EightBlack.

Given that I’m based in Australia, I thought we’d better talk about local search.

In particular - Sensis.

This is going to be interesting.

First off, let me disclose right up front that I’ve been working (make that “talking”) with Sensis on a range of projects for a while now.

Nothing that requires a national security check and nothing worth posting about.

And it wouldn’t stop me letting you know my thoughts about what I think about the Sensis brand, Sensis products and Sensis search engine.

First of all, I think most Australian’s dont get it.

They don’t get Sensis.com.au, they dont get the “brand” Sensis and we’re all not sure why we need to use a search engine “just for Australian’s”.

But because it (and I’m talking about Sensis.com.au the search engine) lacks any real points of differentiation from the search interface you’re used to, why is there a need to use it.

Search frequency is down and the marketing folks are scrambling like mad to do something about it.

The other issue I have with Sensis.com.au is their PPC model. Or otherwise known as Bidsmart.

First there’s no “BidSense” or syndication model to distribute PPC ads.

Bidsmart is also not gaining traction - because again it offers no real point of difference to Yahoo/Overture and Google.

More importantly, the media agency world won’t put up their clients money until they can see some solid traffic statistics.

If it was me, I’d offer 100% rebate to site owners who displayed Bidsmart ads on their sites.

Because if the issue is traffic and Google is paying roughly 10% of the average CPC (cost per click) then one way to get a site owners attention is to give them a ten times better deal.

The bigger issue is their directory business.

It would be a wierd position to be in knowing that in 5 years or less, a $2 billion dollar revenue stream was going to be flushed down the toilet or ripped from your very arms.

Let me explain.

Everyone knows what the Yellow and White Pages are.

The spin doctors within Sensis will tell you that revenues keep climbing year on year (despite the fact that the actual revenue growth is in the minute single digits - like fractions of a %).

They’re also not telling you the deals that their frustrated sales teams are doing to keep a lot of their concerned customers.

We all know that Sensis excel in the area of SME (Small To Medium Enterprise).

In fact they dont just excel. They dominate.

Now let me ask you this.

If you were a small to medium sized business, would you still persist in taking out a quarter page ad in a book that was hand delivered and that, on the face of the evidence, people are using less and less.

More importantly, would you pay $15,000 to $20,000 for the privilege, knowing that once you had committed to the expediture, you were stuck with the ad.

If it worked, it worked.

If it didn’t, well, you’d have to wait until next year. Or hide the book under some boxes so no one at work could find them.

Seriously though, when was the last time you picked up a physical directory and searched for something.

And the trend is on a downwards spiral.

Sensis knows this.

Sure, they are investing in their online Yellow and White Pages.

But the river of gold, in my humble opinion, does not lie with cracking the local search code and trying to figure out ways to get more Aussies to use their search engine.

The money is in coralling the existing customer base to tap into their current portfolio of products.

In essence, it needs to tell its directory customers that the books that they have known for so long will soon disappear.

Alex Mandossian, one of the most respected online direct marketers in the US talks about “consumption of content”.

This is exactly what Sensis needs to do.

And effectively tie its product set together.

For example, it has some neat products up its sleeve. But the issue is that they are all separated and fragmented from each other.

Sensis SMS and Sensis Mobile are stand alone products.

They need to be integrated into the main search application.

The other thing Sensis lacks is a serious shortage of hardcore online talent.

If it’s to become a player, then Sensis Labs needs to be set up, it needs to work with the best Universities in the country and it needs to invest heavily in the garage’s of Australia.

Because as a country, we’ve proven that we can compete with the best in the online space.

Sensis has a way to go before it will clear the hurdles.

On one hand, it has a stodgy old business that effectively is waiting on “death row”. The end will come for the traditional directory business. The problem is that this stodgy old business still generates a couple of billion dollars a year and Telstra needs this.

On the other hand, the pace of the online world is showing no signs of slowing. Sensis has made a few acquisitions (Trading Post) but has missed more than it should have.

It’s struggling to get traction with its online strategy - namely because it’s search application is a “me too” product and because while I think there is huge merit in truly local search, Sensis haven’t yet figured it out.

Lucky for them, they have a parent with limitless reserves of cash.

But then again, so do Google, Yahoo and Microsoft.

And the big differentiator here is that the first 3 have something that Sensis has lacked from the beginning (and still lacks)

A little thing called momentum.

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This entry was posted on Thursday, June 8th, 2006 at 1:18 am and is filed under News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.