Internet Now The Primary Local Medium

Last week, Judy’s Book joined the list of companies that have tried but stumbled or wiped out in local. The market’s complexity and business model challenges make it tough for most startups to succeed. Yet, paradoxically, consumers have clearly embraced the “local Internet” and are using it with increasing frequency to find local information online.

A couple of weeks ago we reported on recent, top-level local data from local SEM firm WebVisible and Nielsen. The data come out of a survey fielded earlier this year with roughly 2000 U.S. adults. However, there were a great many interesting details in the survey that are worth taking a closer look at.

Below, I drill down on a number of areas and findings in the research that are interesting or otherwise revealing.

Embracing the Internet for Local
An overwhelming majority of survey respondents (86.3 percent) either agreed “somewhat” or “strongly” with the statement that Internet was now “vital to my lifestyle.” Those in the “strongly agree” category constituted 48 percent of respondents overall, but 61.5 percent of those were in the 18-24 age group.

Overall respondents identified the Internet and search engines in particular as their dominant information resource for local:

–Search engines: 74 percent
–Print yellow pages: 65 percent
–Internet yellow pages: 50 percent
–Traditional newspapers: 44 percent
–Print white pages: 33 percent
–Television: 29 percent
–Consumer review websites: 18 percent

(Percentages are greater than 100 because respondents were permitted to select more than one answer.)

Relative Usage Frequency
One of the “built-in” comparative advantages of search engines vs. other types of local content sites is that they’re used multiple times daily for all manner of things. People accordingly become acclimated to using them. More specialized local sites, verticals, and Internet yellow pages are used with less frequency to varying degrees, although they often provide deeper and richer experiences for users.

The following is how various local media sources relatively scored on the question of usage frequency for respondents who used the specified medium “a few times a month” or “once or more per week” (the most frequent usage categories):

–Search engines: 60.1 percent
–Internet yellow pages: 37.2 percent
–Traditional newspapers: 36.5 percent
–Telephone directories: 21.5 percent

Importance of Reviews
Reviews are becoming an increasingly important part of the local content mix. Nielsen recently found that traditional word of mouth recommendations were the most trusted form of “media.” That was followed by newspapers and online consumer reviews. Internet and mobile advertising were at the bottom of the list.

The WebVisible data confirm the importance of online reviews and reflect that consumers read them and take them seriously:

–75.8 percent of respondents read online product and/or service reviews
–69 percent read reviews appearing on blogs

Consistent with other data in the market, the majority have not posted their own reviews. Among survey respondents, only 22.7 percent said they had ever posted a review. Asked what type of experience would motivate them to post a review, 39.5 percent said a “positive experience,” 45 percent said a “negative experience,” while 15.5 percent said a “mixed experience.”

Reviews and Other Influences on Purchase Behavior
The survey asked consumers about influences on their purchase behavior under different circumstances. The majority of respondents said they would be influenced by the following:

–A positive online consumer review from a familiar source (93 percent)
–An online ad offering a discounted price from an unfamiliar local business (47.3 percent)
–An online ad offering no discount from a familiar local business (52.7 percent)

Interestingly, professional (“quality”) websites appear to be influential too. A “quality website” from an unknown business was found more potentially influential in a consumer purchase decision than familiarity with a business. Accordingly, the survey asked, “When researching a product or service online, which of the following is more influential in your decision to make a purchase”:

–A quality website from an unfamiliar business (76.5 percent)
–A poor website from a familiar business (23.5 percent)

This is a striking finding and shows increasing sophistication of general Internet audiences and the emphasis they’re starting to place on a professional online identity for small businesses in particular. In a separate but related question, website quality also had a powerful impact on consumer trust:

“When shopping on the Internet, the quality of a business’ Web site is an important factor in earning my trust as a consumer”

–Strongly Agree (34.2 percent)
–Somewhat Agree (50.8 percent)
–Somewhat Disagree (11.9 percent)
–Strongly Disagree (3.1 percent)

Local Fragmentation
Once of the themes often discussed in local is its fragmentation. That’s partly a function of all the competitors and would-be competitors, the numerous local markets, and all the small businesses that represent the bulk of local advertisers. Unlike national search, no dominant local player has yet emerged – or perhaps it’s more accurate to say no fully “trusted” local site has emerged.

While in selected markets there may be a trusted site or sites, the WebVisible survey found that an overwhelming majority of consumers used a “variety of trusted sources” (75.6 percent) compared with those who used a “single trusted source” (6.3 percent). These data indicate that while major search engines have the most local traffic, as simply a function of their overall search traffic, the market is still very fluid and opportunity still exists — but there’s limited room for error in local, as Judy’s Book and others have recently discovered.

Greg Sterling is the founding principal of Sterling Market Intelligence and a senior analyst at Opus Research’s Local Mobile Search program. He publishes Screenwerk, a blog focusing on the relationship between the Internet and traditional media, with an emphasis on the local search marketplace. The Locals Only column appears on Mondays at Search Engine Land.