Local Listings Domino Theory

Four years after Yext went public, market consolidation finally appears to be happening in the local listings management space.

Local Listings Domino Theory
  • Several years after Yext went public, investors are showing renewed interest in the local marketing solutions/SaaS/presence management segment.
  • Listings management has grown and fragmented since the Yext IPO, but there’s a perception it's now a commodity. So companies are building an expanded product suite around listings.
  • Recent IPOs of SEMRush and SimilarWeb may be partly responsible for a new wave of consolidation that appears to be happening.

The local listings management/store locator business has been on a bit of a roll lately. In just the past few weeks we've seen big funding rounds and acquisitions:

What's driving all this activity?

Market Consolidation Delayed  

When Yext went public in 2017 I mused, "Companies like Brandify, Location3, SweetIQ and yes, even Moz, should be rooting for Yext’s IPO to be a smashing success as it would validate their business models, increase the appetite for more investment, and (I can hear those hands rubbing and lips smacking) create currency for consolidation."

The consolidation dominoes fell a bit, but there wasn't the mass hoovering event I anticipated. Gannett acquired SweetIQ (which Uberall subsequently acquired from Gannett), Reputation.com acquired SIM Partners, and Binary Fountain acquired Rio SEO (then Binary got acquired by Press Ganey). Perhaps there were others I missed. What stood out to me was that Yext chose to grow their business via sales rather than buy a competitor – although it did buy Robin Allenson's Inner Balloons to get a foothold in Europe well before its IPO.

Listings: Everyone's Doing It

Instead of mass consolidation, local listings management (LLM) went the way of most local-oriented industries: it fragmented. Now there are probably hundreds of companies around the world offering listings management. (I can hear all the groaning out there, "We don't just update listings! We've got review monitoring and chatbots and all sorts of bells and whistles, etc.") So yeah, everyone does a lot more than listings management. But LLM is still how many of your customers view you, so let's keep using that term for simplicity.

We've got a lot of big and small companies doing listings management and related stuff. Advice Local, Chatmeter, Brandify, Location3, Milestone, PositionTech and SOCi are the first ones with a significant number of locations under management that come to mind. So what's going on?

$SEMR (SEMRush) and $SMWB (SimilarWeb) seem like the obvious culprits.

With market caps of $2B+ and $1B+ respectively, non-public digital marketing businesses have to be thinking about how they can bulk up and take a crack at that sweet IPO money. And public digital marketing businesses, like iContact parent J2 Global are likely thinking about how they can expand their footprints, and of course their multiples.

Let's also not forget about the seeming explosion of local (and non-local) digital marketing dollars that appears to have been triggered by the post-shelter-in-place opening up of the economy.

So more consolidation is probably coming.

Local Foot in the Door

A commodity is a "basic good used in commerce that is interchangeable with other goods of the same type." At this point, I would argue the core of LLM qualifies.  

Perhaps that's why Yext is now going in a different direction, focused on growing its Answers site-search product. And perhaps it's also a reason why Yext hasn't picked up any of these competitors. But for businesses that don't have a sales engine like Yext, buying into relationships with multi-location brands could be a great way to accelerate growth or get to the public markets faster.

It will be interesting to see how this segment evolves. What started out as tools to update business listings has evolved to include services like review monitoring and responding, social media posting, local ad management and chatbots, to name but a few. I am surprised none of these players has jumped into online-to-offline attribution yet. It seems like connecting these local digital efforts to in-store visits is a big missing link.

The good news for companies in this space is that, in most enterprises, "local" is still the most ignored part of the business. That's probably because it can also be the most complicated. If you can get your foot in a brand’s door with listings management, there's definitely got a lot of room to grow.  

Andrew Shotland is the CEO & Founder of LocalSEOGuide. Follow him on Twitter at @localseoguide.