Some Locales More Valuable For Search Ads

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Some local markets are more valuable than others when it comes to Local Search advertising rates.

And understanding why that happens is important business intelligence, accoring to Brad Petersen, SVP of business development for MatchCraft.

"You can no longer look atthe the marketplaces in aggregate," he said. "You need to understand the forces at play in each vertical and understand the business opportunities."

Petersen shared his observations with the BIA/Kelsey Marketplaces 2010 conference in San Diego on Monday. He shared data that showed dramatically different cost-per-click rates for different business categories and different geographic markets.

For instance, in the restaurant category, CPC rates were pretty much the same in Los Angeles, Indianapolis, Springfield and Syracuse. But in the automotive category, Los Angelese commanded a $3.25 rate for specific search-ad position, while Indianapolis drew $1.50 and the smaller markets netted 50 to 75 cents. That's despite the auto dealers in all markets likely making the same profit on each car sale.

Competition is one reason for the difference, Petersen said, with more competition driving prices higher in an auction setting. The strength of products and sales forces in different markets can make a significant difference in the rates achieved. So can consumer demand for certain search topics, if media companies track those differences and adjust their strategy accordingly.

Petersen's company has automated some of this data analysis to help its clients make better sales decisions.

Some other local search and marketing vendors presenting updates at the Marketplaces 2010 conference included:

• MerchEngines CEO Andy Steuer noted that direct marketing solutions are getting more and more complex. "Sell results," he advises media companies to whom MerchEngine provides backend support. "Don't get lost in the alphabet soup of SEO, SEM, CPL, etc." Search ads account for 45% of every online ad dollar, he said, and will be double to a $31 billion market in the next five years.

• NewsForce CMO Dana Todd shared a new twist of custom content that her company offers. With 500 partner websites, NewsForce contextually places display ads that expand to show advertorial content from advertisers. "We are publisher-forward and brand-forward," she said, so the solution is editorial acceptable and drives higher CPMs than traditional ad networks.