Kelsey: Local Search Spending Lags
"If you consider that about 20 percent is targeted at consumers looking for local business information, the spending isn't commensurate with that consumer behavior," said Kelsey Group Analyst Greg Sterling. "There's a gap between what's being spent, according to our estimates, and what the sector might be worth."
Sterling said local search ad spending lags because advertisers haven't worked out the logistics of making efficient buys. "There's a lot of fragmentation--a lot of the local advertising is being done by small businesses," he said. "It's harder to make the buy effectively, and there are a lot more potential places to go to reach those local consumers."
Plus, Sterling said, local search tools have also not been fully developed. "I think that the local targeting tools haven't really been all that good. They're getting better, certainly, but the geo-targeting has been challenging for companies."