When it comes to online advertising, most local businesses are clueless. According to a study by local advertising consultancy Marchex, just 5 percent of the $100 billion local advertisers will spend this year is online. Now I defy anyone reading this to tell me that online is just 5 percent of their ad budget.

As we all know, when online marketing is done right, the return on investment is usually much higher than print, radio or broadcast. Local businesses don't recognize that potential, as evidenced by "a recent Piper Jaffray survey showed that local search is now the second most common activity online," according to MediaPost.

Marchex expects the Internet share of local advertising to increase to 25 percent within a decade, but that is a low amount even for today. Based on my experiences in local advertising for my wife's business, I spent about 75 percent of the marketing budget during the past 2 years in print and the rest online, yet 95 percent of her business has come from Internet listings on directory sites. They are cheaper, interactive, and get the right audience, whether you are an accountant, plumber, or clothing retailer.

Think about how people divide their time interacting with media. People spend about 30 minutes or less per day reading the newspaper, maybe twice that listening to the radio, and much more than that with TV or online. Local advertising strategies should reflect that, especially when you consider that people's mindsets are more focused on buying something online than when they turn on the radio.

There is a huge opportunity for someone in each city to take local businesses by the hand and teach them all about online yellow pages, SEO and banner ad buying.

While it's still small by comparison with less than 3 million unique visitors in August, Veoh is quickly establishing itself as a platform for viewing (and advertising against) video content. Veoh grew by 346 percent according to become the ninth most visited video site Nielsen Netraings, while leader YouTube's growth slowed to a still impressive 66 percent.

VeohTV, an application that will compete with Joost by allowing viewers to record videos to their hard drive for later viewing, is helping to drive traffic. Although bandwidth is becoming less of an issue over time, being able to queue up programs, including a growing number of web-only serials such as Prom Queen and Afterworld, and watch at your leisure will become increasingly attractive as watching online becomes competitive with TV viewing. Now if only VeohTV could easily be watched on the big screen....

Veoh just received $25 million to further develop the platform and refine its ad strategy.
Television networks should be wary as more of their ad dollars will shift online unless they can develop interactive services that can compete with online offerings.

Video search engine Blinkx has teamed up with U.K. video ad network Utarget to monetize its vast library of video content. The company is testing pre-roll, post-roll and overlay ads that are can be linked to top level categories such as news, sports, and user generated.

Suranga Chandratillake, founder and CEO of Blinkx told me that the overlay ads, which run around the video through the Blinkx player and are contextual, aren't in high demand from advertisers today as they are still new. The ads can also be linked to keywords that are associated with the videos, such as banks or credit cars, he said.

The focus has been on geotargeting to reach Blinkx' U.K. audience, but relationships with U.S. based ad networks are in the works, Chandratillake said. I asked him about making news videos searchable or easier to browse, and he said that segmenting news such as text-based search engines do is an area that the company is researching.

So while Google is shunning pre-rolls for overlay ads, Blinkx still thinks there is hope for the pre-roll. It will be interesting to see which company can turn their massive video index and traffic into a more profitable venture.

Toy companies are scrambling to react to the marketing disaster caused by toys made with lead paint. As a Babies'R'Us customer, I received an email from the President, which takes the right approach in acknowledging the issue and pledging change.

Here are some of the changes promised by the company, according to the e-mail.

A new Safety microsite at www.Toysrus.com/Safety to help you find all product safety and recall information;
- The introduction of an email notification system for product recalls;
- The addition of bilingual recall notices should there be future recalls; and
- The introduction of new Safety Boards in all of our stores, which will contain important product safety information, including recall notices

We are wholly committed to our customers’ safety and have reiterated that simple, single fact to our suppliers and business partners. We will not tolerate products that do not meet our rigorous safety standards.

Disney and Wal-Mart have both promised independent testing of the toys they sell, and Mattel was contrite and promised to do more when testifying before Congress.

While the companies could have been more direct in saying that they should have done better up until now, this form of damage control is a good model for marketers. As long as they live up to the promises, their brands should recover.

Local search provider Yellow Book USA has added a unique function that enables consumers to share or save listings that they want to keep. Through a partnership with AgendiZe, the "Click-to-Save & Share" feature lets you send yourself email, text messages, or put a listing into your favorites (such as del,icio.us or facebook) or your Outlook address book.

This is a free service for all paid advertisers in Yellow Book, which differentiates the company from its competitors. A great pizza place or jazz club is worth remembering, and tools that simplify that process are valuable and should increase repeat business. As so much of our information is stored online, it makes sense to put our favorite retail establishments there too.

The service comes in handy if you want to store a restaurant on your cell phone or don't want to have to redo searches. While local search sites do allow you to save listings, it requires logging in, which is a real pain.

Alexandre Rambaud, founder and CEO of AgendiZe told me that you can send links to map through the GPS system or to WAP-enabled phones. He said the technology can be used in banner ads or movie listings, or shopping carts, or virtually any type of ad.

More than ever marketing is a conversation, according to a white paper authored by Communications Company Ogilvy, blog search company Technorati, and industry expert Doc Searls.

Social media and blogging are the most effective ways to enhance branding, or as they put it "Conversational marketing is one of the best ways of ensuring that a brand stays relevant."

That conversation is largely controlled by the middle tier of bloggers who have between 20-1000 inbound links (like us!), the paper says. These bloggers are the influencers of public opinion, and companies should listen to and promote what they are saying.

"We often call this grouping the “magic middle” because it’s where you find the most knowledgeable, well-informed and consistently engaged folks in the conversation. These are people who invest huge amounts of time and passion in the topic or cause. They’re bloggers who link to other bloggers, carrying on an intense multidirectional exchange of ideas and points of view, which is a powerful force in moving and shaping market conversations."

The paper includes several examples of effective campaigns where marketers used blogger quotes in their marketing materials, including promotions for the films An Inconvenient Truth and Shut Up and Sing. However, these examples aren't the best because they were built around politically charged and topical issues, which aren't relevant to most campaigns. I mean who's going to blog about tan lines or dryer sheets?

So us middle tier bloggers can expect to be getting lots of love from the marketers who want to sway us, or at least promote the ideas with which they agree. By sending me this white paper, Oglivy is putting its theories to work. Will it be successful?

Both Google and Ask.com have made it possible to embed maps of local searches on web pages. The tools enable you to define a category and area and highlight the relevant establishments.

This is helpful because you can save searches and share them with others, highlighting your favorite places or showing how convenient it is to access other businesses near your location. Marketers can gain exposure by making the tools available on their sites, or by individuals who independently post maps on their social networking pages.

Ask.com is pushing hard to capitalize on the local search market through AskCity. Local search is still largely an area of blight in need of some major urban renewal in innovation. Finding the most relevant retail establishments in an area should be easier, not harder, than find obscure facts from Google, but we aren't there today.

Source: Resource Shelf

A study by William Blair and Company and AdGooroo quantifies Google's stranglehold on search marketing. Ninety percent of search advertisers work with Google, while Yahoo and MSN have the remaining 10 percent of advertisers. But half of Yahoo and MSN's advertisers also work with Google.

This is analogous to PC market, where Microsoft has approximately 85-90 percent or so of all desktop OS shipments, with Apple and Linux fighting over the scraps. Just as MS is under more intense scrutiny for potential anti-trust infraction, so is Google closely watched because of its ability to change the market at will.

The report (Google is a client of William Blair) says the number of advertisers is outpacing industry growth, so the "long tail" is getting longer as more niche players fight for obscure keywords.

If you want to participate in search marketing, you'll have to contend with Google. Search marketing isn't the entire online advertising universe, so companies who want to avoid Google can utilize display advertising, etc to achieve their marketing goals.

Software company Omniture is building an impressive array of applications for tracking consumer responses to alternative content. This gives marketers new flexibility in customizing content based on demographics or behavioral information.

Omniture just bought Offermatica, which uses a "sophisticated multivariate approaches to test visitor response to real-time changes in online content," or if math geek is not your primary language, allows you change the content presented to consumers based on prior behaviors to see if they become more engaged. Omniture previously purchased TouchClarity, which makes software that customizes content for readers on the fly, and the companies will integrate the technologies.

From MyYahoo to customized recommendations on Amazon or NetFlix, tailoring content to individuals is becoming the rule, not the exception. Applications like those being offered by Omniture allow you to not only tweak content, but also try multiple pieces of content (or customized versions) to see what works before fully changing your strategy. For example a redesigned website could be shown to a portion of the audience to see if it increases clicks before committing to a site overhaul.

An interesting application that uses videos and widgets to market products is TurnHere's video channel for promoting books by interviewing noted authors.

The company has expanded the distribution of Bookvideos.tv by distributing the videos through blip.tv, blinkx, Veoh, and others. TurnHere has a widget for its video player too, making it easy to share, comment, and add interactive content to the videos.

Why watch a video interview with the author of the book that you are considering purchasing? Because like the Inside the Actor's Studio show with James Lipton, it gives you perspective on the personality of the artist, just as seeing what Hugh Laurie or Nicholas Cage is like beyond the sound bite. I've often wondered if my favorite authors are as interesting as their writing is (John Irving tops my list).

We can expect to see more videos of CEOs talking about their companies or product reviews like on Cnet TV as we shift from a text dominated Internet to more of a balance with video. While corporate videos aren't like to be viewed often as widgets, user-generated and professionally-authored reviews will be spread far and wide through networks such as Veoh, blip.tv, and Cozmo.tv.