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How Big Data is Fundamentally Changing Local Search

wei-jiyan
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In January 2011, the Pew Research Center conducted a broad research initiative to better understand how people learn about their local communities in the "SoLoMo" era. Their findings further substantiated that the manner in which we communicate with our local community has fundamentally changed.

The Internet (and search in particular) has come to dominate the manner in which we access and share news, events and opinions about our local communities. The days of asking our neighbor over the fence for the phone number of a reliable plumber are gone.

At stake is a pool of local advertising dollars estimated at around $130 billion, according to BIA/Kelsey. Big data has the potential to shake things up and it begins with local search, where a handful of legacy stakeholders dominate.

A Shift from Authority to Quality

For years, local search was heavily influenced by a handful of stakeholders who combined the publishing of large reams of locally-targeted content with a steady stream of inbound links. In this paradigm, monetization strategies typically involved ad-driven models (e.g., Citysearch) or lead harvesting (e.g., ServiceMagic). The user experience (UX) tended to be a secondary consideration in this “big content” paradigm.

Now, the foothold on local search once dominated by big content sites is now being threatened by big data.

In the first major tremor (Panda), Google threw down the gauntlet and challenged big content sites to begin caring about the user experience. As big data continues to influence the space, we can expect even more tremors.

Drawing upon the massive corpus of user data collected via Chrome, Google+ and DoubleClick (just to name a few), Google will be able to make far more accurate inferences about the “quality” of content moving forward. It’s likely that user metrics like bounce rate, time-on-page and share rate (the ratio at which visitors share a piece of content) may come to influence local search rankings more than traditional signals like inbound links and domain age.

The shift has already begun to influence the local search landscape. In the local home improvement services space, newcomers like Houzz and Thumbtack have already begun to outpace more entrenched properties like Yellowpages.com and Dexknows.com (despite significantly younger domains and fewer inbound links).

Houzz, in particular, presents an excellent model for how a high degree of user engagement can result in premium local search results:

houzz-general-contractors

Compare to YP.com:

yellowpages-general-contractors

The increasing availability of user metrics is one characteristic of big data that is having an impact on the local search landscape. A second – the growing embrace of openness and transparency by organizations and institutions – presents yet another possibility.

Several of the forward-looking legacy players in the local search field, including Google, Yelp, Citysearch (via CityGrid) and several Better Business Bureau’s (e.g. Central, Northern & Western Arizona) have begun opening their data (to varying extents). In return, they receive brand visibility and distribution through the wide variety of applications that leverage their local data. They also gain valuable insight into what works (and what doesn’t), which can inform their own product roadmaps.

These open data initiatives have helped a new crop of start-ups in the local space focus on solving problems without having to worry about data collection.

Consider the example of Eat24, a Web application that makes it simple for people to order food for pick-up or delivery. By leveraging Yelp’s reviews, they have been able to create a meaningful local experience for their users at scale, while focusing their efforts on creating and maintaining an elegant user experience.

From a local search standpoint, the combination of increased emphasis on UX metrics and sudden availability of data may mean even more change in the not-too-distant future.

Key Takeaways

  1. Shift or get off the pot:Newcomers that foster user engagement and a positive brand experience have already begun to take local market share away from legacy players. Just as Big Content sites have been forced to start taking the user experience more seriously to remain competitive, local marketers should consider the risks and benefits associated with a local search environment that has begun to weigh user metrics more heavily.
  2. Innovation through collaboration: - Legacy Big Content sites should consider how collaboration can play a role in fueling innovation. Providing data to newcomers in the local space can provide valuable brand visibility and development insight for legacy organizations. Similarly, local marketers should consider how open data initiatives can help foster a more powerful and compelling user experience.
  3. Buckle up, it’s going to be a bumpy ride: Don’t get too comfortable with your approach to local search because it’s going to continue to change. Beyond the algorithmic changes that local search is likely to experience in the next few years and the changing of the guard we are witnessing as newcomers start to take local mindshare from the legacy players, it’s likely that both mobile and social will shake things up further.

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