The Kelsey Group's Drilling Down on Local '07 Conference

March 30, 2007
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The Kelsey Group's Annual Silicon Valley summit, called "Drilling Down on Local '07," was held on March 20-22 in Santa Clara, California. The Kelsey Group is a leading provider of strategic research and analysis, data and competitive metrics on Yellow Pages, electronic directories, and local media.

Prior to the meeting, the Kelsey Group released its Annual Forecast, which predicts that global advertising revenues from print and Internet Yellow Pages (IYP) and local search will reach $38.9 billion in 2011. Surprisingly, print Yellow Page revenues are forecast to continue to grow over the next four years to a total of $27.8 billion in 2011. Similarly, IYP and local search revenues are expected to top $11 billion by 2011, with the growth rate of IYP exceeding that of local search until 2011 (although total revenues are predicted to favor local search).

The conference was structured to serve as a report card on local search innovations, sales and users; the sessions were focused on examining the following 10 questions:
  1. Who is winning?
  2. What works and what doesn't?
  3. What's the scenario past Google and Yahoo!?
  4. How are Yellow Pages, newspapers, TV et al. affected by search?
  5. How fast is the transformation?
  6. How do Wi-Fi, VoIP, IPTV and other infrastructure platforms affect local search?
  7. Where is the spending coming from?
  8. What's the impact of self-serve advertising?
  9. How are national advertisers getting into the local ecosphere?
  10. When will e-commerce have a meaningful role in local?
The conference was one of the few I have attended where the keynote addresses alone were worth the price of admission. Safa Rastchy, a managing director from Piper Jaffray, dissected the local search market, discussed the hot sectors (video) and concluded that the industry had not yet reached its inflection point. Hillary Schneider, executive vice president of Yahoo!, discussed the company's new search system (code named Panama), described the company's interest in local search and spoke about its efforts in geotargeting (targeting prospects based on their geography).

One of the most talked about presentations was by Nick Grouf of Spotrunner, a company that has taken the Google AdWords model and applied it to creating, distributing and scheduling video advertisements for small business on cable television systems. Due to the nature of a cable television system's wired network, video ads can be geotargeted to appear in micro areas, giving local merchants the opportunity to advertise to a unique local area at a relatively low cost.

Peter Horan, president of Media and Advertising for Interactive (IAC), leads the company's "local brands" such as CitySearch, RealEstate.com, ServiceMagic and Ask (including Ask Local and Ask City) and spoke on the company's efforts to blend these companies into a powerhouse of local information. Horan's memorable quote concerning Ask's new interactive map format that allows the user to markup the map was "ï¿1⁄2local is not about reading, it is about doing."

Ralph Kunz, vice president of Multimedia Experience for Nokia, gave a very interesting talk about Nokia's new Smart2Go platform, a map-centric interface that focuses Nokia's cellular phones on the concepts of "discover, find and obtain." It was clear from his talk that Nokia has committed to geography.

Kunz also said that the global penetration of cell phones reached 37% in 2006 with 3 billion phones expected to be in operation by 2008. At present, 850 million people use Nokia phones, which roll off the manufacturing line at the rate of nine devices per second.

Overall, the Kelsey conference was steeped in geography, even though it appeared that the majority of the audience was unaware of that fact. Perhaps that will change over time. On the other hand, Urban Mapping and deCarta were the only geospatial companies with booths at the event. Perhaps that will change over time, too.

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