Possible Google-Yelp Deal Embodied 'Going Local' Trend

As the year winds down and we all begin to log-off for holiday celebrations on this, the shortest day of the year, the big news of the moment was first, Google's move to acquire Yelp, the hyper-local business location and review service -- and now, the squashing of that deal, according to recent reports.

It's an apt way to wrap up a year dominated by the Great Recession and Big Changes on the Web. 2009 will go down in history as the year the Web got hyper-local, thanks in large part to the massive rise of smart phones including iPhone, the Droid (and other Android-enabled devices), Blackberry and the Palm Pre.

Google may not acquire Yelp. But the deal would have been great for both companies and good for the search ecosystem. For Yelp's part, it has been embroiled in the controversy surrounding its tactics to favor businesses that pay fees to juice their presence on Yelp, alienating those who have loved the unadulterated crowd-sourced nature of the service's recommendations. Yelp undertook these moves, presumably, to drive revenue, which is reported to be closing in on $50 million in 2010.



Google surely wants Yelp less for its revenue-producing potential and more for its content, locally based employees and expert sales force. In other words, Yelp would help Google be a little less global and a little more local. And it seems likely Google would have enabled Yelp to return to its crowd-sourcing roots, eliminating much of the controversy of the last couple years.

Which brings me to something I just can't resist doing: some prognostication for the coming year. Clearly, "going local" will continue to be a huge focus for marketers and technologists in 2010.

If there's one lesson marketers have learned, it's one that comes from search marketing: reach out and engage folks at the moment they have a need or declare an intention. The whole "spray-and-pray" and "interrupt / disrupt" advertising strategies of the late 20th century will continue to draw their last dying breaths as extreme targeting and one-to-one engagement, enabled by really great technology, will come to more decisively dominate marketing strategy.

As Google's local initiatives evolve and just-in-time "smart" data becomes increasingly available, everyday people will be able to declare: "determine my location and tell me where X product is in stock and available now" or "determine my location and tell me where I can get a great deal on a meal" or "determine my location and lead me to a hip, happening happy hour." Smart city initiatives in San Francisco and New York, moreover, will make it easier to: find out where the greatest concentration of cabs are at any give moment; engage in scheduled street protests (if that's your thing); determine when the next bus or subway train is coming; and find parks with the greatest number of shade trees. San Francisco's smart city data includes a plot showing the exact location of every tree in the city.

Similarly, as the content explosion continues, and folks consume that content on their own terms via whichever medium is most convenient and available, advertisers will increasingly try to target their advertising based on past media consumption behaviors and the apparent or declared interests of each individual audience member. This will, again, require increasingly excellent enabling technology that acts on immediately available data and heuristics to target appropriate messages in a way that's welcomed by the audience.

Finally, marketers holding out hope that consumers will return to the profligate spending and "Keeping Up with the Joneses" that defined the last 30 years will run headlong into the reality of what I'm calling parsimony permanence. If there's one thing the Great Recession has achieved writ large, it's a permanent change in the ways in which Americans consume and their attitudes toward debt. The average American has been shaken to his or her core, and even now is still learning the painful lessons of debt, overreaching and the putting on of airs (as my mom would put it).

The American consumer is still figuring out a new values system, which will come into clearer focus in 2010, but one thing is sure: parsimony is the new order of the day. Marketers are going to have to come to terms with this new reality.

For those celebrating the Solstice tonight, Christmas this week and/or Kwanzaa next week, I wish you much joy and peace. And I really, really hope you're about to log-off for a while. Light some candles and reflect on the exciting year to come!

1 comment about "Possible Google-Yelp Deal Embodied 'Going Local' Trend".
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  1. Amin Haq from Media Flint, December 22, 2009 at 2:34 a.m.

    I'm not sure how Google was planning on resolving the inherent conflict of interest issues in acquiring Yelp. I'd be curious to know how Google was planning on competing with its clients Web Visible and Yodle who are "Google Resellers" without upsetting them?

    There's another issue with local advertising related to lack of conversion data: creating and optimizing a money making PPC campaign requires that advertisers collect a statistically sufficient quantity of data in order to optimize their campaigns. Local campaigns due to their inherent lack of search volume (and clicks) typically suffer losses for prolonged periods before turning around. It takes a patient, small, local advertiser to come to terms with her losses.

    The click resellers such as Yodle and Webvisible may have the advantage of harvesting conversion information from running multiple local campaigns on the same data sharing platform. The logic being a dermatologist in Cleveland likely attracts the same local clients as a dermatologist in St. Louis. Hence, sharing conversion data across campaigns and clients results in likely efficient ad spend for the click resellers. However, does it create the same value for their advertisers? Not according to Borrell Research.

    In order for local PPC advertising to really take off this issue of lack of conversion data for small advertisers needs to be addressed. Acquiring Yelp did not appear to be the solution to this problem.

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