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Local Search's 2008 Outlook

  |  January 3, 2008   |  Comments

Last year's Apple iPhone roll out and Facebook's growth have direct implications for local search in the coming year.

This week, it's easy to find lots of articles looking back on the year's top stories and forecasting the new year -- unless your industry is online local search.

Where can you find this kind of information for the local search marketplace? This year, you can draw it from 2007's top technology stories. Two of last year's top 10 tech stories have direct implications for local search: the iPhone's debut and social network Facebook reaching more than 58 million users.

The iPhone's Maps

I still contend the iPhone's best primary application is the Maps tool (a.k.a., its local search application). Everything else on the iPhone was already in use in other devices. It has a camera, music, and a phone. But the device I purchased in 2006 included all three of these applications. Admittedly, the iPhone put these applications, and many more, into a uniquely sophisticated and cool device.

The Maps application utilizes Google Maps, and Google reports its Maps tool usage has increased since the iPhone's release. Clearly, Apple extended an application to an additional consumer touch point. Such an extension will help local search's cause overall. The iPhone has set the bar very high, and already other carriers and device manufacturers have introduced similar products that include local search applications.

The Social Network Graph

Facebook's growth also bodes very well for the overall local search marketplace. A deal to sell a small percentage of the company to Microsoft implies a $15 billion value for the not-quite four-year-old company. Advertisers are intensely interested in tapping into the social network's audience. Facebook has devised the "social graph," a network of connections and relationships between people on the service. Advertisers probably prefer to call this a unique ability to segment an audience to sell products and services.

Interestingly enough, online prognosticator eMarketer has begun to isolate the advertising dollars spent on social network sites. The forecast for 2008 is $1.5 billion, a 70 percent increase over 2007 spending.

Already, many local search directories have tapped into the Facebook phenomenon to increase their own usage and ability to monetize their products. Essentially, these directories enable their site users to use Facebook to drive traffic back to their sites through reviews and recommendations.

Local Search in 2008

So what are the big predictions for local search in 2008? It's more of the same but at a much more frenzied pace than what we've seen yet. Geo-local and vertical local search directories will continue to grow, as they did in 2007.

By my count, about 50 companies launched one or more sites dedicated to online local search. This is a 250 percent increase over 2006.

For the past several years, there's been a subtle vertical segmentation in the local search space. Going forward, it'll be much more pronounced and deliberate.

Focus on mobile advertising will also increase, but I'm not sure we'll see the growth many anticipate. According to a recent eMarketer report, mobile advertising spending in the U.S. will exceed the billion-dollar threshold for the first time this year. There's huge promise tied to mobile advertising; your phone has a lot of specific and detailed information about you personally and where you go physically, further advancing local search. I liken the mobile frenzy to what happened when online local search came to the forefront in 2004.

Keep in mind that so much of the success tied to social networking and mobile advertising is directly linked to the online local search space. Remember, today's local content is directly linked to the efforts and achievements made in years past.

Want more search information? ClickZ SEM Archives contain all our search columns, organized by topic.

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Brian Wool

Brian Wool is VP of content distribution at Localeze, a Chicago-based local search company. Established in 2003, Localeze specializes in connecting consumers with local merchants through online content collection, enhancement, and distribution. An expert in local Internet search marketing, Brian leads the distribution efforts at Localeze and is responsible for content delivery to over 35 leading search engines, Internet yellow pages, and local directories. Brian previously held various sales and marketing positions at comScore Networks and Claritas.

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