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Tuesday, December 26, 2006

Local Search Ready for Takeoff

In a previous post I complained about the high cost of print directory advertising and said that more users will be shifting their search for a local service or product online. The print yellow pages continue to own much of the local advertising dollars because online services haven't done a great job at advertising the benefits of searching online.

During the past few years, local search has integrated maps to make the service more useful, but the search engines should do more to promote and differentiate local search to both consumers and advertisers. The search engines and online yellow pages need to get the word about why they are better than print directories to grow their audience.

According to MediaPost, local search advertising will nearly double in 2007 to $1.83 billion, and all forms of local advertising will grow from 25 to nearly 30 percent of the online market.
There is plenty of opportunity for growth as just 5% of small and medium-size businesses are using paid search, according to BusinessWeek.

To help local advertisers target their customers, Skyhook Wireless is developing technology that identifies a computer's physical location by triangulating the WiFi connection. This makes sense as
local advertisers have smaller budgets, and so they don't want to waste their ad dollars on out-of-market readers.

Local advertising companies will have to do considerable hand holding to make smaller companies comfortable with display advertising and pay per click fundamentals. I would think that small biz would feel more at ease with pay per action, especially with the continuing problem of click fraud.

Local search should be more effectively integrated into general search. Typing in keywords for service should generate responses that include local search, and search providers should use geotargeting to get the process started. Search sites such as CitySearch, Local.com or YellowPages.com should emphasize registration so that they can track users and offer the most relevant responses without requiring a zip code to be entered every time.

Maybe I'm being overly optimistic, but local search advertising has the potential to be on par with print directories in revenue within a few years. With Web 2.0 technology and more relevant results, finding what you need online should be much faster.

By John Gartner at 01:43 PM | Comments (0)

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