Local Advertisers Lack Search Zeitgeist

Google’s annual Zeitgeist report is the first to include the most popular local search queries of the year.

The local search report includes the top five most popular queries for health, sport and professional services, (e.g. “doctor” and “real estate”); and the top local entertainment and cuisine searches, topped respectively by “spa” and “pizza.”

When these terms are searched on Google Local, only 1 in 20 queries generate ads from local, as opposed to national, advertisers.

Industry experts say this low number of local advertisers indicates how far both Google and Yahoo have to go to make local search advertising viable for local businesses.

“If you click on the general search queries in Google Zeitgeist, almost none of them have a genuine local advertiser come up in the AdWords space,” said Dana Todd, EVP of SiteLab International. “Almost all of them are national advertisers.”

Search’s potential to transform interactive marketing has been a resounding theme in 2004. Google Zeitgeist reveals search engines’ limitations when drilling down into local advertising, where the majority of ad dollars are spent, said Dave Morgan, chief executive of TACODA Systems.

“The problem is, you can launch thin information services on a national basis fairly easily. But when you want to offer real value to a local geography, it gets hard. Nuance and depth get very important,” Morgan said.

An estimated 15 million local advertisers use yellow pages services in their local communities. The number increases to around 25 million when newspapers and other local media are added into the mix. Bearing those figures in mind, Google, with its advertising base in the hundreds of thousands, has, “barely scratched the surface of what’s out there in terms of reaching a critical mass of advertisers that could be relevant to local search. Yahoo has the same problem,” Morgan added.

It’s generally believed an on-the-street sales force is needed to convince small businesses of local search advertising’s potential, and what Todd calls “a middle layer” service that would make complicated search advertising more accessible to smaller businesses that fall outside Internet-based business models.

“Google has loads of technology, but this is one marketplace it cannot automate its way into,” Todd said. “In order for them to monetize local search with locally based advertisers, they are going to have to have people walking down the streets, knocking on doors explaining AdWords to local dry cleaners. That’s not going to happen anytime soon, because they don’t have the people to do that.”

Both Google and Yahoo are aggressively seeking strategic partnerships with yellow pages providers and other local media to address that critical gap. Google’s October announcement of a deal with BellSouth, which places 2,000 local salespeople from online yellow pages provider RealPages.com at its disposal, is a case in point. Google also plans to offer those yellow pages customers, the bulk of which are located in the southeastern United States, a flat-rate monthly package to streamline the AdWords keyword bidding process for small- and mid-sized customers. Officially, Google’s local search offering is still in beta.

Yahoo unveiled a similar turnkey solution recently, its Local Match program, designed to bring greater simplicity to small- and -mid-sized businesses seeking to establish a Web presence and market themselves online.

Industry experts disagree when projecting how long it will take for local search advertising to become an essential tool in local advertisers’ arsenals. Some say two years, other believe it will take up to five.

“The point is, local search is incredibly powerful, but we’re very far from having it be a vehicle for local advertisers that’s anywhere near comparable to their top ten local choices, like newspapers, billboards, radio, flyers, [or] direct mail,” Morgan said. “All are more powerful local advertising vehicles than search is today.”

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