Local Search Not for Mom and Pop

It seems like everyone’s rolling out local search. Citysearch began offering paid listings in local search in March; Google began testing regional targeting of AdWords in October; and Overture plans to offer similar functionality in a few months. But who’s going to buy these placements? Will a national advertiser like Domino’s start hyping pepperoni pizzas in Boston and veggie specials in LA? Or will Joe’s Pizza in Piscataway put one of the busboys on keyword optimization duty?

Local merchants have just started to think about online advertising in the past six months, according to Dean Polnerow, president and CEO of Switchboard — and, according to him, they’re not ready for keywords. “Small shops don’t have the time or inclination to sit down at a PC and go through some complicated interface and bid for keywords,” he said. Westborough, Mass.-based Switchboard provides online consumer and business Yellow Pages directories, working with local and national advertises.

Polnerow said that the self-service model pioneered by Google and Overture won’t work for local businesses. “They’re used to a sales guy from the Yellow Pages coming to the building and sitting there for an hour,” he said. “They write him a check for the next year, and they’re done.”

Neither are the local search offerings from Overture and Google really up to speed, according to Peter Hershberg, managing partner in search engine marketing agency Reprise Media of New York City. “For any organization or search engine targeting by location, there are definite challenges that need to be addressed,” he said. “For example, we know that Google can’t differentiate between an AOL user in Florida and California. They all appear to be in Virginia.”

Herscberg said that until consumers are educated about the existence of local search, and begin to use it, it won’t deliver good results to advertisers. He said while that a localized ad among search results might attract consumers to whom it’s relevant, “I don’t know if they’re going to just start searching locally.” He pointed out that online Yellow Pages already offer exhaustive lists of nearby stores.

Los Angeles, Calif.-based Citysearch, a network of local guide sites owned by InteractiveCorp., has offered paid local search since March. CEO Briggs Ferguson said the company has changed its sales message to appeal to mom and pop businesses. A new pay-for-performance model makes sense to them, he said, because leads are something they understand a lot better than impressions. Instead of buying keywords, advertisers can decide how many leads they want and how much they want to spend for them, and Citysearch technology makes it happen.

Citysearch’s sales force does go door to door in major metro regions, and it’s backed up with outbound telemarketing. “We’re now refining our system and improving the value proposition to our merchant base,” Ferguson said. For example, Citysearch is enabling functions to let businesses highlight features such as killer margaritas or specialty dishes.

Merchants don’t need a Web presence to be listed on Citysearch, but Ferguson said that the bulk of his customers do have at least one page. The company used to build Web sites for customers, but now refers advertisers to Vista.com, a Redmond, Wash. e-business provider.

Vista.com can set up a small business with a suite of applications that includes a Web site, email and the ability to tie into any databases or systems already in use for $75 a month. “In the pay-for-performance model, having a customer be able to link its advertising to a Web site makes it a more powerful tool than not having anywhere for Web visitors to go,” said Vista.com vice president of marketing Colleen Coady.

Citysearch means to leverage its long experience providing online listings to remain a strong player. It will reach out beyond its core of entertainment listings to include services like dentists. “Over the years, we’ve toiled at understanding what small businesses’ needs are,” Ferguson said. While they’re no longer skeptical about whether the Web is worth their investment, he said, “They want to focus on how to make the business better. A restaurant is more concerned about the freshness of ingredients than the ROI calculation on the marketing spend.”