What’s Next for Yext?

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I found this post interesting and I thought I’d share here:
I like to share interesting posts and information about internet marketing that read in my Google reader. Let me sort through the junk to bring you the real goods when comes to local internet marketing for small businesses. I thought this was super useful. if you like it be sure to share maybe subscribe to the authors blog: http://www.rimmkaufman.com/blog

I had the pleasure of speaking with Wendi Sturgis EVP, Sales and Service, and Brian Distelburger, President & co-founder of Yext, and thought it interesting enough to share.

Yext Calls started in 2006, providing a pay-per call network to serve local businesses. Yext got businesses the right placements, businesses only paid when they got relevant calls.

But Yext has expanded its offering with PowerListings, a mechanism for businesses to control their local search listings from a single place.

One challenge brick and mortar businesses face is getting accurate, comprehensive, compelling listings to appear in local search results across the myriad of different local listing providers:

Every month, 6% of companies need to update something about their business: the physical address, the phone number, the hours of operation, and so forth. When any of those bits of information change it can take a LONG time for the correct information to work its way across the 100+ databases that need to be updated. Fixing them manually is next to impossible.

Moreover, many of the local search results providers have all kinds of additional fields available for categorization, descriptions, images, and even promotional text that are often unused because the algorithmic scrapers can’t find the information and the advertiser doesn’t have any good way to feed the relevant information to each different local data provider in the format they’re expecting it.

Now they can.

Yext has built API integrations with all the above players to populate, update and re-index their listings from a single input screen. Business owners now have a one stop shop for getting maximum value out of their location data.

Moreover, chains have all kinds of flexibility in giving controls to individual store owners to make their own updates. Particularly useful for a company like State Farm with 10s of thousands of independent agents, each wanting to be found. But also useful for Sears, whose store managers in NY could roll out “Giant’s fans save big” promotions, while their Wisconsin stores ran “Discounts for the Disgruntled” pitches {PS: I totally made up those examples, so no implication that anyone actually did this…just that they could, which is cool imho.}

There is one big hole in Yext’s net. Google, representing ~50% of the local search market, doesn’t work with them. Google so fundamentally enjoys the challenge of trying to solve all the world’s problems through algorithms, that they seem uninterested in allowing us mere humans to feed them info.

It’s Google’s loss, at this point. For example:

The Power Listings maintained by Yext in this case offer a far richer result: better for the advertiser, better for the user, and ultimately better for the local search engine.

The challenge for Yext may be in pricing. The per location pricing model probably makes sense for Mom and Pop, but for a major chain, that might work out to be a heck of a lot of money annually. How often does your local JC Penney’s move or change their phone number? Why should JC Penney continue to pay?

The answer to that last question may lie in the level of success in traffic generation. Yext has case studies showing a 2x to 10x increase in local listing traffic produced by the richer listings. Those are big numbers!

However, more important to the perceived ongoing value may be the text snippets that can be managed at the store level. Case studies showing the power of these “enhanced listing” call-outs as a marketing and CTR improvement tool could make the price seem like a bargain.

I’d be very curious to see what fraction of local page traffic comes from brand search versus competitive non-brand search. In the above example — a brand search for K-Mart — the various store managers might have an interest in stealing traffic from each other, and certainly that would be the case for franchises, realtors, etc, but what is the value for the parent company to have franchises fight for prominence, given that the parent is ambivalent to which child gets the credit?

For non-brand search the value is obvious, but I’m not sure how big a fraction that represents.

Neither RKG, nor I, have any partnership/advertising arrangement with Yext. This is not an advertisement. I had a couple of great conversations with some very sharp folks and just wanted to share.

Love to get your thoughts on Yext’s business model.

http://www.rimmkaufman.com/blog/whats-next-for-yext/31012012/) Don’t forget to comment and subscribe to the authors blog.