Local Is Bigger Than You Think

1
Local Is Bigger Than You Think
its just a mess, thats all
Greg Sterling Sterling Market Intelligence August
10, 2006
2
Big Money Credentials

• Analyst, formerly with The Kelsey Group, ran its
  Interactive Local Media Program (Local
  Search)
• Coverage now broader online consumer and
  advertiser behavior and the relationship between
  the Internet and traditional media, with an
  emphasis on the local search marketplace
• Following a cluster of industries and ad
  vehicles search engines, directories,
  newspapers, social media, verticals, wireless,
  online video

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The Internet Is All About Local

• In 1998, the Internet was about opening up
  national and global markets to every
  business/small business in the US
• In 2006, more and more user behavior and intent
  is revealed to be about local (shop online,
  buy/transact locally)
• In fact, the entire Internet is ultimately more
  about local than almost anything else
  (connecting people locally, influencing their
  local spending)
• Skeptical?

4
Just Take a Look
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What Are People Doing Thats Local?

• Maps/driving directions
• Jobs, Cars, Real Estate, Private Party,
  Dating/Personals
• Local news/editorial
• Product research ?local shopping (incl. coupons)
• AE Restaurants/bars, local events (incl.
  tickets)
• Yellow pages (service listings)
• Travel (we can debate whether this is local)

Most of what people are doing online has a local
dimension
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8 Out of 20 Top Search Terms Are Local
Top Search Terms Driving Traffic to All Sites
July 8, 2006                                     
                            
Source Hitwise (2006)
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Local Search Is Now Totally Mainstream

• comScore (3/06) there were 60m local search/IYP
  uniques
• Roughly 35 of the total US Internet
• This does not include traffic to newspaper sites
  or verticals/local classifieds sites
• Internet has 84 local reach among online
  population greater than print YP
• There are 50 million users of mapping sites

Source Kelsey Group (2005), comScore (2006)
8
Most Media Are Local
Comparison of Media Spending ( Billions)
Local ad spending as much as 147 billion
Source Interactive Advertising
Bureau/PricewaterhouseCoopers (2006)
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Internet Influence over Local Spending Growing
Faster than E-Commerce
I think online ultimately will be 10 to 15
percent of retail -- Jeff Bezos, CEO
Amazon.com, Jan. 05
Offline (Local) Spending 97 of US Retail
But the Internet influences a growing percentage
of that local buying 300 billion in 2006
anticipated
Source US Commerce Dept Sterling Market
Intelligence estimates, comScore (2006)
Dieringer Research Group (2005)
10
Google Revenues Local Importance
Source Piper Jaffray estimates (2006)
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Thanks

• Contact information
• Greg Sterling
• 510-655-8798
• greg.sterling_at_gmail.com
• Screenwerk.com