Local Businesses Aren’t Taking Advantage of Local Internet Search Trends
Despite the explosion in localized internet search activity over the past few years, it seems that local businesses have yet to latch on to it as a powerful and cost-effective tool for attracting prospective clients and customers.
Consider this:
- Local searches more than doubled from 2004 to 2005, according to internet research firm ComScore Media Metrix, who reported more than 421 million local web searches in February of last year.
- “55% of internet users use search engines to find information about local firms,” reported the Kelsey Group (a consulting firm that specializes in local marketing) in 2005.
Notwithstanding these clear trends, local businesses continue to rely on offline ads, with some six million spending $30 billion offline and by contrast $162 million on local search, a mere ½ % of the total, according to Kelsey.
It’s unclear whether this disparity in spending levels is because the major search engines have not effectively communicated and promoted the strength of local search as a marketing tool, or whether businesses simply haven’t grasped it yet. My experience suggests that for those businesses who recognize the trend there’s a perception that it’s complex and costly, and that there’s a dearth of local expertise to put an effective search strategy together. A surprising number of businesses still don’t even have a web site. Regardless of the root causes, however, the numbers don’t lie – it constitutes a major opportunity.
Attempting to fill and profit from this gap are local directories sponsored by traditional media outlets such as local newspapers and directories like Citysearch or CityGuide. Unfortunately, the unwitting local business that participates in these directories often winds up paying a higher average cost per click to appear among a “laundry list” of competitors and 2, 3 or more clicks removed than would be the case by having their site show up in the top paid listings and 1 click away from a direct presentation. Then there are the local, regional or national professional directories for services such as mortgages, legal help, accountants, medical practitioners and so on, which “harvest” leads for resale to local service professionals. They are paying for lukewarm leads when they could be gathering their own live prospects.
There are also some technologically savvy start-ups, such as ReachLocal, who have picked up on this opportunity, and offer the local advertiser a service that includes campaign management, reporting and a free template web page. This comes, however, with a pretty stiff commission on top of the actual media cost and a general web page that does not distinguish or recognize the individualized, specific needs of each business.
The bottom line for a local business is that their potential customers are increasingly going online to search for the same goods and services they offer, while they continue to spend their ad dollars on traditional, non-measurable, less effective media. Right now it’s a missed opportunity, with a decidedly attractive cost-benefit ratio for those willing to embrace it as a core component of their marketing strategy. And by harnessing the expertise of a professional who understands how to build an effective website and navigate their way through the constantly evolving world of search marketing, a real competitive advantage is there for the taking.
5 Key Steps to developing an effective Search Engine Marketing Strategy
- Determine who you are trying to reach. What does your target audience look like? What are their demographic characteristics? Where do they live or work? The major search engines (based on GPS satellite positioning) provide the ability to choose the specific geographic trading areas where you will show up for specific searches.
- Understand what they are looking for. What are their needs and key drivers in the decision making process? How would they describe, in their language, what they are looking for in? With this information in hand you will be able to choose specific search terms to test.
- Evaluate what a new customer is worth to you business. What is the financial value of a customer (i.e. the number and dollar value of transactions over time expressed in terms of gross profit)? Internet search engine marketing is measurable, and you need to be able quantify value in order to establish an acceptable ROI; and to determine what you are willing to pay to acquire a new customer.
- Research the competition both online and offline. Who are your key competitors and how are they attempting to market and capture the same prospects you are after? What are their strengths and weaknesses? How will you differentiate yourself? What are the appropriate benefits you can offer potential customers to best position yourself for success within the competitive environment you operate in?
- Set up a tracking system to measure results. Does your website host provide a good web statistics program that allows you analyze site traffic? Are you prepared to set up a discrete telephone number and email address on your website so you can measure response? Are you prepared to test different elements (copy, layout and offer, etc.) of your website to refine and improve results?
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Alan Hecht is the founder and president of Multi-Channel Marketing. Mr. Hecht may be reached at (919) 969-8000.