A recent article, Strong growth expected for local search advertising cited a recent study which found that companies will increase their spending on local search advertising from $4.1B now to $11.1B in 2011, or 23% per year. While that might not seem like a lot, it is interesting to compare to the other major forms of advertising for small businesses like Yellow Pages and Direct mail, which rarely, if ever, exceed 2-3% a year.

The companies that most often focus on local search marketing are local businesses. Some of the increase will be generated by moving the budgets away from those other forms of advertising to local online search. The other reasons that the study cited included new advertisers, fatter online marketing budgets, and better ad targeting technology leading to better conversions.

The new advertisers is a very important statement.  They are basically stating that more and more businesses will realize the advantage of local search and move into it.  That means that companies who get a head start will have a competitive advantage as they can have a refined process when their competitors are just learning the ropes.  The local search engines like Google also give more credence to companies that have been advertising longer since they have a history of how well their results do and it’s more likely a legitimate business that their searchers are interested in.

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