With many auto dealers closing their doors or cutting back on advertising, AutoTrader has announced that it has laid off a “modest percentage” of its field representatives to keep the company stable.

In a video addressed to the AutoTrader community,  CEO Chip Perry and Sr. VP of Dealer Sales Alan Smith emphasized that the Cox-owned company is “rock solid” and is “very bullish on the future.” They noted that traffic to the site hit a record 16 million visitors last month and they believe there is “pentup demand” in the marketplace.

AutoTrader is beefing up its on advertising, as it anticipates more auto marketing dollars moving online. Three times more is being spent on advertising in 2009 than in 2008, said Perry.

The company is also investing “tens of millions of dollars”  on technology and in a NADA program to train reps how dealerships work. The tech investments  include a new home page that makes dealer links and car offers more prominent.

Highlights from our discussions have been issued in a client report for The Kelsey Group’s Interactive Local Media program. But all agree that the industry has been given a black eye by overly aggressive sales tactics and poor follow-up.

But they also report real progress in engaging their customers. And unless Google and others find a way to sell these accounts on their own — and they haven’t — these companies feel like they’re in good shape.

“At the end of the day,” notes WebVisible CMO Kevin Ryan, “what [advertisers] want to know is how many leads they got; the cost of media; how many people watched videos on their site; how many people got text messages. Actions that have a chance to turn into conversions are the true quantifiable return for the SMBs.”

Marchex President John Keister notes that churn is an issue, but the churn numbers decrease as advertisers “move up the transparency chain. Different advertisers will respond to different things,” says Keister. Ultimately, it is all about selling them “transparent” advertising  that clearly bring in ROI. “They all want to see the transparent value. And that doesn’t always mean ‘clicks and search.’ ”

For Yodle CEO Court Cunningham, there is little doubt that value-added resellers like Yodle add value to SMBs. But only if they get a chance to be educated about the value they bring.

While churn rates are very high at first for the entire industry, after six months, Yodle’s churn rate is just 1 percent more per month, or 12 percent per year. By that point, it has had a chance to educate the customers, and they will have seen the value for themselves. “We’re dealing with a marketplace segment where 40 percent still don’t have a Web site,” he says.

The entrants will be judged by an all-star crew from IAC and other places. The winner will illustrate how the new Sidewalk will let people “live life on the go” on the Web and on mobile. The solution will also integrate well with Citysearch’s taxonomy, directory, content and other open APIs focused on local, and obviously leverage traffic from Citysearch’s publisher network.

Entries are due July 17, and winners will be announced in mid-September. Entrants should log onto www.sidewalk.com to enter. They can follow updates at twitter.com/sidewalkdotcom.

The Old Sidewalk

Coinciding with its high showing in the Quantcast analysis, MerchantCircle today announced that it has added a local city coupon feed for Twitter. Merchant coupons will now be fed to city-specific Twitter feeds (i.e., @MCircleNY) so local consumers can find local coupons and events in real time.

MerchantCircle reports that more than 50,000 coupons and events are built on its system every month by local merchants.

Figuring out who is on top of the heap in the online directory business is a complex task: On one hand, a “directory” category is kind of an oxymoron, given that so much of what is quantified is based on search engine optimization.

Only 25 percent of Citysearch’s traffic, for instance, comes from its destination URLs. Some sites, such as MerchantCircle, barely have a directory — they’re mostly about being discovered by a search engine.

Yet we have still attempt to label “top directories.” Obviously, these leaders are going to be the masters at both optimization and destination.

According to Quantcast, here are the leaders, in order:

1.    Yellowpages.com
2.    Superpages.com
3.    Citysearch.com
4.    Yelp.com
5.    Merchantcircle.com
6.    Local.com
7.    Urbanspoon.com
8.    Insiderpages.com
9.    Yellowbook.com
10.  Servicemagic.com

IAC’s aggregated share in the Quantcast report is of special note, given its ownership of Citysearch, Urbanspoon, Insider Pages and ServiceMagic, and its investment in MerchantCircle.

Today is Herb Gordon’s last day as a consultant to the Association of Directory Marketing, Inc., although he will continue to edit ADM Flash. Flash, the newsletter of the ADM, is sent to more than 1,500 people, and its stories, factoids and tidbits provide direction to those of us in the Yellow Pages industry. Herb is a prolific reader and using both offline and online sources, ADM Flash will advise you that “Yellow Pages Group launched a new local guide for living green and recycling” (press release), that Verizon ranked first in ad spending at $2.2 billion in the U.S. in 2008 (AdAge) and that “SmartPhone rises fast from gadget to necessity” (NY Times). It is one of those pleasant reads that is valuable, interesting and fun.

I called Herb to wish him well. In my view, Herb has had a very positive impact on the industry. He has been a constant in the middle of continuing change, and he has helped guide the industry with a steady hand. (Some of the other leaders with similar credentials include Jim Logan, Elmer Smith and Marilyn Neal … although there are many more.) Not surprisingly, Herb is positive about Yellow Pages. “As a member of all three industry boards — ADM, ADP and YPA — I am convinced the industry has the top management to weather the economic storm and be stronger for it.”

Before joining the ADM as president and CEO in 1991, he was the president of the Yellow Pages division of Ketchum (where he had worked since 1965) and had also been president of a division that encompassed direct marketing, sales promotion and a medical unit. “This experience prepared me well for my responsibilities at ADM. I came with an appreciation of quality research and marketing, the importance of good communications and a sensitivity to responding quickly to clients.” Herb is quick to give credit where it is due. “Any manager knows that he is only as good as the people on his staff. I’ve been blessed in that regard and particularly that Nancy Augustine has worked with me in three different assignments over 30 years. She is one of the most effective executives I’ve ever known.”

In response to a question about what stands out during his career, Herb said “the resounding success of Yellow Pages’ call measurement programs, such as Marketing the Medium and Measurement and Accountability Partnership. Return on Investment is the backbone of these initiatives.” Because the industry “can readily prove it delivers customers with positive ROI,” Herb believes that “the Yellow Pages industry is very well positioned for the future. It has good Internet products. While print references have dipped, the effect is moderate compared to other traditional media. The print product still delivers cost-effective leads for advertisers. There is a strong local and national sales force. Publishers, CMRs and suppliers are willing to invest. I’m very optimistic about the future.”

MojoPages, a 12-person local search/directory player based in the San Diego beach town of Solana Beach, has landed $5 million in Series A funding from Austin Ventures. Mojo has settled on $5 million as the amount it needs to get to breakeven on a cash flow basis, says CEO Jon Carder, who founded the company in 2007 after he got “ripped off” by some movers and wanted to build a local ratings and review site.

Carder notes that Austin Ventures was introduced to the company by longtime industry vets Jeff Stibel of Web.com and Dan Finnigan of Jobvite, who previously led local efforts with Yahoo, Knight Ridder and Pacific Bell. Both had been Mojo angels. Altogether, Carder says that angels have put about $1 million into the company, while he has put in about $500,000.

The company itself has been in the middle of transition. Shortly after launching, Carder says it began to move away from its initial focus on being a destination site. It had become quickly apparent that destination sites require lots of community interaction and there are already major entrenched players in the space, such as Yelp and Citysearch.

Today, the company includes a bevy of content sources, including reviews from Citysearch and Insider Pages. But it is primarily a traffic aggregator “generating tons of traffic,” says Carder. While community development efforts will continue to be supported, a small company has to focus on one thing or the other, he says. And fast, relevant and linked search wins out.

Part of the strategy going forward is to power local search for local media companies, basically charging a CPM rate of around $8. Already, the company  has deals with a number of TV and radio outlets, including Salem Broadcasting, Tritan Digital, Belo Corp. and KSMB in San Diego. It also has advanced field trials with “the largest” newspaper, TV and radio players, says Carder. The signup efforts have been marked by aggressive sponsorship of San Diego-area industry events for newspapers, TV and radio stations, Yellow Pages and geodomain sites.

Efforts with the site should heat up further in September when a new version of the site is released. At that time, prior efforts at community, including large urban parties sponsored by advertisers, will be de-emphasized in favor of the new focus on search. They were fun, but barely breakeven, say Carder.

Today’s MojoPages news has coincided with several recent announcements from Local.com, which is probably MojoPages’ most direct competitor in vying for local search contracts via its white-label division, formerly known as PremierGuide.com. (Other competitors include Localeze and business directory products from Travidia and HarvestInfo. Several other companies have either folded up or been acquired.)

Local.com recently signed two major Belo newspapers: The Dallas Morning News and The Riverside Press-Enterprise. It has also secured a window of $10 million in new credit, secured by assets, that could be used for acquisitions.

Kaesu, a provider of online services to free community papers, has received “more than $1 million” to jump-start its efforts. The strategic investment, from Media Space Solutions, is geared to open up community paper inventory around the U.S. for Media Space’s national advertisers.

Kaesu, a four-year-old company with fewer than 10 employees, has ties with more than 100 community paper companies. It also has signed some local newspaper companies, including 45 titles from North Jersey Media. It generally charges a flat monthly fee for its services.

It is not the first time a media company has tried to organize community papers into a hyperlocal network for national advertisers. The Web operation of at least one TV network has attempted to do the same thing. But community papers have generally been too ad hoc (and cheap) to effectively work with.

Pete Previte, Kaesu president and CEO, says the investment will help jump-start Kaesu’s efforts in helping its papers out-hyperlocal the hyperlocal companies. “It is enough to get to the next step,” he says.

Moreover, efforts like this could represent a new era for the free community newspaper community. While the industry has had something of a downturn, he notes that it has been in a much healthier position than daily newspapers. Indeed, some papers have even seen revenues increase, despite the sour economy.

While the community papers have generally had lackluster online results, Previte says Kaesu is well-positioned to boost results. It helps that the company is made up of industry veterans who speak the papers’ language.

The company helps the papers get up to speed by providing a suite of online and offline tools that help their businesses in general. For instance, it provides electronic tear sheets, online proofs and e-mail communication tools. The online tools that are at the heart of Kaesu’s system can be used to produce online coupons, videos and Web sites.  NVSuburbanite.com, which is located in Cresskill, New Jersey, is an example of a Kaesu partnership.

Niche publications serving specific demographics, like gays, seniors or Koreans, can make a lot of sense, whether they are online or in print. But not every niche is the same.

Longtime YP executive Dick Larkin, the “Small Business Commando,” lays out some rules of the road for niche advertising in the latest edition of his newsletter.

“Your customers want respect, acceptance, and integrity,” says Larkin. “Advertising has to ring true for it to be effective.”

In selling to niche audiences, Larkin advises publishers to brutally assess their own strengths. The only publications that should get the business are those that better serve niche needs than competitors. A tougher question: Would they refer their own friends to a niche business?

In an action that could have broad implications for the classifieds industry, Yahoo HotJobs has added a “Pay Per Candidate” model that guarantees recruiters aren’t paying for untouched “ghost” listings. Pay Per Candidate only charges recruiters when candidates view a listing and act on it.

The HotJobs model, similar to efforts launched by niche recruitment sites such as Indeed, allows recruiters to put a ceiling on the number of applications received. Recruiters can also screen candidate credentials so they aren’t paying for unqualified applicants.

HotJobs’ move suggests continued evolution up the search ladder, and the industry’s growing efficiency (and complexity). It is easy to see how Pay Per Candidate could similarly be applied across the board for car sites, real estate sites and other classified segments.

Theoretically, a next step for HotJobs would be to add more searchable elements, matching searches to candidates, and charging a premium for conversions, a la some of the installations of Vast.com’s service.