There's an old joke about stockbrokers: "in every transaction, the broker makes money, the brokerage firm makes money, and hey, if the customer loses money, well, two out of three still isn't bad."
That's what I thought of when I saw eMarketer has a new report about local online advertising, titled The Local Online Advertising Report.
It projects that "local online advertising spending in the US will reach $2.9 billion in 2007, only 13.4% of the total Internet market. But as portal giants Yahoo! and Google and major newspaper chains make deals to sell advertising and share content, the sector is set to become a significant growth area for the maturing Internet ad space."
The report then says, "The promise of local online advertising, at this stage, is greater than the reality."
As I see it, this is a double-edged statement. While the context refers to how much money is in the local market to be had by local ad networks...it is also true that the promise is greater than the results for most local businesses.
Yes, I know all the examples of local businesses with successful online stories. But what makes these stories notable is that they are still the exception rather than the rule. Online advertising is still time-intensive for local merchants. It works spotty: some categories do well with pay-per-call, others don't. Some categories do well with web sites and e-commerce. Others don't. Some have nurtured review sites and reputation management on the web to develop new business. And so on and so forth.
Local online advertising is a big catch phrase for a lot of online opportunities. So far, there are too many online networks designed by folks too far out of the trenches of the small, local business.
eMarketer concludes that, "several factors are set to accelerate growth of the market: the wealth of small and mid-size companies potentially available as online advertisers, the increased use of local Internet sites and services by individuals, such as local search, and the development of local online ad networks connected with local media, such as newspapers. "
This is certainly titillating to the thousands of entrepreneurs who want to start a company that depends on local ad dollars, but for the thinly-stretched small business owner, it's a target painted on their backs.