Local Online Advertising to Nab $7.8 Billion by 2011, released by eMarketer today, sheds light on how far local advertisers have to go to reach their increasingly online audience. While the revenue crunch for newspapers and the stagnant state of the radio industry (overtaken by online this year in the US) is due to national advertisers moving their budgets online, $97 billion is still spent on offline local advertising. In many markets, the decline in offline usage is far outpacing online growth. The current projections look mainly at display and search ads, and rightly so, as they make up the lion’s share of local advertising options currently. But one would think that in the near future, a bevy of new options will be open to smaller businesses. Local bloggers are growing their audiences by leaps and bounds, with restaurant reviews, local events, community news, etc., and smaller businesses are usually a key component of the neighborhood. A blogger relationship program is low cost and high impact, especially when the marketer is a known personality. Likewise, when mobile finally finds a way to use GPS-enabled ads on a wider scale, the threat to radio potentially becomes much greater. While the barrier to entry with these mediums is more knowledge/comfort than financial, it is only a matter of time before spending accelerates to catch consumer adoption.

Virtual worlds: The next Facebook? - CNN.com is an interesting article about the predicted boom of the “metaverse”, 3D interactive worlds where users interact via avatar. While I understand the attraction of immersion and rich experience, I think many of these studies overlook a key point- to truly represent a physical world there needs to be some perceived separation of the user from information. I.E., for me to believe that I’m on an island, the palm tree needs to be certain distance from me, the cabana another, and the sponsored kiosk yet another, and the time I spend getting from Point A to Point B helps reinforce the perception. When I’m online now, I have the convenience of accessing a multitude of information and sources immediately from my homepage, facebook page, search results, etc., and that’s a key advantage that I’d be sacrificing in 3D. Also, it is much easier (and faster) to scan text than other media- I would be hugely annoyed if the Washington Post or BoingBoing were only available via video or podcast, and the same is true with over 90% of the content I read everyday.

Much more intriguing, however, is the theoretical inverse of the metaverse, the geoweb. As dorky as it sounds, the ability to bring online in to “meatspace” will be much more valuable, IMHO, than bringing the inconvenience of the physical world online for most non-social, recreational uses. Being able to access limitless information wherever I am about a certain place, and read messages from other people about where to go, historical info, and which of my friends are nearby is very compelling, and has been hyped at this point much less. It also has the potential to be much more powerful for marketers in the next 3-5 years (think retail promotions, travel info, mobile advertising) than the metaverse will be in 10. I got through that whole post without mentioning the recent Second Life bank run! Whoops…

Advertising Age’s “What’s Plaguing Viral Marketing” is an interesting counterpoint to the excitement about viral marketing. Based on conclusions of research that discounts the importance of “influencers”, the article presents the idea that marketers are headed in the wrong direction focusing on finding the few people with disproportionate influence that will transform a campaign into a phenomena. It is true that majority of such campaigns fail to catch on, and too many marketers try to catch lightning in a bottle with me-too tactics that have worked for others without considering that what worked for sneakers might not be right for pet care. But this article goes even farther based on what I am sure is a very elaborate computer model. Tom Hespos gives a good overview on why creative shortcomings might be responsible for most viral campaigns falling short, versus concluding that good ol’ mass marketing is what brands should consider (which is oddly enough what the article seems to suggest). I think there is an even bigger hole in this line of thinking, however, and it is based on the assumption that influencers are solely individuals that interact with one community.

Without knowing the ins and outs of Mr. Watts’ model, and drawing on the experience that we have from creating and planning campaigns that get picked up and spread by users all the time, I can say with confidence that it over-simplifies the real world landscape by a large margin. First, the idea that that an influential individual is “several times” more influential than an average consumer is bizarre, considering that an “ordinary” person may or may not blog, and if they do, their average readership is usually less than 10. Most of the bloggers that marketers target have audiences in the tens of thousands or even millions, which would seem to indicate there is a large magnitude of difference between the model and reality. If this difference is because the research uses a flat, peer-to-peer network as its basis, fine, but the article should have mentioned it. Also potentially misleading is the idea that marketers focus on finding individuals as opposed to groups or communities. A person who’s opinion carries weight in one community might be meaningless in another, or may be regarded as scripture in yet another. Knowing what to place where is often more important than who, and only by having a comprehensive understanding about how different communities (vs individuals) feed each other can marketers change viral from hit-or-miss to a key part of their strategy. Users will embrace great ideas, and the challenge is having them in the right format at the right time, not so much hitting up the same .1% of the population over and over again (or hiring a network of people to chase them, for that matter). I don’t know many people in marketing who really believed that if you found the 10 super-influencers you could collect your check and go home, but it is a stretch to apply an abstract model to a much more complicated environment.

Advertising Age - CMO Strategy - Rethink Your Web Strategy or Fail is a great article addressing many of the oft-overlooked realities of online marketing. And while I strongly agree with 90% of what Nilofer Merchant has to say, I do differ on a couple of her “Best” and “Worst” examples (none of which, thankfully, are clients). Craigslist, a questionable inclusion to begin with (not really being a marketer, and a proud holder of “.org”), has revolutionized local advertising by being simple and easy to use- the “all text” interface that it is criticized for has not dissuaded millions of users from embracing it. True, it is in no way elegant, but the for-users-by-users feel is one of its strongest brand assets, and has let it succeed where many cleaner, slicker and flashier commercial properties have failed.

However, my larger issue with the top 3/bottom 3 is the attempt to draw an apples-to-apples comparison between widely varying categories and types of sites. What the “Best” share in common is that they are all services/ecommerce sites or apparel manufacturers (and in the case of Threadless, both). Threadless and Amazonall have enormous inventories, and having customers rate, share, and organize the selection based on personal interest is the only viable option, and one where they can take a relatively “product neutral” stance. I.E. “I don’t care if you buy a Sony or a Canon camera, as long as you buy it from me and come back”. Nike, Converse (owned by Nike), and Lego all reside in a space where customization is key to their category, have a short manufacturing cycle, and have enough sway that they can sell direct to the consumer. The Panasonic and Nikon “Worst” sites, on the other hand, represent an entirely different category. Customization from an appearance standpoint, in electronics is much farther down the list of consumer considerations than apparel, and the products themselves are have a much longer, more involved manufacturing cycle. Also, because they are created by manufacturers that are not in market leader positions (like Nike) their ability to own the consumer without ticking off retail partners is limited. Threadless, by seamlessly (pun intended) incorporating community content, digg integration, and strong social network tools is definitely a model to look to, but one has to keep grounded in product, manufacturing, and most importantly, consumer realities.

Wired has a great article on how the open nature of Google Maps is changing how we interact with our surroundings. What really struck me as interesting is the potential of KML, which allows users to mash-up maps with any data they want and openly share it. Notably, Google is indexing all of the KML files they can find, whether or not it is specific to their own product. So what does this mean for marketers? Google Maps (and for that matter Live Local from Microsoft) will be integrated more and more into mobile, as evidenced by the iPhone’s deep integration of the service, and “third screen” marketing will become a much more effective and necessary part of the media arsenal. Will I drive an extra mile off the highway to go to a well reviewed local diner, versus a fast food chain at a rest stop? Definitely. Would I plan a vacation itinerary around other user reviews that I find via an online map, versus brochures I pick up, or a paid travel site listing? Absolutely. The talk about online local advertising is mostly focused on the online extensions of local media, not the local extensions of global portals, but I think that this will shift in the near-to-mid term. And again, what will drive the expansion, plus make local search (and by proxy, mobile search) much more effective is user tagging. Instead of a product page, it’s a businesses sticky on a map, and letting your users know how you want to be described (not that they’ll always listen) is a large part of taking advantage of this new platform. Whether I’m a car dealership that is betting that my location and advertising will carry the day, a casual dining restaurant chain that wants a new, better way to connect with my customers, or even a global CPG that wants to communicate with a customer base that is on a cell versus a laptop, the geoweb is worth exploring.

Funny or Die, a Will Ferrell-fronted comedy video site, has received plenty of coverage around its launch, more around his involvement and their intro clip, “The Landlord” than around the user-contributed content, which has been more tepid. That said, there is an onslaught of theme-based video-sharing launches, based around humor, non-profits, tech, etc., which brings up a familiar scenario- What if the audience that YouTube has aggregated fragments right as marketers finally figure it out? The struggles that agencies are going through trying to adapt creative to the online video platform will only be compounded when assets will have to be adapted to different formats, channels, tagging systems, and communities in addition to figuring out appropriate length. Clearly many of the start-ups around today will not be around to witness this additional shift, but as marketers focus on the “what?” in a message, they should also be anticipating a much more complicated answer to the “where?”. Oh, and the same thing is happening to social networks as well, but I’ll save that for another post.

Our CEO, Pete Snyder and Project Manager Kaitlyn Wilkins co-authored a great piece in iMedia Connection today. Dealing with the media’s questionable use of social networks after the Virginia Tech tragedy, it raises some very hard questions about appropriate use of people’s online information. A good read on a difficult topic, and hopefully it will cause people to think twice before making public personal profiles in the future.