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Old 11-02-2004   #1
Chris Sherman
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Local Search Marketing: A Huge Untapped Market

Data from a recent telephone survey of 500 small-and medium-sized businesses (SMEs), with 100 or fewer employees, revealed that only 5 percent had adopted search engine marketing, according to the Kelsey Group and BizRate. But that's about to change now that local search has matured enough to deliver profitable leads to these SMEs.

Today's SearchDay article, Local Search: Missing Pieces Falling into Place suggests that local search may be the catalyst that causes advertising dollars to shift away from traditional channels and into search marketing. If so, that's a huge, untapped market that's ripe for the picking for search marketing professionals.

Comments welcome!
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Old 11-02-2004   #2
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There was a post somewhere the other day about the small SEO firm dying out over the coming months and years as the resources needed to compete were just getting over the head of the small firms. That is going to happen on a national and global scale because money is at stake and many of the small firms have pioneered the industry but as it matures, the Fortune 1000 will take it. Global Corporate will take what is profitable. That I believe.

But I do not believe that means the death of the small SEO firm is inevitable. Local search will open the doors to more small firms than there has ever been before. BUT, not neccessarily for the existing firms. MOre for the ones that can adapt or new ones that aren't dragged down with the "that's the way we've always done it", syndrome.

I believe, at least in the beginning months and years, to be successful as a small firm in the local search market, you will need a lot more face-to-face contact. You will need to put shoe leather to the pavement. That requires a different set of skill sets than most of us are used to .

If you are reading this now with a cigarette hanging from your lips, Your'e 20 to 40 + pounds overweight, you're not sure if it's raining or not outside and you haven't eaten anything that was not cooked for you, came in a paper bag or prepared in a microwave in the last two weeks, if you are not comfortable with getting out of bed before noon, taking a shower and putting on some clean clothes appropriate for the business community, you may be in a position to watch some young whipper-snapper take your market share
Being #1 based on your ISP's location in Google for search enigne marketing may get you the call, but the guy willing to show up or invite the prospect to an office, (I guess the bedroom could be an office if you mnde the bed, but I'd feel a little uncomfortable talking to you in your pajama bottoms while sitting on your bed), is the one who will be able to getting the real deals.

Local search is going to create another small business gold rush much like SEO in the mid to late 90's. Only now it will be something much closer to running an insurance office or a small retail store. It's a wonderful thing in my opinion because it will actually create revenue streams and a stronger tax base for a lot of medium to large sized communities and do more to legitimize the SEM industry at a grass roots level than anything any trade association will ever do.

Been sponsoring some local community theatre stuff for over a year now and looking for other things that business people are likely to do in their "off time. Been sprucing up the offices lately to and seem to be getting more and more visitors all the time. It's coming and I think it's long overdue.

I've long felt that it didn't make much sense for a plumber to pay the price for getting top spots for plumbers on google when they could not serve the vast majority of traffic that spot generated .
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Old 11-02-2004   #3
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Local Search Marketing: A Huge Untapped Market

There is so much potential within local search marketing; not only for product/service promotion to key areas, but also in the ability to test campaigns before a national launch. I'll use a large scale example to explain the validity of local: Let's take big-box retailer "A" that has outlets in every major city. By data mining domestic sales information, you should be able to determine the hottest selling (or slow selling) products in each key market. Moving forward, cross-promote key products to varying regions by offering either online or offline promotions such as free shipping or in-store discounts with printed coupon. Mine your results further to determine which landing pages produced the greatest return on your campaign. Also, local fits in perfectly with seasonal product sales as well; think snow blowers in the Northeast and air conditioners in the Southwest. All excellent ways to geo-target key products to drive online and offline conversions.

In the second case, using local as a testing ground for national campaigns is an excellent way to save time and money on a campaign that might not have produced your expected results. Think of local as market research; testing your campaign in a region or DMA such as Columbus should produce results expected of a national campaign. However, extensive search data mining along with targeted keyword research, A/B Testing and results analysis will prove the ultimate success of your campaign.

This is just one example of a large retailer using local search to their advantage, but how about the SME? Well, to be honest, the engines really need to take the next step to provide as much information as possible to get SME's to adopt this new process. You can't just throw out a program and expect an immediate adoption among those in which the program was created. There are going to be those advertisers that will jump in first to test the waters, normally in the ad world we call these people early adopters. And I think that you'll see that as more and more companies use local search to augment their online marketing mix, you'll see these companies join in on the bandwagon. However, they need to have a system in which the research, process, execution, measurement and analysis is up to speed before they jump in. It will get there, and many Search firms have such technologies that will allow for ease of execution. Educate, test and measure, extensively, to prove ROI!!
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Old 11-02-2004   #4
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I think that there are a number of things that are going to happen in this market place over the next several months and both of your viewpoints will definitely come to fruition.

First off large scale advertisers will definitely recognize the value that local search can play in their marketing efforts. I have worked with a large national retailer for the past ten years that does a ton of direct mail but does zero SEM. Their reasoning is simple they can segment their direct mail to the point where they know the return rate that they will receive for every dollar that they spend. The key to getting them online is to be able to show them the same types of segmentation based not only on user location but also on user preference and behavioral charistics that will be able to be applied through offline data. Once you can show this segmentation you will also be able to show the same types of return statistics that you can through traditional direct marketing.

I do not agree that SEM will be an industry that will be sold on a door to door basis. I think that it is more likely going to be an add on service that will be offered by Advertising Agencies in each local market. With this being the scenario you would have several large national players that would primarily serve large accounts and hundreds of mid-sized ad agencies that would serve the smaller local markets. The ad agencies will be able to serve this market through the use of sophisticated tools similar to those utilized to place media on a regional and national basis. These tools are going to be developed by an SEM agency that has experience managing many clients and automating the processes necessary to make small campaigns profitable. Once again in a similar scenario to how television ad placement and analysis programs were developed by companies like Nielsen and Scarborough.

As for the SME's discussed in Greg's artcile there is a definite need for Search Engines to provide more services in order to get them into the market. We have already seen this trend begin to occur with some of the agreements that have been made with yellow page providers over the last several months. What they need to focus on next is developing better technology to be able to place ads locally that can go beyond the IP of the searchers' computer or location specific terms utilized in the search phrase. They need to be able to identify location for at least 70% of all searches to make this a valid medium. The second thing that they need to do is improve the quality and reliability of the tools that they currently provide. Once they have accomplished these two things it will be much easier for an SME to build and manage their own campaign up to the point where they have determined it to be successful enough to warrant contracting someone else to do it for them.
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Old 11-03-2004   #5
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great discussion

Massa I just stared a poll about the resources required to continue to compete within the organic listings, perhaps based on the article you spoke of.

Excellent points made about this article by all. Local search is not going anywhere soon, and it is important for all SEM's to realize this and provide specialized local services. In reality, it matches up very well with SEO. The increase in local searches will make it easier to perform well organically for those terms.

I believe that localized search will certainly grow from the major cities at a much faster pace than over the last few years. It’s fairly telling when keyword research so often reveals San Diego and Seattle, along with New York, Chicago and Houston, within the top-searched local phrases. I was lucky to get my SEO/SEM training in the San Diego market, where everyone it seems uses “San Diego” with their search term already. Talk about easily achievable high CTR’s in Overture AND Google!

As far as SEM local applications, see the above comment. This will increase CTR’s and hopefully ROI’s for many customers (if not there is a usability/charisma issue). I agree with mburgess’ excellent outline of different data mining possibilities that will exist. I’ve said it ten times in this forum but research IS the key to marketing.

Mnaeger also validly points out the value of local SEM to large agencies. IMO they will continue to outsource for a few years, until there are enough SEO’s/SEM’s with the required experience within the job search market. Until that point, SEM/SEO will continue to be sold “door to door.” Agencies will buy-out some, but others will grow in size and reputation. Soon, if not already, an agency would look very suspect if unable to answer the following question during a proposal: “How do you plan to market my website within search engine results?”
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Old 11-03-2004   #6
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I am still surprised of how easy and cheap it is to do local European SEO and SEM.

However, I am very dissapointed in you, Chris, to point that out and send people to "our" goldmine over here Now we had it all to ourself for so long
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Old 11-04-2004   #7
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Originally Posted by Mikkel deMib Svendsen
I am still surprised of how easy and cheap it is to do local European SEO and SEM.

However, I am very dissapointed in you, Chris, to point that out and send people to "our" goldmine over here Now we had it all to ourself for so long
The move to the European market is coming... watch the huge growth of successful translation companies.
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Old 11-05-2004   #8
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to Europe...

As usual, Europe's culture has led the way for us barbaric Americans

Aussie (I used to live in Canberra), how are the local searches in springtime Australia?
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Old 11-05-2004   #9
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The move to the European market is coming... watch the huge growth of successful translation companies.
The trend, as I see it, is that companies outside the US chose to translate to just a few of the European langauges. Hardly ever them all. Lucky for me, Danish is often left out German, Spanish, Dutch, Italian and Swedish almost always comes before Danish.

And it probably makes sense for most to do so. Especially when I look at the translations most US companies are having made when they enter Denmark. Sorry guys, but THAT is not "competition"

You should read Overtures translations into Danish. It is so bad that I think Babelfish might do a better job (that is, if they supported Danish). Just as an example, they have translated the english words in the section where they talk about match options. The problem is, that the two word combos used in English is a one word in Danish so the phrase match description just dosen't make any sense at all. Sometimes I wonder if the translaters read what they translate at all?


From a strategy point of view, though, it may make more sense for a small US company to go for the smaller regions, like Denmark, first instead of the big ones everyone else chose. The reason is simple: Less competition and lower CPCs.

You may ask: But is there any volume? Yes, there are indeed. In Scandinavia there are more people online and more money around than just about anywhere. I have clients that do close to 500,000 very relevant (for their business) search engine visitors a month - just in Danish (allthough, I have to admit thats an extreme one - most is probably in the 20-100k range).
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Old 11-05-2004   #10
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500k visits

sounds nice Mikkel, are those unique visits?

Perhaps Overture should pay you to properly translate the information. I am sure that you are probably one of the people in this industry that is most educated in both Danish and English in using our terminology and idioms

It seems that Overture would be wise to recruit someone like you for each of their areas. I speak some French and a little Dutch, and will take a look and see if I can come up with such basic errors for those. It actually helps me to learn the SEM/SEO terminology for those languages by occasionaly reading foreign sites.

If I was a local searcher in Europe I certainly would not want my language butchered on any results page...
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Old 11-05-2004   #11
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sounds nice Mikkel, are those unique visits?
I am not managing the tracking software for this client but I believe it's the number of unique times that anyone did a search and clicked through to the site. If the same person makes a new search and click that new result I think it count as a second search visitor - which I think is the right way to count it. At least, when you compare the organic volume with the PPC volume to determine value you would count every "click" just as the PPC's does.


I think Overture does what most such companies do: Hire what they think is a professional translation service. However, they fail to have local people actually check that it makes any sense. I think this is just another case of bad top-management trying to define everything - the "Why ask people on the floor when we know it all?" attitude. This is not a question about hirering me or not, its a question of how serious you take the market.
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Old 11-05-2004   #12
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What's a small business?

Equating small business with local search is by no means easy. Defining a small business as "under 100 employees" and then assuming that means they are interested in local search is very risky. Before my current job I ran my own "small business" with 3 employees, and I sold more product to Japan than I did to Texas.
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Old 11-05-2004   #13
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Originally Posted by Chris Boggs
As usual, Europe's culture has led the way for us barbaric Americans

Aussie (I used to live in Canberra), how are the local searches in springtime Australia?
I moved to NYC... though we do a decent amount of advertising back home... our products are more global in nature.
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Old 11-06-2004   #14
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Yes, but can you make money doing it?

That is the central question for local. Controlling margins and dealing with SMEs requires vendor relationships, scale, automation, capitalization, and adequate customer support structures.

Hot? Yes. Easy? No.

Local is not new. Local instead simply describes a businesses' target market- a fundemental component of search since the beginning. Todays talk of local is more about consumer adoption than it is about changing search tactics. Adoption is growing rapidly and those that are new to adopt happen to do the majority of their business in their local markets.

Local is untapped much to the same extent as search is untapped.

G's new deal with Bell South (who has 600K paying advertisers) is an agreement to sell ADwords to local merchants. Google for the first time is formally partnering for such sales efforts because of the difficulties and cost involved in selling to SMEs.

SME adoption is the real local buzz. Yet, SME adoption is riddled with uncertainty for those who are not capable of managing the business requirements of small budgets.

Last edited by Chicago : 11-07-2004 at 07:36 AM.
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Old 11-08-2004   #15
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I sure HOPE local search stays hot!

We just launched a brand new affiliate program for Citysearch.
It's our 1st CPC/CPA hybrid affiliate program and with a big name like
Citysearch we have high expectations that it will do very, very well.

Fingers crossed!

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Old 11-11-2004   #16
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Local Solution vs Patent

First, local business must be able to compete on a level playing field vs those with deep pockets.

Second, most business owners like control. A system must be self empowering in real time.

Third, simple for users to navigate.

The company with a true local solution will no doubt have to patent this system.
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