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March 10, 2006

Battle of the Search

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ClickZ reports on a Borrell Associates study that claims local search advertising will more than double this year, mirroring the success of its national search engine counterparts and turning it into a $1 billion dollar industry. According to the Borrell Associates’ 2006 Local Search Advertising report, local media looks poised to take over local search and transform the way users look at national search engines.

ClickZNews reports that in addition to tracking over 2,000 online search ads on Yahoo! and Google, the study compiled predictions from 400 advertising ‘experts’. More than 60 percent of the experts polled reportedly said they believed traditional print yellow pages would be replaced by an online alternative within the next two years and that the ‘book of numbers’ would ultimately turn into a ‘book of email addresses’ in five years time.

So who’s leading the local search revolution? Research says its real estate and mortgage agents who are using local search to their advantage to drive traffic to their sites.

“Real estate agents tend to drive up keyword bid rates in their industry since, according to Borrell, they’re typically a [sic] ego-driven, and cringe when their listings don’t make the number one spot. ‘When we talk to the agents, a lot of them will tell us in whispered tones that they’re doing all this search engine advertising, and it’s double and tripled their businesses.'”

The report touts that the local searches are gearing up for battle against their national search competitors and it’s the local search with the upper hand. Local advertisers currently make up 36 percent of all text ads on Google and Yahoo results pages. And while local search made up only 10% of all local advertising this year, that number is expected to jump to 47% by 2010, according to the report.

Though national search engines Google, Yahoo and Ask have all developed comprehensive local search features, the report claims its local search who will dominate the industry by capitalizing on the sense of individual community – something the bigger engines simply cannot do.

While I agree that there is a vast growing potential for local search, national engines as mere content providers? I’m not so sure. Today’s user has been trained to use these national engines whenever they are in need of information – whether it’s research or locally-based makes no difference. It’s going to take a lot of time and money for these local engines to gain the kind of attention and credibility already being garnered by the big engines. Finding users who are willing to make the switch will likely be a tricky ordeal.

Additionally, Google, Yahoo and Ask have all poured a vast amount of resources into developing effective local search features and I hardly think Matt or Larry will sit back and watch themselves get beat out by the likes of Local or Quigo.com. And with billions and billions of dollars up for grabs, isn’t there enough for everybody?





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