When will ROBO's Time Come?

I recently asked if mobile local search has finally arrived. Now it's time to ask when ROBO's time will come. ROBO (research online, buy offline) is the concept that a growing volume of product research is happening online while the majority (more than 90 percent) of purchases take place offline in physical stores.

This reality has been central to the business models of Krillion, NearbyNow, The Find, and a growing crop of local search engines that tell you what products are available in what stores, and how many are on the shelf. Google has also played around with this in a limited capacity.

Despite these efforts, and what many surveys indicate, ROBO features haven't picked up on a mass market level. User demand hasn't been heard loudly for things like inventory data and in-store pick up features. Many still search in one place, compare features in another place, check prices in another, pick up the phone to check availability, then get in their car.

Why not do it all in one place (except for the part about the car)? Supply is there from the aforementioned providers, but perhaps not on the scale to give it the awareness it needs. This is made worse by the simple fact that breaking deep-rooted search behavior, no matter how silly or convoluted, is never easy.

An Apt Solution?

Yahoo recently started an effort to get ROBO over this hump, and Warren Kay, director of emerging products, is leading the charge.

"If I'm looking for a car or a lawn mower and I want a particular make and model, I want to know the closest place to buy it," Kay said. "Even the simple concept of where my nearest insurance agent or Target store is -- one level up in the consideration phase -- could give advertisers a more compelling capability."

One challenge Yahoo faces is that some of its national advertisers and agencies don't fully grasp the opportunity to run targeted local campaigns for their store locations. They're comfortable with the more blunt tactics they've used for years, such as impression-based advertising targeted at the DMA level. They're also confused about a point of entry into the fragmented local online ad picture.

"We don't make it any easier," Kay said. "Online players make it difficult for offline traditional media buyers to shift their dollars online. Our goal is to begin the education process."

Yahoo's first move on this front came with Wednesday's launch of APT, its self-serve display ad platform (built on Right Media's engine). One of its biggest goals is to make it easier for national advertisers to run localized campaigns all in one place.

The online local inventory will come from its own network and its growing consortium of 784 newspaper partners. Given the consortium's momentum and established content network, this is a natural place to start. The San Jose Mercury News and the San Francisco Chronicle will be the first ones on board.

"Our goal is to have all [consortium” newspaper publishers on that platform by the end of Q1," Kay said. "It will be a one-stop place where marketers can come and buy inventory in up to 800 local newspapers. Then we will [add” Yahoo inventory through a similar migration plan."

The Long and Short

Longer term, Kay is optimistic about technologies that will provide more granular local targeting and ROBO capabilities through APT.

One of these enablers will be location awareness, which will make local search more accurate and automated for users. It will also allow for better display ad targeting that goes a step beyond city-level IP targeting. Picture rich media ads, for instance, that offer real-time product promotions for the Best Buy down the street.

This could happen through location awareness baked right into the browser, which we expect to see from Google Chrome, followed by Firefox. It could also happen with Yahoo's own Fire Eagle platform, which pulls in location data from various sources users specify (an iPhone for example). Until then, Yahoo already directly pulls some users' locations.

"We have 300 million registered users who have given us their location, and we also have touch points based on users providing a location, such as weather, maps, yellow pages, and movie times," Kay said. "We need to do a better job at packaging this back to our advertisers."

Mobile has strong implications for ROBO as well, given the phone's presence at the point of purchase. Kay argues that search volume is still too low for local ad models to materialize. For now, he's focused on the task at hand: reaching opportune verticals like insurance, real estate, autos and retail, where national advertisers need to more effectively market their localized franchises.

"There is a $22 billion online [advertising” opportunity," Kay said. "So let's take full advantage of where the traffic is today and where the opportunities are, and get that right first."

This topic will be covered further at The Kelsey Group's ILM '08 conference from November 19-21 in Santa Clara, California.