 percent of mobile search. Good heavens people, adopt a kitten. (I have two if you want them.)

Kevin states that local search represents 10 to 30 percent of all queries. What are the barriers to entry for publishers getting into the space and for advertisers?

David throws more stats at us saying that 90 percent of the dollars poured into local search are from the small advertisers. What’s the opportunity for brands? Large brands need to decide how much they want to spend on this new opportunity. Okay. If I’m Brand A how do I know what my mobile or local budget should look like?

The hardest one is mobile, says Ian. One of the things you can do is simply to get started and use the data about your business to build a business plan. Get going by running one mobile-friendly ad. Use it to see what traffic is coming from mobile and what the queries looks like. Don’t spend a lot of money to get started. Don’t do a lot of desktop research. Dive in.

More stats: Warren says 1 percent of search budgets should be used for mobile. Make it an add-on to your existing campaign. Don’t create a separate campaign. It doesn’t make sense at this point in the game. You just want to be present and see what’s going on.

How are you measuring success?

Warren says it’s not about sales or ROI. It’s about consumer experience. We’re at the point where we’re just learning and testing.

To David, mobile is still early adopter, where local search is early majority. There’s actually earned metrics in local and you can spend more money. That opportunity is more real. Mobile’s not just about research; it’s really about testing to see what works.

To get excited about the mobile opportunity you have to look at how many mobile devices are out there. An amazing number of people have access to the mobile Web. He doesn’t know when mobile will hit critical mass, but he thinks advertisers need to find out how to provide relevant material. The opportunity is certainly there.

One of the things moving us forward in mobile is the Yahoo product offering, says Kevin. David says without products like that the question is not how many handsets are out there but how many new handsets are out there. There are a lot of old devices being used by people who can’t send a text message. These people are not mobile enabled.

Kevin shares that he’s a brand whore for Oakley and asks David about the testing they’re currently doing.

David says Oakley has a number of clients asking about both mobile and local. The bottom line is right now is how does local make sense for an advertiser? It makes sense in a number of ways. For a manufacturer not selling direct, it’s a stretch to see where local fits in. There are a lot of people doing searches for "golf equipment [city]". That’s where the opportunity is. You can find retail locations. There’s clearly money to be spent there for advertisers.

In local search, you have to show the consumer the nearest outlet. You can give them directions to Starbucks and have them pass 3 on the way to get there. It’s an inclusion game. All they need to do is make sure the data is accurate on the Web. Companies like Yahoo work very hard to make that content available. You have to be comprehensive.

Warren: Do you think the big monetization opportunity for mobile is getting people to call? Does it have to be clicks?

Ian says no. The challenge for a marketer is that the consumer is way down on the purchasing cycle. If you’re searching for Borders, Barnes and Nobles is out of the conversation. There’s virtually no way for them to steal that conversion. However, if a user searches for "book store," they have a chance.

Ian says advertisers should be cherishing these early mobile users and using them to learn what they want to know about the environment. They’re fantastic and definitely worth paying for. The data is valuable.

David talks about Google’s free 411 service and other similar services.

When we talk to our marketers about pay per call, says Warren, they look at us funny because we’ve been talking about the cost effectiveness of driving people to their Web site but you can’t always click. Sometimes users need to call.

You don’t have to spend a tremendous amount of money to start testing mobile and local. There are tons of opportunities. Every other week we have some new product to try.

David says one of the biggest challenges for agencies and advertisers is that the markets are so fractured. With traditional media there’s been a proliferation with the number of options but advertisers have more tools to manage.

Warren argues that local is no longer a nascent media. It’s a $3.5 billion industry and only makes up 10 percent of online ad spent.

Someone in the audience asks if the iPhone will change the world.

David says he hasn’t demoed it yet but he thinks it will be interesting to see what happens. It may speed up adoption but it probably won’t move the needle too far.

Kevin summarizes the session saying for mobile and local, metrics = tough, volume = not a lot. Ah, more math.

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