Parveen Kaler

The Hidden Asset: Salesforce

Last week Fred Wilson blogged about the hidden asset that local media has.  He used the example of the Village Voice having a large sales team that can go out to businesses to sell advertising around their content.

The New York Times also mentioned how Old and New Media are finding partnerships that work well.  They also use the Village Voice as an example.

Fred Wilson is a managing partner at Union Square Ventures.  Union Square Ventures led the last round of financing of Foursquare.

Mobile and the Salesforce

Foursquare is a location-based, social network with a few game mechanics sprinkled on top.  It’s intended to be accessed from a smartphone.  There is an iPhone App along with a mobile website that can be accessed from other smartphones.

Fred mentions how Targetspot and Clickable are attempting to fill a gap by competing with the sales teams that local media companies have built.

He does not mention how this is also relevant in the world of location-based services.

The competitive advantage that YellowPages and other incumbent directory services have are their large sales teams, too.  YellowPages can assign a sales person to every single business in a neighbourhood.  The second competitive advantage is the large database of listings that YellowPages has accumulated.

The competitive advantage that Foursquare and other location-based services have is that they can target listings much more precisely than a generic directory service.

Digital Media’s Competitive Advantage: Crowd-sourcing

Foursquare has been using crowd-sourcing to populate their database in Vancouver.  6S Marketing has also been promoting Foursquare here in Vancouver.  You can read up about it in this Vancouver Sun story.

Aside: Ignore the term social media. Calling Foursquare social media is like calling World of Warcraft social media.  The term has been so diluted that it is basically meaningless now.

My understanding is that 6S Marketing is not getting paid for the promotion.  They charge local businesses for Mayor Offers and Special Offers Nearby inside of the application.  They have become the sales team.

However, this is a stop-gap solution.  In the future the sales of ads will be crowd-sourced too.  Buying advertisement in location-based services will be self-serve and sales teams will no longer be required.

Reading Tea Leaves

The location-based services market will be huge in the upcoming years.  We will see the decline of traditional directory services like the YellowPages.  YellowPages just can not target advertising like newer services can.  They also can not provide analytics as to how well the ads are working.

In the short term, advertising for these location-based services will require a middle man.  The big $1 Billion exit in the mobile/local space will be a company that can acquire ad inventory that can be locally targeted.

Think: The DoubleClick of mobile/local.