I've been spending a lot of time recently looking at local search, and discussing its importance with dozens of small businesses at the events I speak at. One discussion keeps coming up that I believe is terribly misguided. Small businesses think that their only competition in local search will come from other small businesses. So, as long as they stay ahead of their local competition, they are fine. I don't believe that viewpoint will turn out to be correct in the end.

My belief is that the biggest competition that small businesses will face in local search will be large businesses. What local hardware store is not viewing Walmart and Sears as big competitors? Why don't you think that will play out online, too? And from the viewpoint of what's best for the searcher, why shouldn't it?

I know, I know, you aren't seeing that now, so why worry about it? My answer to that is: By the time you do see it, it will be very hard for you to fight back.

Image via Wikipedia

It reminds me of a situation a few years ago in a different kind of marketing. You youngsters probably don't remember how critical directory links were in a pre-social world. They are still somewhat important today, but back then, they were the best links you could get to your site and #2 was trailing by some distance.

Anyway, I remember how Yahoo! Directory and Open Directory both had hard-and-fast rules about being directories of sites, not pages, so they had a slew of small sites that each landed in their particular categories of the directory. Each of those small sites looked at its competitors as other small sites. Then, something changed.

WebMD, the huge medical information site, made the argument to both directories that they should not have only one link to the home page of WebMD. Rather, each of dozens of WebMD "sites" on medical conditions (heart disease, diabetes, etc.) were easily the equal of all of these small sites, and they deserved links from all of those categories to each of their "sites."

It took a while, but eventually both directories agreed, granting dozens of individual directory entries to WebMD. This one action forever changed the competition among those small medical sites--now WebMD competed directly with them. Further, the precedent was set for other large sites to follow. Nowadays, directory listings have faltered in significance, but you need to pay attention to the point here.

It isn't hard for me to imagine how local search might take the same path. Sure, it starts with local businesses, but it quickly moves to chains of stores that compete in that category. If you have a local auto parts store, you're just waiting for the day that Pep Boys decides it is rolling out local search to all of its stores. Believe me that they will make sure their Google Place page is optimized for every single retail outlet they have.

But I don't think it stops there. Why wouldn't Costco trumpet its automotive department as every bit the equal of Pep Boys? They even install your tires for you, if you want. I don't know how this plays out--perhaps they need to get a unique phone number that calls directly into each store's automotive department. Perhaps they need a unique mailing address. Maybe they need neither--just petition Google the same way WebMD spoke to the directories.

I already see some of these chain stores in the listings, but I don't think the big box stores (such as Costco) have really optimized their local presences at a department level yet. You'll see sporadic stores pop up, with a few departments, but the day is coming when every department of every big box store has optimized its Place Pages and garnered Yelp reviews and is going after local search with single-minded intensity. Just so you know, I speak to a lot of large businesses, too, and this is already starting to happen.

The search engines want this, because it makes their results better. There is too much money for the search engines in local search for them to sit idly by while only small businesses participate. A searcher wants to see where the products can be bought nearby, from a big company or a small one. If you are expecting local search to be the bastion of Mom and Pop shops, I think you'll be disappointed.

What's a local business to do? Don't be complacent about your "place" in local search. You might be happy about your listings now, even if you haven't done that much work, but that is likely to change as more of your larger competitors get into the game. If you haven't claimed your Google Place Page listing, run to do so. If you haven't focused on collecting online ratings and reviews from satisfied customers, start. If you have never even checked the accuracy of Internet Yellow Pages listings, what are you waiting for?

And if you are a large business with many local outlets, I think you can guess what to do, too. Many people are finding your smaller competitors in local search today, either because you are missing from the results or your results don't look all that compelling. It's time to get cracking.

Mike Moran