Local search spreads its wings

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Few marketers want to deliver the same message to all users nationwide, and so local search is increasingly popular as direct marketers can target users based on the location expressed in their searches.

Marketers have used local radio, print and TV advertising for years, so why not use search for geographical targeting as well?

"This is especially valuable for marketers in localized service industries like real estate, cars, home repair, dry cleaners, doctors and lawyers," said Michelle Schofield, vice president of marketing at Efficient Frontier, Mountain View, CA.

"It doesn't matter if you are a national company that delivers services on a local level or a small business serving a single locality, you can reach the consumer at the very instance they are seeking local information and services," she said.

A local search function can be cost effective. For example, an insurance company that operates only in 10 states would not want to serve its ads nationwide because that would waste most of its ad budget right from the start, said David Berkowitz, director of strategic planning at 360i, New York.

Some marketers may need even narrower geographies, like a hairstylist who attracts customers within 20 miles of her salon.

A national brand might want to reach out to different geographies in different ways.

"In March, a department store might still be selling winter coats in Montana while selling swimsuits in Florida," Mr. Berkowitz said. "An airline might target East Coast searchers with flights to Europe and West Coast searchers with flights to Asia.

"A fast-food chain might stress the speed of delivery to rushed urban-area searchers while stressing the low price and great value to those in the Midwest," he said. "All of this is with the goal of making ads more relevant, and the major search engines include ways to accomplish this."

In June, eMarketer projected that U.S. local online advertising would be $1.3 billion this year and skyrocket to $2.8 billion by 2008. And a recent comScore Networks report found that 109 million people performed a local search in July, up 43 percent from July 2005.

The potential of this market encourages innovation.

"We're seeing quite a bit of innovation, especially from the search engines," Mr. Berkowitz said. "Mapping technology keeps getting more sophisticated. Google is constantly rolling out new features for Google Earth, where users can search the globe displayed with 3D satellite imagery.

"Microsoft is using its 3D aerial maps as a big component of Live Local," he said. "Yahoo also has a new map program in beta that makes it easier to plot directions for multiple points on a given route and also makes it easy to browse local businesses on a map."

Ms. Schofield identified pay per call as a trend in local search. Many small and midsize businesses lack Web sites or aren't equipped to manage and track pay-per-click campaigns. Pay per call lets them advertise with an address and toll-free number.

This trackable approach means smaller businesses can use online advertising while investing in little more than a toll-free number.

"National businesses that have been using general search may consider allocating dollars to local search since many consumer purchases are still made at the local level," Ms. Schofield said. "Though e-commerce has grown exponentially, the vast majority of consumers still shop locally."

Monetizing local search requires following the same rules as other tactics.

"Local search marketers, just like general search marketers, need to define their key marketing metrics and daily budget spend criteria," Ms. Schofield said. "Next, they need to run models to select the most favorable bids based on their campaign goals and budget spend to determine if they are generating a successful ROI."

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