Donna Bogatin at ZDNet had a widely cited post coming off the recent Kelsey conference that put a $31 billion figure on the local search market. What is that number?
It’s the approximately $18 billion in current print newspaper classified advertising and approximately $15 billion in US yellow pages advertising.
But here’s a much bigger local number:
Source: Robert Coen, Universal McCann (June, 2006)
Here are the competing local forecasts:
- Borrell Associates: By 2010 local search + geotargeted display advertising = $8.61 billion (from $4.8 billion in 2005)
- Kelsey Group: By 2010 local search (Search, IYP, Mobile) + online classifieds = $9.9 billion (from $3.3 billion in 2005)
- Jupiter: By 2010 local online advertising = $5.3 billion (70% attributable to classifieds; from $3.2 billion in 2005)
- eMarketer: By 2008 local = $2.8 billion
Here’s an interesting NY Times article (reg req’d) comparing the US and UK online advertising markets (with lots of discussion about local.) And here’s a piece from Friday’s MediaPost, which says SMEs are ready to increase their online marketing spend next year, based on a Yankee Group survey.
Stop. Take a breath. The $31 billion (or even 50% of it) is unlikely to migrate online at the expense of traditional media in the next decade. Local online will be worth many billions (it already is in a broader construction of the category). But it’s very challenging for all the reasons discussed at length on this blog in the past. Just think about how difficult it is to get someone’s attention at all these days — let alone a harried small business owner who has better things to worry about than SEO and SEM.
People forget that local search is a multi-headed beast. There are both large and small advertisers that target locally. Agencies and their brand clients are already tapping into geotargeted search and display advertising, with demographically and geographically targeted video to come. The big, national advertisers who target consumers in particular local markets are not part of the drama here. They see and understand the value of these targeting platforms and they can adopt them more readily.
The drama really surrounds SMEs — the 10 or 17 or 22 million — and how much of their spend will migrate online. That’s about simplicity, the infrastructure and the sales channel. The models and infrastructure now exist to bring a substantial number of SMEs into paid search and other forms of online marketing over time. It’s a question of execution and overcoming the ambivalence of doing so among traditional media, which have the most hooks into the local market.