Top "local" site Weather.com dropped a spot from May. Superpages moved up one and Yellowpages.com moved down one slot. Craigslist remained at number 18. Also interesting is the growth of coupons as a category online:

This corresponds to what Scarborough Research found about Internet couponing finally starting to show some life:

It has turned out to be somewhat confusing to many advertisers and has obscured rather than elucidated the opportunity. The opportunity is to lead shoppers and searchers to an offline point of sale or vendor for fulfillment of their need. That opportunity extends to businesses large and small, to national brands and independent local stores.

Online influencing offline sales.

But national brands and marketers often don't see the opportunity because they  associate the word "local" with someone or something other than what they do. They may understand, by contrast, the crude geotargeting of the ad networks. But overall they don't fully grasp the opportunity and that "local" or "geotargeting" is really about reaching particular people in particular places -- who will typically buy something or do something in a physical location.

I'm not ready to abandon the word "local" but it has become as problematic as it is descriptive. What do others think?

In mobile, location may be the most important variable but on the desktop it can be one of several.

Ad serving on the desktop is moving toward much greater technological complexity, with the following model emerging: ad copy and creative turns into a data feed of several elements and "the platform" (e.g., Yahoo) decides what particular ad to serve to the particular individual. This allows marketers to target locations/DMAs and focus on audiences; it gets simpler for them.

But in this increasingly sophisticated world of nouvelle ad platforms, local could lose some emphasis as part of an overall BT scheme. Not sure however.

Here's the initial banner (from NYTimes.com)

Here's the "landing page" that one clicks through to, which prompts for a zip code:

And here's the beginning of the lead-gen form that follows after the entry of the zip:

What might have been done differently:

• The zip prompt could (should) have been in the initial banner itself
• The banner ad copy could have used IP targeting to mention the SF Bay Area where I live and am now. Of course if I'm traveling it wouldn't be right, using that methodology. But most people will be at home and they could have taken the risk. CTRs would but better on the campaign.
• The landing or lead-gen page could be more localized and offer some ad copy tied to by location and/or a visual representation of the SF Bay Area (image, map, etc.). Again, using IP targeting there's a risk here that if I'm not at home I'm going to get mismatched information.
• Moving up the zip prompt into the banner (the "landing page" [#2] ad copy is redundant and unnecessary) would yield more accurate market information, allowing the lead-gen form to be much more locally customized and "warmer" than it is now (just a generic form).

These are relatively simple changes the agency could have made that would make the campaign more effective and eliminate a step: IP-targeted ad copy in the banner with a zip prompt there, followed by a landing page/lead-gen form that offers a locally tailored image or ad copy (based on the zip entry).

A much better campaign and example of "national going local."

From one point of view here's the most interesting paragraph in the release:

Diversified revenue base now exceeds $10 of revenue per thousand page views, and the Company’s most established towns, serving 3 million people, are now profitable, with all corporate costs fully allocated by region.

Many people have never heard of the site. In a way, this is another story like DiscoverOurTown, which I wrote about previously.

The company isn't doing its own ad sales, but getting ads from a range of partners. However, considering that CPM rates appear to be falling, those ad rates are extremely impressive. Ted Buerger, Chairman of AmericanTowns, spoke to me on Friday about some of this data and reiterated his faith in the power and importance of quality content at the local level. One could call the site a local or community "portal" but with an emphasis on local events as the differentiator.

Buerger wanted to reiterate the value of local to counter the perception of some of the more high profile local flame outs and skepticism that has met the segment in the recent past.

The "OAK" (Oakland) caught my eye and caused me to click. (No doubt the location awareness was based on IP targeting.)

Disappointingly, the landing page was just the site and not geotargeted or otherwise locally tailored. But it's an anecdotal illustration of how, at a general level, geotargeted ads perform better than generic/national ads. I would have been less likely to click had the local component not been there.

And here's another tepidly geotargeted campaign from T-Mobile:

Clicking the banner leads to this landing page, where you can watch the TV commercials or "check your coverage."

The latter in turn sends you to the regular T-Mobile site. How much more effective it would be if the landing page above is a 3D version of the major metro where or near where I live, rather than this more generic city image. Though baby steps, these ads start to get at the power of real geographic customization.

NBC Universal (and private equity) just bought that property and its cable channel parent from Landmark Communications for $3.5 billion. Landmark, which owns IP intelligence firm Digital Envoy, newspapers and classifieds properties, local TV affiliates and Q Interactive (formerly CoolSavings), had the makings of a great local ad network anchored by Weather.com. Alas . . . they'd probably rather have the cash. The Weather Channel had been for sale since January.

Weather.com has tons of geotargeted and contextual-local ad placements. It's also got a mobile offering. All this is great news for NBC. Now what will the company do with it?

Similarly, in the Publicis mobile case, Yahoo!'s platform is now going to determine the right ad to serve to the mobile end user. Ad creative, provided to Yahoo by Publicis, will be sliced and diced. Display ad copy and creative elements are being turned into "modules" (my word) and then recombined dynamically. At a conceptual level this is also what is happening in the ShopLocal deal; targeting data from Yahoo! determine whether to show, for example, the HP ad with the printer or the laptop image, what local store information to show and so on.

The hypothetical layers of targeting here are many: demographic, local, contextual and/or behavioral. The practical reality today, however, is somewhat less "one to one" than these capabilities suggest. One or two ad elements change rather than four or five. However the targeting is rapidly getting more sophisticated and layered. Indeed, the promised "holy grail" of mobile advertising is true "one to one marketing." (This has historically been said about email and is now being said about social networking.) But for these recent platform advancements such precise targeting would never be possible.

Let's step back.

There's absolutely no chance that agencies and advertisers could do this "one to one" targeting on their own right now. They're still figuring out basic stuff about online and how to combine traditional media with online campaigns effectively. There's almost no way they could create a range of hypothetical campaigns that would address the various audiences and behaviors they want to target, let alone "manually" determine when to show those ads online and where (to some degree however you can do this with search campaigns and specialized landing pages).

The light bulb that went off for me is this: "the platform" is stepping in to take all the available data and then create and an ad accordingly. The "ad" is evolving from a fixed combination of creative elements into a data feed that can be parsed and recombined. As one example, United Airlines might have different fare offers for different cities. There might also be different messaging for loyal customers vs. those who aren't enrolled in the frequent flier program. Accordingly, different messages, data and ad text can be delivered to the publisher/platform and the system figures how to put those different creative elements together and when based on the user and her behavior or profile. The ultimate "creative" is determined by the machine.

Now back to local specifically -- and all this goes double for mobile/LBS.

Most major advertisers don't know how to think about local online today and most aren't taking advantage of current capabilities, let alone all the emerging layers of targeting. But what these increasingly sophisticated ad platforms (i.e., Yahoo!'s) will do is compensate for that lack of human sophistication. It's a bit of a "Zen" thing: first there was simplicity, followed by complexity and then there will be simplicity on the other side of complexity.

In other words, all that the agency and marketer will eventually have to know about digital marketing (including mobile) is that they want to target women, 18-34 who live in New York, San Francisco or Chicago and are interested in certain product categories. They'll create their ads accordingly. Then they'll deliver electronic data feeds of their creative and the platform will determine what to show when. They won't have to figure out much tactically or mechanically. The complexity of the entire system will be in the "black box" of the platform and buried for both the marketer and the end user, who will just see an ad and respond or not respond.

Better and more precise location targeting, for example, will be provided by "the system," which will ferret out user location via a range of strategies (ISP, browser, user registration data, triangulation, GPS, keywords, zip identification, etc.). The advertiser or its surrogate will just need to know the conceptual capabilities of the system: the "idea" that a 40-something year old technophile on a smartphone in midtown Manhattan can be targeted.

The "how" will be taken care of.

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Addendum: This isn't a move toward the "commoditization" of advertising. It's about taking the complexity out of online advertising, which agencies want. There will still be plenty of "art" in figuring out the messaging and thinking about advertising across platforms and how to integrate those campaigns.

Somebody yesterday called my attention to an interesting piece in AdAge, which is an interview with DirecTV's CMO. Here's the relevant bit for my purposes:

Three years ago, the marketing strategy was pretty much to have this one national marketing strategy. The reality of it is that the competition is local. The competition is not national competition. The competition is Comcast. It's Time Warner. It's Cox. It's Charter. It's Fios. And you've got to be able to really understand what's going on and understand where things are heating up geographically, where they're dialing off, and read and react and adjust your plans accordingly.

(my emphasis)

The iPod and the Zune, the iPhone and the Blackberry are competing on a national stage and so are many brands, but purchasing is almost exclusively done locally. Here are the top 25 advertisers in the US according to AdAge:

1. Procter & Gamble Co.
2. AT&T
3. Verizon Communications
4. General Motors Corp.
5. Time Warner
6. Ford Motor Co.
7. GlaxoSmithKline
8. Johnson & Johnson
9. Walt Disney Co.
10. Unilever
11. Sprint Nextel Corp.
12. General Electric Co.
13. Toyota Motor Corp.
14. Chrysler
15. Sony Corp.
16. L'Oreal
17. Sears Holdings Corp.
18. Kraft Foods
19. Bank of America Corp.
20. Nissan Motor Co.
21. Macy's
22. Anheuser-Busch Cos.
23. Honda Motor Co.
24. Viacom
25. Berkshire Hathaway

Almost without exception all of these folks have local distribution or local sales outlets. But their online ads don't necessarily reflect that and connect the dots. In other words, they haven't connected their digital advertising with offline sales. They need to. Brands like DirectTV (which was a big PPCall advertiser with Ingenio) are waking up to this critical online-offline connection.

As I've tried to argue, when local targeting improves (by zip, neighborhood) and US Census and other information are layered on top of that, you have a potentially much more powerful demographic targeting tool:

Source: comScore

These are all fast-food places, which fulfill locally -- meaning people come in to local outlets to buy things. There are a total of about 877 million impressions here for the month of March according to comScore. The average CPM for March was $0.49, according to PubMatic.

If you do the math, at a crude level these impressions were worth a total of approximately $429 million. If that holds constant over a 12-month period, that would represent about $5 billion dollars. It's unlikely that these figures are in fact accurate. But consider that this is an example of where, potentially, billions of dollars in online advertising are being spent to drive in-store sales.

Arguably this should be counted as local online advertising.

Correction: I've failed to divide the numbers by 1000. So they're inflated. But the point is the same: this should all be considered local advertising, even though it may not be specifically geotargeted.

Marchex has sought to change all that by bringing together all those components into an single ad network under the brand "AdHere." The network is performance-based and directed toward both national brands and SMBs. The slogan is "National Presence, Local Impact." Advertisers may target by site, category and/or keyword.

The theme of this initiative is exactly right: trying to carry the consumer through the entire funnel, from awareness to local store/distributor purchase (offline). The "purchase funnel" is largely a fiction but if it were as coherent as the name suggests it would look like this:

Marchex is also trying to bring a higher level of service to advertisers through this network. AdHere now joins a range of other "local networks" in the market (not in rank order):

• Yahoo! Network (via its own vertical and local properties and newspaper partners)
• Google Ad Network (with geotargeting)
• Centro (not a network per se but looks like one from the outside)
• Quigo (AOL) has lots of local distribution among partner sites
• Real Cities Network
• NNN
• Internet Broadcasting
• MediaSpan

AdHere helps Marchex simplify its messaging and comes at a time when marketers and manufacturers are starting to clue in to the value of the local online marketplace and its ability to drive offline transcations.

Enquisite, Inc., a developer and provider of the next generation of search analytics solutions, today announced that it has secured $3.2 million in Series A funding. The investment was led by Jeff Webber, Managing Director of The Entrepreneurs Fund III, a Silicon Valley based, early stage venture fund focused on Web 2.0 Software startups.

Enquisite was founded by Richard Zwicky, who is something of a local expert and has spoken at many shows on a range of topics including local. One of the features of this suite that's very interesting and powerful (from the POV of this blog) is that it can tell you geographically where your traffic is coming from. Google analytics added a similar feature not long ago. Until then Enquisite was the only tool that was capable of offering that level of visibility. My understanding however is that Enquisite has greater "granularity" and precision around these capabilities.

Marketers have yet to fully understand how they can leverage this kind of information for better traditional media and integrated marketing. These data can also be used as a prospecting tool. For example, if you're not yet operating in a particular market but you see that traffic is coming from such a market it tells you there's demand and you should pursue it.

These data can also help measure the impact of traditional marketing efforts. After a direct mail drop or TV campaign are you seeing traffic spikes in those particular geographic areas? It shows you the campaign is working, or how effective it is. By the same token you can assess where you may be weak or need to beef up exposure or coverage (based on the absence of traffic in those regions or cities).

Since almost all purchases happen at a physical POS in a local market (95%+), this kind of online-offline visibility will become critical over time.

What I don't have visibility on right now (beyond anecdotal information) is how much "downsizing" is going on for local advertisers in traditional media and whether that spend will recover after the recession is through. Some of what's going on is definitely a structural shift, but it's hard to get visibility on the scope of that longer term.

Large and small advertisers alike are looking for greater efficiency under the currrent economic pressure. The opportunity for online advertising is great because of its perceived ROI and "transparency," and the potential risk to traditional media across the board is also great. As I've tried to argue, however, online media is not a total substitute for traditional media, which are still very important.

We are arguably at a time of what might be called "techtonic upheaval" in the ad world. And the earthquake isn't yet over.

Combined, TV is the largest single category. Also, not here is roughly $15 billion for yellow pages (print + online) spending.

On a percentage basis, most categories are unchanged. The biggest mover is classifieds, down 2%.

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Related: comScore crowns Google the top site on the Internet in April.

"Classifieds" is where online YP revenues are categorized by the IAB.

Basically, the top 50 sites are taking 90% of online ad revenue. There's been a slight shift from CPM to PPC models.

One question is how much of this spend is geotargeted or local?

Borrell says $8.5 billion was in 2007. That's probably high or not "apples to apples" with what the IAB is measuring. We can assume that a piece of lead gen, most or all of classifieds, some of email, a bit of video, some of display and a chunk of search are local. All of that probably puts local online ad spending north of $5 billion. That's a very casual calculation on my part but would make local roughly 25% of all online ad spending.

What do others think?

The new AdBrite powered portal is called "Live Nation eFan Finder" and it allows band managers and local Live Nation salespeople to see local online ad placements and track the performance of those ads. Below is a screenshot of the dashboard for one campaign:

The ad placements/inventory and targeting capabilities come from AdBrite's network, which include geographic and demographic options (as the campaign above suggests). According to the release, "Live Nation's local marketers are able to easily create and place tailored ad campaigns for the company's concerts, utilizing geo-targeting and other advanced matching technologies to connect with music fans on AdBrite's network of 50,000 web sites."

AdBrite's marketing VP Paul Levine, who previously ran Yahoo! Local, made the very interesting point to me that in addition to providing greater transparency than other ad networks this helps to solve a problem that plagues local online advertising. Local/SMB advertisers want to see their ads, which is difficult  in a dynamic online environment, and this addresses that challenge: advertisers can see the creative and precisely where the ads are running.

If you think of these band managers and local salespeople as SMBs, or franchisees in a sense (vis-a-vis Live Nation), you start to see how this model for AdBrite has potentially broader applications and implications.

Adify allows entrepreneurs, publishers and others to create "white label" ad networks using its platform. Adify refers to itself as a "vertical ad network." Through its customers and their niche/vertical networks, Adify was itself building an interesting ad network. And Adify at one time was angling to become the backbone behind quadrantOne.

It's certainly one of the most interesting ad platforms/networks out there. CEO Russ Fradin (formerly of comScore and Wine.com) will continue to run the company.

PaidContent reports (from sources) that 2007 revenues for Adify were roughy $7 million, so it's a big multiple.

I had lunch the other day with Wayne Reuvers who runs a company called Live Holdings, Inc. It has a number of products/offerings. But the product in question, LiveAdMaker, is a multi-platform tool that manages ad creative and distribution across multiple media: TV, radio, newspapers, out-of-home, online search and display and direct mail (I'm probably leaving a few out).

It's all about local markets/local distribution.

This is almost exactly what Google is trying to build (and maybe Microsoft): a dashboard (with corresponding infrastructure) that manages advertising across media and to the various consumer distribution points. These guys have had this in the market for several years and are working with agencies and OEMs/brands. The company has a very impressive client list.

I was literally astounded by the platform's capabilities (I saw a demo over lunch). Reuvers was customizing a TV spot, with localized text/graphics and rearranging segments of the commercial in real-time through the company's Web-based interface (it's all hosted).

I also can't imagine I'd never heard anything about them. This is the "one stop shop" that everyone from Google to Gannett has been talking about but hasn't yet actually built.

Reflected in some of my conversations yesterday with some of these companies is the fact that many agencies and marketers don't understand or clearly see the local opportunity and, beyond that, aren't equipped to take advantage of it. I told a couple of people yesterday that for online marketers to understand it and get really excited it may need to be reframed as "demographic targeting." In the offline world, demographic targeting is synonymous is local targeting of course.

More accurate local targeting (zip-level or below), combined with US Census data, offers demographic targeting to online markets. Even more precise targeting, such as GPS, Wi-Fi triangulation or several other strategies offers something potentially richer and more complex.

For example, I spoke with Placecast CEO Anne Bezancon yesterday and she distinguished "place" from "location." Location is a specific geographical point or Lat-Long, whereas place takes into account not only location but other factors, such as demographics, dayparting and context. She said serving an ad to the attendees of Ad:Tech is very different than simply serving an add that is geotargeted to San Francisco.

This kind of targeting and relevance is where online advertising needs to go, only the industry doesn't quite "get it" yet.

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Related: Urban Mapping launches "GeoMods" ehanced ad targeting tools.

Two consumer groups asked the Federal Trade Commission on Tuesday to create a "do not track list" that would allow computer users to bar advertisers from collecting information about them.

The Consumer Federation of America and the Consumers Union also urged the FTC to bar collection of health information and other sensitive data by companies that do business on the Internet unless a consumer consents.

Just as BT is really cranking up, so is the opposition. Here are some recent posts on the subject:

• Relevant Ads but No Tracking Please
• Turning Display Ads into Directional Media
• The Ad Predicament and the End of Tracking?
• ISPs Get into the Ad Game

However, today the company released what it's calling OTX: "Open Targeting Exchange." What's different here is that AdBrite is asking third parties to "bring their algorithm" to AdBrite's network of publishers and advertisers. Unlike conventional exchanges that use a single algorithm and seek third party inventory, the OTX is opening up to NIH ad technologies. It will thus use different algrorigthims: BT, local, demographic, etc. to determine what ad is going to deliver the highest yield at any given moment (although I don't think the analysis happens in real time).

I can't pretend to understand the back end here but it strikes me as a really interesting approach to improving returns for publishers and advertisers (as well as the network). Third party technology companies that bring their algorithms to the OTX will get a piece of the revenue they help generate.

It will create the ability for the newspapers to sell not only their own sites but into Yahoo! and, eventually, other Yahoo! publisher partners as well. Equally, Yahoo! will sell its own advertisers distribution on the various newspaper partner sites. In other words it debuts as a kind of massive local ad network (there are more than 500 newspapers that belong to the consortium). In parallel newspaper-run quadrantOne is attempting something similar on a somewhat less ambitious scale.

AMP positions Yahoo! as a kind of central clearinghouse for ad inventory of all types: rich media and video, search and mobile. It's extremely ambitious and technically challenging. If it works, it also makes newspapers stronger from an ad sales perspective, giving them much broader reach and access to a range of targeting capabilities they simply didn't have in the past online.

If the Microsoft deal happens, however, the fate of the platform becomes uncertain given the stated objective to achieve economies of scale with a unified "back end" and ad platform. Microsoft has invested heavily in AdCenter and is unlikely to abandon it in favor of AMP unless the latter is clearly superior.

Here's more coverage from Search Engine Land, the WSJ, NY Times and AdAge.

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Related: Yahoo! responds to Microsoft's ultimatim.

Nearly three out of four people, or 71%, [in a Truste survey] said they realize that companies track their Web browsing activity for purposes of sending them targeted ads. The majority--57%--said they are not comfortable with the practice, even when their browsing history can't be linked to their names.

At the same time, 72% of Web users also told researchers they find irrelevant ads "intrusive and annoying," although one key strategy for displaying relevant ads relies on behavioral targeting, or monitoring where people go online and then determining their interests . . .

I previously wrote about how overzealous BT will bring regulation that effectively hobbles it: The Ad Predicament and the End of Tracking?

However there are interesting potential alternatives to BT for display, which include units such as Linkstorm's overlays, widgets (e.g., Google Gadget Ads), brand advertising in search results (see also here), and other interactive display units such as Admission's dynamic platform.

Here's an example of the latter's inventory based display advertising:

Clicking on any of the individual cars opens a window as follows that becomes a lead-gen form (and could contain video):

These sorts of ads can take ride on top of BT; however, more importantly, such units can be effective outside of it. They can be targeted contextually to the content of a site or to a geography or both without relying on any consumer data mining. Consumers interact with the ads and then self-select, turning a display ad into "directional advertising" -- the equivalent of the behavior that has made search so effective. (And some of these ad units include a search box as well.)

As mentioned, there are a range of companies offering display advertising with interactive capabilities or elements. But if legislation or regulations are enacted that require tracking notifications and consumer opt-out opportunities, these sorts of alternative strategies to make display ads more effective, by making them highly interactive, are going to be the way that the industry needs to go.

See this related piece I wrote at SEL regarding branding in search results.

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Disclosure: I'm an advisor to Admission Corp.