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Search Writes the Yellow Pages
Obituary
November 19, 2004 |
The news piece was buried on page 36 of the business section in a major
Canadian daily newspaper. It was just one paragraph, a mere 46 words,
announcing that the Yellow Pages Group had signed a deal with Google,
making their information available on the new Google Local service. I'm
not sure the editors realized they were running the obituary for an 80
year old, 16 billion dollar a year North American industry.
The localization of search has been inevitable. Really, only two
things have been holding it back:
First, the accessibility of the Internet. Using a search engine to find
local information only makes sense if web access is just as close as
your nearest phone book. We're not there yet, but wireless networks and
new mobile devices are definitely closing the gap.
Secondly, more local companies have to have an online presence. There
needs to be some website for the search engines to find. It's in this
second regard that we still have a long way to go.
But overcoming these hurdles is simply a matter of time. Obviously,
Google feels the time is close at hand, and they're busy hammering nails
in the coffin of the Yellow Page industry. The discrete announcement
from the Yellow Pages Group about the Google deal indicates that they're
very aware that the writing is on the wall. The Yellow Pages have been
diagnosed with a terminal case of obsolescence. The world is quickly
passing the industry by.
Why Local Search Makes Sense
Using the web to find local businesses makes a lot of sense. Once you
find the business, you can interact with it to the full capacity of the
web. You can access reams of information, browse catalogues, book
appointments, ask questions, see interactive demos, get a map of the
location or even purchase online. It's tough to do all that with a
Yellow Pages ad.
Look at 3 examples of the top yellow page advertisers, lawyers, pizza
shops and appliance repair shops. On the law firms website you can read
the bio of the lawyer who handles the practice area, discover more about
the firm, and perhaps even submit a question or two. You can also
schedule a consultation visit. With the appliance repair shop, you can
read a troubleshooting guide, make sure they repair your brand & model,
and even search to see if they have the necessary parts in stock. And
with the pizza joint, you can shop, pick your pizza, place your order
and wait to have it delivered..all with a few clicks. Sorry Yellow
Pages, you just can't hope to compete with the advantages of the
Internet.
Finally, the Yellow Pages are restricted to predefined industry
categories. If you’re not sure what industry to look up, you won’t be
able to find the advertiser. Search is keyword based. Type in a product
or a model number, and search will take you to the right vendors. This
offers significant advantages for the user and the advertiser.
Local Businesses Still Have to Get Serious about Online
Of course, to make local work, local businesses have to fully tap the
potential of the Internet and create a rich online experience for users.
This has never been a priority before, but it will be in the next few
years. When the internet becomes ubiquitous local businesses will have
to pay much more attention to it as a marketing and customer
communication tool. The Internet, or its next evolution, will become an
essential part of our day to day lives. We won't be able to live without
it. The lines between the real world and the virtual world will blur
dramatically. It will be imperative for every business to gain a
presence in that virtual world. That means a lot of business for local
web designers, both in designing websites and revamping current
brochureware sites.
The Local Boom in Search
The second part of the boom comes when companies who never cared about
search realize it's suddenly very important to capture a top 10 ranking
in their local market. At this point, the same rules apply for ranking
relevancy on Google Local as on the main Google index. Google still
wants the best sites, as determined by PageRank and other factors, to
show up at the top of the listings.
This will fuel new demand for search marketing services, as the industry
reaches into an entirely new market. Local advertisers will discover
what national and international marketers have discovered in the last 8
years: Search is the best online channel for providing qualified leads.
Suddenly, the number of companies seriously considering search will
mushroom from its current number (probably about 100,000 total, based on
information from Overture and Google) to include almost everyone. This
will fuel a new boom in search, both on the sponsored and organic side.
Budgets will be small, but the opportunity will be rich for better do it
yourself tools. This potential likely goes part way to explaining the
seemingly high valuations placed on recent acquisition deals including
WebPosition Gold (by WebTrends) and GoToast (by aQuantive).
How Yellow turns to Gold for Search
The question on a lot of industry analysts minds lately has been the
sustainability of sponsored search revenue. I'm getting asked this
question weekly by analysts from several investment firms. I think the
answer becomes apparent, in the long term, when you look at the
potential for local search.
The yellow pages industry accounts for about 16 to 17 billion in annual
revenue in North America. Right now search is about a 2 to 3 billion
dollar a year industry. Overture has about 100,000 active advertisers.
While impressive, this number only accounts for 0.5% of all the
businesses in North America. As search takes over for the Yellow Pages,
the revenue growth opportunities are immense. Don't worry, search’s day
in the sun is still yet to come. |
Gord Hotchkiss
President and CEO
Search Engine Positioning by Searchengineposition
Enquiro Full Service Search Engine Marketing
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