The local newspaper and the yellow pages have been slowly dying for more than a decade, leaving small businesses and merchants few options for local advertising. In its place, Internet companies like Groupon , Yelp , and ReachLocal arrived on the scene to reinvent local advertising online – but none has proved to be a digital nirvana for local businesses, because these solutions do not provide a simple and scalable way to connect with consumers who have a real-time need for their services.
Let’s look first at daily deal sites such as Groupon and Living Social. While these sites are good at taking advantage of local disposable income, they don’t particularly help small businesses grow a base of loyal customers who are not just interested in the next lowest offer. On the other hand, consumers that have an immediate need (such as a leaking roof) can’t realistically wait until a relevant offer is available.
On the other hand, while directory sites such as Yelp, Google Places and YP.com may help local consumers in the event of a real-time need, most primarily focus on simple listings and reviews… which means consumers may need to sift through dozens of reviews to find the right service provider. Reviews also may or may not be from a real customer, and more often than not these reviews are getting posted by reputation management companies and friends and family.
Directory sites simply provide raw information and otherwise add little value to consumers; they don’t offer a meaningful and cost-effective opportunity for small advertisers that will translate into a profitable method of building a business.
The traditional internet solution of web search doesn’t quite hit the mark either. For example, if I’m at work when my wife calls to tell me about a leaky roof, I might search for roof repair from my office in San Ramon. Based on my IP address, I’ll be provided a list of roof repair services near my office… 50 miles from my house in San Carlos. As a consumer, where I happen to be undertaking my internet search doesn’t mean it’s the same location I’ll need the service rendered.