Overture to Introduce Local Search Ad Program

NEW YORK — Overture Services plans to release a local search advertising program in the next few months that lets advertisers set a geographic radius for the display of their search listings and participate without operating a Web site.

Geoff Stevens, general manager of local search at Overture, said at the Search Engine Strategies conference here March 4 that the system would match local advertisers to nearby customers. Overture advertisers would target their listings either by a mile radius or ZIP codes in their area. Overture's search partners would determine a searcher's location by asking for it or through registration data.

Overture hopes to lure many of the 10 million small businesses not already using search marketing to give it a try by eliminating some of its complexity. Stevens said Overture would simplify the bidding process. Another innovation planned is the ability for an advertiser to set up a Web page through Overture that has information like hours of operation, address and phone number.

“It's designed to address the 70-odd percent of businesses that don't have Web sites,” he said.

Stevens did not say which Overture distribution partners would use the local search platform. Each implementation would be customized for the partner sites. For example, an Overture partner without user geographic data could have a ZIP-code prompt for searchers to enter their location. With 130 million registered users, Overture parent company Yahoo is able to pass a user's location to Overture.

The release of the local search platform, which an Overture representative said was planned for this spring, would put it a step ahead of rival Google. The search leader currently lets advertisers target listings based to 210 regions based on users' Internet protocol addresses. But Google is still testing its local search platform and working out its kinks, said Sukhinder Singh, general manager of local search at Google.

“Our goal in 2004 is to improve the quality of that product,” she said.

The local search market has emerged as a hot topic in the search industry. The Kelsey Group estimates that local commercial search represents 25 percent of all search activity, and this market could generate as much as $2.5 billion by 2008.

Cheryle Pingel, chairman of search marketing firm Range Online Media, said the local search market had great potential, yet she urged caution.

“With this ramp-up, we're going to have to be patient,” she said.

One major problem facing its widespread adoption is the self-service ad model. Stevens said Overture planned to partner with yellow pages and newspaper publishers that already have sales forces. Singh said search marketing firms have a role to play, establishing themselves as channel partners.

The complexity of keyword bidding is another impediment to small-business adoption, said Erik Hawkins, senior vice president of the product group at Citysearch. To address this, Citysearch sells its 25,000 advertisers buckets of leads at fixed prices.

“We've seen working with local merchants that having a simple pay-for-performance product is more important than having a sophisticated one,” he said.

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