Search Engine Guide: Local Search Is the Next Big Thing for Entrepreneurs

No entrepreneur would seriously think of consulting the yellow pages for the next big business opportunity. Right?

Quite wrong. Don’t look now, but the online equivalent of the yellow pages is precisely where the big bucks may lie. Local search technology has opened the door wide for businesses of all sizes to use the Internet to attract customers.

Thanks to geo-targeting capabilities, advertisers can aim their ads specifically to consumers within designated geographic areas, making online advertising perhaps the most cost-effective marketing channel for virtually any type of local business.

Every search engine is embracing local search capabilities as a way to provide geographically targeted advertising to consumers and broaden the relevance of search engine marketing for local businesses.

But while online advertising might be the rage for larger companies with fat marketing budgets, smaller, local businesses have been slower to jump on board. The reasons vary. Many don’t yet have Web sites so they think it’s pointless anyway; they don’t have time to manage complicated search engine campaigns; or they just don’t know how to get started.

The opportunity is huge for entrepreneurs who want to bridge that gap. According to industry estimates, local businesses nationwide spend $100 billion annually on advertising targeting local or regional audiences, but only 3 percent of that advertising has migrated online.

Local search is hot. The problem – and the opportunity – is that someone needs to sell it to local businesses. EBay established the model, creating a cottage industry of independent businesses that help buyers and sellers manage the online auction process.

Now, a new opportunity exists for individual entrepreneurs and business opportunity-seekers to become major players in the local search juggernaut by bringing Internet marketing to Main Street. A burgeoning role exists for intermediaries to help companies – big and small – manage the complexity of search engine marketing. Indeed, it’s possible to start your very own SEM business.

According to a recent New York Times article, industry analysts characterize local advertising as among the most important business opportunities yet to be exploited online. A wave of entrepreneurs already is starting to crest out of the dramatic increase in search engine marketing. So, where to start?

Challenges for Local Businesses

Closing the gap is a matter of becoming familiar with the challenges facing local businesses, and then finding a way to help business owners overcome them. Anyone who can deliver a successful online advertising solution that exploits local search stands at the door of a very profitable business.

One of the first issues confronting local businesses is logistical and can be easily overcome: As many as 70 percent of small businesses still lack their own Web sites. If they’re going to run an online campaign, they’ll need to be able to point consumers to an online presence – if not a full site, at least a page or two – to provide basic information about their products and services and tell consumers how to reach them.

A bigger challenge for local businesses, though by no means insurmountable, is to generate a meaningful amount of traffic for a specific geographic area. Advancements in local search technology give local businesses a powerful new tool: the ability to use the big players like Google, Yahoo Search Marketing, AOL and MSN to target ads to consumers in specific geographic areas. But there’s still a strategy involved in selecting keywords and deciding which publishers provide the most effective targeting.

And that shines a bright light on the blunt reality of today’s “self-serve” search engine business: Search engine marketing is hard. Business owners have to establish relationships with several online publishers, manage multiple keyword buys and monitor constantly changing bids for those keywords. This takes time, which most small business owners don’t have.

Effective search engine optimization also requires that they keep track of what times of day their potential customers are most likely to be online (because they will want to bid higher during that time) and maintain a complex matrix of what works and what doesn’t in terms of specific keywords, bid amounts, etc. The complexity is daunting and, for most small businesses, a deterrent to Internet marketing.

Once a campaign is running, accountability and tracking become the big challenges. How do business owners know their online campaigns are working or why they aren’t, if that’s the case? They need to be able to track accurately both online and offline activity, including clicks to a site, e-mails, telephone calls and on-site visits.

If they’re going it alone, it can be difficult to identify which leads specifically came from the online campaign. If the ad clicks directly to an existing Web site, they need a way to separate out that traffic. If return on investment is to mean anything, they must be able to trace all actions flowing from their online ads back to their campaigns.

Nationwide Chains Need Local Search, Too

Your potential customer base as an independent agent for local search technology goes well beyond the mom-and-pop shop down the street. Large national chains and franchise organizations also are struggling to adapt local search capabilities to market their businesses. Their challenges are to use a national campaign to drive local traffic and to retain control of corporate advertising even as individual outlets and franchisees spread their wings online.

Local search targeting capabilities can help large national organizations by limiting the display of their online ads to Internet users in markets in which they actually have a presence. Companies must pay for every click on their ads. But often a consumer will click, only to discover later that the company has no retail outlet in her area. Those clicks are useless.

Further complicating matters, more individual franchisees and retail outlets are organizing their own advertising, often at the expense of the national organization’s campaign. One renegade franchisee, running its own Google campaign, can bump off an entire national campaign because Google doesn’t allow two listings with the same Web address to appear in its results.

National retail chains and franchise organizations are increasingly desperate for a solution that would localize their national campaigns and restore overall control to corporate headquarters.

Profit by Meeting the Need

Is it worth it? According to comScore Networks, 111 million people execute 46 billion Internet searches yearly – three times the number of annual yellow pages referrals. And Kelsey Group-BizRate estimate that 25 percent of all Internet searches are local in nature, meaning local consumers are looking for local merchants. Potential customers are online, and most businesses realize they need to be there, too. They also realize they need help.

So what can entrepreneurs do? Help local businesses and national chains incorporate online advertising into their marketing. Ambitious opportunity seekers have a chance to jump in at the ground level of a trend. Local business owners will find a way to use local search technology to their benefit. Prescient entrepreneurs who seize the opening now will become major players in this lucrative advertising trend.

For more articles from The Direct Marketer’s Essential Guide to Search Engine Marketing, visit www.dmnews.com/search .