How Many Local Advertisers Are Online?

It is oft-repeated that there are “300,000 local advertisers online.” 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.

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. 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. Revives City Guide

Spurred on by the likes of BackFence in its suburban territories, has launched its third attempt at a city guide. The new effort, which succeeds previous efforts with CitySearch and Zip2, has a new search engine powered by FAST, search by location and proximity, improved navigation, selected newspaper content, editors picks, ShopLocal sales information, and a calendar that can be browsed by events and categories.

What the site does not include are Yellow Pages, which had been abandoned after Switchboard stopped supporting it. While has been an innovator in selling ads on podcasts, video pods and RSS, it has never found “meaningful ways” to sell local service and merchant ads. Indeed, CEO and Publisher Caroline Little, during a keynote at the Kelsey ILM show, said that is “4-5 years behind national players” such as Yahoo and AOL who have local templates.

A major emphasis of the new city guide is on “frictionless consumer generated media,” including user reviews of Washington area services and events. Soon, users will also be invited to comment on news and feature articles. Coming up in three-to-six months will be a photo library where users can send in their favorite photos – among the most popular features, coincidentally, on BackFence. “People love photos,” said Little. “We learned that on 9/11.”

GoogleLocal Stresses ‘Openness’

GoogleLocal is one of the biggest wildcards in local advertising, with new partners and angles being pursued for AdSense, AdWords and GoogleBase, the new self-serve directory and classifieds product.

Whatever it is planning behind the scenes, Google clearly wants to be seen as a bunch of good guys. Keynoting the Kelsey ILM conference, Google Local leader Shailesh Rao’s presentation was almost entirely data-and-content free, focusing instead on the shimmering possibilities of local information and services.

“We don’t see ourselves in your business,” said Rao. “I don’t feel your pain.” Addressing the controversial rollout of GoogleBase, Rao said it has simply been misunderstood. “GoogleBase is not synonymous with owning content,” he said. “Google Base is to the benefit of owners of content….it is a meaningful, structured (way to do) content.”

Google’s Froogle Ramps Up on Local

Google’s Froogle has been an also-ran among the giant comparative shopping sites, being out-distanced by the likes of eBay’s and Scripps’ Shopzilla. Indeed, Google’s apparent inattention to Froogle has been a mystery.

But this week, Google turned on the burners for Froogle. It announced that it will provide sales-and-inventory search programs for big box and local merchant retailers with ShopLocal, and StepUp, a Bay Area startup that now provides online inventory search for 1,200 retailers in 8,000 locations. Roughly 75 percent of StepUp’s merchant base, or 900 retailers, come from outside the Bay Area. StepUp also has 250 Bay Area specialty retailers, grandfathered from its acquisition of MarketSquare.

The Froogle announcement is actually the first concrete manifestation of GoogleBase, a do-it-yourself classifieds and Yellow Pages builder. While few details of GoogleBase have been released, its mere existence has caused some consternation with local media and commerce companies, who now finally understand that they’ll be directly competing with Google.

Online Newspapers See 11% User Growth

The transition for newspapers from print to online is incomplete, and possibly unsuccessful. But online newspapers have definitely gained momentum, with usage up 11 percent from last year, according to Nielsen/NetRatings. At the same time, the Audit Bureau of Circulation reports that print circulation dropped about 2 points.

Nielsen VP of Analytics Charles Buchwalter told The Local Onliner that one driver of newspaper sites, and other news sites, is the rise of RSS news feeds. The ability to add newspaper feeds means that people are accessing more newspapers, more often, said Buchwalter – even though RSS has “not penetrated significantly” at this point.

Beside RSS, another reason for the jump in usage is that people are accessing newspaper websites from several computers – although Nielsen tries to count them as one user, said Buchwalter. “It’s a tremendous part of it.” A third reason is that many newspapers are simply doing a better job of driving traffic – and getting credit for it. “The Washington Post is doing a very good job with their data analytics and their continuity links,” he said. More details follow.

Newspapers and Disruptive Technology, Circa 2005

Shareholder cries to break up or sell Knight Ridder begs the question, once again, of where newspapers are in Clayton Christensen’s “disruptive technology” cycle. Are they still facing the beginning of disruption, where newcomers are focused on new audiences that newspapers don’t care to reach? Or are they in the middle of disruption, where those newcomers have begun to repackage their products so they compete more directly with newspapers? Or more disastrously, are they at the end of disruption, where newspapers are much on the defensive that they cannot win, even in their traditional markets?

Harvard Business School Professor Clark Gilbert worked under Christensen at Harvard, and has made media disruption a specialty of his own. In a Nov. 8 Manager’s Journal Column in The Wall Street Journal, written with Innosight’s Scott Anthony, the suggestion is that newspapers are probably in the middle of disruption – a stage in which it is not too late to remake themselves for the future. Gilbert and Anthony also suggest that newspapers have been moving in the right direction with a stream of acquisitions that specifically address new audiences, including Careerbuilder,, Slate, MarketWatch, and Topix.

Gilbert and Anthony say it is too early to definitively assert how successful newspapers will be in their efforts not just to turn back the clock, but reach new audiences. But the acquisitions that newspapers have made “appear promising. Not only do these companies have large audiences. They provide newspapers with new business models and access to segments where online brokers are actively participating.”

Broadcast Interactive Evangelizes for TV Websites

It’s no surprise that TV station websites remain underwhelming in most markets. They still think of the Web as a promotional platform. But since 2003, a number of stations have begun to remake themselves, leveraging their local presence with content and advertising. Some are making a dent in the local advertising market, with earnings running from $300,000 to over $1 million in larger markets.

Station groups like Clear Channel are doing it on their own. Most, however, have signed partnerships with TV website specialists, whose ranks include WorldNow, with 147 stations; Internet Broadcasting Systems, which has 70 stations, including many top markets; and relative newcomer Broadcast Interactive Media. Broadcast Interactive will have 70 stations by the end of the year, but mostly in smaller markets – the disadvantage, perhaps, of starting after WorldNow and IBS.

BIM Chief Timur Yarnall shared his sense of where the marketplace is going with The Local Onliner. The best situations for TV Websites are when they go local and create new revenues from new customers, rather than bundling in existing contracts with car dealers and other traditional TV advertisers, says Yarnall. Homebuilders, real estate brokers and mortgage advertisers are examples of new customers who haven’t previously worked with TV stations. “The website clinches it. Otherwise, these guys would not have gone near TV.” More from our discussion is below.