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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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October 26, 2005

Significant Opportunity Available to SMB Advertisers that Embrace New Media, According to The Kelsey Group

The impact of this opportunity on the $200 billion global local advertising market is a key theme on the agenda for the upcoming ILM:05 conference.

Princeton, NJ (October 26, 2005) -- A widening gap has emerged between consumers, who are increasingly using the Internet to find local businesses, and those same local businesses, which have so far largely failed to adopt online advertising in significant numbers. Although Internet marketing by small and medium-sized businesses (SMBs) is growing, it has not kept pace with rapidly changing consumer behavior, according to The Kelsey Group. This trend has significant potential implications for traditional media and for SMBs. The Kelsey Group’s upcoming Interactive Local Media 2005 conference (ILM:05) will explore these implications and the strategies being adopted in response by newspapers, directories and search engines. The conference takes place Nov. 30-Dec. 2, 2005, at the Hyatt Regency Reston in Reston, Virginia.

“Our most recent research indicates a clear shift in user behavior from traditional media sources to online,” said Neal Polachek, senior vice president, research and consulting, The Kelsey Group. “National advertisers have been quick to embrace paid-search advertising, as evidenced by Google’s recent quarterly results. Yet small-business advertisers have done little in terms of reallocating their budgets to take advantage of the surge in online and search engine lookups. The question is: How do SMBs get in front of these growing numbers of consumers on the Internet?”

Findings from recent Kelsey Group research demonstrate this trend:

  • Use of search engines to find information about local businesses increased significantly from 47 percent in 2003 to 55 percent in 2005—a 17 percent increase (User View, Wave II).
  • Between June 2004 and July 2005, small-business advertisers indicated their budget allocation had shifted just three percentage points in favor of online advertising options—from 18 percent to 21 percent (Local Commerce Monitor, Wave VIII).

About ILM:05
The global market for local advertising is worth an estimated $200 billion, and the opportunity for successful players in this market is a key driver behind billions of dollars in recent and potential transactions, including eBay’s acquisition of Skype, R.H. Donnelley’s acquisition of Dex Media and speculation that MSN, Yahoo!, Google and Comcast are all vying for a stake in AOL. ILM:05 offers a prime opportunity for emerging players, industry insiders, financial analysts and potential investors to acquire firsthand intelligence about the future of this market. The agenda features many of the influential companies operating in the local space and will explore the full range of issues surrounding the various segments of interactive local media—local search, Internet Yellow Pages, vertical directories, online newspapers and classifieds, social networks and wireless.

Sponsors for ILM:05 include: Acxiom, AdMission, CountyWebsite.com, DCCI, eStara, Fast Search & Transfer, i411, Ingenio, Interchange, Local Matters, MapQuest, TrafficLeader, TrueLocal, Who’s Calling and YellowPages.com. For more information, contact The Kelsey Group by phone at (609) 921-7200 Ext. 10, by e-mail at [email protected], or visit www.kelseygroup.com/ilm2005/.

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

For more information contact:

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

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