Internet Searching Hits Close to Home

By Neil Street
Posted Sunday, July 4, 2004

Search Engine Marketing Convention in New York drew thousands of attendees eager to hear the latest news in online search, one of the hottest topics in marketing today. Why is it so hot? Consider this simple statistic: at the forum on local search marketing, the combined value of U.S. sales driven by the various search engines represented on the panel was estimated to be $40 billion annually. The estimate may be wildly innaccurate, but whatever the true figure is, one thing is certain: it isn’t pocket change. It’s big, big business.

The general consensus at the convention held that local search (a term that actually covers more than just search engines) is the big prize for companies seeking a portion of the dollars that are increasingly expected to be spent by both national and local advertisers aiming at local markets.

The reason that companies large and small are salivating at the prospect of these local online ad dollars is that consumers are increasingly using the Internet to search for local goods and services. In that sense, consumers are leading the charge in this new direction – the search engine and directory companies are trying to catch up with what is already an established trend. One often quoted statistic, courtesty of Yahoo (who, with their amazing database resources ought to know) is that at least 30% of all searches in a given month are for local goods and services. What’s more, the trend is increasing. It’s easy to understand why consumers are searching this way – the Internet as a medium is inherently more capable of serving up extensive, and often interactive data in response to a query than any other media.

At this point in the development of the Internet, it’s unclear how the online marketing messages of millions of local businesses will be served up to the end user. Currently, most small businesses do not even have a web presence to which consumers can be directed. Then there is the question of directory versus search – how will the consumer look for the information, how will it be delivered, and most importantly, what will it cost the advertiser? Today, a number of different models are competing in a race to offer the best model both from the view of the advertiser and the view of the end user. Google is beta testing a search method that serves up local results, which will of course tie in with Google’s Adwords program (paid little box ads next to search results). Yahoo is blurring the lines with their new offering, which is a “paid inclusion” model that then ranks a site based on relevancy, and, as if that were not complicated enough, blends it with a “pay per click” model. Verizon is unveiling similar “blended” strategies through their Superpages directory, and other players are rushing to market with their plans and programs.

What to do while the major players sort out the field? If you are a website owner with a local focus, now is the time to start getting familiar with the new opportunities: check out Yahoo’s new “paid inclusion” program (offered via Overture); Citysearch is worth a look; Google is beta testing a local version of Ad Words; and the Internet Yellow Pages from Yahoo and Verizon are both worth evaluating. And don’t forget to optimize your site for search, through appropriate use of keywords plus geographic modifiers. Beyond the website owner, the boom in local search affects anyone involved in local commerce. Whatever your role, it’s important to be aware that an economic sea change is taking place. Remember that consumers make most of their purchases within 50 miles of home. Like politics, most business is local. Any major change in how consumers shop for those purchases is an important economic event.

About the Author
Neil Street is co-founder of Small Business Online, based in Wilton, CT., a website design, management, and promotion company dedicated to the Internet needs of the small business. His website is at (http://www.smallbusinessonline.net) Send email to neil@smallbusinessonline.net He can also be reached at (203)761-7992