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The History of Local Search on the Internet

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Some websites have offered a local component since the later part of the 1990s, but these have been mainly comparison shopping sites and directory-style sites.

Their efforts may not have been perfect, but they realized the importance of local search before most other search engines did.

It really wasn’t until research conducted by the highly regarded Kelsey Group, among others revealed some interesting information that made everyone in the online world sit up and take notice.

Released late in 2003, The Kelsey Group’s survey and research produced some interesting data and estimates. Here are some of the more pertinent results:

• Traffic from the major search engines that can be defined as looking for a product in a certain location can be as high as 60% (for market leader Google), although for other search engines, a more typical percentage range was closer to 10% to 15%. Even the percentage for Yahoo was rated at 12% to 40%.

• Local search traffic from the smaller, niche search engines, which often provide impressive ROI on PPC ads, usually was in the range of 10%.

• Businesses reported that about 75% of all their customers originate from within a 50-mile radius of their location.

• Approximately 80% of small-to-medium-sized businesses reported they buy their needed products/inventory within a 50-mile radius of their business.

• Kelsey estimated paid local search would make up about 24% of the market by the year 2008.

• By 2008, purchases tied to local search are estimated to reach at least $2.5 billion.

The results of a similar survey conducted by The Kelsey Group and BizRate, a comparison shopping site, were released a number of months later, in February 2004.

This research used, as their source, a group of U.S. residents who had made an online purchase in the previous year.

The report showed a quickly changing scenario and clarified some of the earlier information.

Kelsey spokespeople themselves stated that they were rather surprised by some of what they found.

• 25% of all users of search engines who are looking for products are looking for businesses close to home and/or work. This is about twice what their earlier survey showed.

• 36% of searches are shopping related, either to research compare prices, or buy online.

• 64% identified search engines as the primary way consumers find something online.

• 80% said that commercial search results were “good” to “excellent.”

• 44% of consumers are making more local product/service searches than in the prior year.

Two key points from the research deserve repeating here:

• Almost half of those who buy online are using local search.

• One-fourth of all shoppers using search engines are looking for a local business to buy from.

There is no doubt that PPC online business is growing. Spending on search-engine-related spending was reportedly close to $1 billion just during the second quarter of 2004, while in the corresponding period in 2003 it was half that amount (about $515 million).

One trend, already underway, affected the development of local search significantly-the growing presence of online versions of print telephone directories (the “yellow pages”).

Throughout 2004, many search engines have contracted with various yellow pages properties to integrate the yellow pages web capabilities with the search engines’ version of local search.

Throughout the remainder of 2004, a variety of ways of implementing local search capabilities were added into PPC search engines, especially during the latter part of the year.

The complexities and variations of these local search solutions prevent us from predicting will become the “standard” local search solution, but there are some key clues to be found in the programs developed and currently used by PPC search engines.

To small businesses, the ability to run a local search is a huge development. This finally gives you the opportunity to persuade Internet customers who like to buy locally to choose your business over the store 3 blocks away, without even having to interact with them.

Local search is here to stay, and it is not too late to enter the game. In fact, this is exactly the right time to become involved!

What looked like trends six months ago are now reality and a major upheaval is quietly making its way through the online community.

Many businesses have become disillusioned with organic search results. They have found that PPC is a more reliable option for their ad dollars, and adding the local touch is the icing on the cake.

Local PPC search is definitely worth investigating and experimenting with to see if it can help you increase your ROI by converting more online visitors to your website into buyers.

Keywords: Local Search, paid local search, yellow pages,


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