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Search engines are jockeying for position at the top of surfers’ Favorites lists and the latest innovation is ‘local’ search. There is certainly demand, but hurdles remain. By Martin Croft

The internet has opened up the whole world to ordinary consumers. But what people actually want to look at (or for) is more often than not quite close to home.

So the power of the Web is being harnessed to order a pizza from just around the corner, to book cinema tickets at the local multiplex, to find out the time of the last train home or to get the phone number of an emergency plumber.

As a result, search engine companies and online marketers are finally waking up to the fact that they need a local dimension. Google, for instance, has just announced the UK launch of its local services for PCs and mobile phones. Google Local UK combines local business data from Yell.com with local information from Google’s index of more than 8 billion Web documents. Google says this means it can provide local information without having to rely on predetermined business or service categories. Obviously, the search engine giant will be marketing heavily to Google AdWords advertisers who want to reach customers searching for businesses, products and services in their area.

Google UK managing director of ad sales and operations Kate Burns says: “Adding a local dimension fits with our mission to organise the world’s information and make it accessible to everyone. In the past two years, we’ve seen a change in what UK users are searching for – they are doing much more local searching.” Burns adds that Google Local also fits with the launch a few months ago of local targeting for advertisers, which allows them to “drill down” by postcode and so get a better idea of to whom they are advertising.

With Google Local UK, users simply enter a key phrase (fish and chips, for instance) plus their postcode or area name to receive a comprehensive list of nearby fish and chip shops. Each result is accompanied by a phone number, street address and links to related websites such as those of other fish and chip shops, reviews and other useful information. As well as searching by postcode or area, users can also search by street name, London Underground station or airport.

Google is also launching Google Maps UK, a dynamic mapping feature that is integrated into Google Local UK. Users looking for local information can immediately see their search results on a map and find directions on how to get there from any given point.

Finally, Google has also linked up with online and mobile mapping provider Multimap.com to add local “contextual” advertising to Multimap’s public website. Google’s AdWords sponsored ads, which are targeted to the location shown on screen, will now appear whenever a user looks at a particular map.

The map as medium

What that means, the companies claim, is that users who have searched for a map in a particular town see links to online sites for businesses operating in that area.

Multimap.com founder and chairman Sean Phelan says: “Two years ago, advertisers weren’t that interested in geographical targeting; by a year ago, it had become a nice-to-have for over a quarter of our advertisers; this year, a third of our advertisers demand it; and next year, we expect at least half to have a requirement for such targeting.

“Local advertising is the next big thing in online advertising and it’s great that a search engine of the calibre of Google has recognised that targeting customers on the basis of place is just as valuable as doing so by content.”

MSN UK search business manager David Graham says: “With up to 20 per cent of online search queries relating to a product or service near a person’s home or work, local search represents a fantastic and, as yet, relatively untapped opportunity for advertisers to connect with their customers. Price is also a compelling factor: the cost-per-lead generated through local online marketing is at least 50 per cent lower than through traditional forms of local advertising.”

Graham points out that canny advertisers can use various sources of information to target their output on a local level: “IP address, customer PC settings, customer address, mobile phone location and now GPS technology are all key data that can be used to target advertising messages.”

In the US, MSN.com already features a “Near Me” function, which does exactly what it says: searches for providers that meet the specified keyword criteria and are physically near to the user.

Nearness, incidentally, can be a relative concept when it comes to local services, because it is usually based either on a computer’s IP address or on information provided by the user (such as a place name, street name or postal code). These may provide completely false information – IP addresses are often allocated to the server through which a PC is linking to the internet, which means a PC located in, say, London can appear to be somewhere in the US. Postcodes, of course, relate to the area a user is interested in, which is not necessarily the same thing as where they actually are.

Close – but to where?

Mobile computers (and mobile phones) can provide a more accurate idea of physical location, based either on GPS chips or on which mobile cell a call is made from: but few PCs are yet equipped with GPS locators, and cells can vary in size immensely, from metres to kilometres across, depending on whether they cover urban or rural districts.

Ruud Smeets, general manager, local for search engine company Overture Europe, has slightly different statistics to Graham’s, but his overall message is the same. He says: “Up to 30 per cent of all search traffic has a ‘local’ element to it,” adding that “you might expect people to go to the internet Yellow Pages, but they often turn to a search engine. That is an obvious opportunity to build a whole new business for us.”

In the US, Overture already has a product called Local Match. Smeets admits that “a specifically European product is being developed right now – it should be available later this year.”

That product is likely to resemble the US one, which means that small to medium-sized businesses (SMEs) will not have to create their own websites – Overture will create a page for them which carries all the relevant information.

Overture is also working with associations such as BusinessLink and regional chambers of commerce across the UK to educate SMEs about the search marketing model and why it is particularly effective for smaller businesses.

Greg Ott is vice president of marketing for Ask Jeeves in the US, where Ask.com offers Ask Jeeves Local Search, a facility that is soon to be launched in the UK. He argues: “Local searches are an important and growing area of search services. Some estimate that up to 15 per cent of online searches are for something nearby. Local search services will better satisfy these users and encourage more people to use the Net for local information and services.

“This creates a new opportunity for brand marketers to use search to advertise to more users, and to communicate more specific, relevant information such as a location or promotion that fulfils the customer’s immediate needs. Local search also allows advertisers to target their advertising more accurately and thereby gain efficiency. For instance, an advertiser can avoid serving an ad to a customer who lives in an area where its service is unavailable.”

But local search is a very different speciality to the national arena, and big brands will have to learn a different set of rules. Ott adds: “In the local field, mass marketers are competing with local merchants and businesses that are experienced in targeting customers in a limited area. Local businesses are successful in creating personal relationships and positioning themselves in a way that is relevant to their local market. Mass marketers will have to think about the way they communicate and present themselves to create a relevant local consumer connection. Additionally, local search data will add a new dimension to market research. In order to take advantage of the expanded capabilities, mass marketers will have to become more proficient at analysing and acting on this information.”

All the major search companies are developing their own local or geographic services. But, as one online industry insider says: “The problem is the search engines haven’t rolled them out yet – they’ve been in final testing for years.”

Too big for your town?

The biggest issue facing search engine companies when it comes to local search is a very simple one: while there is huge demand for such services from consumers, traditional online advertisers are less interested. They tend to be much larger companies that have a national reach anyway.

The companies that would benefit most from local search services are undoubtedly local SMEs. But while some SMEs have had considerable success marketing themselves online, the vast majority have little experience. And while there are hundreds of thousands of SMEs in the UK alone, the search engine companies have no experience of selling to them.

Until now, SMEs have tended to rely on more mundane “search” tools – in particular, local directories. Smeets accepts this. He says that selling to SMEs is “something we haven’t done before, and I don’t think we’re particularly experienced – so we would like to link up with a partner that has experience in this area, such as Thomson, Yellow Pages or BT.”

The Search Works chief operating officer Jim Brigden was involved in setting up Overture in Europe. He says: “It’s a massive opportunity for search engines, and SMEs are well aware of what local search could do for them. But the search engines are having problems, because they have not yet worked out how to service that demand. They are not geared up to service a classified market made up of thousands of SMEs.”

On the other hand, directories companies that have traditionally offered local search services are aware that consumers are using online search to find local services. “They see Google as a massive threat,” argues Brigden.

Click on and call in

Craig Osbourne, media director at digital agency Agency.com, says: “Local search and other locality-based services are providing the next level of relevance for the customer. Argos is a good example of a retailer that already provides customers with a localised service, with its ‘check and reserve’ feature. Customers can browse online and then reserve items to be picked up at a convenient Argos store.”

Osbourne continues: “Online’s success continues to be driven by its ability to enhance users’ experience and provide relevance via targeted messaging. The ‘think global, sell local’ message is well suited to online as customers can browse a central hub and still have the product delivered or the service provided locally.”

Tri-Direct head of online Simon Bailey says: “Though local search services are currently being developed and used in the US, we’re not at the same level of detail yet in the UK. We don’t have quite the same impetus to drill down to the local level because the UK has a much smaller geographic area. Furthermore, local searches are very low down on the habit list of the online community.”

He says: “There is often a powerful need for national brands to drive retail traffic at a local level, but their ability to do this online is limited. This is partly down to the sheer effort involved in tracking internet users to a specific postal area (though segmenting by city is fairly straightforward), and partly due to the way consumers access online information with requests that may not reveal their desired location. For instance, are they looking for local plumbers for themselves ââ¬â or for their mother, who lives 200 miles away?”

The Online Marketing Show

Marketing Week and New Media Age are joining forces for the launch of Online Marketing 2005. This new exhibition and seminar programme offers visitors a chance to catch up on the latest developments, techniques and opportunities in internet, mobile and interactive television marketing and advertising.

Where: Royal Horticultural Halls, Westminster, London SW1

When: June 8 and 9

Visitor enquiries: 0870 7444984

Exhibitor enquiries: 020 7970 4337

Info: onlinemarketingshow.co.uk

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