Web Trails Only Yellow Pages, Newspapers As Promotion Medium

The Web has become a leading advertising and promotion medium for businesses involved in the local commerce market, trailing only telco Yellow Pages and newspapers, says a new industry study.

The conclusion comes from The Local Commerce Monitor, released by The Kelsey Group and San Francisco-based ConStat Inc.

Based on surveys of businesses in 14 major and secondary U.S. markets, the report shows that the Web has surpassed direct mail as an advertising and promotion medium for businesses, and is closing in on newspaper usage. In key, tech-savvy markets, the Web has surpassed newspapers as the second most important medium.

Across the U.S., 17.2 percent of businesses involved in local commerce now use the Web for advertising and promotion, ahead of direct mail, which attracts 15.5 percent of businesses, the report said. Both categories lag behind telco Yellow Pages, which is used by 37.2 percent of businesses, and newspaper advertising, which is used by 18.7 percent percent of businesses.

“At this point, the Web is supplementing traditional advertising, rather than cannibalizing it,” said Neal Polachek, The Kelsey Group’s vice president for research and advisory services. “But we expect to see ad and promotion dollars making a transition over to the Web from key categories starting later this year.

“The best way for Yellow Pages and newspapers to prevent the cannibalization of their combined annual revenues of $50 billion is to accelerate the development of their own Web businesses to serve the local business operator.”

Bill Deaton, managing director of research firm ConStat, said that while analysts see business as a global phenomenon, local businesses are “beginning to recognize the value of the Web as a local communications tool.”

This semi-annual report is designed to provide clients with in-depth understanding of the local commerce community — small and medium-sized businesses — serving consumers and businesses. Findings come from Los Angeles, Seattle, Atlanta, Houston, Boston, Chicago, New York, Sacramento, Omaha, Nashville, Oklahoma City, Norfolk, Columbus and Hartford.

The Kelsey Group and ConStat will present more detailed findings from the Local Commerce Monitor at The Kelsey Group’s Fifth Annual Local Online Commerce Conference scheduled to take place July 18-20 in La Jolla, Calif.