BellSouth: Selling Up or Selling Out?
BellSouth Advertising and Publishing, the yellow pages arm of BellSouth, has announced that it has become an authorized agent for Google, and will market Google paid search programs through its vaunted 2,000 person strong sales force.
BellSouth and other yellow pages publishers such as Dex Media had previously created Web advertising bundles that they had been offering to their customers. These bundles consisted of various combinations of Web site hosting, Web site design, and entry-level paid search programs. However, this move by BellSouth greatly changes the playing field. It also appears to be an admission by BellSouth that paid search has become more than an optional add-on, and that search engine advertising is as compelling to advertisers as its own online yellow pages offering.
This deal also suggests some recognition by Google that to crack the potentially huge market for local advertising, it needs feet on the street, and that its self-service approach to sales and customer service fails to cut it with smaller and less sophisticated advertisers.
Can this marriage work? For BellSouth salespeople to successfully sell Google paid search programs in conjunction with print and online yellow pages, they're going to have deal with some sticky questions: Does Google replace the need for my online yellow pages advertising? How much of my yellow pages budget should I allocate now to Google? How come Google offers pay-for-performance pricing and you don't? One thing that is certain is that smaller advertisers are much more likely to re-allocate their existing ad budget to participate in Google than find new dollars to participate in Google. That means a real risk of revenue loss for BellSouth.
It's also important to remember that while corporate executives can make all the plans and sign all the deals they want, if the sales force doesn't buy in, they will not succeed. What kinds of things does yellow pages sale organization like? Simple, quick, easy, add-on sales that in no way jeopardize their existing revenue or commissions. The Google deal fails all these criteria.
My prediction: the BellSouth sales force will ultimately submarine this deal. Google will end up no worse for wear, and BellSouth will realize that repping their competition is not in their best interest. I'd also like to reiterate that what really may be making paid search so attractive is its pay-for-performance model. If so, BellSouth may want to take a look at Verizon's deal with FindWhat as perhaps a better path.
Online Users Seeking e-Quality
The USC Annenberg School ' s Center for the Digital Future has just released results of a nationwide survey in year four of an ambitious ten year project to monitor how the Internet is influencing all aspects of American life. A noteworthy finding was that users are at last acknowledging that not all online information is created equal.
For the second year in a row, the study found a decline in the number of users who believe that "most information on the Web is reliable and accurate." The figure is now down to 48.8%. The number of users who believe that "only about half the information on the Web is reliable and accurate" continues to grow, and now stands at 41.5%.
How do users determine quality? The answer in a word appears to be "brand." Users consistently rated the information quality of "established media" and government Web sites higher than Web sites of individuals (which I read to include small and unknown media sites as well). According to the study, 62.1% of users believe that established media Web sites are "mostly reliable and accurate" and 56.5% of users believe that government Web sites are "mostly reliable and accurate." The percentages rise even higher when the study looks only at users who've been using the Web for a number of years.
I've suggested for several years now that there would ultimately be a "flight to quality" as users began to realize how much inaccurate, outdated, incomplete and biased information exists the Web, and that this shift would primarily benefit those established publishers with a reputation for providing quality data. These data suggest that this important and very positive shift is already underway.
Detailed data from this survey can be found at: www.digitalcenter.org
When In Doubt, Buy Someone Out
With the ink still dry on its wacky deal to sell online advertising for Google, BellSouth has topped itself by announcing an Internet yellow pages joint venture with SBC Communications. And if that isn't enough, the new joint venture has announced that it is finalizing a deal to acquire Internet start-up YellowPages.com. The dust hasn't settled sufficiently to know if the new joint venture will also be selling online advertising for Google, but hey, why not?
What's going on here? Great question. Having had limited success selling to their own home markets, these two regional giants will combine forces so that they can enjoy limited success selling online advertising in their combined home markets. The press release announcing the joint venture proudly notes that it will have "50 million monthly consumer searches, giving advertisers increased traffic." Actually, the new joint venture's Web site will certainly get increased traffic, but the local auto body shop in Macon, Georgia isn't likely to, and therein lies the rub: yellow pages owes all it success to advertising from local businesses serving local markets.
The big yellow pages publishers have always been long on cash and ambition and short on creativity. That's why it's not all that surprising that when they want some fresh new ideas, they pull out their checkbooks and buy some. In this case, the fresh ideas are being supplied by YellowPages.com, a seven-year old Internet start-up, which is being acquired for possibly as much as $150 million, according to some press reports. Do the math: even yellow pages publishers wouldn’t pay that much for a domain name. What they’re really trying to buy is a clue.
Striking the Right Print/Online Balance
This week technology media juggernaut TechTarget announced that it's launching CIO Decisions, a new print magazine with a circulation of 60,000, targeted at senior-level information technology executives in mid-market companies.This will be the third print magazine published by TechTarget, which started life as a Web-based publisher serving information technology professionals, a group that by now you would think would want to receive all information digitally.
Also this week, the British Computer Society , another large group of information technology professionals. released the results of an extensive survey of its membership that found that members preferred to receive the Society's magazine, Computer Bulletin, in print format.What's noteworthy is that an audience so comfortable with technology still has an appetite for print, and that publishers are still willing if not eager to support that appetite. Perhaps it's a reaction on both sides to the problem of noise.
For subscribers, so much is flying by them so quickly in electronic form that it's difficult to keep up. The print format allows them to read where and when they choose, when they can best focus. For content that isn't time-sensitive, this makes a lot of sense.For publishers, launching a new Web-based publication means immediate competition with large numbers of competing Web sites, blogs and email newsletters. In print, the number of competitors is dramatically reduced, and with the reduced amount of postal mail being sent, a print publication can make a big impact fast.The British Computer Society study also found that members did want to receive certain things electronically, such as breaking news and job-critical articles, and they looked to the Society's Web site as a reference archive and member bulletin board.All this suggests that publishing in both print and online formats can actually offer competitive advantages, provided that publishers recognize that the optimal mix of formats will continue to change, and be ready to react quickly. It also suggests how dangerous it can be to ever assume we know what our customers want.
RFID" The "Next Big Thing"?
If level of press coverage is a reliable indicator, radio frequency identification (RFID) technology is poised to become the "next big thing."
What is RFID and why does it matter? RFID technology is deployed through tags that can be thought of like bar codes with little radio transmitters attached. More precisely, they are relatively inexpensive, paper-thin computer chips that can contain manufacturer codes, product codes and serial numbers and can broadcast this information to nearby receivers. RFID tags could revolutionize the tracking and counting of equipment and inventory, and therefore have potential applications in almost every industry. The first widespread rollouts of RFID are about to begin, and where there are products and inventory, there are (or should be) electronic buying guides and marketplaces.
Another important aspect of RFID tags is that the information on them has to be meaningful globally, and that means coordination, which means databases. The big winner to date is Verisign, which scooped up a contract to maintain the primary databases of companies and their products and ship that data rapidly around the world (RFID is designed to allow trading partners to exchange all sorts of product information on a real time basis). However, ICR believes that Verisign sees its biggest opportunity long-term in the movement of the data, not the data itself. That leaves manufacturers or their agents (industry database publishers, anyone?) to upload and maintain the product information.
Further, while the RFID specification provides for a globally standardized company numbering system, it anticipates that vertical industries will use existing product identification systems or create them. Thus, the book publishing industry will likely embed existing ISBN numbers into RFID tags, and the food industry will use UPC codes. Opportunities abound in those industries lacking such standard product identification schemes.
It seems every industry has its own exciting ideas of how to take advantage of RFID technology. The pharmaceutical industry wants to label all prescription drugs with RFID tags containing individual product serial numbers as a way to combat theft and counterfeiting. Almost every industry seems to see inventory applications, as merchandise can broadcast its arrival at the warehouse door, and its departure at the store's main entrance, all without human intervention. Wal-Mart has already announced that it will mandate use of RFID tags by its largest suppliers beginning in January 2005.