local ad market

Local Web-Ad Market Cools Down

Local ads have accounted for some of the fastest growth in Internet advertising in recent years, as small businesses from car-repair shops in Dallas to bakeries in Charlotte, N.C., have taken their marketing online.

This year, growth in the local-ad market -- which represents about a third of total online ad spending in the U.S. -- is expected to shrink, according to one key estimate, challenging the ad and media-buying shops that rely on the local Internet market.

A number of start-ups, including ReachLocal, Yodle and Spot Runner, have cropped up in the past few years, raising millions of dollars and building technologies to help local businesses make the most of their Internet ad buys. Meanwhile, more-established local-media companies, from newspapers to Yellow Pages directories, have scurried to retrain their sales forces to sell online ads alongside their traditional products.

Now, local businesses are chopping their total ad spending amid the recession. While the local online-ad market remains one of the few relatively bright spots in the ad landscape, it probably will be tough for any one ad-space seller to reap much of the benefit.

"You have a lot of competitors offering the same thing, or something that is very similar. It's holding back the market to some degree," says Greg Sterling, principal at consulting firm Sterling Market Intelligence.

And there won't be as much gold to go around as the prospectors had hoped. Online spending by local U.S. advertisers, which grew by 45% in 2008 to $12. 7 billion, is expected to see growth fall to 5.4% in 2009, according to media-research firm Borrell Associates. Total U.S. online ad spending is expected to be about flat, declining 0.3% to $36.9 billion in 2009, compared with growth of 8.5% in 2008, Borrell says.

Despite the challenges, ReachLocal, based in Woodland Hills, Calif., plans to announce Wednesday that it has created a new system to help local advertisers buy targeted display ads. The initiative is part of its effort to become a full-service marketing shop for local businesses.

The system, which ReachLocal has been test-marketing, gives local advertisers access to some of the same sophisticated targeting technologies used by major marketers, such as showing ads only to consumers who previously visited the advertiser's Web site or live in a certain area.

Other companies attempting to strike gold in the local-online ad market are also creating new products. Earlier this month, Marchex, a Seattle-based local search-advertising company, expanded its offerings to encompass mobile marketing, which includes creating mobile Web pages or click-to-call search ads. In January, Yodle, of New York, said it had raised $10 million in financing and planned to double its investment in creating new products and technologies, as well as continue to expand its national sales efforts.

ReachLocal chief Zorik Gordon says that despite the slowing growth, the shift from traditional ads to more-measurable online advertising, which includes pay-per-click ads, will continue, and that ReachLocal should benefit.

Founded in 2004, ReachLocal is out to build a sort of mini-Madison Avenue stretching across the country. Backed by $67.9 million in venture funding, the company has about 700 employees in 30 offices world-wide.

It started by selling Web-search ads, or ads related to what a search-engine user is searching for, and creating a reporting system that lets advertisers track the effectiveness of the ads they buy. For instance, ReachLocal can assign a special tracking phone number to an ad that allows the advertisers to tell how many phone calls the ad has generated, and to listen to recordings of those calls.

.. more online at WSJ

what would google do : NOT!

I am not going to read the book on" what would google do" by jeff. the whole concept is crazy. One industry's method of success does not apply to another's (to a large extent). Here is some proof : just in on WSJ

Google Quits Radio-Advertising Business
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Google Inc. is abandoning the business of selling radio advertisements, the second area of traditional advertising the Web giant has exited since the start of the year.

In a blog post, Susan Wojcicki, vice president of product management at Google, said the company was closing the project because it hadn't "had the impact we hoped for." She said that the company would find roles of most of the people affected but that up to 40 people may not find new jobs at Google. The company also put its radio-automation business, which automates radio broadcast programming, up for sale.

The moves demonstrate how Google is continuing to cut costs by backing away from projects most a field from its core search advertising business, which has been sustaining the company during the downturn. In January, Google said it would close down its business of placing ads in newspapers and it has also shut down or stop development on a number of smaller Web services like a virtual world and a search engine for catalogs.

Selling radio ads was one Google's earliest attempts to diversify beyond its search business by selling ads across traditional media as well. With the closure of its print and radio services, Google is primarily fishing for growth in new areas online, such as selling graphical ads on Web pages or ads on mobile phones.

Google started its radio-ad selling business in 2006, with the purchase of dMarc Broadcasting Inc., an online system for advertisers to buy radio airtime. Google paid $102 million in cash for the company and said it would pay up to an additional $1.1 billion over three years if certain performance targets were met. A Google spokesman declined comment on whether additional payments were ever made.

In 2007, Google signed a high-profile deal to sell a guaranteed portion of ad inventory on more than 675 radio stations owned by Clear Channel Communications Inc. But, overall, its radio ad system – designed to mirror Google's successful search advertising business - never really took off. A Google spokesman declined to comment on whether Google owed Clear Channel any money for ending its service.

The retreat raises questions about Google's prospects in selling television ads, the one major area of traditional advertising it is still trying to crack. Google has been adding more air-time into the auction-based system through deals with television networks. The company has acknowledged that the effort hasn't generated any meaningful revenue to date but believes it is promising.

Ms. Wojcicki said in the blog post that Google will continue to invest in its television-advertising business. She added that Google will use the radio-ad technology it has developed to find ways to sell ads against online streaming audio services.

i am back on my blog..

facebook micro blog does not do justice to real-blogging. 

i am back on blogger.