As Local Search Behavior Evolves, Marketing Spending Will Follow

One of my 2016 predictions was that the evolution of local search would be the story of the year, so let me help make it so. My reasoning was that the mechanics of search are changing rapidly, and that matters because search plays such a critical role in so many components of the connected local economy.

The figure above — from an IDC study commissioned by YP.com — shows me two things:

• The first is what IDC calls the “local search zigzag.” That is, the propensity for consumers to use multiple resources and, it turns out, multiple devices often from multiple locations, to do a local search. IDC found that zigzag behavior was common regardless of whether it was a search for an item in a store, fast food dining, or several other local search tasks that IDC surveyed 750 U.S consumers about.
• The second is that Google and other search engines were the origin for fewer than half of local search tasks. Other starting points included topic sites, coupons, reviews, directories — in fact, the study showed a very fragmented search environment.

At the same time, most consumers used a search engine at some point along the zigzag, even if they didn’t start there. The net result for marketers is that the role of the search engine is changing, but it isn’t really diminished. That means all is well for Google, right?

Well, not so fast. As shown in the second figure, to the left, eMarketer forecasts that next year, U.S. digital display advertising spending ($32 billion) will be bigger than search ($29 billion) for the first time ever. That’s due to mobile’s growth versus the desktop, and Facebook’s increasingly important role as a marketing vehicle.

Some of that “mobile” figure isn’t really that mobile, because it counts ads seen on tablets that are usually used as home laptops. And people use smartphones from a fixed location as well as when they’re on-the-go. But the combination of smartphones, apps, and social media is reshaping advertising and marketing spending dramatically.

A few months ago, I made a case for why Google’s still going to do well in mobile search. Its strategies for apps indexing and deep-linking, relevance-ranking, and mobile user experience look solid. Facebook’s local search and Yelp-like service efforts are brand new and fairly tentative. Apple is pivoting on its mobile iAd sales strategy, and has always seemed uncomfortable with advertising as a revenue stream. And don’t forget, Google’s still got YouTube and Doubleclick, though neither will deliver the 60-plus percent market share it sees in desktop search.

Action Plan
The practical result of these consumer behavior and spending shifts is that local marketers and merchants — and the tech and services companies that support them — have to recast their notion of what constitutes search. You can’t just think about Google, plan around search engine optimization and paid search, and house those efforts in a “search marketing” category. Indeed, sophisticated marketers think not only about search, but about “discovery” and “product and service information research,” and have been working on listings and directories and reviews all along. But campaigns, programs, and budgets tend to be siloed. And that’s especially true for small businesses.

Ultimately, merchants and marketers have to be find-able and present useful information regardless of the searcher’s context. And that’s where the mechanics of local search marketing get messy. It feels like a great opportunity for tools and managed services that help break down those silos, and measure effectiveness across or between them. National brands and retailers practice media mix modeling and work hard at understanding advertising attribution correctly. But that expertise is beyond local small businesses and branch managers.

To capitalize on local search disruptions, marketing technology and service providers should weave the local search threads for their customers:

• For enterprise marketers, key challenges will be in cleaning and integrating diverse data sets from search results, targeting data from competing and incompatible sources (Apple, Facebook, Google), and their own CRM.
• For small businesses, such cross-pollination is over their heads, but they’ll need and appreciate common metrics and dashboards for managing the effectiveness of listings, social media, and search.

David Card is Street Fight’s research director.