Will Technology Push Local Search Advertising to the Next Level?

Over the past few months, talk and hype have run rampant about new devices, technologies, and Wi-Fi access points to extend wireless access for consumers.

A host of companies are developing and launching handheld devices designed to allow consumers to use the Internet much as they do with a PC. Apple’s been stealing headlines with its iPhone launch and iPod reconfiguration. Dozens of other companies have launched similar types of handheld devices to provide similar consumer experiences.

Consider too the companies developing new technologies and Wi-Fi access points, holding the potential for a truly untethered consumer marketplace.

New consumer technologies such as these have a way of reconditioning consumer behavior. Look at the wide adoption of the BlackBerry and similar e-mail devices. Business users no longer need to boot up a home or work computer to check and respond to e-mail. These users have been reconditioned not to use a PC but to instead rely on a handheld device for business and personal communication tasks.

Tracking Online Local Search Usage’s Evolution

What does this have to do with online local search and local search advertising?

Online local search has been growing steadily. According to recent eMarketer projections, online spending will reach $2 billion for the year ending 2007, up from $1.3 billion in 2006.

Yet many would think that doesn’t keep pace with consumer use. Local businesses aren’t adopting online local search advertising as quickly as consumers are beginning to use various online products.

This isn’t a recent revelation. Many have tried to determine why consumer adoption of local search is so far ahead of local businesses’ utilization of local online advertising.

Let’s take a step back. Are expectations for online local search advertising growth out of line with today’s actual metrics? It’s possible many are comparing the online local medium to the 100-year-old yellow pages print products that generate approximately $14.6 billion in annual adverting.

A new Universal McCann report pegs the national print yellow pages at $2.2 billion and the local portion of print pages at $12.4 billion. Here, comparisons and expectations are being drawn. These numbers better fit a mature market than an emerging one.

Will Local Businesses Follow Consumer Adoption?

It was widely believed that when home broadband penetration surpassed the 50 percent threshold, online marketing would be poised for greater growth. The real threshold turned out to be around 40 percent. Once penetration reached that mark, the channel began to offer advertisers and marketers alike the audiences they needed to be successful.

Is there a technological tipping point at which local search advertising will be able to claim victory? If so, what will it be?

I’m not sure handheld devices such as the iPhone can support the types of search, access, and utility a PC provides. On the other hand, certain applications on these devices, such as the iPhone’s map application, will provide quick and easy access to local search advertising.

These applications offer enough evidence to say we can correlate the emergence of a certain technology, threshold or otherwise, to the event that the local search community has been awaiting: the moment that we’ll be able to point to, in retrospect, as the stake in the ground leading to victory.

Seeing Is Believing

For years, local business owners have had the annual knock on the door or phone call from a yellow pages salesperson selling the multitude of benefits that advertising in a local book will bring.

This value has been supported in the local business owners’ eyes by both the magnitude of television advertising and the high visibility of stacks of yellow pages books on neighborhood doorsteps. Plus, it’s a fairly straightforward advertising product: For X amount of dollars, you get this amount of space on the page in a book that’s distributed to Y number of consumers.

A few Internet yellow pages (IYPs) are starting to more broadly advertise their online presence, primarily to consumers. Most notably, Yellowpages.com, Dex, and Yellow Book are using creative and catchy TV commercials to promote their online local products, in addition to their print products.

On a lesser scale, these brands used to advertised to local business owners, touting the benefits advertising will bring a business owner. But for the most part there’s been little if any hard evidence that local business owners should invest in online local advertising.

Competition is also a factor. Online, there are many more advertising options and online properties from which to choose.

There are typically just a few print directories in any given market. But online has no boundaries. As a result, there are countless options and sales pitches a local business owner hears week in, and week out. It will be an uphill fight for IYPs to gain the same traction with online local search they’ve enjoyed with the print yellow pages.

A Tipping Point for Online Local Advertising?

In the end, which factor will carry local search to mass adoption? Will the consumer ultimately push the local business owner to recognize this marketplace by the continued growth in local searches?

Or will the online local properties that control the advertising push harder through advertising and good old sales?

So far, consumers have been getting ahead of online businesses in adopting local search. But we may be reaching the point where the balance shifts to online local properties.

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