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Video and Mobile Search Take Center Stage

boland-michael
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The intersecting points of Web 2.0 and local search were spotlighted throughout The Kelsey Group's Drilling Down on Local '07 conference late last month. The show took place in Santa Clara, Calif., a stone's throw from Google, Yahoo and Microsoft's Silicon Valley campus, each of whose role in the local search space was underscored throughout.

Mobile Search: Can You Hear Me Now?

Just as Kevin Newcomb posed the question in a SearchDay article last week, "Is This the Year for Mobile Search?", mobile represented a prevalent discussion point at the conference. This was driven largely by Microsoft's then very recent acquisition of voice automated search provider Tellme.

Tellme VP of marketing Sanjeev Agrawal sat on a mobile search panel in which he affirmed the competitive advantage in mobile local search that Microsoft can gain over its search competitors, given new voice search capabilities and the installed base of its Windows Mobile Operating System.

This installed base combined with the product developments accelerated by Tellme's technology could also push overall mobile local search adoption forward. Voice search – along with SMS – is currently the most user-friendly form of mobile local search, and Tellme's multi-modal functionality lends an extra degree of capability by allowing users to choose between text messaging and voice input, as well as output (search results).

"Voice in/voice out makes a lot of sense in some cases, and voice in/data out makes more sense in others," said Agrawal from the stage. "It really depends on the situation."

Mobile Search: GPS-Enabled Mapping for Nokia

Nokia VP of Multimedia Ralph Kunz meanwhile demonstrated a new mobile search application, smart2go, during his keynote address. It is a 3D mapping and local search application that allows users to pan in and out of digital maps and "fly over" areas in 3-dimensional fashion. This will be the centerpiece of GPS-enabled mobile local search for Nokia and will be pre-installed onto 100 million mobile devices by 2008, according to Kunz.

"Proximity is extremely important once you have a GPS-based device," he said from the stage, adding that imbedded GPS will soon be ubiquitous with the falling price of GPS chips which currently cost less than $2 each. "It is going to be built into everything."

Smart2go contains 15 million points of interest (POIs) including landmarks, tourist attractions, restaurants etc. Mobile users can send these POIs, directions and map screenshots to friends by text, Bluetooth, or e-mail.

These free features open up opportunities for various forms of advertising, according to Kunz, including sponsored search links, coupons and branded icons on maps. There are also possibilities to upsell users to enhanced functionality or premium content such as travel guides.

"There will be the opportunity to build mobile communities and [create” income through upselling and ads," said Kunz "We're building an ecosystem of branded content. Why just note a gas station, when it can be a branded gas station like Texaco."

A key element in Nokia's mobile strategy will involve the "three-screen" integration of PC, mobile and TV.

"Mobile is not a stand-alone. People want to personalize and manage things on their PCs," said Kunz. "Mobile will always need to work on the magic triangle of PCs, TV and the phone."

The challenge here will be pushing out mobile local search applications given the fragmentation of mobile services, and the carrier control present in the US mobile market that makes it difficult for mobile search providers to get applications in front of consumers.

"It is something we need to take seriously," said Kunz. "The local search experience is the one that is most relevant to us. If you don't bring search to the home screen, they'll forget that they have it. It is very important that it be visible on the front of the device, and embedded with something that helps you find local content."

Video Steals the Show

Local video advertising also represented a prominent focal point throughout the conference, as each panel discussion circled back to video at least once to emphasize its opportunities in local.

The buzz around video throughout the marketplace has largely been driven by the awareness and popularity that YouTube has brought to the medium. But this has more recently reached a local level, with an ecosystem that is beginning to form around the production and automated distribution of video advertising for small businesses.

This has mostly included services from companies such as Spot Runner and TurnHere, which offer to produce and distribute video ads for small businesses at price points that are significantly lower than they've traditionally been. This has pushed the market forward by bringing video advertising within the reach of the SMB segment for the first time.

Augmenting this trend is the general affinity for video that many small businesses are beginning to show. For many small businesses, video is a medium that they conceptually "get," as its value is easier to asses than some forms of online performance-based marketing. Pay-per-click, for example, may be less attractive and more abstract to certain small businesses that are more interested in leads, foot traffic, or phone calls.

"Sales reps get it and advertisers get it. It's something that everyone can relate to," said Gordon Henry, CMO of Yellow Book USA, during a panel discussion. Some of this comes down to the same vanity factor that we've seen traditionally drive some Yellow Pages advertising. TurnHere VP of Business Development John McWeeny likewise confirmed that TurnHere's sales efforts into the SMB segment have revealed that the interest in local video advertising is indeed rising.

These factors also rang true for a panel of real-life Bay Area merchants who were invited to give their perspective on the good, the bad and the ugly of their local advertising spending. A cosmetic dentistry practice and a roof rack shop both confirmed they are working on video ads – a small but telling example that local video ads are real, and small businesses are creating them.

IAC's CEO of Media & Advertising Peter Horan also revealed that Citysearch will integrate local video ads from TurnHere into its listings, while Yellowpages.com CMO Matt Crowley presented his company's opportunity to integrate video ads into IYP listings. Spot Runner CEO Nick Grouf, meanwhile, demonstrated how his company can drastically undercut ad agencies with new forms of creative and an automated (self-service) process of customized production and cable media buying.

The price point for video production is around $500, according to Grouf, while cable ad inventory on popular basic cable stations such as CNN or Comedy Central can be as low as $12 per spot in most markets. This importantly creates an entirely new addressable market segment for television advertising, which is the "Holy Grail" for small businesses who have traditionally wanted it but couldn't afford it, according to Grouf.

"$500 is not the negating item. We're pretty confident if we wanted to raise price, we could. But what we're doing is working with very small businesses," he said.

So how will this all come together? Though there is a lot of buzz around video, many question marks remain about how these video ads will be distributed, and where they will be watched. Cable television is one possibility that is being pushed by Spot Runner, although Grouf believes that the next step will be to move from the neighborhood targeting possible with cable, to the IP targeting possible with IPTV. This will allow advertisers to target down to a set-top box level.

On the web, another possibility presented by Yellowpages.com CMO Matt Crowley, is a video player that is embedded in some online Yellow Pages listings. This would essentially enhance the level of media and information of a traditional online Yellow Pages lookup. A similar possibility is to embed video into landing pages of local businesses in portal local search products like Google Local and Yahoo Local.

From a sales channel perspective, this could involve bundling video with existing print and IYP ad sales, according to Crowley. He also demonstrated AT&T's "3 screens" strategy – similar to that mentioned above by Ralph Kunz – that will integrate and personalize content and advertising across the PC, mobile device, and television (IPTV). The same strategy was echoed by many local media players at the conference, and will continue to gain attention throughout the local media landscape.

We're still in an early adopter phase for video advertising, however, and there are many factors at play. User adoption, advertiser adoption, and technology and distribution models will all affect one another's development and adoption. The same can be said for mobile local search, and we still have a long way to go before both of these emerging mediums reach their adoption and revenue-generating potential.

Michael Boland is a senior analyst with The Kelsey Group’s Interactive Local Media program, and a contributor to the Search Engine Watch Blog, focusing on local and vertical search topics. Prior to joining The Kelsey Group, Boland spent several years as a technology journalist.

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