News & Events

Kelsey Group Analysts Identify Key 2009 Trends to Watch in Local Media

Highlights include developments in voice search, local social marketplaces and mobile directories, and use of traditional media as a differentiator

PRINCETON, N.J. (Dec. 17, 2008) – The Kelsey Group (www.kelseygroup.com) has identified more than two-dozen key trends and industry developments to watch in 2009 in interactive local media, global Yellow Pages, and vertical directories and classifieds. Among the predictions prepared by Kelsey Group program directors Charles Laughlin, Matt Booth and Peter Krasilovsky for the firm’s advisory services clients, are developments in voice search, local social marketplaces and mobile directories, and use of traditional media as a differentiator.

“For some time now, our analyst team has been predicting that 2010 would be a tipping point,” said Neal Polachek, chief executive officer, The Kelsey Group. “The complexities facing the local advertising industry as a result of the challenging global economic situation are likely to accelerate the transition of some local advertising dollars to the Internet, while at the same time making the role of the local media sales representative more important than ever. In 2009 we will continue to research and report on these trends and expand our coverage across traditional and online segments with input from fellow BIA Advisory Services analysts who produce market-by-market revenue estimates.”

Among The Kelsey Group’s predictions for local media in 2009 are:

·         SMB Video Ads. Kelsey Group analysts are beginning to see data that suggest the firm’s aggressive video ad forecasts might have been too low. At Interactive Local Media 2008, for example, Gordon Henry, Spotzer’s president of North and South America, suggested that within a few years half of SMBs that have Web sites will have a video advertisement. That’s approximately 3 million small-business ads in the next few years in the United States alone. What to watch for in 2009: Even faster adoption than The Kelsey Group’s forecast of a 163 percent compound annual growth rate (CAGR).

·         The Online-Only Yellow Pages Publisher? For some time The Kelsey Group has been predicting that an existing print directory publisher would divest all or much of its print operations and transform itself into an online-only business with an established sales force and brand. This hasn’t happened yet, but Kelsey analysts believe the prospects of it occurring in the next 12 to 18 months are reasonably good. However, some willing sellers may have trouble finding willing buyers. What to watch for in 2009: Look for organizations that are structured to enable a clean separation of the print operation. Also look for organizations that are clearly disinvesting in print by shifting all or most marketing and product development funding and energy to the online product.

·         Mobile YP Leaves the Laboratory. The Kelsey Group expects to see directory publishers treat mobile as something more than a science project, or a modest extension of Internet Yellow Pages distribution. As smartphones, iPhone and iPhone wannabes proliferate, mobile will become a key usage channel and publishers will begin to find ways to monetize it, though we don’t expect to see much meaningful revenue in 2009. Google has stepped into these waters with its recent launch of iPhone and G1 ad targeting. What to watch for in 2009: As publishers look increasingly to sell a bundle of leads across media platforms, they will want to include mobile as one source of leads. We’ll also see whether publishers follow Google’s lead and begin offering advertising units exclusive to mobile platforms.

·         Local Marketplace Sites Jump on Social Bandwagon. The big social sites such as Facebook have been largely missing in action on the local front. But Facebook is opening up via Facebook Connect, which allows sites such as Citysearch to use its profiles and other features to their own ends. The site is also being used by local marketers such as Campusfood.com for games that increase loyalty and patronage. Its “Food Friendzy,” for instance, currently has 27,000 users. What to watch for in 2009: Expect to see a lot of use for this (and not just on Facebook). Many sites will implement other social features on their own, such as ratings and reviews, photos, videos and bulletin boards.

·         Voice Search Usage Will Accelerate. Voice search is gaining traction at portals and Internet companies. Missing among the players (which include Google, Vlingo and Tellme) is a major Yellow Pages publisher. Kelsey Group analysts caution publishers not to ignore a critical window into their local data for too long or the opportunity will pass them by. What to watch for in 2009: Major Yellow Pages publishers to build or buy a voice search solution.

·         Use of Traditional Media Becomes Differentiator. The role of traditional media has been beaten down by the arrival of new media channels and search. But it still has a broader scale and reaches more people than new media. Indeed, with dropouts of many key advertisers, better positions (and prices) help them stand out. Expect to see TV ads, radio and to a lesser extent, newspapers, act as differentiators for leading online services. Services such as HouseValues.com are already going this route. What to watch for in 2009: Look for cross-media bundles bringing together newspapers, TV, radio and online services.

A year-end review of events revealed the Kelsey analyst team achieved 75 percent accuracy on its 2008 predictions, with 18 of 24 predictions classified as “on target.”

About BIA Advisory Services, LLC

BIA Advisory Services, LLC, a subsidiary of BIA Financial Network, provides research, data, analysis, and financial and strategic consulting to media, telecommunications, technology, directory publishing, and local search companies. BIA Advisory Services includes The Kelsey Group, experts in traditional and online local media and advertising; BIA Research, providers of competitive and comparative market information and analysis through data services, specialized reporting, engineering studies and mapping; and BIA Consulting, specialists in business intelligence and corporate growth strategy, and the nation’s leading communications appraisal and valuation firm. Additional information is available at www.bia.com.

About The Kelsey Group

The Kelsey Group, a division of BIA Advisory Services, LLC, is the leading provider of research, data and strategic analysis on directories, small-business advertising, online local media, vertical market advertising and mobile advertising. As the premier analyst firm covering the directory publishing community and the emerging local search marketplace, The Kelsey Group provides advisory services (The Kelsey Report®, Interactive Local Media and Marketplaces), publishing (Global Yellow Pages™), consulting (more than 400 individual assignments) and conferences (74 events). For more information about The Kelsey Group, visit www.kelseygroup.com.