[Editor’s Note: Put it down to spring fever or March Madness, but SearchLine was caught a bit short this week. In light of the deal Verizon SuperPages.com signed on Monday to sell Google AdWords placements to its Internet Yellow Pages advertisers, we thought it would be at least useful to offer an interview from a few months ago with Eric Chandler, president of internet operations at SuperPages.com. SearchLine promises to take its gaze off the puffy clouds and the basketball brackets very shortly, and to speak with SuperPages about the Google deal at the first available opportunity.]
The Internet passed one of those mini-milestones in January when SuperPages.com, the online directory and search service owned by Verizon, celebrated its tenth year of doing business on the Internet.
Like most ten-year-olds, the company used the occasion to hold a party at its Texas headquarters. Unlike most ten-year-olds, it also took the time to speak with SearchLine about where it’s been and where it, and by extension the online directory space, are going.
Eric Chandler, president of Internet operations for SuperPages.com, has been around for most of that decade. He joined Verizon Information Services, Verizon’s electronic division, in 1998 in a marketing role and has spent most of his career marketing Verizon’s directory services to the electronic media. Now, as president of the division, he oversees not only marketing but operations, sales and business development.
“In this business, being in the field since 1998 qualifies me as an Internet pioneer,” he says.
Strategy-wise, the biggest change Chandler can see looking back over SuperPages’ decade was the decision a couple of years ago to offer a performance-based pay-per-click ad model. But even more important, he says, was a fundamental shift in the company’s perception of itself, moving from an Internet Yellow Pages (IYP) to a full-featured local search engine.
“Our feeling that an IYP can easily be pigeonholed as a plain reference-type lookup, where people come, find a business phone number and leave,” he says. “We thought the local search space was bigger than that, and the content on our site today reflects that. We added things that let us be less about reference and more about helping consumers find what they’re looking for where they want it, and helping them find the right type of product in a category.”
Of course, plenty of other IYPs were making approximately the same decision at the same time about the future of expanded local search—not to mention lots of the first- and second-tier search engines. While local is only part of the ad business at Google, Yahoo, MSN, Ask Jeeves and AOL, and is certainly a small sliver of their general-search focus for consumers, those companies can be aggressive competitors on the technology development front.
For that reason, Chandler says, it’s all the more significant that Superpages.com was able to bring out a pay-per-call ad option before any of its non-directory rivals. The company introduced its model, called Pay For Calls, in August 2005, giving advertisers the ability to offer
Right now, the biggest pay-per-call competitors are the Ingenio network, running on its proprietary pay-per-call platform, and AOL, which has licensed that technology. But others are making moves to integrate phone calls with their local search. In November 2005, Google began testing Click-to-Call, which sets up a conference call between the user and selected companies that turn up in a search results page. Advertisers reportedly pay a premium flat fee to enable the feature; it’s not based on the number of calls they receive.
Even more, some big players are known to be working on ad products that will let users call advertisers as easily as they now click on ads, by integrating voice over IP. Last week Skype, the IP voice platform now owned by eBay, announced SkypeWeb, which permits Skype users to click and call 50 Web sites in 20 countries, according to the company release. Yahoo!, MSN and Google have all moved quickly to sign partnerships or develop technology that is brining IP voice calling to their instant messaging customers. And the analysts and search industry gurus who track Google’s patent filings have reported that the company also filed for an IP calling patent back in 2004—which they read as a sign that Google wants to extend its pay-for-performance search ad model to phone calls.
SuperPages.com also offers its own click-to-call feature. Through a partnership with eStara, advertisers who’d rather get IP voice calls than clicks from their online listing can pay extra to display a link that lets users connect to them directly over their computers.
Chandler says SuperPages’ early lead in getting out a pay-per-call ad product is all the more significant because so many of the businesses that his sales force calls on sell services, not products. That makes them less likely to value a transactional Web site; lawyers, dentists, contractors and real estate agents prefer calls to clicks.
That shows up in the average rate those merchants are willing to pay for a Pay For Calls listing: $6 to $8 depending on their category, rates above the industry average, Chandler says. The top pay-per-call ad categories are mortgage companies, attorneys, home improvement providers, realtors and insurance agents.
SuperPages is also able to leverage an asset that the online search engines don’t have: its Verizon Yellow Pages print directory. The company has begun including in those books generic display ads in popular categories that feature generic pay-per-call numbers that connect to the highest SuperPages.com ad bidder in that category and that calling region. The first 40 of those local directories with pay-per-call ads hit doorsteps last December.
Local search sites such as Yahoo!’s have also begun adding personalization in the form of user reviews, either through ratings or direct comment. While most of these center around restaurants and entertainment venues, SuperPages added user reviews to its site in November 2005, particularly aimed at service-oriented businesses After finding a business, users can open a special “reviews” page that shows how others have ranked that advertiser and read their remarks.
“We felt there was a real gap in reviews on the service side,” Chandler says. “If you’re looking for an electrician, plumber, or landscaper, you’re mostly reliant on word of mouth. We feel we can really fill a need for users with this feature.” As of January, SuperPages reported more than 40,000 user reviews of local businesses; the company says it adds about 600 reviews a day.
Allowing reviews and ratings introduces an element of risk, of course: What if advertisers don’t think a review is fair, or if their overall ratings are low—or if they suspect a competitor is trying to scuttle them with a pan? SuperPages considered the implications and decided that it was a controllable risk worth taking. SuperPages looks at the ratings and reviews before posting them, and lets advertisers opt out of the ratings functions entirely.
But if they do, they’ll be losing the benefits as well as the risks of user reviews. Most of the ratings are favorable: either three, four or five stars out of five, Chandler reports. “We feel the benefits to the user and the advertiser will outweigh those isolated cases where we may have an issue” with bad reviews, Chandler says. Basically, if you think a review is bogus or just unfair, SuperPages will check it out; if you think too many dissatisfied customers are going online to complain, start encouraging your fans to post.
Overall, SuperPages.com now lays claim to about 16 million directory listings, somewhat fewer than it had last fall thanks to a concerted effort to scrub out duplications and overlaps. Total monthly searches hit 141 million in November 2005, up 13% from the previous month and up 18% since the beginning of last year. And by that time, SuperPages.com had built up its roster of online advertisers to more than 185,000.
At the end of January 2005, parent company Verizon reported annual revenue growth of 18.4% at SuperPages over 2004’s numbers, and said searches had increased more than 17% over the previous year’s total.
Stats like that might be one factor that led Verizon to announce in early December that it was considering selling or spinning off Verizon Information Services, the division that runs SuperPages.com and its print directories, in order to concentrate on expanding their high-speed fiber networks. Chandler refuses to comment on the status of those exploratory talks, but other analysts have speculated that the property is most likely to be purchased by buyout firms rather than the other big local search players.
While Google or Yahoo! would love to have the directory listings that a SuperPages would bring—which are much larger than their own current listings—it seems more likely that they’ll continue to gain access to that and the other IYP databases through strategic partnerships rather than acquisition. SuperPages supplies directory listings to the Yellow Pages functions on MSN, Lycos, About.com and other, smaller search sites.
And those partnerships could include positions for SuperPages.com local advertisers, too. MSN announced in mid-January that its MSN Local Search would start showing SuperPages local ads in appropriate categories and markets. The ads display in a bar across the top of the MSN results page and can blend pay-per-click, pay-per-call and flat-fee ads. SuperPages pay-per-click ads are also distributed through the MIVA network of Web sites.
Such arrangements are good for SuperPages simply because it gives them more ad inventory; the company currently has more local businesses looking to place ads than it has room, Chandler says.
Will serving up local ads to other search engines be a sustainable source of revenue? MSN is in the process of ramping up its own adCenter search ads, for example; why wouldn’t the company simply sell local ads too?
“The majority of these advertisers would not be online if we simply put a self-serve ad tool up there and told them to go use it,” Chandler says. “The only reason they’re there is because we hold their hand through the entire process. We not only sell them an ad, but in some cases build them a Web site and manage it so they can focus on their business. We’ve created and hosted 50,000 Web sites for these advertisers. That’s our core competency—creating those doors and then bringing customers through them.”
Search engines like MSN don’t have nearly enough salespeople and customer service reps to provide the level of service that local advertisers need, he says. That means they’ll always need the special services of an IYP like SuperPages.com, both to sell the ads and to sell local businesses of the need for them.
“There’s a very natural collaborative opportunity between us and the search engine players,” Chandler says. “They have a lot of distribution, but we’ve got the ability to reach and service these local advertisers.”