Marchex, Inc. (NASDAQ: MCHX) recently released an industry report titled “Unlocking the Potential of the local Internet“. In the report, Marchex points out that the local advertising market will be worth an estimated $100 billion by the end of 2007. It also says that local Internet advertising is expected to be about 5% of this year’s local advertising spendings (as compared to radio, TV, newspapers, etc.). The company says that, according to Piper Jaffray’s online media survey, local Internet advertising spendings could reach 25% by 2017, which would equal $25 billion. Excerpt from the report:
The local search landscape has changed a great deal since the first city guides and online directories were launched more than a decade ago. As much as anything else, the 2005 birth of Google Maps confirmed that we have a reinvigorated local search space. Practically every major Internet destination has locally focused tabs or links; and new local sites, such as eBay’s classified site Kijiji.com, launch almost daily. A recent study by comScore Networks and TMP Directional Marketing, found that local search grew 24% so far this year, while general Web search grew only 14%.8 We are beginning to witness how powerfully the local Internet can influence the way we interact with and make decisions in the offline world.
It has been clear to me that local search traffic is growing, but Marchex’s report clarifies just how quickly local search numbers will be increasing in the next few years. This also shows why Marchex has been investing so heavily in local search businesses and geographic domain names. Local niche domains will see a surge in direct navigation traffic as people are increasingly using the Internet to find nearby businesses. Owners of local domains can profit from this trend by developing their domains into local business directories or search engines, for example, or they can continue to park their domains and watch revenues rise as more people will be using the web for local searches and more advertising dollars will be migrating from traditional media to the Internet.
You can download Marchex’s report at http://www.marchex.com/reports. By the way, you should also check out Marchex’s newly launched local search blog at LocalPoint.com.
For those of you interested in better ways to monetize your domain portfolio’s traffic, Domain Name News has an extensive article on domain development today. The author, Ahmed F. from iBegin Source, points out that developing a domain might result in less revenue in the short term compared to domain parking. But building a unique content website under a domain name attracts more traffic in the long run. For example, Ahmed says that a domain he recently developed, Minnesota.com, now receives more traffic than before and that revenue is up, too.
There is a lot of data out there – both free and paid. And I don’t mean obvious sources like Wikipedia (which has been over-used). Project Gutenberg offers classic books for free. Perfect fit for literature/author domains. Geonames offers large amounts of local data for free. And those are only the free sources – there are a lot of paid sources that make a lot of sense for domains. In the post I mentioned in the beginning – the first comment is about developing local domains. There are tons of geodomains. Franky Schilling has mentioned local domains before. Frank M talked about Marchex utilizing local data on local domains, and even specifically mentioned where others could purchase local data. Heck SuperPages.com trumpeted their purchase of the LocalSearch.com domain. Why are parking companies just sitting around? Buying local business data may not make sense for one domain. But with tens of thousands (or even more) parked domains, it does make sense for parking companies.
Ahmed F. makes a good point. I have written about Marchex being on the right path before. Marchex (NASDAQ: MCHX) has purchased lots of local search data, business data and other relevant content that will help the company build its local domain portfolio into a powerful local search network, and it will help Marchex increase their domains’ revenue in the near future. So why don’t domain parking companies buy more images, text content and other data for their clients, too? This would make it easier for domain owners to attract more traffic, and I think it would increase revenue in the long run, because parking pages will look more like developed websites and parking sites might even be indexed by search engines better if domain owners were also allowed to add their own unique content in addition to the content from the parking company’s database. There is plenty of room for domain parking companies to innovate in this field. I believe that masses of domain owners will switch to the first domain parking provider offering an extensive content database and easy, flexible website development tools.
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