Can Citysearch Stay in the Game?

CityGrid is the parent company of Insiderpages, Urbanspoon and one of the original local city guides, Citysearch, as well as local ad network CityGrid, is a one-stop for local businesses that want to enhance their digital footprints. CEO Jay Herratti discusses the dynamics of the local online market and how Citysearch can find its footing against a new crop of rivals.

If you ask a consumer whether he prefers a personalized message or a local message, of course he will say, “I want the personalized message.” The beauty of location-based services is that it can provide the consumer with the personalized local offer. I don’t think of them as mutually exclusive. Having information about where the consumer is located is a net additive. I can serve you business offers that are very close to you and very timely; you can access them not 24 hours later but 24 minutes later. It expands the local advertising market. It turns every single app into a local app, whether it’s an app designed to provide local information or a general music app, for example. Because we always know where the person is we can begin to serve personalized local offers. That is the power. Knowing where the consumers are expands the inventory and expands the opportunity for better targeting.

Citysearch was one of the early comers in the space. It’s been around for 16 years. It launched in 1995, and it’s a story of resilience. You find very few brands that have remained relevant that long. Of course, it faces a lot more competition now, and it has been out-innovated in certain areas, but it’s got a loyal audience of 22.5 million. It’s got relevance. The way that it remains competitive is that it understands why people come. They come for a good local guide. At Citysearch, users hear from three voices: the expert opinion, the voice of businesses and user reviews. We present a fairly balanced picture between the three. But the market keeps changing. I think you will see customers honing in more on the expert voice. The environment has grown very noisy with crowd sourcing. I think that the expert voice is making a comeback. I think you look at the giants, the Googles and Facebooks, and while the market is still growing so rapidly there is room for everybody to grow. It’s when the growth begins to slow that you have to re-evaluate. If you have something to offer, you stand out. At some point it will start contracting. When that happens publishers need to ask themselves, “How do I survive in a new world order?” If you do a search on Google, you’ll see Yelp, Citysearch, Google Places. That’s the first page. And that first page is hard to get onto if you are a new publisher. Citysearch, because of its longevity, does very well with SEO traffic. It’s the newcomers that will have to innovate. Foursquare was an interesting example of a newcomer saying, “To hell with search. We will go with a mobile app.” They created a channel where consumers come directly to them and then integrate into the Facebooks and Twitters. They sidestepped Google and search altogether.

I believe that people completely underestimate how costly it is to acquire local advertisers. In order to succeed with local advertisers, you need to start reaching out to small local businesses, service them, and retain them and demonstrate the value of your business to them.  You have to do that over and over. Unless you have 5000 sales reps with hundreds of customers each, that’s almost impossible to do.  It’s very hard to find models that are scaling profitably.

Everybody gets it, says, “Let’s get on board, let’s start getting the likes.” But then what do you do with it? I’m starting to see the next generation of apps being developed. They are trying to build the tools for local businesses to do something with Facebook. Buddy Media and its competitors, they gave national brands the tool sets to exploit social. And I’m beginning to see the next set of tools being developed to help small businesses to do that same thing. It’s not there yet. It’s got to be super simple and very fast, almost automated, for it to be of use to small businesses. But as more young people become entrepreneurs, they are much more comfortable with technology. We are also big believers in bringing out your true colors. If you have a lot of people following you on Facebook, put your story out there. Consumers love to hear from small business owners. They like stories of how businesses began, about interesting people who work for the business. Create content that reflects your brand. People will engage with it.

Mobile ad networks. My advice is that the mobile world is way, way too fragmented, too complicated for small businesses to handle themselves.  It’s just too difficult. You cannot manage it as a small business owner.