• by Wendy Davis  @wendyndavis, May 1, 2006

In an attempt to encourage smaller, less Web-savvy businesses to purchase online ads, Yahoo Local late last week said it rolled out flat-fee pricing for text ads.

The listings are available at the top of the page on Yahoo Local, for monthly fees ranging from $20 to $300--with the highest prices charged to advertisers in the most popular categories and the largest cities. For now, the ads include basic directory information, such as the business name, address, phone number, map, and a link to its Web site; Yahoo also is testing images in the ads, according to Aytek Celik, senior product manager, Yahoo Local.

The fixed-rate offering--which marks a greatly simplified model compared to online auctions--could persuade less sophisticated marketers to experiment with Web ads, said Greg Sterling, principal analyst with Sterling Market Intelligence.

Many local advertisers believe that search marketing is important, Sterling said, but are stymied by the complexities of managing keyword bids. But small local businesses are already familiar with flat-fee pricing, making it more appealing to them. "The model that most local advertisers are used to is a flat-fee or fixed-fee model, where they know exactly where they'll appear and for how long," Sterling said. "They don't necessarily want to spend the time to learn about search engine marketing and optimization," he added.