It is oft-repeated that there are “300,000 local advertisers online.” This represents less than 3 percent of the 12 million local businesses that advertise in the U.S., and obviously, plenty of room for growth.
Is this aging guesstimate close enough? I don’t really track the big numbers, but it doesn’t strain the imagination to suggest there are at least 400,000. And that’s just on the search and pay per click side. Overall, there may be more than 900,000 local businesses advertising online.
It is all guess work on our part, but here is how we calculate. Google is close-lipped, but it is thought to have over 150,000 local advertisers. Yahoo Search Marketing (Overture) might have another 100,000. And then there are the localized efforts run by the remaining portals, and many smaller players to contend with, including the contextual networks, the social networks, and various other local services.
Quigo, a contextual network, for instance, has quietly wrapped up more newspaper relationships than Google, so one might guess that a good portion of its advertisers – 50,000? — are local. And Citysearch has said for many months that it has about 35,000. If it has a positive story to tell, Citysearch will eventually update this figure. That’s 335,000 advertisers right there.
The Yellow Pages have also been getting on board with search and click programs. Dex says it is getting 2 percent penetration among its 400,000 advertising accounts from its recently introduced clicks package (8,000). Verizon has a much more aggressive clicks program, and might have many times more the results.
And all this is just for search and clicks. Looking at more traditional local advertising products (i.e. enhanced listings), the number of local online advertisers swells exponentially. Most of the YellowPages companies are still focused on enhanced and featured listings. YellowBook, for instance, has a relatively undeveloped Internet presence. But it is saying that it now has 375,000 advertisers paying an average of $100 for enhanced listings on top of their other advertising. The large number is really surprising, given YellowBook’s traditional lack of focus on its online business.
One wonders what the results are like for the more developed players, specifically Verizon SuperPages, or Yellowpages.com, which is the jv between AT&T (SBC) and BellSouth. Even bigger numbers, of course, will come from Web hosting. Our surveys tell us that roughly 47 percent of local businesses now have Web sites.
Why does it matter how many local advertisers are really budgeting for online? Because the higher number shows that most local sites are really underperforming.