Sourced from Search DaySome pundits claim that the paid search market has peaked, but new research tells a different story, suggesting that local search is emerging as an important and powerful driver for the paid search market.
There’s a “mixed message” about search engine marketing out there. One message is that paid search growth is starting to slow as the market “matures.” The other version, diametrically opposed, is that search is still in its infancy (or perhaps early adolescence) and is going through growing pains, to extend the metaphor. Whatever your opinion, paid search needs to tap the small business marketplace to fully realize its potential.
At a high level, there were two principal barriers to SME adoption of geotarged search engine marketing: the perceived lack of local search usage and the complexity of campaign set up and management. Both of those issues have now been addressed-at least in part-and the way is cleared for growth in both consumer and local advertiser adoption.
Consumer Usage Is Growing
Roughly a year ago, FindWhat’s Tom Wilde (then with Lycos) and AOL’s Gerry Campbell argued that a central problem in attracting local advertisers to search was a “chicken and egg problem”-not enough local traffic to attract advertisers and not enough local advertising content to attract users. However, data from two rounds of Kelsey Group-BizRate.com consumer surveys, as well as from Nielsen and comScore, show that awareness and usage of local search is growing.
New Kelsey Group-BizRate.com data from a survey of 3,887 online consumers, conducted in early September, on a broad range of shopping and search-related topics revealed the following:
- More than 74 percent of survey respondents said that they had conducted local searches
- Among local search users, 27 percent of their total search behavior is for local information
- Approximately 45 percent of local searches had a buying intent
- The survey also found that 20 percent of all searches among this population are local
By contrast, Nielsen//NetRatings found, in July, that 24.4 percent of searches were local. comScore found, in February, that 61 percent of Internet users conduct local searches, but that local search constitutes 6 percent of total search activity.
Regardless of whose numbers you accept, consumers’ use of the Internet (and search engines in particular) to find local information is growing. That will only continue as search engines add and refine local offerings for consumers. And Yahoo! is now doing an extensive consumer marketing campaign around local, which has already boosted awareness and usage of its local search and related SmartView products.
SMEs Now Get It-Conceptually
In one broad sense, the growth associated with local search is simply a reflection of the growth and usage of search engines and, beyond that, the rise of the Internet as a daily utility in people’s lives-at least for the broadband set. SMEs are themselves Internet users and are very much aware, if only anecdotally, of the fact that more and more of their customers are online and searching as a way to find products and services-often in the local area.
However there’s a gap between this recognition-and even what might be considered a pent up demand for access to online marketing channels-and SME behavior. As mentioned, they haven’t boosted or shifted their ad dollars commensurate with their desire to be in front of online consumers.
Kelsey Group-ConStat SME advertising data from June of this year reflects a 10 percent jump from the same time last year in the perception of the Internet as an important marketing medium. Simultaneously, however, the percentage of SMEs using the Internet as an alternative to traditional media was flat versus last year.
This brings me to the second barrier to small business adoption of online marketing and search in particular: complexity and confusion. Setting up an effective search campaign takes time. There’s obviously a learning curve. And that doesn’t even get into provisioning a campaign across multiple paid search networks. Even if you’re committed to figuring it out, there’s potential for confusion and frustration.
In recent research to measure the understanding of online advertising, TKG asked 500 SMEs to rate themselves on a 10-point scale according to their grasp of Internet marketing. Almost 60 percent indicated fairly high levels of confusion about online advertising.
There’s tremendous inertia among small businesses and most don’t have the time, as a practical matter, to learn about search. SMEs want to be in front of online consumers.
But the search engines haven’t done a particularly good job of educating SMEs, although they are starting to make much more of an effort. In fairness, this is partly because they don’t have a channel into the local market. But that is now changing, courtesy of yellow pages and others.