Schematic representation of vertical and horiz...

Schematic representation of vertical and horizontal integration in the automotive industry (Photo credit: Wikipedia)

I just read a fantastic article at Above The Crowd about the big three, Social, Mobile, Local. I’m not going to steal the whole thing because you should really go over and read it yourself but here are a couple good quotes.His premise is that because of a variety of factors including the common person’s usage of the smart phone that the local customer and hence the local busisness wins because they have access to websites like and Open Here are a few things that really stand out.

He says that young companies are hungry and look at “Deep Data” to provide the conusmer with rich data/information.

many young companies, taking a page out of the playbook of data-driven software-as-a-service companies, have created deep vertical integration within their spaces in order to drive traffic and enable services. By organizing small business owners, supplementary service providers, and customers on a single canonical set of data, these companies are not only providing new ways for customers to discover local businesses: they are creating new ways for local businesses to interact with customers. They are moving from “listing” services to “automation” services, a

Above The Crowd makes a great point when he says that the big guys aren’t always successful at penetrating the local market because they want to make the small business fit into their mold. That the big boys want a one size fits all (reminds me of the yellow pages in the old days just wanting to make lists – ATC addresses this issue as well). Here is a brief quote:

Going “deep” like this is a significant challenge for larger incumbents. The playbook requires a deep understanding of the industry, access to all the key content and its structure, a targeted and experienced sales structure, and a willingness to invest in a market that may seem “niche” to the broader service provider. You have to be willing to get your hands dirty. These large companies favor a horizontal, one-size-fits-all approach, offering a widget that all local companies would potentially use (such as virtual loyalty cards). But these lightweight offerings from the incumbents will fall well short of the “automation” features and functionality enabled by the innovators digging deeper into the vertical.

We’ve already seen a couple of recent examples of this with Google. In mortgages, Google launched a product but ultimately retreated, citing prioritization concerns and “taking a hard look at products that haven’t been as successful as we had hoped.” A seemingly simple category like mortgages proved difficult to nail within the overall Google strategic framework. Likewise, in order to gain a foothold in travel — a space where deep verticals thrived for many years —Google ultimately realized they had to pay $700mm for ITA Software in order to acquire the vertical tools they needed to be successful.

Finally the Customer Wins!

Does this mean that it’s too late to get into the game? Are we at a game over moment within the Internet? I don’t think so. The customer wins but it’s not too late to get into the game. Some industries have moved quickly into integrating Social – Mobile – Local techniques but as you can see from the quote below the field is still wide open.

English: A business ideally is continually see...

A business ideally is continually seeking feedback from customers: are the products helpful? are their needs being met? Constructive criticism helps marketers adjust offerings to meet customer needs. Source of diagram: here (see public domain declaration at top). Questions: write me at my Wikipedia talk page (Photo credit: Wikipedia)

But the really exciting part is that we are still really early in this process of transformation away from listing/directory advertising to a local Internet.  By way of comparison, in the fourth quarter of 2011, Southwest Airlines reported that 86% of its revenue was booked online.  By comparison, only 12% of US restaurant reservations are booked online. Only 15% of dentists are connected to customers through services like DemandForce.  Only 3% of takeout orders are processed through online offerings like GrubHub. And less than 1% of realtors are premier agents on Zillow.

More then ever the need for good content is needed for the local consumer. Because services like Yelp, Zillow, Open Table are automated means that they can’t possibly address every need for every web site and every business. By maintaining your own website with your own information and using these other sites as feeders you can only be helping yourself. Your customers will still want to dig deeper and will still visit your website to see new menus items and specials, more photos of your products, more information that is specalized and can not fit or be placed on these automated sites. The truth is that one size does not fit all anymore! Be sure to visit Above The Crowd and the entire article and comment on his site.