Local search advertising continues to grow
One of the fastest growing areas in the world of online advertising right now is that of local advertising, particularly that of local paid search. According to a recent report by Borrell Associates (www.borrell.biz), local online advertising will grow to be “a $7.7 billion category in 2007, reflecting a 31.6 percent growth over 2006.”
In a previous local search post, I mentioned that the three main search engines are driving this growth and accounting for almost two-thirds of the spend in this sector. In fact, up to 2004 almost the entire spend on online local advertising was driven by banner advertising or yellow pages’ listings, but there has been a marked shift in the past two years with search beginning to take a bigger share of this spend. In addition to paid local search advertising, local e-mail advertising is also expected to contribute to the overall pie in the next few years.
The buoyancy in this segment means that numerous media players have caught up on the immense potential of the local online advertising market and are expanding their sales force. Not unexpectedly, the real estate and automotive categories are witnessing the greatest amount of activity, garnering about one-third of all local online advertising spend in the US.
How online classifieds are shaping local advertising
In September, comScore released an analysis on the consumer activity in the area of online classified sites. The study highlights that traffic to these sites grew a phenomenal 47% in the past year to reach 37.4 million Internet users, reaching about 22% of the total Internet population. The leader of the pack, Craigslist.org registered a 99% growth in traffic during the year! According to a comScore analyst, it is clear that Internet users are now catching on the phenomenon of online classified advertising as this segment grows at a faster clip than many others and this is undoubtedly influencing the way traditional media companies are approaching the classifieds business.
What should be of interest to online marketers, beyond the obvious potential of the volume of traffic that this segment is recording, is the nature of the audience that is driving the traffic. The above-mentioned comScore study also highlights that young professionals in the age group of 25-34 and high-income households tend to visit the classified sites much more than the average.
So, if you are an online marketer trying to reach the demographic of the young, affluent professional, can you afford to ignore this particular advertising vehicle?
Preparing for mobile search
There is another very important reason for adding local search to your marketing mix, even though it may seem premature at this point. It is the inevitable proliferation of mobile search advertising, and when that happens, the most likely beneficiaries will be those who are advertising in local search.
Admittedly, mobile search is far from achieving critical mass. One of the main reasons for this is while today’s mobile phones have the capability to allow users to surf the Internet, the proportion of users knowing how to really set up and use them for this purpose is very small. A number of players are now engaged in making it a lot simpler for users to use their phones for surfing the Internet more, and we aren’t too far away from that happening.
While Google has been testing its pay-per-click ads on the mobile search network, Yahoo has also launched a beta test of its mobile search ads in the US, after a trial run in the UK and Japan. The rationale of these companies banking on mobile search is very simple: at any given time, there will be more mobile phone users than computer users. Imagine a mobile phone user on the road looking for a particular outlet or service in the neighborhood. His search is bound to be very local and he is interested in only the local results. Obviously, the odds are pretty much stacked in favor of companies/ advertisers that the user finds with such a search.
Big opportunities for smart marketers
As eMarketer wrote in an article recently, “there is nothing small about either the size or the growth rate of the local search market. The implications are very clear for marketers: local search offers large opportunities for marketers in terms of both high-precision targeting as well as their disposition to take action upon seeing a marketing message. There’s everything to gain in tapping into the local search and online advertising channel.
0 Responses to “Local search advertising grows”