Key Local Media Trends to Watch in 2008.

The Kelsey Group has identified more than two dozen key trends to watch in 2008 in the global Yellow Pages, local search, interactive local media, vertical directories and classified media markets.

“In many ways 2007 was a bit of a watershed year as offline media companies more fully acknowledged the threat of the Internet while online media companies sought to exploit ever-widening opportunities,” Neal Polachek, chief executive officer, The Kelsey Group. “Through this lens, our analyst team has laid out its expectations for the coming year. We will be researching and watching the marketplace closely to determine the impact of the continued shift of advertising dollars from traditional to new media platforms.”

Global Yellow Pages in 2008

With most economists predicting a slowdown in the general economy, Kelsey Group analysts believe 2008 will be a pivotal year for the global Yellow Pages industry.

“For Yellow Pages, the key question is whether the print product will emerge as healthily as it has after previous downturns,” said Charles Laughlin, senior vice president and program director, The Kelsey Report and managing editor, The Kelsey Group. “In the past, small and medium-sized businesses have protected their print Yellow Pages investment at the expense of other media. Given the structural changes in the local ad market, we believe the next downturn will favor media choices that are more flexible and provide a lower cost per lead than print directories, which would signal a profound shift.”

Among The Kelsey Group’s predictions for the global Yellow Pages business are:

* Major Metro Markets Lead the Revolution: More publishers operating in large metro markets will proactively institute opt-out plans for consumers to reduce distribution to the ones who really want the print directory, something publishers have historically resisted. Also look for initiatives to radically rescope major metro books or introduce new formats.

* Expanding Online-Only Expansion: In the coming year, we expect to see more publishers using their Internet offerings to expand into new markets. In some cases this will lead to new print directories, but more often we expect to see publishers establishing a sales presence outside their home markets or franchise territory with no intention of launching a print book.

Interactive Local Media in 2008

The Kelsey Group’s Interactive Local Media analyst team anticipates a number of substantial trends and developments in the local online marketplace in 2008, including rapid development in the online auto and real estate verticals, big increases in local search inventory, more search through specialized devices, and a big leap forward in the importance of user-generated content in consumer decision making.

“This year products that aim to bring the merchants into the consumer review process will begin to become more widely available,” said Matt Booth, senior vice president and program director, Interactive Local Media, The Kelsey Group. “These products will give merchants a voice in the feedback about their businesses by allowing them to contact review writers and offer to fix any problems.”

In addition, the Interactive Local Media analyst team predicts:

* Multi-channel Selling and Performance Management: The introduction of print Yellow Pages advertising products with call-tracking numbers that allow for variable pricing. These merchants and their call tracking numbers will be pushed across media channels to increase call volume.

* Rise of Vertical Sellers; Vertical Sales Effort Saturation in High Ad Spend Categories: In a word, noise. This will include SEO/SEM solutions offered from newspaper groups; Internet and vertical resellers targeting auto and real estate via SEO/SEM; numerous start-ups announcing plans to enter these categories. On the content side, we expect to see MLS listings creeping into non-Realtor.com sites; and, finally, higher AutoTrader consumer engagement.

Verticals, Classifieds and E-Commerce in 2008

Among the trends Kelsey Group analysts anticipate for verticals, classifieds and e-commerce in 2008 are an acceleration in the print “fade rate” of Yellow Pages and newspaper circulation; the untethering of print and online usage; an uphill struggle to build independent local sales channels; more localization of national; and more use of robust ad reporting.

“In the long term, we remain bullish that online and mobile products will bring in better than one-to-one conversion rates because of their superior return on investment,” said Peter Krasilovsky, program director, Marketplaces, The Kelsey Group. “But it won’t happen for some time. For now, local advertisers will continue to use the rise of online marketing to spend less on advertising rather than more.”

The Kelsey Group’s 2008 predictions for the verticals, classifieds and e-commerce arenas include:

* Higher Cannibalization of Traditional Media Sales: The promising growth of search engine click packages suggests one-to-one conversion will be sooner rather than later. Look for sales results, especially from Yellow Pages.

* Cautious Additions of Video, Mobile and Outdoor: Video is where the immediate action is. Start counting ads, and look for penetration above 5 percent in some categories.

For more information at http://www.kelseygroup.com