As we reported earlier the Online Local Search and Directory Market is Heating up, which is an emerging marketplace as confirmed by the Sensis FY08 report. Today we explore one of the new entrants in this segment, Local.com.au, founded by Ron Brewster of Sydney, Australia.In a recent email-based interview with Ron, he gave insights into his venture and how he is progressing with it. This is what he has to say:
• Please tell us about your venture/company?
local.com.au is a directory of business and services Australia-wide.
We allow free advertising for all businesses, including FREE links to websites.
For $1 a day, businesses can rise to the top and add pictures and videos to listings.
I believe we have the BEST directory model currently on offer in Australia.
• Who are the people behind this and how it started?
Myself primarily, but I have a very good coder and a series of consultants who I work with.
I had the idea back in the late 1990s when I could see tourism embracing the internet and felt that there was room for a directory that would serve local business
We're currently looking at a minor expansion and will probably start employing within the next 6 months.
• How long it took before it was up and running?
I've been working on this for 10 years now, but it took about 6 months to get the software model right initially, but business back in the late '90s just wasn't ready to think about "local search". I remember being told, on more than one occasion, that nobody would search for anything local on the internet.
After a few false starts, I put it on the back burner until the end of 2006 when the term "local search" was starting to be talked about.
We then rewrote the software totally and with a few tweaks along the way, you can now see the complete model on local. com,au ... although there are some newer technologies to be built in when the time is right.
It's really only in the past 6 months that I've seen our traffic levels and direct referrals to local businesses are at a level where I'm now prepared to "take it out in public".
(I was.. and still am, acutely aware of talking up the benefits of a directory without being able to back this up with sound results)
• What is the main objective/mission behind your venture?
To give small businesses a level playing field to advertise in a meaningful way online.
General advertising costs are becoming prohibitive for small businesses and I believed there was a better model that could help this vital business segment.
There are huge numbers of home-based businesses that are essentially hidden from sight. I see local.com.au as a means of giving them a profile in our local communities.
I was a huge supporter of Google AdWords in the early days, but the rising costs are now starting to preclude smaller businesses unless they have deep pockets. Basic keywords now are approaching $1 a click and in one extreme example have reached $11.00 a click.
I am determined to provide low, fixed-cost advertising that will allow small businesses an equal opportunity for online advertising.
• What services it provide for consumers or customers?
Allowing links to websites free of charge, and even linking to other local directories - local.com.au provides the best source of in-depth information for local consumers.
We even allow videos to be attached to paid listings, which is going to be a great tool for local businesses.
Over 90% of our listings link directly to websites, and even those without websites are given ample space to write a decent business profile.
Most directories are made up of name, address and phone numbers... For consumers seeking in-depth information, they are essentially useless... local.com.au is seeking to fill this gap.
• What type of customers you are targeting?
Local Consumers... anyone seeking information on which to base a decision to purchase or use services.
Interestingly, our traffic dips through the school holidays leading me to believe a lot of parents are using the directory. We also see this in the shift in keyword searches just before the school holidays as well... It's an interesting dynamic.
We are also focusing very much on Local Business - any local business wanting to be exposed to our traffic.
• How many people are using your services?
We currently have just under 4,000 registered businesses, most in the Sydney and NSW Country regions.
We're experiencing strong traffic increases, having doubled unique visitors in the first half of this year (2008), but based on current figures, we're getting over 30,000 unique visitors a month and making over 50,000 referrals to listed businesses' websites.
I am hopeful that over the next 12 months, we can make over 1 million referrals to local websites, and gain over 750,000 unique visitors.
• What sort of marketing you are using to spread the word?
At this stage, nearly all our traffic is based on organic search terms within search engines, and Google is providing us with over 70% of our total traffic.
We do no advertising and have very few links back to the directory.
Obviously, as we start gaining more paid listings we will use these funds to raise public awareness.. this will help increase our traffic which in turn will help drive sales of paid advertising.
• How are you measuring the success of your venture? Are there any special mechanisms/tools in place to monitor the progress?
My only benchmark is the ratio of referrals back to registered websites.
Obviously, we monitor traffic, but unless we are providing a direct benefit to registered businesses, then we're missing the point.
I remember reading a keynote speech about directories. A phrase that has stuck with me was a reference to directories talking up the benefits but failing to deliver.
I've read in the past few weeks where both Yellow Pages & True Local are claiming traffic levels that sound impressive but are only just equal to the number of businesses they have listed... the equivalent of one visitor a month for each business listing.
• What is the monetizing/revenue model? Is there any new model, which is being tried?
Ha... I think all directories are struggling with this to some degree.
We are starting to actively sell Premium Display Listings to business sectors we know are gaining benefits, but it is our desire that businesses will see the benefits and sign themselves.
We have considered Google AdSense, but at this stage, I am not convinced it will provide the best long-term solution.
It would be preferable, in my opinion, to have our own dedicated advertisers who we know will provide a better fit with the directory.
It would be a great advantage to be able to partner with a larger organisation to assist with generating a profile, and sales, but at this stage of the many approaches we've had, most are only interested in acquiring the domain name cheaply.
• Which are the main competitors or major players in this market segment?
Umm... Yellow Pages, True Local, HotFrog, and DLook are all providing similar services, but I feel local.com.au is offering a better choice.
While there are a significant number of directories, I can see most have followed the Yellow Pages model of name, address, and phone number.
Those that are providing a directory similar to local.com.au are either restricted geographically or appear to be out-of-date.
I would like to think that local.com.au could become one of the stronger directories within 3-5 years... we certainly have the name and the potential.
• What do you think the government (federal and state) should do to improve the culture of innovation and the IT industry?
I may be getting off the topic here, but essentially we work in a deregulated industry...
As an example, I can't have someone change a washer in a tap without them being regulated and licensed. But a 16-year-old with no business skills can set up a website and deal with the professional image of a company and its communications. They can set up online transactions dealing with credit card information.
We've all got our horror stories of seeing shocking websites produced at extraordinary prices, or designers ordering domain names in their own names and in some cases high-jacking them.
I have literally seen the exact same services being offered at $50 that some other companies are charging over $2,000 - if anything were to be done, I think a rethink of how we can protect the 80% of businesses that now deal with the internet would be a good start.
• How often do you catch up with others trying similar things and where do you catch up? Do you have dedicated communities in your city?
We're an isolated and insular industry.. too many late nights thumping at keyboards, drinking coffee and ruining our health. Traditionally many in the industry have jealously guarded their ventures, but I'm starting to see a shift as the cream rises to the top. There is starting to be a real openness in some circles.
I try to read a lot of forums and blogs, and am starting to talk about similar ventures .. it's always interesting to hear how others are struggling with similar issues.
Thanks, Ron for sharing your thoughts with us. All the best for the future.
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