Local on Local: A New Report From Marchex

Marchex has released a report today that profiles the local search space. It essentially takes a deeper dive than the report the company put out in September, which sought to explain the local opportunity to those unfamiliar with the space. This report characterizes local as the fifth online consumer facing “mega trend” (others are communications, search, commerce and social networking).

From the report:

Consumers are increasingly relying on local search to make decisions about where to spend their money and time offline. In fact, 86 percent of Internet users search for local products and services, up from 70% in 2006, and more than 90 percent of the transactions resulting from these searches are completed offline. Recognizing an opportunity, advertisers’ investment in local online advertising services are projected to grow from $8 billion in 2007 to nearly $20 billion in 2011, equaling the $20 billion spent on total online ad billings in 2007. Marchex is working with our partners and customers to address five trends that are driving the growth in Local.

It also takes a look at a number of key issues in local such as user generated reviews, SEO and the impact of call tracking. To do this it taps a number of contributors inside and outside of Marchex that are plugged in to the local space such including lead search architect Matt Berk and VoiceStar’s Ari Jacoby.

The capability brought to Marchex by the August VoiceStar acquisition will be a major area of attention and development going forward, President John Keister told me last week. This will allow it to offer advertisers calls in addition to clicks in the SEM services it offers. This is similar to AT&T’s acquisition of Ingenio, and both deals signal an interest in gaining the capability to deliver calls to advertisers from print and online campaigns.

Marchex’s ability to reach advertisers is meanwhile improving through channel partnerships it has formed in the past year with Idearc, Citysearch and AT&T. The company is moving in lots of directions and has a multifaceted business model that includes SEM services as well as its own content network. There is some confusion in the marketplace and in the media about what this overall business model looks like, so a TKG report is in progress to profile the company in greater depth.

Keister will also be on a panel in the track John Kelsey and I are running at SES New York today. If you’re at the show, we’d love to see you there.

9:30am – 10:45am — Local Search: Are Partnerships the Key to Success?

Ninety percent of consumer purchases are made within 20 miles of a person’s home or office. Not only are millions of small businesses vying for the attention of ready to buy consumers, but so is virtually every national business selling products locally. The Kelsey Group forecasts that global local search advertising revenue will grow from $21.B in 2007 to $6.6B in 2012, a CAGR of 25.5%. How are online firms aggregating content and selling ads?

Speakers

John Kelsey, chairman and cofounder, The Kelsey Group

Bruce Crair, COO, Local.com

Justin Sanger, founder and president, LocalLaunch

John Keister, president, Marchex