Dec 23, 2009
The Coming of Age of Local Online Advertising
The Coming of Age of Local Online Advertising
The convergence of technological advances with consumer readiness will spark vigorous activity in the mobile local advertising space in the new year. Phones are getting smarter, applications are getting more sophisticated, and both consumers and businesses are seeing new ways to benefit from mobile local deals.
The future of local online advertising is bright. As we stand on the brink of 2010, there are many reasons to be hopeful. We are seeing new innovations on search engines, the proliferation of hyper-local content developed and managed by micro bloggers and business owners directly, and a resurgence in online coupons with sites like Groupon.
All of these trends are driving an increasing number of consumers to go online more often to find local products and services. More than 80 percent of consumers are searching online for local products every day. They are searching from their homes, but increasingly they are searching on mobile devices -- and the new Google (Nasdaq: GOOG) Nexus phone will likely offer souped-up search capabilities. With all this innovation, it is no wonder that small business owners are spending US$7 billion on local online advertising. The online advertising market for 2008 was just under $25 billion and for 2009, it is more than $16 billion thus far.
New Audiences, New Opportunities
Google has maintained a lion's share of the market, with 65 percent of all searches taking place there. However, 2009 saw the launch of Bing, Microsoft's (Nasdaq: MSFT) revamped search engine, which combined with Yahoo (Nasdaq: YHOO), captures a healthy 28 percent of all searches. Alongside the search engines are a long tail of new community/lifestyle oriented sites that are getting upwards of 200 million visitors per month, like Citysearch, Yelp and Yellowpages.com. For the local business owner, this growing array of choices can be daunting and complicated, but for consumers, the competition has lead to innovations in search technology, such as real-time search results (i.e. Twitter's recent integration into Google, Yahoo and Bing), and video/image searching.
These search engine developments give business owners more options for reaching new audiences and diversifying ad spending. As more consumers use niche sites to search for local businesses, more of those local business owners will migrate dollars from their ad budgets, perpetuating the cycle.
There are also more options to publish and create local content that can be shared and made available on a wide scale. Things like micro-blogs (Twitter), social networks (Facebook), and local directories (Citysearch, Yelp) are being utilized by consumers on a daily basis. However, with more options comes more worry. Consumers now expect to be able to connect to their favorite brands, both local and global, and be kept up to date on their offerings and changes.
Local Discounts Work
The amount of advertising dollars spent on social media sites, according to Neilsen, increased 119 percent during 2009. Social media's share of total online advertising spend doubled to be about 15 percent. Facebook, one of the biggest and most popular social networking sites, is expected to be nearing $1 billion in revenue. The information available on each of these sites represents another chance for a business to impact potential consumers -- positively or negatively. In tandem with the rise of the social network comes the increased importance of reputation management. Many companies offering online marketing Download Free eBook - The Edge of Success: 9 Building Blocks to Double Your Sales solutions are now adding or preparing to add a reputation management component. Since much of decision making about purchases now comes from reviews posted online, a business must know what is being said about it and have a way to participate in the conversations.
New companies are cropping up and taking notice of the local advertising opportunity all the time, such as Groupon and YouSwoop. They are making local e-commerce easier, faster, and more lucrative than ever before. Groupon recently raised $30 million to grow the business. With the economy, coupon use has increased by over 35 percent over 2008.
By offering specific, localized discounts and promotions for users, these sites are going from potential customer to actual customer almost instantly. In many cases, they are bringing in significant revenue for a local, small business that might not otherwise have come in.
Mobile on the Move
If 2009 was not a turning point for mobile, 2010 will be. With a constant parade of innovations -- from smarter targeting on cellphones for location-based ad delivery to better applications and more targeted search -- mobile continues to gain a bigger share of the ad market. An increasing number of small businesses will enter the space and spend in it for the first time. Underscoring its very public interest and investment into mobile, Google just launched a test for a new innovation, Google Favorite Places. Google sent 100,000 barcode stickers that local establishments can proudly display for mobile users who might be interested in stopping in for a bite to eat or learning more before getting an oil change, for example, supplying immediate access to detailed information, including reviews, about themselves.
Time will tell whether this idea can succeed, but it certainly shows Google is not letting this high growth segment pass it by. The economy is slowly creeping back up, and 2010 brings a fresh opportunity for local businesses to embrace the opportunity of promoting themselves online.
Published In: The E-Commerce Times
