what effects will local online advertising have on the GYM / Google MSN YAHOO!

Posted on March 10, 2006
Filed Under Local Search |

some interesting thoughts I read today on Clickz about possible effects on the big players in the Searchmarket.

Paid search advertising by local advertisers is poised to more than double
this year to $987 million, and nearly double again in ‘07. That’s
according to the “2006 Local Search Advertising” report from research
firm Borrell Associates, which indicates local advertising could have a
transformative effect on the overall search engine landscape.

Despite localized ventures by the largest national search engines, local paid
search accounted for a relatively meager $420 million last year, “a
tiny spot on the wall,” as the report puts it. The report projects,
however, local paid search will go from representing barely 10 percent
of all local online advertising today to 47 percent in 2010, reaching
over $4 billion.

The experimentation stage is over for local advertisers, the report
declares, showing that although just 5.6 percent of sponsored links on
the major search engines were bought by local advertisers 18 months
ago, today they’re purchasing 36 percent of all such ads.

In addition to tracking over 2,000 online search ads on Yahoo! and Google,
the study compiles the predictions of 400 ad “experts.” Over 60 percent
of the panel believe search engines will morph with the online yellow
pages model in the next two years, contributing to the eventual demise
of the print yellow pages in many major US markets. Another interesting
prognostication: “More than three-fourths of the Borrell panel agrees
that within the next five years, yellow pages books will evolve into
directories of local Web site addresses. Eighty-five percent of
respondents think this will happen within five years.”

Real estate agents lead the local search ad pack. Real estate and mortgage
advertisers are “usually right up there,” said Borrell Associates
president, Gordon Borrell. “They’re the leading spenders on all [local
Internet advertising], not just the search engines.” Search ads for
individual local agents have leaped from 17.5 percent of local search
ads 18 months ago, to 23.9 percent a year later, to 49.6 percent of
listings on keyword searches across 10 different cities.