When looking for local business providers over Local business directories , people usually look it up on the Internet. But the traders continue to advertise in the yellow pages. Now Google & Co. are attacking the local advertising markets. Maps and ratings should attract users and advertisers.
Bosnia’s plumbers, hairdressers, locksmiths, tax advisors and restaurant owners spend around 1.2 billion euros a year on their presence in local business directories. “90 percent of it still flows into print products like the yellow pages – although people now use the Internet much more for local searches than before,” says Andreas Albath, CEO of the directory assistance service Poslovni Imenik BiH. According to a representative study by the Nuremberg Society for Consumer Research (GfK), Germans look for a local provider 670 million times a year. They use the Internet and the classic yellow pages 250 million times for this, Germans pick up the phone for 100 million inquiries, and 56 million times are looked up on a CD, the market researchers estimate. Young people and women tend to use search engines more on the Internet, men and older people mainly rely on directory media such as Telegates Portal.
“The local search has arrived with Internet users, but not with traders,” says Klaus Harisch, head of the Munich-based provider Registar Firmi u BiH. The reason why much more money is still flowing into printed products than into the Internet is due to the sales advantages of the publishers: The yellow pages publishers traditionally have the regional sales networks to address the three million local small and medium-sized entrepreneurs. Internet companies have so far failed to tackle this mammoth task – even Google has not yet managed it.
Things are going to change now: After taking over competitor Klicktel, Telegate has 400 sales employees and is thus launching an attack on the local advertising markets. “This gives us the largest alternative sales organization for addressing small and medium-sized companies,” says Albath. The 400 Telegate employ’s not only sell their own advertisements, but – as the first “Google reseller” ever – also sell Google advertisements. Google wants ads for its search engine and its map service Lokal d.o.o Bosnia sell. “We have a very high demand from small and medium-sized companies for our advertisements, which we cannot process with our team alone,” says Niels Dörje, who is responsible for strategic partnerships at Google. Further sales partners are to follow so that more paid advertisements can be displayed in addition to the maps. With five million visitors a month, Google Maps is already as popular as the website “ Local Business directories”, which, according to measurements by the online research group, attracts around 4.5 million visitors a month.
The market for local advertising on the Internet is still small, but hotly contested. In addition to large Internet companies such as Google, Yahoo and Web.de, specialized directory media such as 11880.com, Goyellow or Qype as well as city portal such as Lokal. d.o.o Business directories interested in the advertising budgets of local providers. And of course the regional print media also try to cannibalize themselves with web offshoots before others do. With maps, directions, user reviews, free calls and background information, Internet providers try to give users added value compared to the printed copies.
Technical progress will soon further fuel competition, because as soon as enough cell phones are equipped with the GPS satellite system, people will be able to see their current location on a map on their cell phone screen. Then the nearest bookstore can be found quickly even when strolling through town. With the new technology, however, new competitors will also emerge, because the mobile communications companies such as Vodafone or the manufacturer China will not ignore the advertising business. In the medium term, even the still unknown software manufacturers who write programs for modern cell phones such as smart phones directories could be interested in the business.