Content Matters

BankRate this week made two significant acquisitions, acquiring MMIS/Interest.com and FastFind (Wescoco LLC), strengthening its leadership position in the consumer mortgage and interest rate market.

MMIS publishes mortgage tables in newspapers and also runs the Interest.com website, a consumer site that connects borrowers and lenders.  FastFind is a web-based lead generator, also in the booming mortgage/refinancing market.

The MMIS acquisition expands BankRate’s network of advertising vehicles, serving up more page views and providing space for banner ads.  This expands Bankrate’s presence in their core market.  Adding FastFind should provide some new opportunities to close the loop between borrowers and lenders, letting Bankrate increase the amount of revenue it generates from its top accounts.

Bankrate has done an impressive job the past five years.  Starting as a small newsletter, The Bank Rate Monitor, Bankrate went a bit haywire during the dot.com days, changing its name to ILife and launching various consumer finance portals, including ILife.com, Consejero.com and Garzarelli.com.  Elisabeth DeMarse was hired as CEO and brought focus and discipline to the company, shedding unproductive assets and moving the stock price from around a quarter to the high teens in a fairly short period. 

In 2004, Tom Evans, former GeoCities head, was named CEO and has continued the growth.  With the new acquisitions, BankRate is forecasting revenues of $78-79 million this year and net income of $1.23 per share.

With mortgage rates staying on the low side, and consumers continuing to refinance, Bankrate has thrived in recent years.  They have diversified their revenue streams somewhat, to reduce their dependency on the mortgage refinancing market, but it will be interesting to watch how they perform if rates rise and home building slows.

I’ve read a lot of comments recently over whether the new Google Base is likely to become a “Category Killer”, taking large amounts of business away from eBay, Craig’s List, Yahoo Shopping and even Amazon.

While Google certainly has the money to make a big splash into any market, I don’t think that their entry into the classified space will be the category killer people fear.  Two factors will continue to weigh heavily in favor of some of the existing players:

1. Specialization:  EBay has developed an extensive community of buyers and sellers, with its ranking system at the heart of its success.  Will Google, a technology-driven company, put the work in to build its community effectively?  Amazon, through its reviews, has become the first place most of us look to assess a consumer purchase.  Others have tried to emulate that, but none have succeeded. 
2. Local presence: Craig’s List has been able to cultivate a local feel in its markets, critical for classified sales of a car, a sofa or guitar.  The usability of Craig’s List is strong, as they built their system with users, not technology in mind.

One downside to Google Base will be its massive size.  Because it’s free and it’s from Google, I expect the database to become huge, with many commercial enterprises spending numerous hours keying in all of their products.  That mass will likely make it unwieldy, unless sellers do an exceptional job of tagging (unlikely).

I think that Google Base will certainly have an impact.  It probably will continue to accelerate the decline of newspaper classifieds and have modest erosive effect on eBay, and Craig’s List.  But, technology does not always make for the best user experience.  I’ve tried a few times to use Yahoo Shopping and always abandoned it, frustrated.  The existence of Google Base may require eBay and Craig’s List to continue to improve their user experience, and it may push the price of a future Knight Ridder acquisition down.  But, it’s unlikely to become the dominant player in the classified space in the near term.

Gather.com this week launched their site, a social networking site consisting of a set of blog-based communities.  Gather’s approach is to create communities of user-created content (blogs, podcasts and such), and also can be the online host for existing offline communities such as a book club.  Gather’s twist is that they have assembled a group of contributors to public radio stations to author content.  So, when you post your blog to Gather, it could easily be commingled with content with audio from Minnesota Public Radio or the “Featured album of the week” from WXPN radio in Philadelphia.

Gather’s business model is serving up ads alongside the content.  To gain user participation, Gather has a ranking system.  Users rank the postings that they read, and contributors whose postings are read most frequently or get the highest ratings get “points” which can be converted to merchandise via Gather partners.

What I like about Gather is that it’s reinforcing the concept of tagging content.  The communities are built based upon tags, so the better you tag the content, the more likely it will be read.  I don’t fully get the public radio connection, except that it might target certain demographic groups.  Gather’s Board includes several executives from their lead investor - American Public Media Group (parent of Minnesota Public Radio), and should have credibility within that community, but I’m not sure what value that adds to a social networking site. 

We seem to be entering version 2.0 of the online community world, and I still think there will be many more failures than successes.  Just as in the real world, online communities need to have a sense of purpose.  While a community like MySpace might address the needs of teenagers seeking to share indie music, I’m not sure that easily translates to the public radio demographics.  Only time will tell.

For day two of the InfoCommerce conference, the focus shifted largely to working with search engines.

Today’s keynote was delivered by Craig Pisaris-Henderson, CEO of MIVA.  MIVA is the current name for what most of us knew as FindWhat.com (as a marketer who likes names that convey what a product does, I have to admit that FindWhat seems much more compelling to me than MIVA, but that’s a discussion for another day).

Craig was making the argument that Yahoo and Google are publisher’s adversaries and that MIVA’s focus on the publisher, rather than the user, was a better solution.  The audience did not seem convinced, voicing the opinion that “if the users want to use search, then you should be there to receive their traffic.”  While MIVA has done some interesting things, I think that you need to go where the traffic is.  While there are pros and cons to ad networks, I’m not sure there’s anywhere else to generate that level of traffic.

Two panels were the most compelling presentations of the day.  “Search Engines: Rep Firms of the Future” focused on the question of “is Google friend or foe?”.  Led by Sean Brooks of TechTarget, Joe Douress of LexisNexis Martindale Hubbell and Jeff Leibowitz of the Laredo Group, the theme of this panel was that Google and Yahoo are there, so embrace them.  At the same time, publishers own an amazing amount of valuable content, so while search engines have their place, premium content providers can establish strong positions and Google will not take over the world.

On a more tactical basis, the last panel of the day was “The SEO/SEM Bake Off”.  Aaron Kahlow, CEO of BusinessOnline, Diane Burley, President of PureContemporary.com and Todd Watts, Director of Marketing for Liquidity Services, Inc. debated the merits of organic vs. search marketing.  Aaron Kahlow led off with a strong and compelling argument that SEO was where publishers should focus, yet today we spend 80% of our dollars on SEM.  Diane Burley used a case study of the first year of her online magazine to show how to balance various approaches.  Todd Watts was able to demonstrate that SEM could play a great role in balancing SEO.  While no one can guarantee that they can give you the top position for each term in SEO, SEM allows you to buy the ones where you’re not getting the SEO results you want.  Reinforcing the concepts mentioned by Anne Holland of MarketingSherpa yesterday, the panel agreed that publishers bought SEM because it was easier to understand and execute.  Better results could be achieved by investing more in SEO, then using SEM to fill in the gaps.

Overall, this year's InfoCommerce Conference was compelling, with a strong mix of traditional and new publishers.

For more coverage of the InfoCommerce Conference, check the detailed session notes taken by John Blossom at Shore Communications as well as the comments on Dave Jung's b2blog.  Dave spoke at one of the breakout sessions.

Today I’m blogging from the InfoCommerce Conference in Philadelphia.

InfoCommerce Group, led by Russell Perkins, is the premier consulting firm focused on database and directory publishers.  This year’s conference brings a blend of traditional and new publishers, with particular focus on the role of quality in the content industry.

Richard Malloch, President of Hearst Business Media, was the keynote speaker.  Malloch provided an insightful and rare peek inside a private company that often stays under the radar.  Focusing on their healthcare business, Malloch outlined a company that has transformed itself to partner with its clients (hospital systems, pharmacy chains and others), and now can claim an average customer life expectancy of 40 years.

Chris Kenton, CEO of Global Fluency and Business Week Online writer and provocateur, spoke on “Making Quality Real”.  In a compelling 20 minute presentation, Chris blew up many traditional marketing and b-school assumptions. 

A hands-on workshop was led by Anne Holland, Chief Sherpa at MarketingSherpa.com.  Anne provided updated results of their analysis of email open rates, best practices for email response forms, use of Heat Maps to better understand user behavior on search results pages and other key topics.  One interesting point Anne raised was the huge focus on SEM, while investing in SEO will have a bigger impact for most clients.  Her rationale for why we all focus on SEM is that marketers have spent their career focusing on the creative and on ad-buying.  It’s easy and we know how to do it, while SEO is techie stuff focused on algorithms and quantitative data.  So, if you like the creative side more, go find a specialist to help you on the SEO side.  Anne closed her presentation with “sites for Content Companies to watch in 2006”.  I was pleased that three of the five she mentioned are among my “50 Content Companies that Matter” list – De.licio.us, Wikipedia and Google; with Flickr and PubSub.com (a blog search engine) as the others.

My favorite session of the day brought three non-traditional publishing executives together.  Jim Fowler, Founder of Jigsaw Data, Lou Morsberger, CEO of ValueStar and Tim DeMello, Founder of Ziggs.  Each of these companies are focused upon user-contributed content with little or no human interaction.  Jigsaw has pioneered the “business card swap” approach, applying lessons from eBay and others.  Ziggs’ focus is enabling users to take control of their identity on the web.  ValueStar is applying ratings to local services (plumbers, home repair, auto repair, etc.).  Both Jigsaw and Ziggs are delivering astonishing growth rates – each adding more than 10,000 contacts per day.  According to DeMello, there are more than 25 million people searches done on the web each day, and a typical professional probably gets searched about once per day.

Day two, tomorrow, should be equally compelling, with panels including representatives of Hoovers, Factiva, Aviation Week, Thomson Gale and others, plus drill-down sessions on SEO/SEM and RFID.

For more info on the InfoCommerce conference, take a look at John Blossom's blog notes from the show.