By: Catherine P. Taylor
(Mediaweek) Overture, the Yahoo! division devoted to the hot search advertising category, is launching a new product focused on reaching advertisers who want to target locally. The product, LocalMatch, will be available on many of the sites that license Overture’s search ad technology, including Yahoo!, Microsoft’s MSN, some sites within the InfoSpace network and ESPN.com.
The service is designed for national/regional advertisers looking to drive traffic to local locations and to small businesses who want to make sure they are included, along with their competitors, in listings for pizza parlors and dry cleaners. The service is entirely pay-for-performance. “They will not pay for clicks they don’t get,” said Geoff Stevens, general manager/local at Pasadena, Calif.-based Overture.
In terms of how LocalMatch could benefit national retailers, Stevens pointed to the example of such chains as Sears, which might want to promote a linen sale in one location and an appliance line in others. For small businesses, the service’s biggest draw may be that it allows those without Web sites to still be listed on the service. Such advertisers can input key business information, such as location, operating hours and types of payment along with potential keywords — with guidance provided by Overture — to have a search advertising presence.
Overture’s entry into the local search ad market comes about three months after rival Google officially announced the beta version of its consumer-facing local search service, Google Local. In April, the company said it would offer enhanced targeting to accompany the service, giving advertisers the option to target at the city level and also to allow advertisers to target within a chosen geographical area around their business. Other companies, such as Verizon, have also entered the local ad search market.
Research varies on how big this business will be. Some companies, such as US Bancorp Piper Jaffray, see the marketplace as being at approximately $5 billion by 2008, while others, such as Jupiter Research, predict a 15% annual growth rate that would put revenue for local search advertising at around $825 million by 2008.
In other online advertising news last week, Time Warner’s America Online unit said it would buy Advertising.com, which focuses solely on pay-for-performance advertising, for $435 million. The Baltimore-based company, which acquires ad inventory from Web sites and sells it as an advertising network, will substantially expand AOL’s pay-for-performance inventory, which previously had mostly come from its search partnership with Google.