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Local Search Update #7
Local Search, Small Business by Greg Sterling We recently had the pleasure of meeting Greg Sterling, Mr. " Hyper Local", at our booth during the Vegas NAA Marketing conference in late January. Subsequently, he adeptly chaired the session that Search Initiatives sponsored at the conference on local. That booth meeting reminded me of one of Greg's latest musings, and I thought it would be a great snippet to share with you. First, let me set the stage for you! Since rolling out our local directory and ecommerce platform, we have discovered just how tricky and sometimes difficult it can be to get the attention of your average small business owner. There simply are not enough daylight hours to finish the job. Adding Internet advertising, monitoring a website, managing the nuances of search advertising, search engine marketing, and pay for click advertising can often be a job in, and of itself. In the course of selling advertising, it can be just plain hard to get mind share. To some newspapers this might sound like a barrier to opportunity. Often it really amounts to a cry for help in growing their business. The real opportunity is for papers to help the local small business owner and act as their "right arm", advertising advisor, and local on ramp to the Internet. That's where papers can really provide meaningful help! Greg is the founding principal of Sterling Market Intelligence, a consulting and research firm focused on online consumer and advertiser behavior and the relationship between the Internet and traditional media, with an emphasis on the local search marketplace. This entry was first posted on Tuesday, January 2nd, 2007 at 9:23 PM and is filed under Local Search, Small Business on Greg's Screenwerks blog, on and offline musings about online. You can follow any responses to this entry by back tracking to Greg's site at: http://gesterling.wordpress.com/2007/01/02/s mall-biz-self-service/ One of the most challenging aspects of local search is small business (SMB) advertiser acquisition. Everyone is aware, especially Google, Yahoo and Microsoft, that the US SMB market is where the advertiser volume is: almost 99% of US businesses qualify as small businesses (here defined as < 100 employees). According to the US Small Business Administration (SBA), more than 20 million firms qualify under the definition above, with almost 19 million of those having no employees at all! Paid search was built by small businesses, which discovered its effectiveness long before the Fortune 1000. I've estimated that as much as 70% (perhaps more) of Google's advertiser base qualify as SMBs. And while Google is moving "upstream" to try and capture more major branding dollars, it's equally concerned about gaining more small business advertisers, as are Yahoo and Microsoft. But the lack of a local sales force has made it difficult to deeply penetrate the SMB market. By contrast, the new AT&T, for example, will have roughly 3,500 local sales people. Google, Yahoo and Microsoft have relationships with yellow pages publishers and others, which they've used as channel partners to gain small business advertisers they would otherwise have been unable to directly acquire. Accordingly, one of the raging debates in local search concerns "self-provisioning" or "self-service." The question is: how many SMBs will sign up directly for paid search and how many must be acquired through a "push" channel (local sales force)? There are those convinced that a sales force is absolutely necessary to acquire any meaningful penetration in the SMB market. In the end, I tend to agree -- "DIFM" (do it for me) is more powerful than "DIY" (do it yourself). But I also think that larger numbers of SMBs will do some form of self-service as those tools and entry points become more pervasive and simpler to use. Google, Yahoo and Microsoft have all been implementing simplified processes to gain SMB adoption. Google has AdWords "starter edition," which offers a simple landing page, simplified budgeting and keyword tools. The company also did a novel deal with Intuit's QuickBooks, embedding AdWords in the software workflow. Yahoo's Panama has comparable tools and the company also has flat-fee advertising on Yahoo Local. Microsoft has AdCenter sign up via its Office Live SMB domain registration and website building tool. But what is reasonable to expect from SMBs in terms of actual numbers? Let's take a real world example: Kudzu. Kudzu is a local search site owned by Cox Enterprises, which started in Atlanta, Georgia and is now in four cities across the US. Georgia has roughly 813,000 SMBs, according to the US SBA. That number represents almost 98% of all businesses in the state. The greater metropolitan Atlanta-Sandy Springs-Marietta area is where approximately 50% of those businesses are located. Kudzu, for several reasons, experienced unusual success in getting SMBs to register and augment the information provided on the site. Kudzu GM Tom Bates reported that the site had 20,000 local businesses that actively registered. The Kudzu figure represents about 5% of greater Atlanta area businesses according to my calculation. This is not the number of advertisers mind you, just businesses that have registered and changed or added information on the Kudzu site. But getting them to register is a step in the process of getting them to advertise. As online marketing becomes essential for SMBs more of them will be motivated to make more effort to advertise online. And as online marketing and paid search become simpler to adopt more will adopt it accordingly. In other words, a kind of movement toward the middle will take place. I somewhat aggressively forecast in 2006 that within five years about 10% of US SMB advertisers would be doing some form of self-service. But let's assume the number is somewhere between 5% and 10%. The question then becomes between 5% and 10% of what? It's not exactly clear what the right number is. Consider that the US yellow pages industry has 3.2 million "advertisers" according to industry reports (but define advertiser). And yellow pages are the single largest vehicle for SMB advertising. But, as mentioned, there are more than 20 million SMBs in the US (25.85 million when you use a broader definition of SMB). If one uses 10 million SMBs as the "addressable market," that would mean between 500,000 and 1 million US SMBs self-provisioning online ad campaigns in some fashion, according to my projection. If on the other hand one uses an addressable market figure of 15 million that would mean between 750,000 and 1.5 million within five years. Currently there are approximately 500,000 (give or take) paid search advertisers overall. Of course, this does not consider how many businesses will be brought into paid search or online marketing indirectly through local directories, verticals and small agencies, which are the primary ways that most will appear online. And those numbers will ultimately be much larger than self-service.
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Why Newspapers Need Local Search To Leverage Ad Revenue |
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Searching for a Solution
As consumers shift their local information searches from traditional print media such as Catalogs, Guides and Yellow Page directories to the web, newspapers are now responding by adding engaging local search to their websites. Compelling local search enables publishers to provide a local alternative to national websites, such as local.google.com, citysearch.com and yellowpages.com. Search Initiatives’ prime business goal is to help local publishers beat the pants off of the national search players, better monetize their own local traffic with local advertisers, and make them the center- piece of eCommerce locally in their local market area. LOCAL SEARCH Local newspaper web sites already have a unique position and an opportunity to capture more revenue and visitors. Historically, they have been the dominant medium for marrying buyers and sellers together in the local market place. Our local search and advertising platform helps community papers take full advantage of their unique position by quickly and easily aggregating all their content into one engaging search user experience. First off, we provide search against all their buckets of advertising, editorial and listing content. Our search engine is often asked to crawl and normalize all the content into one common set of search results. Providing one common way to search and see the results makes site navigation that much easier for their visitor and potential consumer. YELLOW PAGES ON STEROIDS Secondly, we provide a “Yellow Pages” like listing experience online. It’s SO easy to use that even the Internet novice can navigate their way through this self-service ad entry routine. It’s intuitive and follows normal conventions for a step-by-step ad entry. Advertisers can easily adopt their basic free listing. Listings might be from the paper or a third party. In the process of adopting their listing, the advertiser can register their business for some basic level of exposure on the site. The publisher typically offers a range of listing enhancements which build significant recurring monthly revenue streams. Unlike traditional guides and Yellow page offerings that partner with Google, Yahoo and MSN on a bidded click basis, we offer several impression-based advertising opportunities that newspaper publishers can leverage. We take the listings advertiser out of the ghetto of the directory, and position them against the publisher's available impression based real estate. PUTTING ADVERTISERS IN YOUR "LAP" Our Local Ad Platform (LAP) allows the advertiser to expose not only their listing(s) but local text ads and coupons that are associated with their listing. Our LAP really works to put the right message in front of the site visitor and potential consumer. The advertiser can associate their listing with several business categories, while publishers can, in turn, target the ads to the best location fit on the site for that advertiser. Our platform and strategy leverages the large amount of local traffic that a newspaper site has, their brand, and their traditional role as the key broker between buyer/seller. We place the publisher at the main intersection of local transactions and help marry consumers and advertisers on their web site and within our advertising platform. together in a well managed and newspaper local marketplace. br> |
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About Search Initiatives, LLC |
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Search Initiatives is fast becoming one of North America’s premier providers of local search with enhanced listings on a self-service ad platform. Our private-label local search and ad solutions enable publishers and portals to build traffic and grow online advertising revenue by adding local search capability. Our Local Ad Platform is the perfect complement to your editorial and advertorial content. Our solutions can be deployed in as little as a day, and are usually as simple as incorporating a java tag whenever a MarketSquare is required to expose ad inventory or listings. Better still, we can help you sell the Local MarketPlace. We are committed to helping local media position their website at the heart of the local sales opportunity. Our LAP and search services are world class. We allow a local media company to effectively compete against the national search engines, yellow page providers, and strong vertical destination sites. Search Initiatives is a privately held corporation based in Nashua, NH. We are committed to helping local papers position their website at the heart of the local sales opportunity. Our LAP and search services are world class and allow a local newspaper to compete effectively against the national search engines, yellow page providers, and be a strong destination site. Search Initiatives Delivers on Local search for: www.themercury.com Jeff Rapson, VP of Sales email: jeff.rapson@searchinitiatives.com |
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