Here is a very insightful story about Overture's local search product. Overture (owned by Yahoo!) is the company that puts the "Sponsored Listings" in Yahoo that are the top three returned search results. The holy grail for the search engines is to tap into the local advertising business that is largely dominated by Yellow Pages publishers.

SearchTHIS: Overture Gets Local Right
Tuesday, June 29, 2004
By Kevin Ryan, Search Columnist

In its second iteration, paid search provider finds smart approach to local experience.

Remember one of the original promises of the World Wide Web? "Local relevant content for all," went the mantra. Until now, marketers and users alike have been forced to live with search content and local information at odds with one another. Like a collected group of "B" movies with cult-like user loyalties, local information and search providers had yet to meet the needs of its constituency in a truly efficient manner.

Local search is said to be worth billions of dollars, yet for a lot of good reasons, local content providers have yet to crack the local code. For the past year, we have watched Internet yellow pages struggle with an identity crisis and search engines catch and release local marketing tools in beta tests, while users get left in the lurch looking for plumbers, lawyers, restaurants and dentists online.

This week, Overture releases Local Match, its second iteration of local search and probably the smartest approach to serving up local content to date. Overture's product seems to be the first of its kind that keeps both users and advertisers in mind while intuitively addressing some of the biggest problems with local search.

What's wrong with local?

For the most part, the notion of applying local dynamics to some type of directional online experience conjures up nasty images. Search providers are competing with Internet yellow pages directories and local destinations or city guides, all trying to create the ultimate local experience but ultimately forming a congealing mass of quasi discernable geographically germane information.

Where can I find a video store with a copy of "Clash of the Titans?" Does my local convenience store carry Nails brand cigarettes? Is there a diner nearby with cheap artwork for sale? Can I use my American Express card at the video store, corner shop and diner? Will they be open when I get there?

Advertisers in Internet yellow pages buy ads that show up in search results where they may or may not have locations, because that's how the former regional bell operating company autocrats designed the ad units. It was a great idea for generating ad revenue but not the best local experience for users. In the absence of accurate data, the national ad seems like a good idea, though.

The user interface for most Internet yellow pages is a bit cumbersome as well. I like to call it the "search, search and search again" tool. User identifies location, guesses at category and then launches the search. Then, user refines the category search. You see, one can never just search for a "hotel" in New York because there are nine categories for "hotels" and you have to pick one before searching again for the result.

Search engines aren't much better. Targeting local searchers in paid listings means assembling an enormous keyword list of keywords, titles and descriptions, and/or applying some level of match technology to a brand name or generic keyword to pick up geographic combinations. In the latter instance, the user is faced once again with the yellow pages problem. Maybe the search result is locally relevant, maybe it isn't.

Of course, it would seem trying to turn an Internet yellow pages into a pay-per-click search engine would be a good idea, right? Verizon tried it earlier this year and replaced the flat fee for ad unit model with a pay-per-click bidding environment. The preferred method -- by phone number -- for many users to respond to an Internet yellow pages ad is now harder to find. All you have to do to update a bid is call it in, relying on the friendly operator to put your ad in the right position. Said process is sadly reminiscent of a used car salesman's tactic of "just sign the contract and I'll fill in the numbers later." While pay-per-call models are currently being tested and released on a limited basis, clearly the pay-per-click migration for online yellow pages is in need of refinement.

Breaking local search paradigms

How does Overture's latest effort break the barriers created by existing local search evils? It's a pay-per-click model that works within the existing Overture advertiser system. It allows businesses without Web sites the ability to advertise in pay-per-click. Location-based paid listings are provided by either a user designation or the "cookie remember me" function.

In short, Overture has solved many of the troublesome issues of local search for both advertisers and users with easy access to maps and the ability to provide critical business information such as hours of operation, methods of payment and specific services offered.

Here's a breakdown of the new local experience.

Integration and representation -- The first question advertisers will ask is, "Can I just move my existing program into a local environment?" Well, yes and no. You can import terms from your existing Overture paid listing program and use keyword suggestion tools, but the ad format is a bit different. Local Match advertisers must have a physical location. A jewel in the crown of this new program is the ability to upload massive amounts of existing location data as quickly as one would upload a paid inclusion feed though advertisers will not be able to modify terms or bids by location. National advertisers with hundreds or thousands of local sales channel listings will be provided in a snap, assuming of course said advertisers are in possession of stated location specific data.

Relevance and user experience -- The real beauty of search engine local models is the absence of the cumbersome search, search and search again interface. A user simply enters a keyword and location and search results are delivered in one step. The advertiser's address provides the listing and description messaging is used to promote the location. Though much of the user interaction will be determined by how Overture's partners integrate the local search functionality, since user location is either pre-determined or self-designated, advertisers will need a physical location. Great news for local businesses, not the best news for virtual businesses -- but seriously, how annoying would it be to get virtual plumber listings when doing a local search?

Advertiser and user symbiosis -- URL inclusion is optional, providing the truly small business that has no time, desire, funds or perceived need to launch a Web site, with the opportunity to advertise. I love my dry cleaner, but I really don't think I would spend a whole lot of time at his Web site. At the same time, I am sure my dry cleaner wouldn't care to spend the time normally assigned to locating my lost articles each week writing titles and descriptions for his search ad. In the Overture model, he won't have to, since the title is automatically created as a business name or business name combined with the geography.
Internet yellow pages tend to deliver ad units in order of amount invested, while relevance is determined by user category selection (search, search, then search again) in the guessing game format. Overture's model offers listings with the bid amount first, followed by location, and lastly, seniority. This model will ultimately allow an easier user interface with a better advertiser experience.

Local search utopia

Overture's local search will be released here in the United States on primary syndication partners like MSN and Overture parent Yahoo! yellow pages, along with other local areas and relevant locations within InfoSpace, to name a few. All of these sites have yellow pages areas, populated with local or national advertisers, which raises an important question. Are we witnessing the end of online yellow pages?

MSN, for example, already has search clutter with multiple paid search listing sources beside crawler-based listings. Now, the Verizon-provided yellow pages listings will be competing with local listings, which users might perceive as more clutter. Clutter, as we have come to know, is the kiss of death for search listings.

Overture doesn't see the two areas in competition. Geoff Stevens, general manager, Overture Local, says, "Local Match is designed to complement existing yellow pages content areas."

The Local Match program may have been designed to complement, but as with any other new ad format or technology, users will decide whether yellow pages or Local Match is better with their click-and-call behavior. My money is on the Overture model, but its ultimate success in overtaking the yellow pages will depend on being able to provide much needed accurate data on a large scale.

iMedia search columnist Kevin Ryan's current and former client roster reads like a "who's who" in big brands: Rolex Watch, USA, State Farm Insurance, Farmers Insurance, Minolta Corporation, Samsung Electronics America, Toyota Motor Sales, USA, Panasonic Services, and the Hilton Hotels brands, to name a few. Ryan believes in sound guidance, creative thought, accountable actions and collaborative execution as applied to search, or any form of marketing. His principled approach and staunch commitment to the industry have made him one of the most sought after personalities in online marketing. Ryan volunteers his time with the Interactive Advertising Bureau, Search Engine Marketing Professional Organization and several regional non-profit organizations. Meet Kevin Ryan at Ad:Tech July 12-13, 2004.