The Local Internet: New Consumer Findings from TMP-comScore
Online marketers have been predicting the death of print yellow pages for years. While that will probably never happen, what has recently happened is the displacement of print yellow pages by the internet and search engines as the primary medium for local business information. A parallel development is the emergence of a more fragmented and complex "local search" marketplace.
These shifts were captured by advertising agency TMP Directional Marketing, which commissioned comScore to perform a study in May 2007 about local search user behavior – online and off. The stated purpose was to "understand the use and value of on- and offline local search sources," including Internet yellow pages, print yellow pages and search engines. That study involved behavioral observations and survey responses from 3,000 members of comScore's US consumer panel.
TMP followed up that original study with a second one this year, in July 2008. The results were released late last week. This overview compares the topline findings from the previous study and those just published.
Internet now 'primary' local information source
When asked about their "primary" source for location business information, here's how survey respondents answered:
In the 2007 findings, print yellow pages were the single, leading source for local business information. However the internet, in the aggregate, was used as a primary tool by almost twice as many respondents. In the 2008 survey, search engines (e.g., Google) have pulled ahead of print yellow pages, while internet yellow pages (e.g., Yellowpages.com) saw growth and local search sites (e.g., Google Maps, Yahoo Local) experienced a slight usage decline.
Usage frequency among the various sources was consistent in the two surveys. Print directory usage is typically less than once a week, while online sources are used at least once a week or more frequently.
Local search market share
The study divides the various competitors into two somewhat artificial categories, one that features "local search sites" and internet yellow pages and the other consisting of general search engines and portals. Here's how the two categories compared in terms of local search market share:
This separation of the categories obscures the fact that there's considerably more local search query volume on the general search/portal sites. Though general search engines see more local reach, volume and usage frequency, that doesn't necessarily translate into usage of their "daughter" local sites. According to the TMP-comScore data, internet yellow pages users are more engaged than those of local search sites, conduct more searches per user and look at more pages than users of local search sites.
Behind these numbers is the persistent question "what percentage of search is local?" The answer depends on how one defines "what is local" to some degree. However, using a fairly conservative methodology, comScore finds that local searches represent about 12% of all search activity. That amounts to almost two billion searches per month according to the firm.
Usage differences among site categories
Among the most interesting data from the survey concern differences in the way consumers approach and use the different categories of sites. Yellow pages websites are used mostly for local service business lookups, while product search tends to be a larger feature of general and local search sites.
What's striking about the slide immediately above is that most of the intended uses are evenly distributed across the site categories. However there are three exceptions: product research, phone number lookups and driving directions.
Local search sites (e.g., Google Maps) are apparently used more heavily for directions than the other two categories, while internet yellow pages sites are more frequently used than the others to find business phone numbers. Product research is much more often done on general search sites. The map-centric nature of many local search sites, typified by Google Maps, could help explain why consumers use them more heavily for directions.
The following chart shows how consumers interact with the three site segments in terms of content-specific vertical categories:
It's surprising that yellow pages sites fare so poorly in the home improvement category, considering their usage for "home services." In addition, restaurants and pizza in particular are among the most frequent lookups in print yellow pages. So it's somewhat surprising to not see that translate into internet usage on yellow pages sites.
Local search leads to action
A very high percentage of local searchers go on to take some sort of subsequent action. Accordingly, the following chart reflects 2008 responses to the question: " Which of the following activities did you do as a result of this online local business search?"
The finding above that immediately jumps out is the one showing internet yellow pages users' propensity to pick up the phone. That makes sense given that one of the primary uses of yellow pages sites is to obtain a business phone number. Regardless, a large majority of local search users go on to take action (i.e., either an in-store visit or telephone contact):
- General search: 66 percent
- Local search: 72 percent
- Internet yellow pages: 80 percent
While a telephone contact can be tracked, internet-driven in-store visits are harder to measure and remain one of the vexing challenges in local.
Mobile the next frontier for local
While directory assistance has always been a form of local, mobile search, with the advent of the iPhone and growth in general smartphone adoption, local searching on mobile devices is finally starting to happen. Here are data from the 2008 survey on the question of local business search by phone:
The chart above reflects all cellphone users. The percentage of users that have conducted a local search on their mobile phones shoots up past 50 percent if one looks only at smartphone owners.
The entry of mobile—both an extension of the internet and a unique new medium— offers consumers more choice but also further complicates the landscape by introducing more complexity. Long gone are the days when local advertisers had only to place ads in the print newspaper or yellow pages and be confident that they were reaching most of their intended market.