Local Search Swerves to Express Lane

You can tell the local search market is heating up by the amount of attention it’s getting from people who aren’t local at all.

In the beginning, local search belonged to the Internet yellow pages (IYP) directories. These were primarily the online arms of the local print business phone books and thus were related to the Baby Bell providers for their region. Verizon had SuperPages; BellSouth had its RealPages and SBC its SmartPages. (The very similarity in names bespeaks lack of competition.) Qwest had Qwest Dex, until it sold the property in 2002 to pay down dot-com debt.

True to their phone-company roots, these online directories took a by-the-book tack to Internet listings. Information was categorized by business type, and users pretty much got the business’s name, address, and contact information, nothing more. And that sufficed. Users reached for the online version of their local carrier’s directory, out of habit or because the URL was on the cover of their phone book.

That cozy relationship changed when the search industry began showing signs of maturity. With large national companies fully engaged in search marketing, the major engines have turned their eyes to the relatively untapped small business market for growth. And like politics, all small business is local.

In fall 2004, Google, Yahoo and Ask Jeeves all unveiled new or revamped local search sites. In late November, Microsoft began beta-testing a long-awaited MSN Search engine that offered a “Near Me” button for finding neighborhood vendors. Features sets on these sites include handy things like proximity scoring, maps and driving directions. Google Local consolidates a handful of local search results on a single map. Yahoo Local includes ratings and reviews by consumers who’ve used a business, so a searcher can look not only for the closest pizza place but the one with the best calzone.

How do IYPs compete with that?

They do so—and they are doing so– by becoming less a phone book mounted on the Web and more a “pure” Internet search environment, says Justin Sanger, president of Chicago-based Internet marketing company Local Launch.

“There’s been a significant blurring of the line between the traditional IYPs and the pure search engines such as Google,” Sanger says. “Today, both are going after the same small advertisers and the same local end-users. And they’re doing it in an online environment where users have been conditioned to expect control. They’re used to entering search strings based on their unique needs, not on categories imposed by the directory.”

Both sides know the competition is fierce. In local search, the hunt for advertisers is often a zero-sum game. Small to medium enterprises (SMEs) usually have limited marketing dollars, so if one online directory wins their business, it’s often another’s loss. That has intensified the race to add bells and whistles to online local listings. Once Google or Yahoo offers rich features such as images and Web links in local search, IYP competitors have to at least enhance their Web listings for advertisers, or it’s game over.

The same pertains to end-users. Web search consumers have by now become accustomed to the Google/ Yahoo model as the default for most online searching. That means, for example, that they expect to navigate a local search site via a central search box wherre they can type in their query keywords with all pertinent details. They balk at having to sift down through category pages that feel like cyber versions of the phone book holding up their nightstand. IYPs have had to restructure their sites to suit user expectations about what a search looks and feels like.

Most are working on doing just that, Sanger says. But it has meant a large expansion of the type of data they provide to include more detailed content about the businesses they list than they’ve ever used before– everything from the hours of operation at a local shoe store to the services, products and brands they feature. “It’s this ‘metacontent’ that enables a user to make full use of the open search environment,” Sanger says. “Under the traditional yellow pages format, somebody searching for ‘Nike shoes in Chicago’ would not get a result because their data sets weren’t structured for that kind of keyword search.”

To amass this new data, the IYPs are relying on business profiles, usually created by the advertisers themselves. These profiles offer the rich, detailed content that serves as the basis both for the IYP’s keyword search function and for buying decisions and other actions by searchers.

Those users want more than just flat listing data. That’s why they’re searching the Web in the first place rather than reaching for the phone book. “The beauty of the Internet is precisely that you can switch to a business’s Web site and find as much detail as you want,” Sanger says. “The IYPs want to keep the consumer on their sites right up to the point of the buying decision, or they’ll lose them to a commercial Web site. And to do that, they have to offer some of the same rich information consumers could find elsewhere to compare services and products.”

While they’re making progress in the content arena, the IYPs still are playing catch-up to the big engines in terms of functionality. Google and Yahoo in particular have been good at thinking themselves into the minds of their users and discovering what they want when they do a search. Sanger points to the user reviews on Yahoo Local as a good example of the utility that IYPs have to compete against. Users can sort search their Yahoo Local search results based on these ratings, creating an ad hoc Zagat’s Guide of neighborhood choices for many products and services.

“These are technology companies,” Sanger says. “They’ve segmented the search market in order to drill down to find a functional need and fill it. In local search, that means proximity, mapping, driving directions and user reviews.”

If the IYPs hold any advantage in the contest for online local search, it’s in having feet on the street. SMEs have traditionally bought their directory advertising through sales calls, either face-to-face or at least over the phone. Yahoo, Google and their ilk are not designed to sell ads by hand in that way.

“As big as Google is these days, with something like 200,000 advertisers, that’s nothing compared to the 600,000 listings in BellSouth’s local print business directories,” Sanger says. “They have about 1,800 salespeople out there every day meeting these small-business owners, and Google wants that presence.”

They’re even prepared to deal with the competition to get it. In October 2004, Google announced a partnership that will have BellSouth’s reps sell placements in Google’s AdWords program.

And small business will take a lot of selling, not just on local search but on search of any kind. Of 22 million SMEs in the United States, only about 3% do any kind of keyword buying. Even negotiating the IYPs’ rate cards can be daunting for many small businesses, says Sanger. That’s where his company comes in, strategizing and managing local search campaigns for SMEs.

But for all their alienation from high-tech search, small businesses have no problem grasping the importance of localization. “About 75% of SMEs draw their sales from within a fifty-mile radius,” Sanger says. “So local search is not just a hot new marketing tactic to them; it’s the traditional way they’ve done business.”

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