March 12, 2007 Comments
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With more than $100 billion a year going toward off-line local advertising (yellow pages, billboards, newspapers, radio, etc...) and estimates that just $4-$7 billion is going toward online local advertising, you've got to wonder when online local advertising will catch up. Greg Sterling takes a look at the issue in an article over Search Engine Land today titled "How Much is 'Local Search' Really Worth?"
Greg sums up the spending projections of five different analyst groups and explains what each of them counts as being part of "online local advertising" to come up with the numbers.
He also explores some of the drivers and barriers to growth for this segment of the industry.
Several high profile local consumer sites have changed course or bailed out recently in recognition of these challenges. Yet behind the scenes an entire ecosystem is emerging to simplify online marketing and make it more accessible for local businesses. (National businesses have agencies to do their media buying and face different challenges.) Yellow pages publishers, newspapers, web hosts, a few verticals and others now sell SEM and SEO clicks (and calls to a lesser degree) to local businesses.
He also goes on to share that with the U.S. Small Business Administration claiming that there are more than 25 million small businesses operating in the U.S. today, that the market potential is huge. Imagine if just a tenth of them spent $1000 a month online. That would add up to about $30 billion a year.
We've still got a ways to go however. Small businesses are still woefully absent in the online market place and complicated advertising systems make it difficult for them to find the time or marketing dollars to get in the game.
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