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Shoppers Search for Local Businesses Online


The two largest U.S. Yellow Pages directory publishers were bankrupt as their profitability went into a prolonged decline. Moreover, there's no relief in sight for these legacy service providers -- in fact, Google will likely further erode their revenues with a new offering that targets their best customers.

Why won't the Yellow Pages publishers recover? eMarketer reports that the overwhelming majority of U.S. Internet users research online to find local products and services, according to the latest market study by BIA/Kelsey and ConStat.

The most common online tool used for local research was search engines (Google). Less than one-half of respondents still used Internet yellow pages and 42 percent checked comparison-shopping sites before heading to local businesses.

In summer 2009, TMP Directional Marketing and comScore found that 46 percent of local online searchers contacted a business by telephone after Web research, and 37 percent visited in person.

"The Internet has indeed become an integral part of consumers' local commercial activity," said Steve Marshall, director of research, BIA/Kelsey. "The data suggest we're at an inflection point where the balance of power in local shopping is shifting to online."

Local advertising dollars will follow eyeballs -- BIA/Kelsey expects the Web to get an increasing share of local ad spending over the next several years, reaching one-quarter of the total in 2014.

Over time, the researchers have noted an increase in the number of sources used for local shopping research, suggesting audience fragmentation that can be challenging for advertisers.

According to the market study results, 58 percent of respondents said they had redeemed an online coupon when shopping locally in the past year, and 19 percent made a local appointment other than a restaurant reservation on the Web.

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