Local search
sometimes seems like Rodney Dangerfield: It
can't get no respect. This has most recently
been evident in the category's omission from
Mashable's Open Web Awards, and from the
program of the upcoming South by Southwest
conference.
But there have also been glimmers of hope
for local, if you watch closely enough. At
the Kelsey Group's Interactive Local Media
Conference last month, local online
advertising took center stage. And at SES
Chicago last week, local was given lots of
airtime in sessions about search marketing,
online video, and shopping search.
A key theme at both shows was something
that's been on everyone's mind lately: the
economy. Though overall ad spending is
falling, economic factors could bode well
for online local search as small to
medium-sized business (SMB) advertisers
demand more measurability and concrete ROI.
There have been many fence sitters in the
SMB segment for online marketing and search.
That's the nature of the beast --
deep-rooted habits and busy SMB schedules
have been powerful retention factors for
traditional media companies that subsist on
local ad dollars.
But could tough times push many of these
SMBs over the fence, to finally check out
this SEM thing that everyone's been talking
about? There are arguments for and against
this.
Local Motion
Online video is one area that could have
an impact. User demand has exploded
(according to recent comScore data) and many
advertisers, large and small, are seeing
cost-effective online video as a substitute
for television advertising (one of the
biggest victims).
Combine that with universal search and
the opportunity to increase rankings by
embedding video in local business listings
or landing pages. Here, the traditional
strengths of video (entertaining,
informative, colorful, etc.) marry the
direct response and targeting capabilities
of the Internet -- especially when joined
with information-rich Internet yellow pages
or city guide listings.
For small businesses, this will also be
driven by economics as digital production
and distribution bring video within their
grasp for the first time. This will open up
the market considerably and drive local
online video from a $10.9 million market in
2007 to $1.5 billion in 2012, as projected
by the Kelsey Group.
Putting it another way, video's falling
barriers could make it as popular and
necessary for small business marketing as
Web sites have become today (about half of
the 15 million U.S. storefronts).
"We look at Web site penetration as a
model for what could happen with [local]
video," said TurnHere VP of Corporate
Finance and Business Development, Jared
Simon at SES. "Back around '96 we saw Web
sites pick up as a must-have thing. I don't
know when we're going to see the inflection
point with video, but we believe it will
follow the same path."
Local's Turning Point
Most of all, mobile will put local on the
map (bad pun). As I've harped on in past
columns, the mobile industry's quickly
evolving standards will give local search
the boost it needs. This was the subject of
many of SES conversations last week.
This will play out as sexier and
user-friendly devices (and falling prices)
continue to bring smart phones closer to
mainstream territory. Equally important is
the door continuing to swing open for
third-party innovation in the mobile
environment through devices like the iPhone
and G1 (also see Palm's Software Store
announced this week).
The iPhone only makes up about 1 percent
of worldwide mobile devices, but its sales
are quickly rising and we'll see its
adoption spike in 2009. This will happen as
prices continue to drop and the iconic
device is sold in all Wal-Mart locations (no
kidding).
Meanwhile, copycat devices will continue
to flood the market and compete on price,
making iPhone-like search features a
commodity and a mass market phenomenon. I'm
making the call (bad pun #2) that we'll see
such a device for under $100 in 2009.
Moving Target
Bottom line: because local search is so
conducive to the immediacy and geographic
relevance that is inherent in mobile search,
a great deal of the application-level
innovation driven by all of the above will
focus on local search.
Think of it this way: In the online
world, about 20 percent of searches have
local intent, said Yahoo Local's Director of
Strategy and Business Development, Atif
Rafiq at SES Chicago. But in the mobile
world, my hypothesis is that local will
represent a much larger stake of overall
search activity and user intent.
But that doesn't necessarily mean that
advertising dollars are there (yet). The
combination of a recession and an
"experimental" ad medium means growth in
2009 should be flat. But as things rebound,
mobile data consumption will independently
grow closer to the levels that will begin to
attract advertisers in greater numbers.
Given the demand for more measurability
and ROI, application development will
include ad models that are conducive to the
immediacy and direct response nature of
mobile. This will include lots of voice
search applications, click-to-call ad
models, and mobile shopping search with
directly measurable calls to action like
mobile coupons.
The ultimate killer app in mobile local
search has yet to be developed. We'll see
lots of experimentation and false starts
before market standards emerge. But one
thing I'm fairly sure of: local search will
ride mobile's coattails in the explosion of
application-level innovation that we'll see
over the next 24 months.
This innovation, combined with search
volume increases, will attract more small
and large advertisers that wish to target
locally across the 3.3 billion worldwide
mobile devices (Google already has its eye
on this prize). Then maybe local will get
some love.
