Of Local Search, Love Meters, and Raking Leaves

Last month in “Local Search: Where’s the Love?” we looked at local search’s struggles to get recognition. Since then, we’ve seen more evidence of the greater degree of prevalence it could take on this year.

This week alone saw a series of events and announcements that indicate more love for local search, despite a continually faltering economy. As argued last month, local search’s measurability and concrete ROI should give it favor among small to medium sized-businesses (SMBs) over traditional offline media.

The week started out with the release of WebVisible and Nielsen’s annual local search survey, which showed that online search and e-mail newsletters are the only forms of media that have grown among users over the past two years for locating local businesses.

WebVisible Statistics

Among 400 U.S. adults surveyed, 82 percent use search engines to find local businesses. For the source turned to first, 50 percent choose search engines and 24 percent choose yellow pages. Small businesses showed similar results in their own local search usage: 41 percent chose search engines as the first place they turn and 31 percent choose yellow pages.

The last point is important, as Kelsey Group data historically has shown SMB personal search use as a leading indicator of their own ad spending.

Growth in Tough Times

On Tuesday, local SEM service Yodle scored $10 million in C Round funding, showing a vote of confidence for the company and the market opportunity for local online ad spending.

The company also announced substantial growth metrics for 2008, including 700 percent year-over-year revenue growth, 5,000 advertisers (up from 125 in 2006), 250 employees (up from nine in 2006). TechCrunch also reports a Q4 run rate of $30 million.

“In the earlier part of the decade, there was more of an imbalance in the number of consumers [online” and the number of advertisers that were there. Now we’re seeing that supply and demand evening out,” founder Nathaniel Stevens told me. “Additional components are making it more effective for SMB advertisers when you look at geotargeting, performance tracking, Web analytics and call analytics.”

Topical Issues

Another local search announcement hit the wires Wednesday. Local product data provider Krillion announced it will distribute ads and product inventory content across Topix.com’s hyper-local news network (claims 16 million unique visitors).

This will take the form of “local best deals” sections on many of Topix’s 40,000 ZIP code-specific pages. As Krillion’s data drills down to product feeds at 40,000 individual retail locations (Home Depot, Target, Wal-Mart), these listings will promote in-stock merchandise at the closest stores.

“We have an index of products carried across U.S. cities and towns,” Krillion CEO Joel Toledano told me. “This makes sense for Topix users reading articles about those areas. It’s bound to be more relevant than a random Netflix ad or University of Phoenix banner.”

Can You Hear Me Now?

This week also saw the launch of a new iPhone voice search application from AT&T (creator of the popular YPMobile app). Known as Speak4It, it allows users to speak local search commands and receive map-based search results of nearby businesses.

iPhone Speak4It

This joins a handful of similar voice search apps launched recently for the iPhone, including Google and Vlingo. Expect more to hit the market, as voice search will a big area of upcoming product development tied to the growth in mobile local search innovation.

Heading North

Lastly, heads turned in the local search world when Canadian local search startup Weblocal.ca reported reaching a million unique monthly visitors after only 60 days in operation. The steep traffic growth is mostly due to the combination of old and new media (and some unique attributes of the Canadian search market).

Weblocal.ca Unique Visitors

The joint venture brings the local sales and content assets of Transcontinental Media together with the innovation and Web 2.0 functionality of YellowBot. This includes lots of social media, user-generated content, tagging, and SMB video.

Raking It In

Despite a good week, local search still has a ways to go. One of the takeaways from the WebVisible study is how local ad spending, though increasing, still lags behind online usage increases.

There are also major challenges in corralling 25 million U.S. SMBs. Ad sales, content management, and local SEO will continue to be headaches. There are well-documented issues with SMB self-service campaign management, and with the tools at their disposal, such as Google’s Local Business Center.

Along these lines, I heard a great analogy this week. SMBLive CEO Matt Howard tells us to imagine the world is a big yard owned by a guy named “Mr. Google.” The leaf-laden yard contains big heavy ones, perched up, waiting for Mr. Google’s rake. But the majority of yard space contains smaller leaves that fly around and evade him.

“Getting small businesses to comply with Mr. Google’s wishes is a very difficult task; there are too many of them,” Howard said. “A huge commercial opportunity remains wide open to help millions of SMBs get discovered in local search in a manner that is immune to their inherently fickle, distracted and leaf-like behavior.”

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