New Report Suggests Brands Remain Ambivalent About Local Search

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local-searchLast month, Facebook announced plans to further reduce the organic reach of promotional content — a decision that sent shockwaves through the brand marketing community. Nate Elliot, an analyst at Forrester Research, called out for marketers to stop making the social networking site the center of its relationship marketing efforts altogether.

Among local marketers, the move has sparked a similar backlash. In a Street Fight column published yesterday, Todd Bairstow argued that the rapid adoption of social media by marketers large and small far exceeds its effectiveness. Those claims may be justified, but the spectacular rise of social media among marketers should give local search community pause to think: how could a less effective medium cast such a large shadow over search?

Consider a new Forrester report commissioned by SIM partners that suggests a large swath of national marketers still struggle to understand the role of local search in a national marketing strategy. The complexity of the local search industry, the report argues, has created unnecessary barriers for large marketers to invest in both paid and organic search initiatives.

The study, which surveyed marketers for 13 large multi-location brands, found that brands often invested in local search in an “ad hoc” and bare bones manner. A third of respondents said they lacked both the budget and the expertise to grow a local search initiative into a more meaningful part of their marketing strategy.  The question for the local search community is why brand marketers still remain reticent about investing meaningfully in these efforts.

The search community undoubtedly suffers from some of the ambivalence around “local” that plagues the local technology industry. In addition to the perennial belief that “local” refers to small businesses, respondents also confused local search with traditional media. “When we say ‘local search,’ we’re not talking about coming up in search results. We’re talking about making sure we’re listed correctly in local directories,” said one respondent.

But it’s also a question of familiarity, says Jon Schepke, chief executive at SIM partners. “Social fits a bit more neatly into a bucket and a lot of people were using social media as consumers,” he told me Tuesday. Most marketing executives were familiar with creating compelling content on Facebook, but few spent their free time optimizing a site for search across thousands of locations.

Shar Van Boskirk, the Forrester analyst who authored the report, believes that local search may benefit from competition in other areas of paid and organic search marketing.

“Direct response giants are capping out on paid search, said Van Boskirk, VP principal analyst at the research firm. “That is, they no longer get any increased return, even when they spend more on the medium. So they are turning to alternate options that might allow them to reach a different audience, or even reach the same qualified audience at a more optimal spend.”

Either way, national marketers are likely about to experience an “educational” onslaught over the next 12 months. A deluge of companies have started selling local search and marketing products to national brands in the past few years, and the subsequent competition will feed marketing efforts aimed at drumming up demand for local amongst brand marketers.

Steven Jacobs is Street Fight’s deputy editor.