Local search, local revenue

Important article from Forbes on local search.

Google itself isn’t even making the most of the local-search market share it has. About 25% of all Google searches are local, but only about 10% of Google’s ad revenue–about $220 million in its last quarter–comes from ads generated through local searches, says Piper Jaffray analyst Safa Rashtchy.

Do a query on Google for your local community, i.e. “Springfield,” and look at the AdWords ads returned. You’ll see plenty of results for travel and real estate, but not much else. If any of the ads were placed by locally owned and operated businesses, they will most likely be Realtors. Now append that search with something like “plumbers” or “insurance” or “restaurant,” you are not likely to see any local results (though plenty of out of market results, including start ups going after directory business).

Local search advocates need to address these twin challenges: While we in the media and marketing get keyword advertising, the concept really hasn’t penetrated popular small business culture yet, and even for those small businesses that know about it, they don’t get it. I’ve run a small business and dealt with many small business owners and there is a common trait among small business owners — they are all too busy to want to worry about self-service advertising. It’s human nature — it’s hard to go outside of our comfort zones and learn something new, and doing self-service advertising, and to do it well, isn’t easy. It takes work.

Of course, I think this is where local media companies will have an advantage over Google and Overture — we can become the service agencies that help local advertisers manage their “self-service” advertising.

That’s one reason this McClatchy deal is interesting.

What local media companies — except, now, McClatchy — need to watch out for, of course, is start ups that step in and start brokering AdWords within their own communities. That is a potential disruption waiting in the wings.

Here’s another start up looking to get into local search.

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