BIA/Kelsey has been promoting the development of reputation management for some time now and sees this area as defining the local space in the next three years. On a panel this morning BIA/Kelsey analyst Matt Booth hosted a discussion that included three players in the reputation management space: Matthew Berk of Marchex, Ben Smith of MerchantCircle and Alex Hawkinson of SMBLive.

Berk kicked off the panel by showing a few examples of Marchex’s reputation management solution that essentially captures three areas of content as it relates to SMBs’ existence online: ratings and reviews; snippets from the Web in the form of Twitter feeds, blogs and the like; and directory data to keep track of potential inaccuracies in business name, phone number, etc. Berk touted reputation management as a way for small businesses to save time and money by staying on top of their digital footprint. He believes the next step of reputation management is getting an SMB engaged in a conversation by engaging in leads, publishing content, offering specials and coupons.

“Four years ago there weren’t review for dentists,” said Berk. “Now there are dentists with hundreds of reviews. That’s just a fact. There’s going to be more of that and it’s going to get more fragmented.”

As Ben Smith of MerchantCircle noted, one common piece of feedback his company receives from its users is that they want a way to immediately respond to a negative review or correct, say, inaccurate directory information. As he indicated, right now, that’s just not possible with the push of one button.

One approach to reputation management that attempts to simplify the complex process of managing an SMB’s presence online is what SMBLive is doing via its CloudProfile offering. The idea is that a user can use one application to publish in numerous places via syndication such as making updates to their Web site, Facebook account, Twitter feed and the like.

Berk indicated that he’s betting on three things regarding the future of reputation management. He believes there’s going to be more and more content about SMBs and it will become more and more fragmented. He sees SMBs, particularly new SMBs, as being more willing to use and invest in technology. And lastly he’s betting that the tools will become more simplified and will not need as much sophistication for SMBs. He sees these things occurring and that SMBs will see the value in paying a premium to manage their reputation online.