AuthorHouse Blog

Borrell Associates Inc. just published a report looking at the increase in online local advertising over the last two years. In 2005, local paid search amounted to $420 million and 5.6% of all sponsored links on the major search engines. This year, the amount is predicted to be over $1 billion with 33% of sponsored links being paid by local advertisers.

Are companies just spending more money online through local paid search or are they reapportioning their budgets? Ask the newspapers, magazines, and other traditional medias and they’ll tell you about their shrinking budgets firsthand. Why do they spend money on local advertising? One reason: It works.

Another report by Borrell polled 2,466 local media websites to benchmark their revenue models, expenses, and overall sales activities as they strive to get their piece of the $1 billion pie. While the major portals like Google and Yahoo have done a good job of incorporating local content to get closer to the consumer, they are still relying on databases, paid feeds, and geo-spacial coordinates to ‘look local’.

This should be a shot in the arm to all local portal owner/operators. In the short-term, go ahead and sign up for Google’s AdSense program to capture some revenues from your traffic. You’ll be a little disappointed with the revenues and lack of reporting, but it is a good supplement to your revenue model until you can get all your slots sold on your own.

Over the past 6 months, I’ve been reading a lot of books. Like most entrepreneurs, I have a short attention span so the books I read must capture my interest early or it will have a bookmark in it for months.

A recent read is a must for anyone doing a local portal website: “The Tipping Point: How Little Things Can Make a Big Difference“. When I first picked it up in the airport bookstore, I expected it to be another Chicken Soup-type book, teaching how life is a game of inches, or just some other self-help organization book. Thankfully, I was wrong.

In Malcolm Gladwell’s book, he talks about the three types of people that influence business epidemics, or in our case, local website adoption: Connectors, Salespeople, and Mavens. As Gladwell explains how each of these groups influences the masses, I started seeing my neighbors, friends, and coffee shop acquaintances much differently. I also learned that I’m a Connector, a trait that comes with knowing a lot of people and trying to ‘connect’ them together for the good of the community. What type of person are you? What type of person do you need to sell ads for your website?

If you are running a local portal in your community, or maybe you are an aspiring local politician, “The Tipping Point” is a must-read book.

Local online coupons are making a return after several dot-coms bit the dust in 2000. This most recent one, Zixxo.com, seems to have a fairly easy to use coupon website engineered for local portals and users.

An advertiser or user merely registers with Zixxo to add or view local coupons based on your zip code. Once you are logged in, you can view a directory style listing of local coupons, print them out, and redeem them either online or at your local bricks and mortar store. Advertisers can also submit their local coupons for free, a price tag that no local business can bark at.

While this may be free for now to advertisers, there are rumors that Zixxo.com will charge 50 cents per coupon at some point, but even at that price, it is still a deal. What is your alternative, MoneyMailer or ValPack coupons? Thanks to the USPS, direct mail has become too expensive for most local mom and pops, this will be a good alternative for them in the long term.

Are there alternatives? Of course. Longtime online couponers like Coupons.com and Boodle.com are in the coupon race as well. But Zixxo.com understands that people shop locally, especially the Boomer generation that uses coupons to begin with.

Online couponing has always had a financial model issue. Until Zixxo (or any online couponer) gets enough traffic to make it worth a business’s time, they really can’t charge for their services. Also, the Gen X, Y, Z etc. ‘kids’ don’t coupon as much as the Boomers, which coincidentally are not bigtime internet users. The first online couponer that can couple coupons online with coupons offline will win this race I think. Bundling this service for an advertiser gives them a revenue model AND distribution.