SES Local: The Long Tail in a Yahoo!/Google World

There is vast opportunity for local niche players in a world that is otherwise dominated by the leading search engines. Moreover, the emergence of search, in all its variations, creates a wealth of local inventory for advertisers smart enough to pursue it. All this, according to speakers at Chris Sherman's SES Local Conference in Denver Sept. 28. The 10-panel conference had about 225 attendees.

While 85 percent of local searches goes to the top 10 sites, 15 percent goes to niche and regionally strong local search sites, noted Localeze's Gib Olander. "There is a long tail," he said. "It is hard to cover all the sites offering local search."

Marchex's Gary Roshak echoed the gist of Olander’s comments. "There is life after Yahoo! and Google, with plenty of inventory," said Roshak, referring to the inventory shortage that typically affects major search engine categories. He added that the narrower focus of specialty sites — especially the localized domains that Marchex has been gobbling up — has become "increasingly relevant. Seventy percent of users type in URLs directly, rather than taking links from a search engine or from bookmarks."

To LocalLaunch President Justin Sanger, the issue isn't so much an inventory shortage as the challenge of integrating inventory with the needs of the advertiser — something that a consultative Yellow Pages sales force is especially well positioned to provide. LocalLaunch, of course, was recently sold to R.H. Donnelley.

With SEO, SEM, Pay Per Click, Pay Per Call, Profiles and other newfangled ad platforms, advertisers need to "productize their inventory," said Sanger. "This requires blending mixed buys, pricing efficiencies, and data transfer efficiencies."

The problem, however, is that many sites haven't stepped up to the plate, technologically, and are unprepared. "Some organizations haven't even put their APIs in place," Sanger complained.

Local Matters CEO Perry Evans, meanwhile, characterized it all as "the battle for the lead." SMEs will pay more and more for leads, making them an increasingly valuable customer, he said.

But it is a fallacy to start counting the 10 million to 12 million SMEs as shoo-in customers. Evans noted there are three types of SME customers: "winding up," "winding down" and "coasting." Obviously, only some of them are likely customers.

Chances to convert SMEs are better, however, if local media companies can show how they help convert the leads. "Certainly, it has been difficult to qualify a lead based on the criteria input to a search box," he said. But a new generation of local products, such as neighborhood-centric services and "purposeful" shopping guides can go a long way. "Shopping is often the forgotten play."

On the other hand, Evans feels that inventory control products, such as Intuit's StepUp, are "something of a pipe dream. They don't even know what they have (in stock) themselves."