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Local Search Hosts The Ad Battleground

David A. Utter
Staff Writer
Published: 2006-05-11

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The major online players, Google, Yahoo, and Microsoft, all have advanced their efforts at serving local markets with improved mapping products, high-quality imagery, and advertising tools aimed at bringing the offline small business into the online world.

The late Sam Walton built a global retailing empire by starting in a small town called Bentonville, Arkansas. Low prices and high volume moved products off the shelves, and do so in hundreds of Wal-Mart locations today.

Volume has been a battle cry at various levels depending on the business. BMW prices vehicles to serve a smaller market, while Toyota alters pricing through its vehicle line to build higher volumes of sales.

Playing the high volume game can be dangerous. Margins tend to be razor thin, and they will cut a company until it bleeds red ink all over the balance sheets if implemented carelessly.

Done correctly, volume can carry a firm with wave after wave of little purchases, made by loyal repeat customers. It's the way businesses, at least the good ones, have built their success, since it costs more to gain a customer than to keep one.

On the Internet, search advertising has started to reach the point where competition, both present and forthcoming, can have a price impact. Even the most successful seems to have its eye on building that volume, and the trio of Google, Yahoo, and Microsoft demonstrates that.

Google rules online advertising through its AdWords product. It offers a self-service approach that automates the process of purchasing and placing advertising online.

Our readers know AdWords, and many know it quite well. For those who have built up some online success with it, beware. Google wants to bring your competition online.

Once one moves the various product beta releases aside, it's easier to see Google's focus on local search. Even a rare misstep proved instructive; Google merged its Maps and Local services into Google Local, only to change it back to Google Maps due to customer confusion.

Google has invited its Advertising Professionals to become Google AdWords Seminar Leaders. They would deliver one-day AdWords seminars in US cities to instruct business people on the joys of search advertising.

They also moved the barrier to entry down, by releasing the one-page AdWords Starter Edition for advertisers. It offers location advertising, with some basic targeting to narrow the ads to a single city if desired.

Yahoo moved last year to lower the financial barrier to search advertising. They dropped the minimum deposit to $5 for ad campaigns. There is a minimum bid requirement of 10 cents for click-throughs.

Or, a business that moved quickly could have picked up a spot with Yahoo's Featured Local Listings. The services offers top-of-page listings in Yahoo Local Search, for a flat rate of $29.95 per month. Businesses can choose bottom-of-page listings for a lower rate.

Along with that search listing, Yahoo provides some extra handholding for the business without a web site. Part of the local advertising service with Yahoo includes a customizable listing and business details page; also, Yahoo provides a free 5-page basic website for the advertiser.

Microsoft appears to have part of their plans in place. Through its new Office Live service, businesses can receive a free domain name and website, and other services.

It isn't hard to imagine Microsoft using Office Live as a gateway to its AdCenter business, the newly arrived competitor to Google AdWords and Yahoo Search Marketing.

Microsoft is planning to spend some $6.2 billion this year in online research and development. Some of that money certainly will go to Windows Live, which has a Local component online and running now.

Windows Live Local carries advertisements alongside its maps. Drag the map view, and new advertisements for businesses visible in that view appear.

So much focus on local detail, by all three companies, has to be recouped in some manner. For either Microsoft or Yahoo to make a dent in Google's multi-billion dollar paid search revenue, they will have to be better than Google in bringing in the smaller business advertisers, and do so in as great a volume as they can.

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About the Author:
David Utter is a staff writer for WebProNews covering technology and business.

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