Local and Shopping Search Grow

More than 72 percent of online shoppers use general search engines nine or more times per month, and a growing portion of those searches are shopping-related or local in nature, according to a consumer search behavior study by BizRate.com and the Kelsey Group.

The study found that 74 percent of respondents perform local searches, and 37 percent of online consumers are very familiar with shopping search sites.

“The data indicates that search continues to be the dominant way people find things on the Internet,” said Greg Sterling, director for Kelsey Group’s interactive local media program. “It also shows that awareness and usage of local search continues to grow.”

Respondents said 27 percent of their total search behavior was for local information. When the data is extrapolated to the general Internet population, it shows that 20 percent of all searches are local, Sterling said.

Nearly half of respondents, 43 percent, said that they preferred to research and shop online, while roughly 28 percent displayed some combination of offline/online behavior.

“As consumers use the Internet more to find local information, specifically business information, that will impact advertising revenue,” Sterling said, noting that as consumer activity moves online, advertisers will surely follow. “That’s the $14 billion question,” he said, referring to the amount spent on yellow pages advertising by small businesses.

According to Kelsey Group research, there are currently between 35 and 40 percent of small businesses with Web sites, and only about 24 percent of small businesses advertise online.

Reaching those advertisers has been a challenge for Internet publishers and search engines. According to a recent JupiterResearch study, yellow pages, newspapers and radio each receive more than three-quarters of ad revenue from local advertising, while online advertising generates less than a third if its revenue from local ads. That is not expected to change soon, the report found, indicating that short-term growth in local search online will be driven by national advertisers targeting locally.

JupiterResearch also found that local online advertising will grow 28 percent in 2004, from $1.9 billion in 2003 to $2.4 billion this year. It is expected to reach $4.9 billion in 2009. Local advertising’s share of total online ad spend is not expected to rise much beyond its current 29 percent mark.

Search companies are trying to reach local businesses by pairing with established small business service providers, as Google is with BellSouth, or FindWhat with Canada’s Yellow Pages Group. Similar programs have recently been launched by Web hosting providers Affinity Internet and Interland, who teamed with yellow pages publisher Dex Media.

Other findings of the Kelsey Group study show that, among the 3,887 online shoppers in the panel, Internet mapping sites rate as the top search activity, based on familiarity, frequency of use, and loyalty, followed by general search engines. Only 35 percent indicated loyalty to one general search engine.

After mapping sites and general search, Internet yellow pages, online classifieds, shopping search sites and entertainment information sites round out the top five online search behaviors, followed by online travel sites, local destination sites and vertical directories.

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