Changes are coming to the world of advertising and media. Given these changes, we have immersed ourselves in the world of advertising, and in particular the YP space. Here are some observations, facts, thoughts, predictions and opinions. We hope you find them interesting. We’re relatively new participants in the YP business, which gives us a unique perspective to develop paradigm-shifting solutions for the YP industry. If you’re an industry participant please feel free to let us know if you think we got it right or if we got it wrong – either way we want to know.

The origins of YP

Sometimes to understand something you have to go back to its origins, and looking to the origins of YP explains a lot. Back in the early days of the telephone in North America, governments passed legislation requiring that white pages (telephone books) be delivered free of charge to every land-line address. Today (with few exceptions) this law is still on the books. This allows YP companies to work in conjunction with Telco’s to either combine the Yellow Pages with the white pages, or at the very least piggyback delivery.

There was a time when the Yellow Pages were everything. In this time before the Internet, there were few ways for consumers to find businesses and services they needed. They could ask a friend, check the newspaper, listen to ads on the TV and radio, see a billboard or bus sign – or, they could pick up the Yellow Pages where they could “let their fingers do the walking”.

The truth of the matter was that for most business categories, the Yellow Pages were a must-have, and so for years the cost of Yellow Page advertising was almost inelastic. Business were born and thrived, at least to some extent, on the strength of their position and the size of their ad in the Yellow Pages. As an advertiser you could not reduce your spend, or you would lose your important position at the front of the directory. To be sure, the Yellow Pages produced real, valuable, and tangible results for businesses. An ad in the Yellow Pages connoted trust, and consumers turned to the Yellow Pages to find businesses and services they could trust. Consumers used the Yellow Pages because they were the easiest, fastest, most complete and trusted source of information.

YP industry today

Today things have changed. The Internet has become the ubiquitous and de facto starting place for global and local search. Consumers prefer the Internet because it makes search fast, efficient, mobile, and increasingly convenient. Most importantly, it has become the most information-rich and trusted source of information. An Internet search can provide more and better results. Results have richer information like maps, directions, hours, descriptions, photos, and videos. Most importantly, Internet results provide trust. Ads in the Yellow Pages are simply words created by the advertiser. Internet results provide expert reviews, peer ratings, and rich content like photos and videos. These are things that print alone cannot provide. The Yellow Pages were once considered the most complete source of business listing data, but this is no longer true. For these reasons, consumers are migrating online at an amazing and increasing rate.

As consumers migrate online, both advertisers and publishers follow. Traditional media have made attempts to create online properties, but have generally failed to innovate and leverage the benefits of the Internet to their greatest advantage. They are impeded by valid concerns such as cannibalizing traditional revenue while maintaining or growing their current share of SMB (Small and Medium Businesses) advertising dollars. Further, traditional media organizations are saddled with infrastructure costs, outdated pricing models, and publishing cycles that true pure-play Internet advertising plays need not consider.

The current state of the economy has only added fuel to this fire. The economy drives advertisers to question the value of all spends, and media spends are no exception. The transparency and pay-for-performance nature of online media is raising expectations for accountability across all media.

This environment has caused traditional media revenues to decline, and most markets are experiencing consolidation and rationalization as they struggle to find ways to maintain their share of current advertising revenue from SMB’s.

As seems always to be the case, the impact of the Internet on an industry is overestimated in the short run, but underestimated in the long run. This holds true for YP, and we believe that any revenue gains for Yellow Page print media are due to inertia. Customers are not just moving online – the fact is that most have already moved online, and will continue to do so, to the detriment of print.

It should be noted that there are a number of stats that indicate that consumers still use the Yellow Pages when it comes time to purchase. We suspect, and anecdotal observations confirm, that consumers still use the Yellow Pages from time to time as a method of phone number lookup – that is, in the same manner as the white pages – but not as a method of discovery or choice.

The Yellow Pages to date have only just begun to feel the sting of advertisers’ migration to online advertising sources.   Some, unbelievably, still attribute the revenue decline to only the current economy. A few others hold on to revenue growth, obtained through innovative sales techniques and a well-trained  cadre of feet-on-the-street salespeople, as proof positive that no such online migration is occurring. However, the majority of Yellow Page operators at the C level are savvy business professionals that understand there’s a sea change taking place, even though they may lack the motivation or tools to make the necessary changes.

How the YP industry has reacted

All of this would seem to point to a dismal future for the YP industry, but there are some powerful positives. Decades of being the heavyweight incumbent for SMBs’ advertising dollars have left the YP industry with some very valuable assets. The YP industry has perhaps the largest, best trained, most motivated and skilled advertising sales force in existence. For decades they have established and cultivated relationships with SMBs. It should be noted, too, that Yellow Page advertising for many verticals or segments still works and has a very positive ROI. While many business segments, such as travel, have all but disappeared from YP, other segments have grown. The YP sales force has done a great job of targeting and cultivating high-value segments such as legal and dental.

YP has also begun to embrace accountability. Pay-for-performance call tracking, once used only for non-traditional and rescue accounts, has now come into general use in many areas. The sales process has become increasingly multi-product, digital, and explicitly performance-based.  Many YP sales teams are leveraging their relationships with SMBs and are embracing a consultative sales approach, delivering a wide range of products such as SEM, SEO, web presence, analytics, and reputation management tools. At the same time, YP companies are very interested in developing self-service models for low-value segments, as consultative sales methods are costly and labor-intensive.

On the consumer front, YP has done a better job than their newspaper counterparts. They have migrated online faster and have begun to embrace user-generated content such as photos, videos, ratings and reviews to improve the consumer experience. But they still lag far behind their pure-play Internet counterparts, particularly in verticals such as real estate and automotive. YP has not truly embraced the “social” aspect of the web, beyond providing links to share or publish via Facebook or perhaps Twitter. The true value of Social Context has largely been unexplored. YP has done a decent job of leveraging their mass of local business data to provide mobile solutions, but could still do far better, particularly with respect to location and social context.

Prescription for the future

Clearly the advertising spend for SMBs is changing. This August, for the first time, the number of SMBs using the Internet to advertise (77%) was higher than the number of SMBs using traditional advertising (69%). However, the full weight and enormity of this has not yet been felt, as a disproportionate number of dollars were still attributed to traditional advertising. That, however, is about to change. In fact, Internet advertising, currently the third largest spend, is expected to surpass the newspaper spend before 2013 – newspapers being the biggest advertising spend overall today. Unless newspapers react with products other than print, we think this day will come as early as 2011 or 2012.

Much of this shift is happening as SMBs shift their advertising spend from traditional media  to their own online presences, pure-play verticals and Google adwords. The YP industry is in a truly unique position to take advantage of this opportunity and potentially even grow their share of SMB advertising spend.

A successful future for YP will include evolutionary changes such as transitioning online to IYP, embracing transparency, pay-for-performance, user-generated content, publishing cycle changes, pricing model changes, and sales process changes. However, revolutionary change will need to be embraced to truly seize the opportunity. The YP industry will need to think back to their origins and rediscover the essence of what made them the most valuable source of advertising to their customers. Before the Internet the Yellow pages were:

1. The most trusted and complete source of business information.
2. A business model that was incontrovertibly the best ROI available.
3. The most convenient, fastest way to engage local businesses.

Here is our prescription for how Yellow Pages can attain the above:

1. Become the most trusted source by providing Social Context to consumers visiting the directory.
2. Become the most complete and richest source of business listings by allowing all businesses to provide complete and rich data and participate in the online directory for free.
3. Provide an incontrovertible ROI by embracing a new advertising model in which advertisers set their own advertising fee and only pay based on a successful transaction, and use this model to leverage the advertisers’ spend on their existing web presence.
4. Become the most convenient, fastest way to engage local businesses by providing consumers with an interactive system to communicate with advertisers on a one-to-many basis.

We would be remiss if we did not tell you that we have developed the set of tools that can help YP companies do exactly what we’ve described.

Using our platform, the Yellow Pages can once again attain this position of advertising dominance. Yellow Page companies have both the sales force and the means to take advantage of the shift of advertising dollars from traditional print to online models.

SASKATOON, SK, January 8 2009 – With the explosive growth of new social media like Facebook and Twitter, it’s never been more vital for businesses to keep track of what people are saying about them on the Internet.

“People are rating your services on sites like ServiceMagic and Yelp,” said Brendan King, CEO of the Canadian Internet startup MyFrontSteps. “They’re blogging, and commenting on each other’s blogs. One comment can be seen by tens of thousands of people. It’s really upped the stakes.”

MyFrontSteps has just released a new service called StepRep, located at steprep.myfrontsteps.com, to help small businesses and independent contractors manage their online reputation. What makes this service different from others that have come before?

The price, for one thing. StepRep is free. And it was designed with simplicity in mind, to encourage non-tech-savvy users to give it a try.

“Small business owners might think, hey, I’ve got a low profile, no-one’s talking about me,” said King. “But when you don’t have a large online presence, the effect of each comment is magnified. It’s even more important to keep on top of what people are seeing when they Google your name.”

StepRep sends out an alert via email whenever a new result appears, allowing users to respond to blog posts or comments immediately.

Results can then be sorted and managed, and positive items promoted using a “widget” that can be added to the user’s blog or website. These search-friendly widgets draw search engines toward positive results and away from negative ones.

For users without a blog or website, StepRep provides a simple profile page that displays positive stories.

StepRep is only the first part of a larger strategy to connect businesses and their customers through social networks. In March, MyFrontSteps will launch Homebook, a place for homeowners to share photos of their homes and get ideas for design and renovation. Homebook users will be invited to link to their trusted home service providers on StepRep.

StepRep and MyFrontSteps are products of VendAsta Technologies, a software development team based in Saskatoon, Canada. In August 2008 the startup received $3 million funding from Victoria Park Capital to develop a social networking initiative that would combine the founders’ expertise in software and real estate services. Their website is at www.vendasta.com.

For more information please contact MyFrontSteps CEO Brendan King at 306-955-5512 ext 102.

So what is MyFrontSteps? Well, MyFrontSteps connects people over any social network allowing them to control the sharing of their home with friends, family and the world – from their front steps in. It allows them to leverage the collective experiences of their social graph – people they know and trust – to find inspiration and local service providers to improve home and lifestyle.

We have put together a video in the Creative Craft style to describe what we do.

We believe MyFrontSteps will have millions of homeowners sharing their home and home experiences on their social network of choice.

We intend to help people and companies in the real estate and home services industry to connect with these consumers via our StepRep product.

So what is StepRep and how will it work for you? Well, StepRep is going help you in at least three ways:

StepRep will help you track and monitor your online Reputation and Identity

There are lots of reasons why your online Identity and Reputation are important. Today you can monitor what people are saying about you on websites and blogs with lots of tools like Google Alerts or RSS feeds. Tomorrow, StepRep will automate that process and help you to monitor the right things. More than that, however, we will help you to monitor what people may be saying about you in places you might not even know about. Anywhere the conversation is occurring such as; Facebook, Linkedin, Myspace, Flickr, YouTube, Plaxo, Friend Feed, Twitter, Plurk , or any of the emerging platforms and services. Services that you won’t be forced to join.

It will help you manage and even build your online Reputation

Today it is a technical and time consuming chore to mange and build your online Reputation. Websites, blogs, news releases, social network profiles; the list and the work involved, is immense. We aren’t going to give you all the details just yet, but we promise to make managing and building your online reputation an order of magnitude easier.

Most importantly, StepRep will let you leverage your Reputation, via past and current customers, to gain trusted access to all the people in their social graph (people who know and trust them), on all the different social networks.

In our past lives we learned something that all technology providers should know. Real Estate professionals don’t use technology for the sake of technology; they use it to make their lives, and their customers’ lives, better. Put another way, technology doesn’t change “what” people do, it just changes “how” they do it.

We also noted phenomena in technology adoption and usage. It goes something like this. An Agent or Broker has no business so they embrace technology to attract new business. They attract new business, impress their new customers, and their new customers refer more new business. They then become so busy they cannot keep up with the use of the technology tools so they quit using them.

The key thing to note is that satisfied customers refer business – lots of it. What if you could get your customers to advertise to all their friends that they choose you as their professional of choice?

With StepRep and MyFrontSteps you will be able to do just that. StepRep will allow you to connect with your past customers as friends on the social networks where they hang out. You will be able to connect with them as “friends” on all the social networks without having to join all these networks. In short you will be able to leverage your great reputation, built by the great work you have done for past clients.

Your customers’ friends friends will see you in the context of whatever social network they happen to be on. This gives your customers a chance to connect with you as friends and hold you up to their friends as their professional of choice.

This is important, because we all know, as much as your customer may like you or your work, they aren’t going to be recommending you in every conversation. That said, today, more and more conversations are happening on Social Networks. Connecting with customers as their friend, and provider of choice, helps make you a part of the conversation when and where it occurs.

If Joining Linkedin, Myspace, Facebook, Twitter, Hi5, Orkut, building a website, writing and maintaining a blog sounds and feels like too much work then StepRep is for you. In fact, as your satisfied customers participate in the social networks of their choice they do the work of recommending you.

StepRep is a small part of a much bigger solution that will ultimately allow professionals of all kinds to leverage their social graph (people they know and trust) to bring them business and referrals.

In order for any person or business to have an effective online presence they need to establish, monitor and maintain their Identity and Reputation. To this end we have put together a short video explaining Identity and Reputation.

We have been working hard on some very interesting things. Stay tuned.

Imagine, trying to convince people to make a behaviour change when it is not apparent that the results of that behaviour change will be positive. This is exactly the challenge that many Web2.0 companies are faced with when they try and embrace the real estate community. Free available and repurposable data, Agent Ratings, public comments on listings; these are a few of the things that the industry resists. They resist it not only because it is a change in behaviour, but because they can not see the benefits. To see the benefits requires a “change of their state of mind” and from time to time a paradigm shift does occur. Do you know what happens when there is a paradigm shift? Everyone starts over, and they start over from the same point.

I guess what I am saying as that sometimes it is not always obvious what is good for the real estate industry. And, from time to time, something happens that resets the playing field and everyone starts from the same place.

If you haven’t read the post on “social reputation” I think you should. The reputation paradigm is shifting. Google yourself, Google your competition. The playing field is zeroed. How do you rank so far?

Even given overwhelming evidence people will be slow to change. Sometime they just have to believe.

Think Different.

This is an example of the “Mpemba effect”  Where hot water can freeze faster than cold water.  You have to stretch your mind to believe.

First lets start out by defining what Identity or Social Reputation actually is. In my view  your “Identity/Social Reputation” is simply the social standing that others hold you in.  More simply put we could say that:

Identity/Social Reputation = what you say about yourself + what others say about you.

In the past (pre – Internet) your identity reputation would typically come from what others said about you.  Word of mouth so to speak.  One way to carry around what other said about you would be via endorsements and memberships in organizations or other such designations.  In the past this information was tough to discover. It existed in public records etc.  One way people use this information is via designations after their name which they display on their cards, business signs or in their conversations with people.  For instance, PhD, Esq, CMA, BSc, MD, Realtor, GRI, ABR you get the idea. 

Fast forward to today.  Google has become a verb.  I can “Google” almost anyone and find out far more about them than they may think.  The Internet has opened the door to instant access to data. It matters not whether the data is accurate or relevant.  It simply is.

Is this important to the real estate industry?  You better believe it is. Until very recently the real estate industry has chosen to stick it’s head in the sand and hope it would all go away. It won’t.  To that end I will attempt to illustrate the importance of Identity in the context of the real estate industry and the agent/consumer relationship.  It is one of the biggest issues facing the web today. It is affecting many industries and particularly those where the Internet is making an impact and changing consumer relationships and conversations from the offline world ( belly to belly conversations ) to the online world.  In order to understand the “Identity/Social Reputation Problem” I want to take you back through a bit of Real Estate / Internet history as I see it.  I believe that the key to predicting the future lies in understanding the past.      
   
Imagine back in time to the early 90’s.  Computers were becoming ubiquitous but the Internet was a small network of Universities, Military servers, big companies and geeks, the world wide web was in it’s infancy, growing up fast, but to be sure still in it’s infancy.  Computers were changing  the practice of Real Estate.  Listings were being emailed, listings data was improving and brochures were being created but as of yet the Internet had not made an impact.  If consumers were thinking about entering the market they had few choices.  Look in the paper, visit open homes or builder showcases.  Ultimately, though, because of the limited options consumers had a much shorter “pre-research” and “research” phase.  They were forced to “call a realtor” even if they weren’t quite sure they wanted to enter the market. I personally feel that this created a situation where Realtors were put in position where they were seen as trying to “sell” a consumer that wasn’t yet ready to enter the market.  I also feel that this is, in part, why consumers have such a low public opinion of Realtors (see NAR survey results).  The good realtor would have to spend hours doing a number of things:  Educating the consumer on the market, helping the consumer to decide even if they want to enter the market (without being pushy). And finally helping the buying consumer find a house that fits their lifestyle, budget,  and neighborhoods preferences, satisfied home inspections,  helping to negotiate, etc. Helping the selling consumer to set price, stage home, advertise, etc.   In short doing all the things good Realtors do that add a ton of value.       
      
The Internet has changed – it is now ubiquitous – and has changed many industries with it.  For example the travel and investment industries will never be the same.  Real Estate however hasn’t really changed all the much, or has it?   The best way to assess this, in my opinion, is to look at the consumer.  Today’s consumer has expectations that are slowly but surely changing. A consumer that wants to enter the market today has one more choice then his 1990 counterpart.  He has the Internet and he is choosing to use it.  Calling a realtor or any other live person to help him decide whether or not to enter the market is a decidedly unsavory second choice.   
 
The Internet has provided an alternative that has exposed what has really been happening since cavemen began considering looking to move caves.  Consumers can browse homes, look at prices, research neighborhoods and decide whether or not they want to enter the market.  This stage of research is decidedly longer than a realtor is used to. It can be up to 24 months or longer. Until the consumer is committed to entering the market  he doesn’t need a realtor because he doesn’t need what a realtor has to offer:  specific advice, negotiation, legal and administrative help, professional marketing and consulting, local service recommendations and the host of other things a good Realtor will do.      

So you you might ask yourself, what the heck does this have to do with identity and social reputation?  Lots I believe.  In the past (pre-Internet) consumers had to contact a realtor for access to information. In  order to choose which real estate professionals to contact they would learn about the Realtor’s Identity and Social Reputation.  Back then a “good” Realtor would have a “Social Reputation” that would be passed on by word of mouth from past clients and friends.  He would advertise his “slogan” along with his designations, his franchise association and maybe even his sales volumes etc.  He would say things like “#1 agent in xxx market” .  His reputation amongst past clients and colleagues and his advertising became his social reputation.  In the past, reputation changed slowly, it took much longer to create or to destroy.

The Internet has accelerated the discovery of ones reputation.  I only have to “Google” someone to find out what he is saying about himself, what others are saying and have said about him. Reputations can be created and destroyed in hours and days rather than months and years.   This is particularly important to Realtors as more and more people are selecting them based on their online social reputation. In the past where a person would pick up the phone and call a friend they knew had just bought or sold a home they now can simply and easily look to their social graph to see who their friends (people they know and trust)  are recommending.  They can, and already are, doing this through, Facebook, Linkedin, Myspace, Hi5  and a whole host of other ”social networks”.   

Smart real estate professionals know exactly what their “online footprint” or “social reputation” is.  They are building it by blogging as subject matter experts and connecting to consumers in a multitude of ways including social networks.  In short they are participating in an online conversation with the rest of the world.    

Are you?