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Eileen Pacheco
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Charles Laughlin
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Greg Sterling
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Neal Polachek
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December 19, 2003

Local Paid-Search Advertising to Reach US$2.5 Billion by 2008, According to The Kelsey Group

In a new report, the firm estimates 10% of local searches result in a buying decision.

Princeton, NJ (December 19, 2003) – In a new white paper to be released next week entitled, "A Closer Look at Local Search," The Kelsey Group estimates 10 percent of all searches that are local also have a commercial intent, in that they ultimately result in a buying decision. This is one of the factors influencing the recent interest in local paid-search advertising, a market the firm expects will amount to US$2.5 billion in the United States by 2008.

"We estimate there are some 200,000 to 250,000 paid-search advertisers globally right now, and 10 million small and medium-sized enterprises in the U.S.," said Greg Sterling, director of The Kelsey Group's Digital Directories: Interactive Local Media Continuous Advisory Service, and author of the new white paper. "There is clearly a tremendous local opportunity, but there are plenty of challenges in tapping that market, partly because it is so fragmented."

Sterling explained that one only needs to look at the buying and selling patterns of small and medium-sized enterprises (SMEs) to understand why search providers are actively involved in developing localization solutions. Research conducted by The Kelsey Group and ConStat Inc., found that 60 percent of the small businesses surveyed reported that at least 75 percent of their customers came from within a 50-mile radius. And 80 percent of SMEs indicated that at least 75 percent of their buying and/or selling of products and services occurs within 50 miles.

"A Closer Look at Local Search" examines the rapidly developing local search marketplace, highlighting the many important developments of the past six months. The report includes usage and revenue projections, as well as profiles of major and emerging players in the space, including America Online, AskJeeves, Citysearch, FindWhat, Google, InfoSpace, LookSmart, MSN, Overture, Yahoo! and others.

For more information regarding "A Closer Look at Local Search" or the Digital Directories: Interactive Local Media Continuous Advisory Service, contact Steve Vasil at (905) 765-5910, or by e-mail at [email protected]

About The Kelsey Group
The Kelsey Group is the leading provider of strategic research and analysis, data and competitive metrics on Yellow Pages, electronic directories, small-business advertising and local search. Beginning in 1986, the company has built a reputation as the leading analyst firm covering the directory publishing community, providing advisory (The Kelsey Report® and Interactive Local Media), publishing (Global Yellow Pages™ and Local Media Journal™), consulting (more than 300 individual assignments) and conference services (60 events).

For more information contact:

Eileen Pacheco
(781) 556-1026
[email protected]

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