Local Search Leans on Community Content

We tend to trust people who are like us. Whatever consequences that may have in politics, religion or economics, it’s a behavioral fact that online marketers are quickly coming to terms with by incorporating what’s coming to be known as “community-generated media” (CGM) in their Web sites—content created by people like us, whoever we think we are, and therefore for people like us.

Of course the rise of blogs and even video logs—”vlogs”, if your tongue can wrap around that—is a reflection of this shift in the content flow from top down to bottom up. But it’s been playing out on a more sales-related ground in the proliferation of consumer reviews on sites for everything from books and music to electronics and autos. It’s why a user can go to Amazon.com with an album title in mind and still spend an hour reading pages deep into the site: We’re just interested in what other people think.

That’s partly a matter of our level of trust in regular folks like us, which is where the marketing angle comes in. Research published last year by Forrester and marketing firm Intelliseek found that more than 60% of consumers said they trusted online recommendations from other consumers “somewhat”, compared to less than 50% who said the same thing for branded Web ads, less than 40% for sponsored search ads, and about 5% for pop-up ads.

Now this CGM is making its way into local search directories. In mid-August Yahoo! Local revamped its directory search to include ratings and reviews of local businesses supplied, at least in theory, by Yahoo!’s 181 million registered users.

“The future of local search lies not only in offering highly comprehensive and relevant local search results, but in combining these results with community generated content,” said Paul Levine, general manager of Yahoo! Local in a statement. “We will continue to bring the human element to local search, leveraging community knowledge to give users more depth and social context in their local online experience.”

Users can submit their recommendations for restaurants, movie or other entertainment in a certain neighborhood. Searchers can then access those reviews and ratings through a My Yahoo! account or via an automated RSS feed, along with an interactive map to help find the local business.

In addition to adding the new review feature, Yahoo! Local has also adding the ability to search major metros by neighborhood, so a search of Brooklyn NY can tunnel down easily to Flatbush or Park Slope. The search includes a map with keys for users’ favorite restaurants in the area and other local favorites, from hair salons to plumbers.

One concern with community-generated content is the potential for abuse—either by friends and family seeding good reviews or by competitors trashing the business online. Brian Gil said in an e-mail that Yahoo! Local will “let the community monitor user reviews by marking a review as helpful, not helpful or abusive”, using links at the bottom of each review. And Yahoo! Local will encourage the community to produce this review content by offering all reviewers a chance to participate in a drawing for prizes—cars, trips and MP3 players.

It’s a strong push toward consumer content for Yahoo! Local. Most local search directories start by amassing content from merchants, either by screen-scraping the local Yellow Pages or by getting them to fill out online profiles. But actively soliciting and hosting useful CGM from users takes local search to the next level and could turn local search from a simple utility into a Web destination, adding value for users and thus for the local merchants who want to reach them.

Yahoo! is doing this in a big way and reaping the rewards in traffic: Internet analysis firm Tekrati reported that Yahoo! Local got 4.4 times the visits in July that Google Local received (although Google’s local market share is growing faster.)

But smaller directories can still have an outsized impact on the local search niche. InsiderPages.com may not have 181 million potential reviewers or cars to give away, but it does have a social network of [??] and Starbucks gift certificates.

CEO Stuart MacFarlane says InsiderPages had its genesis in [2003??] when he bought a home and had to walk around his new neighborhood getting recommendations for repairs. “I thought, ‘Wouldn’t it be great if there was a single directory where I could get personal recommendations like this not only on contractors but dentist and dog walkers?” he says. Since he was working at the time in the new ventures division of Idealab, the Web incubator headed by Bill Gross that developed GoTo.com (later Overture Services and even later Yahoo! Search Marketing) and CitySearch (now part of InterActive Corp.), he didn’t have to go far to develop his idea of a local directory built on a social network. The idea launched as a beta site targeting the Los Angeles area in July 2004 and came out of beta in October of that year; the company opened the site for nationwide reviews in May 2005 and began selling pay-per-call ads to local businesses at the same time.

The idea behind Pasadena CA-based InsiderPages is that users can join, invite their friends and neighbors to do the same, post reviews of local businesses they recommend, and see lists of the recommendations of others in their social community. When they search for a business, the reviews posted by their social network of friends will appear at the top of the results. Non-members can view the directory and the reviews, but can’t post their own ratings or invite their friends into the network.

Users get a small rebate ($5 at press time) for using the services advertised in InsiderPages. And since May, small local businesses of all types can run short text ads next to the reviews in their category on a pay-per-call basis.

The company doesn’t publish membership numbers, but MacFarLane says they’re in “the multiple ten thousands’ and growing rapidly. What they do publish is the number of business reviews on their site: 250,000 and counting, up from 100,000 in June. While the company encourages any reviews, the overwhelming majority of them are positive. “People tend to be more comfortable saying positive things,” MacFarlane says. Reviews are checked for authenticity both by a proprietary algorithm in-house and by community policing; if a review is seriously challenged as fraudulent, InsiderPages pursues the issue with the original poster, always maintaining his or her anonymity.

And local businesses can opt to appear in the “Featured Business” section of the search results page for their region and category. In that position, they get a unique toll-free number (provided by a pay-per-call platform from VoiceStar) that tracks calls from InsiderPages members and pay only for the calls they receive. The amount they pay depends on their category; higher ticket services such as financial planners will pay more to advertise than hair stylists. But to encourage take up, new advertisers get their first five phone leads free.

“Since we developed both Overture and CitySearch, the idea of performance-based advertising was very much in our DNA from the start,” MacFarlane says. “And most of the truly local advertisers are much more comfortable getting leads over the telephone than via the Web.” And since users of the InsiderPages local directory are much closer to a buying decision than standard Web search users, those calls convert at a much higher rate than search ads—five times more likely in the L.A. beta test.

This combination of local search and CGM can create the conditions for truly viral marketing. For example, InsiderPages recently noticed a spate of reviews for businesses in Bakerfield, CA, not one of its metro targets for growth; it turned out that some InsiderPages members had moved there and were busily turning out reviews as well as signing on new members.

“That’s a big part of the incentive to write these reviews—because you’re creating content and recommendations for people you know rather than someone anonymous who might just be browsing the Yellow Pages,” MacFarlane says.

The company intends to pursue national growth, but at the moment the majority of its reviews—and therefore its ad revenue—come from West Coast cities. That may be one problem with word-of-mouth marketing: It doesn’t develop along a predictable path. “We’ve found that for the site to be useful in a given city, it needs a certain critical mass of reviews so that the next person who comes to the site can find it useful,” MacFarlane says.

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