As Yellow goes hard, Localist goes soft

  • Digital
  • June 13, 2011
  • Ben Fahy
As Yellow goes hard, Localist goes soft

Yellow Local appears to have spared no expense in splashing itself around Auckland since launching, with its new hyperlocal offerings featuring on billboards, TV, online and in print. And while NZ Post's Localist has been promising to launch—and promising to offer something better than Yellow—since late last year, it has taken a much different approach to that of its major competitor and soft launched the site on Friday.

Localist chief executive Blair Glubb says it's important to emphasise it's only been live three days, and he's expecting the requisite glitches and bugs to show themselves. But by soft-launching it gives the team an opportunity to sort those glitches out.

Rather than blast its arrival through an ad campaign, Glubb says Localist's approach was to build it up in the market, which is why the sales team have been selling spots in the print directories for 10-12 weeks "with a reasonable degree of success".

"I think [Yellow] have been working on it for a while. But I really don't want to talk too much about what Yellow are doing. There really are some fundamental differences between what we're building and how we're building it," he says.

Up until recently he says the Yellow model has been to put businesses that pay more at the top of the list. And while some businesses like that, consumers don't.

"We're trying to stay firmly focused on what what Aucklanders would want and want Auckland businesses would like."

Of course, while it's fighting Yellow, it's also fighting Google and Facebook. But Glubb says the local directories have one major advantage: a salesforce on the ground that can penetrate the small business scene. Google has been trying for a while to strike up a deal with directories services in the US to get their staff to start selling Google Adwords to small businesses, simply because they don't have those connections, and Glubb says that's even more apparent in New Zealand.

"50-60 percent of New Zealand small businesses don't have a website or any web presence," Glubb says.

So, while print might seem antiquated in these digital days, it's still where a lot of the directories money is. And while he believes the days of the big doorstop book will soon come to an end, he believes there's still a big place for print if it's created as a more relevant, localised guide that also features interesting content.

"15-20 percent of the whole advertising industry is spent on digital, so the reality is that over half is in print in one form or another. For lots of businesses, they're still spending significant amounts of money there."

Online, Localist is bringing an editorial proposition to the world of directories. It has hired an editor and a production team to wade through "the stream of stuff" and choose the good bits and it has also enlisted the help of The 100, a group of socially-active Aucklanders who will provide interesting content. There will also be user-generated "ratings, reviews and raves" like that seen on Yelp.com and, while there are some concerns as to what effect malicious reviews from competitors might have on the overall ratings of a business, Glubb says, like Google's search algorithms, it's set up so that the truth will eventually out (negative reviews count towards the star ranking, but the comments won't be published).

Having the backing of New Zealand's most trusted retail brand, NZ Post, has had a big impact, he says. Localist was branded very separately, but the association still carries a lot of weight, particularly given the success of Kiwibank (adding to the 'trustiness', former Kiwbank chief executive Sam Knowles is chairman of Localist). When the sales people tell them it's owned by NZ Post, he says they "know they can hand their money over and we will deliver".

More than a few commentators have claimed two big entities getting involved in a nascent digital realm by investing in start-ups is bound to fail, and they always point to Ferrit, Telecom's ill-fated online shopping site as evidence. Glubb thinks there's too much emphasis placed on Ferrit and, despite a few detractors from the "Twitterati" who believe a government organisation could never build anything that people actually wanted, he says the case study to prove them wrong is Kiwibank.

"Everyone said it wouldn't work and that it was a stupid idea because it couldn't keep up with the big guys," he says.

We all know what happened there. And Glubb will undoubtedly be hoping similar miracles can be performed with Localist.

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