There is no question that online video is hot. YouTube has standardized and popularized it while broadband penetration has enabled it. Users love it, advertisers are starting to love it more and more, and now search engines love it too. Video's attractiveness as an ad medium has grown with the knowledge that it can be used as a hook to gain better search rankings.

But the video discussion usually focuses on national and brand advertisers. Pre-roll, post roll, overlay, inline, and a whole bunch of other terms have been batted around, representing the challenge in integrating ads that aren't obtrusive to viewers. Of course most users get turned off by all of them (sorry, bad pun).

That's where the beauty of the local video comes in. Like a lot of other broad internet trends (social media, mobile search, etc.) video has made its way to local in its own little way.  In other words it's become an attractive way for small and medium sized businesses (SMBs) to start advertising.

This longstanding desire (who doesn't want their own television commercial) is now realized with cheaper online production and distribution that has brought the medium within reach. Traditional opportunities were limited to costly self-production and cable spot advertising.

But unlike the national video ad formats mentioned above that require inserting ads with content, local video advertising is the content.  In other words, an SMB video lives and breathes on the company's website, IYP listing, City guide profile, or search results. There it serves a user-centric purpose of assisting buying decisions and giving color (literally) to a listing, where a user has intent to find something locally.

Feet on the Street

But how do you sell this to tens of millions of scattered SMBs? It's a high volume, low margin play that's extremely difficult to wrap your arms around from a sales perspective.

This is what makes the opportunity so salient for what some consider to be a dying industry, namely the yellow pages. Though online marketing is eating the industry's lunch, publishers have something that Google may never have – a sales force that walks around and knocks on every door in town (well, most doors) to sell local advertising.

This advertising of course has included print yellow pages for more than a century. But in the past few years – after being challenged by online players – the industry has started to take an "if you can't beat em, join em" approach. In other words it has begun to equip this army of sales reps with locally targeted SEM and SEO advertising from the likes of Marchex, LocalLaunch, and WebVisible.

And the latest addition to this sales bundle is, you guessed it, video. Combined with the above reasons, the publishers I talk to make it clear that a driving force for pushing video is that its margins have the potential to offset the declines they are seeing in print.

This is combined with the theory that it will bring in a whole new batch of advertisers they currently haven't reached with print and online ads (about 2/3rds of the 15 million U.S. SMBs). Video's broad appeal and lowered barriers make this easier to imagine.

This economic picture for publishers is brightened further if you look at the size of the SMB video opportunity. The Kelsey group forecasts that it will grow from US$10.9 million in 2007 to US$1.5 billion in 2012, a compound annual growth rate of 167.8 percent*. Yellow pages publishers are best equipped to realize a large chunk of that revenue – that is, if they can sell it and deliver on it.

So they've begun partnering with the likes of TurnHere, PixelFish, AdFare and others, to bring the local video opportunity into focus. These vendors have each risen to the demand with the help of digital production and distribution technologies that follow the fundamentals of Moore's law.

Getting it Done

So that's where we are now. Advertisers are lined up, users are ready for video in their local searches, and publishers and video vendors have begun to rise to the occasion. Now the hard part: getting it done.

ALSO ►  The Future of Digital Video: Why Brands Need to Follow the Consumer

Through these early partnerships and early sales efforts, we've seen a fair amount of growing pains. Yellow Pages publishers are committed to the opportunity verbally, but execution is always different. This is especially true if it can mean short term losses in cannibalizing a core revenue source. And sometimes execution missteps aren't their fault.

Like with SEM, publishers have to work with these third parties to fulfill the campaigns, which involves losing total control of the advertiser relationship. This hand off to the video vendor has lots of room for fumbles. This is especially the case with video, which is physically more complex than SEM fulfillment. It involves appointment scheduling, video shoots with busy SMBs, editing, post production, and of course, distribution.

Distribution is a whole different story, and a whole different blog post. But as these production and sales issues are hammered out, that side of the equation will become more of a commodity and the real discussion (and points of differentiation) in local video will focus on where the video is shown.

As mentioned, publishers' own online destinations – their IYPs – are a natural place for these videos to live because they catch users right when they are looking for things locally. But SMBs will need more than that.

As you read on this blog, vSEO will be important in order for videos and their landing pages to "live" in as many places as possible. For publishers, this gives their advertisers more exposure and distribution and can even drive traffic back to their IYP domains.

They're starting to realize this, at least in their words. We'll have to wait and see about execution. For now, they have their hands full with sales, order fulfillment, and customer service; and it's been one step at a time. That day will come though, and publishers will need help (read: SEO chops) to get it done.

* Some local video forecasts predict much higher numbers, which comes down to the definition of local. Rather than national advertisers placing video in "local" media such as online newspapers, TKGs forecast specifically homes in on the market size of small businesses that will advertise with online video.

This will all be a key topic at The Kelsey Group's DMS conference next week in Atlanta. If this is too short notice and if the west coast is more your bag, we'll also be batting this topic around during the November Interactive Local Media conference in Santa Clara, Ca. Hope to see you there!

Adjusting The Local Picture   The Online Video Opportunity MikeB This article was written for readers courtesy of Michael Boland.  Thanks Michael!

Michael Boland is a senior analyst with The Kelsey Group's Interactive Local Media program, and a contributor to the Search Engine Watch Blog, focusing on local and vertical search topics.

This coming Wednesday, at the Kelsey Group's Direct Marketing Strategies Conference, in Atlanta, Georgia Michael will be co-moderating a panel of industry experts who will discuss the opportunity that internet yellow pages (IYPs) have with local online video and video advertising. If you have not already registered for the conference, please do so here.

Below are the details regarding this particular session:

The Online Video Opportunity Wednesday, Sept. 17, 2008 (10:45 am - 11:30 am)

Video is fast advancing as a key element of the local online advertising mix, and Internet Yellow Pages providers are jumping in with their own products. This session will explore the emergence of online video on IYPs and examine its potential growth trajectory.

Bottom-Line Questions:

  • What are the most effective approaches for selling online video to SMBs?
  • How do publishers deliver a quality video product at high margin and low price point?
  • Should video be a high-premium, low-penetration product or vice versa?


  • Chuck Lee, Executive Director, Internet Marketing, AT&T Advertising & Publishing
  • Olivier Vincent, President and CEO, Canpages
  • John McIntyre, CEO, PixelFish
  • Murray Roblin, VP, Strategic Alliances, SpotMixer


  • Michael Boland, Senior Analyst, The Kelsey Group
  • Michael Taylor, Senior Analyst, The Kelsey Group
  • gigurdjieff

    To me, the Yellow Pages works best for dated businesses without any online presence, no social media or website, but this is becoming a thing of the past. These businesses probably find it hard to compete with today's companies that use multiple means of promoting their products and services, like a Local business directory, Facebook, Twitter, and that have a nice website.

  • JeffBach

    I'm in this space and have done numerous online video for SMBs for two national level aggregators with links to AT&T. Having been in the space for nearly two years, it is looking to me like distribution is smoothing out, although problems remain getting the video file repurposed to multiple sites. Production remains an issue. While I am biased because I am in it, I am less optimistic now than I was when I started. As in so many other areas of our economy, production costs are being driven down simply by paying less to the people doing the work as well as by requiring more from those same people while offering less money.

    Production levels need to remain high. The director/producer/camera guy (me) in many cases remains the sole contact with the client, other than the sales guy from AT&T. As commoditization continues, the professionals, semi-pros and adults in the video production industry who know how to talk with other adults and business owners are gradually leaving as the pay drops. This leaves behind the kids, students, and 20-somethings who tend to be very transient amongst other things. This means continual high turnover and an increasing hassle for the aggregators as they continually have to retrain and vet new filmmakers and add more QA/QC in order to verify that the content coming in the door by an ongoing crop of new filmmakers is sufficiently good to satisfy the clients.

    Meanwhile, the pros, semi-pros, and adults that are leaving are doing so having realized that there is a market here in local video.

    The Achilles heel for local online video has always been one thing - SALES.

    If you can do video AND you can sell video services, I think you can write your own ticket.

  • Video Marketing

    Google may not have the sales force to do this but my guess is once it turns lucrative and people they do the math, the'll quickly jump into the space inorganically (read acquisition). But I guess they could also build a sales team fairly quickly and easily. But great article, this space is starting to heat up.

  • @Jippidy

    I just stumbled on this old post - what a great exploration of online video marketing at the local level. The general consensus is that local video search is one of the next big growth markets, so it all boils down to execution at this point.

  • Ron

    Like with SEM, publishers have to work with these third parties to fulfill the campaigns, which involves losing total control of the advertiser relationship. This hand off to the video vendor has lots of room for fumbles. This is especially the case with video, which is physically more complex than SEM fulfillment. It involves appointment scheduling, video shoots with busy SMBs, editing, post production, and of course, distribution.

  • Andy G

    I feel like you guys are in my head. This is a little creepy. I was pondering over this entire concept about 2 years ago and after reading this...... wow... good stuff!