Business Week runs an article today that talks about the success many small businesses are having with paid search advertisements but gives the appropriate warning that regionally based companies need to dig further into the possibilities presented by local search targeting. It's a good article, filled with quite a bit of information that's relevant to small localized businesses.
One of the most important points made by the article is the problem that small businesses face when they try to target topical phrases instead of regional phrases. The example given is of a San Francisco based outdoor events planner that noticed their ads were drawing visitors from as far away as Ohio and Florida. While the company managed to double their revenue in 2005 by drawing about 97% of non-repeat customers from the Internet, they were obviously frustrated at the idea of paying for visitors that they couldn't service.
This is one thing that many small business owners fail to address in their own campaigns. I get emails all the time from small businesses that desperately want to rank well for the generic version of their services. Their theory is that by capturing ALL traffic, they'll manage to get the ones they want. What they fail to realize is that they are often putting a lot of time and money into earning those rankings while 90% or more of the visitors they are attracting are from areas that they cannot service. This is especially dangerous for small businesses that are purchasing these phrases from pay-per-click services like Google AdWords and Yahoo! Search Marketing.
This is where local search targeting becomes an essential component in the marketing mix.
From the article:
A growing number of small businesses are using local search. A November, 2005, survey by Boston's Yankee Group found that more than 30% of businesses with 20 to 99 employees and 40% of those with 2 to 19 staffers were using local search engine advertising. Those numbers are expected to increase substantially this year. "Definitely more businesses, particularly service businesses, are using local search," says Sanjeev Aggarwal, senior analyst at Yankee Group. "They know people aren't looking in the Yellow Pages." About 55% of consumers used a search engine to find information about a local business last year, up from 47% in 2003, according to Kelsey Group, a Princeton (N.J.) research company specializing in electronic media.
Ensuring that you don't pay for clicks from out-of-area Web surfers isn't the only benefit offered by local search. Like other search engine advertising, the local variety lets you track your account closely to find out which keywords are most successful at drawing customers and how much you're spending each day. For companies with tight marketing budgets, those are no small advantages.
Both Yahoo! and Google allow for regional targeting of pay-per-click campaigns. Yahoo!'s system works by having advertisers select a base location and then specifying a range around that area that they wish the ads to show in. Google offers up a few more options, including the ability to select a city, a region or even to define an area on a map.
If your business serves only a specific regional area, you need to make sure that your pay-per-click ads are targeted in this manner. If not, there's a good chance that you're wasting a lot of your dollars on visitors that cannot buy from you, even if they want to.
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