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Local search advertising to reach $2.5 billion in 2008

Loren Baker
Loren Baker SEJ STAFF
Local  search advertising to reach $2.5 billion in 2008

Local paid search advertising is on pace to generate $2.5 billion in 2008, according to a new research report.
In a study expected to be released today, The Kelsey Group estimates that locally targeted listings are the next frontier for paid search, tapping into the 10 million small- and medium-sized businesses in the U.S.

The Kelsey Group, Princeton, NJ, estimates that 60 percent of searches are local in nature, and 10 percent of those searches are for a commercial service or product.

As top search engines Google and Yahoo add more local search options, the market is forecast to grow from $1 billion today to $2.5 billion in 2008.

U.S. Bancorp Piper Jaffray expects the overall search market to increase from $2.3 billion in 2003 to $5.7 billion in 2008. The investment bank expects search engines will draw more traffic as broadband penetration increases. It expects search volume will grow as much as 20 percent during the next few years.

Yellow pages ads remain the chief marketing medium for small businesses. The Kelsey Group said that while nearly 80 percent of small advertisers use offline directories, fewer than 20 percent use search engines. Of the $22 billion spent on local advertising, search accounted for just 3 percent compared to the 46 percent tied to yellow pages.

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Loren Baker

Loren Baker

Loren Baker is the Founder of SEJ, an Advisor at Alpha Brand Media and runs Foundation Digital, a digital marketing ... [Read full bio]

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