The Economics Of Local Search Marketing

Our startup Clickable began as an online solution to make self-serve search advertising simple, instant and profitable across all major advertising networks, like Google, Yahoo and Microsoft. As our CEO, David Kidder, often says, our Clickable Pro solution is a simple, Apple-like version of AdWords, Google’s search media buying center. But over the past year, we’ve expanded our business to address local advertising, a segment comprising hundreds of thousands of local businesses. We recently announced Clickable Platform, the first white-labeled solution that allows online advertising resellers to rapidly scale online advertising and lead-generation programs profitably to a full continuum of local businesses.

Through the deployment of Clickable Platform, we gained a unique perspective on the challenges the local marketing industry faces as dollars continue to transition to online at the expense of conventional, offline channels, like print directories.  With a stake in this market, we wanted to gain a much deeper understanding to improve search-marketing performance for local businesses.

That’s why we asked Borrell Associates, a research and consulting firm that tracks local ad spending, to study the economics of the market and surface key challenges, solutions and opportunities. While this research report was underwritten by Clickable, we asked Borrell to approach it independently to strengthen objectivity and explore new areas. Most important, we hope to solicit feedback and drive positive, constructive discussion. We strongly believe there will be many winners who address key growth challenges and opportunities by innovating and executing on best practices. Please let us know what you think.

Key Findings

• Locally placed search advertising in the U.S. is projected to grow 30 percent over the next five years, from $4.1 billion in 2008 to $5.3 billion in 2013.
• According to the report, this growth will be led primarily by advertising service providers that adopt scalable technology infrastructure and recalibrate their economics to allocate more customer investment to search media spend.
• Many online advertising resellers and affiliates, who service local businesses, churn half their customers within a year’s time, and some lose as many as 90 percent. This often is due to missed expectations and a lack of return on investment for local-business customers.
• Most important, advertising products and value must be easily understood by local businesses. That requires a shift from selling Web site clicks to selling measurable leads and phone calls.

You can download the full report for free, courtesy of Clickable. David Kidder, our CEO, also posted highlights on the Official Clickable Blog.