Newspapers and offline yellow page directories have traditionally been the mainstay of local advertising. That might be about to change as local search becomes the latest business opportunity to be exploited online. (June 5 2005) It's no wonder, as Kelsey Group reports that U.S. businesses spend $90 billion annually on local advertising. Online search portals are focused on monetizing search and want a piece of the pie.

Small Business—No Small Potatoes

Government data consistently shows that the bulk of new job creation is in the small business sector—it's something like three out of four new jobs.

In fact, the U.S. Chamber of Commerce reports that America's 23 million small businesses employ over 50 percent of the private-sector workforce. Not only that, small businesses account for over half of the U.S. GDP.

As broadband becomes prevalent, and consumers routinely use the web to research and buy products, the importance of local search becomes increasingly apparent. Current estimates say 40 percent of search engine queries are for local businesses and services. Couple this with research that shows 92 percent of local searches convert later offline, and you can see an emerging pattern of consumer behavior.

This hasn't gone past the major search portals. They're out to win the hearts and minds of consumers and business owners alike by focusing on local search functionality. By now, most search portals have a yellow pages or local search component with access to local listings. There's Yahoo!! Local, Google Local, AOL Search, Verizon SuperPages and more. MSN just announced plans for a satellite mapping system to enhance their local listings.

Consumer Habits Are Changing

In March, the Kelsey Group revealed that 70 percent of U.S. households use the web to research information when shopping locally for products and services.

To quote Kelsey VP Neal Polachek, "Use of the Internet as a shopping resource is already changing the face of local advertising."

Kelsey Group also predicted the web would likely surpass newspapers as an advertising medium in the near future.

Comscore-Media Metrix reports that local search more than doubled from January 2004 to February 2005, with over 421 million local web searches conducted in February alone. Yellow pages online have also increased traffic about 46 percent during this period.

The new consumer modus operandi seems to be first, research online; then later, buy offline.

A sampling from research findings highlights this behavior.

• DoubleClick-comScore reports that half of online shoppers conduct search engine research prior to making a purchase.
• Overture-comScore found the average online buying cycle to be over one month.
• 85 percent of the conversions were latent (not directly following a search session).
• 38 percent of the conversions took place in weeks 5 to 12 of the buying cycle.
• 92 percent of all computer and consumer electronics purchases occurred offline.
• Only 1 percent of conversions occur in the same online session.

Small Businesses Flocking Online

Small businesses are finally ready for online marketing, as consumers adopt web search with a vengeance. Approximately 14 million small to medium sized companies in the U.S. don't have websites. Yahoo! is there to help by offering a free website to any small business with a physical location.

Even if you don't have a web site, a Yahoo! local listing can provide an online presence. Many consumers searching for local businesses don't purchase online—they just want to find a business nearby to shop in person. So having a local listing can bring a lot more business your way.

Another way to get a web presence of sorts is to buy pay-per-call search engine advertising. This gives you an informational landing page online where you can publish your business name, address, an 800-number, business information and a call-to-action message.

ReachLocal specializes in local search, offering a cafÈ menu of local search services, including: search engine and Internet yellow pages marketing, pay-for-performance advertising, reporting and tracking, quick and easy web presence, and other Internet marketing services.

Local Listings Give Easy Access

Using local search can be faster and easier than flipping pages in a phone book. Just click the local section of your favorite search engine and key in the type of business or service you need along with the location. Voila, you have a list before you that includes:

• The name of the business and contact information
• Description of the products and services
• Business hours of operation
• Website link, if applicable
• Map link for location

Customer review link (not all engines have this)

I've tried them all and find Yahoo! Local to be the best. When I searched for a local business in my town, Yahoo! served all local results. However, performing the same search on other engines resulted in only 2 in my town and the rest in adjacent areas.

Getting Listed

If you own a local business, make sure you get found by submitting a local listing. It's similar to filling out an online form. Look for a link to the sign-up page on the search engine homepage. It's easy to set up an account.

Here's how it works on Yahoo!:

• Enter your contact and business information in the form provided. This includes name, phone, email address, company name, hours of operation, etc.
• Select the categories for your listing, which may include a main category and subcategories (restaurants would have subcategories by specialty, as would physicians).
• Confirm local listing: Check to see if your information is correct.
• Submit local listing: This activates your listing.

Yahoo! offers a free submission and an enhanced listing for $9.95 per month.

A Yahoo! Local enhanced listing helps you stand out by displaying your business tagline or marketing message in search results and providing two customizable links to coupons or special offers on your website.

So, is local advertising revenue up for grabs? You bet, and you ain't seen nothin' yet.

     --Paul J. Bruemmer is founder of trademarkSEO.com His articles have appeared in numerous publications, including ClickZ, MarketingProfs, Marketing Today, WebProNews, SitePoint, SEO Today, SEO Consultants, MarcommWise, Pandia, B2B Interactive and Search Engine Guide. TrademarkSEO is a search engine optimization firm based in Santa Ynez Valley, California and serves clients nationwide. His company provided search submission services to over 10,000 websites, including many of the most prominent names in American business.