Local Search Poised For Marketing Success

People in the US tend to spend 80 percent of their budgets within 50 miles of their homes, and the Kelsey Group thinks that bodes well for local advertising's $110 billion market to shift more into local search ads. Google may already be the largest local search advertising company. A Jordan, Edmiston Group investment bank said analysts believe 10 percent of Google's multi-billion dollar revenue stream comes from local sources. Only about four percent of local ad dollars are currently being spent on local search advertising. The Kelsey Group expects that to grow, and fast. They forecast a 50 percent annual growth rate for local search spending. Google reports its quarterly financial on July 20th. These should be very interesting given the context from the Kelsey Group report. If Google does $6.6 billion in revenue as projected for the fiscal year, growth in local spending alone as forecast might bump Google to $7 billion in revenue next year. Enjoying that growth and more means facing down the yellow pages companies for the attention of local people seeking information. It's a challenge for Google, Yahoo, and Microsoft, all highly desirous of more of the local search market. The yellow pages publishers have an advantage today. The Kelsey Group refers to local ad service selling as a "high-touch" occupation, and salespeople can be expensive. Keeping with Google as an example, we see how that search advertising company's strategy appears to be playing out. In March 2006, Del.icio.us | Digg | Yahoo! My Web | Furl Bookmark Murdok: David Utter is a staff writer for Murdok covering technology and business.