5 Leading Indicators of the Future of Local Search

The local search market is changing. On the buy-side, enterprise advertisers are starting to assert their control, demonstrating that they can leverage large footprints to compete in local with clean distributed data, and accurate claimed citations. Consumers, meanwhile, increasingly want to use their mobile devices for more activities than navigational search, expecting to be able to buy and not only find goods and services nearby.

The industry is responding. Google is moving to wield even more control of the local search market, not as a search engine, but as a commerce engine; Facebook has entered the local search race with gusto; and Yelp looks to get a foothold in local commerce with delivery trucks. The advancements of local search are evolving so rapidly that a race to control consumer behavior may be brewing between the Davids and Goliaths.

Here are the five major indicators of what is to come and trends to watch:

1. Advertisers will be the Local Kings, Not the Directories
For years, advertisers empowered the directories to win in local search. Focusing on data syndication to the ecosystem and not on the advertisers development of local pages has put Google and other search engines in a precarious position.

By and large, enterprise advertisers fail to maintain local pages and instead fuel the directories. Google is therefore forced to recognize the directories as largely the only local content about the location-based advertisers. Instead of a large home improvement store promoting itself through its own local pages, it is promoting itself through directories. With no local pages for Google to rank for the advertiser, the directories dominate page one instead.

However, advertisers are beginning to recognize this: directories are not the answer to their local search challenge, but rather the source. Google is pressing for additional Google+ Local content to elevate their listings over the directories. Agencies and pundits are pushing advertisers to put up local pages. The advertiser will emerge as the king of their domains soon enough; they will capture their rightful traffic and then we will see many of the directories fall.

2. Facebook, the Rise of the Next Great Search Engine
Facebook is a not a micro-Internet anymore. You can increasingly do everything on Facebook that you might do outside on the Internet: Email, IM, video, media, mapping, and search – especially local – is becoming the next big achievement. Graph Search has made personal demographic, psychographic and behavioral data about its users available to all Facebook Connect partners. Participating publishers can target content to a user in real-time. And Facebook continues to learn more about user activities while they are outside of the magic kingdom.

The “parent-child” functionality of Graph Search is particularly important for large companies with multiple locations. The brand can host a main profile page for its parent company while allowing users to access, like and utilize location child pages with individually relevant and timely information like maps, hours of operation, pricing, services/products and more. With so much of the activity on Facebook at the individual level, and so much insight into the individual user, the most impact will be realized on local search.

3. Maps, Ratings and Ecommerce Collide
Yelp, a service that was originally designed as a rating engine, is evolving into a local commerce provider, signaling a transition from local discovery to local action. The company now offers consumers the opportunity to order food online through its site or mobile app. This development suggests that ratings, tips and word-of-mouth referrals will only continue to grow in importance for brands navigating the local search space.

How about Google Shopping? Isn’t it competing directly with local advertisers by promoting consumers to make direct purchases through search result listings? The local search or local intent is no longer just about information, but driving the action or sale as well.

4. The Dawn of Personal Search
We are beginning to see a major shift from local to personal search. Geocoding will intermix with demographic, psychographic and behavioral data — especially through social networks like Facebook and Foursquare. Consumers will begin to receive relevant information without needing to take an action. For instance, your mobile device will recognize that you have an upcoming dinner engagement with a colleague and recommend a great Italian restaurant nearby based on your network’s reviews. For instance, personal search will help us in advance of a state of emergency: directing us to get gas only from those stations that are open, and bread from only those whose shelves are not yet bare.

5. The Google Ecosystem
Google is primarily a search engine, right? Google Shopping enables it to promote local products to consumers conducting local searches. So it is a commerce engine, too. Google Maps can help someone find a product or service or brand in the real world, but it can also leverage that search to present alternatives on the actual map Google Wallet gives it transactional ability. We can keep going through the suite. My point is that Google is the second biggest destination on the Internet, and 35% its usage is local-based search. That traffic is highly transactional which means that Google has an opportunity to capture an extraordinary amount of transactional revenue.

What if Google were to stop presenting organic results 35% of the time and instead present a map view of the paid-advertiser locations and a carousel of shopping products that you could buy right there through the map? All of a sudden Google+ Local is taking in huge amounts of data including SKUs. It’s not that you will be able to promote your inventory right through the map; it’s that the only way to promote your inventory on Google will be through the map.

Google could drop their walls around you at any time. It’s Facebook’s world that we play in. Both are Goliaths that could control the local experience and force advertisers inside in order to access the consumer on an ongoing basis. If advertisers stop receiving the traffic they rely on from local search, local pages and directories become non-starters. Neither will matter any longer. All that will matter is that you provide both major marketplaces with as much location information as you can, and stay relevant.

Ari Kaufman is CEO of Placeable.