Tuesday, February 8, 2011

Snatching Nickels From the Steamroller's Path

Competition for local advertising is increasing at a remarkable pace. A small business owner can have a mobile ad campaign with little money and almost no effort:  Google Boost: Now Appearing On Mobile Phones - Google Small Business.

I don't know if he invented it but Joel Spolsky was the first I heard use the phrase about snatching nickels. He was referring to small shops that were filling gaps in a larger vendor's platform. Sooner or later the vendor fills the need and poof goes the business model of the small shop.

I think Google has managed to make a good start at doing sort of the opposite. Google has crept into the local advertising market with such a broad offering that it makes the incumbents look like niche players. They may very well displace multiple billion dollar businesses as they continue to expand their ability to service local advertisers. By providing Adwords, YouTube, Places, Hotpot, and Boost Google is becoming a one-stop shop for local online and mobile advertising.

Look at the year over year revenues of all the print advertisers that cater to local businesses. They are shrinking, getting smaller, growing backwards, declining, and falling. To make it easy on you just scan the newly created BIA/Kelsey Local Media Index. Notice the direction that Yellow Pages companies are going. Notice the direction that online local companies are going. For the time being, Google is actually counted as online advertising and search. Obviously they make a huge portion of their revenue from search but I bet more and more of that has a local flavor.

For a Yellow Pages company to survive they must be able to compete for local advertising dollars. If those dollars are being spent for a different media than the print Yellow Pages then companies must offer more than print advertising solutions. The offerings it seems they must provide are online. Right in the middle of the path of the Google steamroller.

1 comment:

  1. "For a Yellow Pages company to survive they must be able to compete for local advertising dollars." That's right. Without the support of local advertising, you'd crumble and fall way back in Google.