The results of two new studies published this week, one from JupiterResearch and the other from Borrell Associates, suggests that local paid search is ready for a boom. The study pegs local online advertising at somewhere between $3 and $4 billion this year, with projections that it will reach $5 to $8 billion by 2010. From ClickZ:

"According to JupiterResearch, online local advertising will reach $3.2 billion this year, a 26 percent increase from 2004. In the next five years, the local market will continue double-digit growth, with 11 percent gains, compounded annually, to take the market to $5.3 billion in 2010. Classified ads will continue to command most of those dollars -- 70 percent, according to JupiterResearch."

This is good news for the industry and savvy small businesses. Local search is an open market right now for small businesses that want to explore new advertising models. For example, in even most large cities, home improvement related searches are dominated by national companies like Sears and Service Magic that have localized offerings. It's still fairly rare to see a local business showing up in either paid or organic listings.

In my own hometown of Columbus, Ohio, a search for restaraunts shows just one paid listing from a local company (the always tasty, if a bit pretentious Cameron Mitchell options) and a collection of national companies running automated listings. Anybody want a "Discount Columbus Ohio Restaurant" from Ebay?

The businesses that take note of this and get their search marketing strategies in place early should be able to pick up some nice business at fairly low costs before their competitors get wise to things. The stumbling block for many, however, is lack of resources and lack of understanding.

"Local businesses may not know how to utilize online advertising, according to David Card, VP and senior analyst at JupiterResearch. "They're going to have to go through the whole education process that multinational advertisers went through," said Card. "It's many years behind where current online advertising is."

While many may find that quote disheartening, it should be a shot of adrenaline to determined small business owners. If you've been putting off search marketing as a line item on your budget because your competitors aren't doing it, you need to get past that line of thinking and start coming up with a plan of action. Knowing that you can beat your competitors to market and get your own skills honed before your competitors even start playing around should be good reason to get a search marketing campaign launched.

Discuss this article in the Small Business Ideas forum.
September 23, 2005

Jennifer Laycock is the Editor of Search Engine Guide, the Social Media Faculty Chair for MarketMotive and offers small business social media strategy & consulting. Jennifer enjoys the challenge of finding unique and creative ways to connect with consumers without spending a fortune in marketing dollars. Though she now prefers to work with small businesses, Jennifer’s clients have included companies like Verizon, American Greetings and Highlights for Children.

Search Engine Guide > Jennifer Laycock > Online Local Advertising Poised for Solid Growth