According to this study done by the [praized subtype=”small” pid=”20178e0104701d2c9f1cfd74135355c7″ type=”badge” dynamic=”true”] and ComScore, local searches online are growing at a faster pace than regular Web searches. Year over year, local search volume grew by 58% (vs. 21% for regular search) for a total of 15.7 billion searches. This represents 12% of all searches at the top 5 search portals.
In addition, “Internet Yellow Pages and locally-focused online business directories also saw double-digit growth of 23 percent in the same period, totaling 4.6 billion searches in 2008. ” The press release adds: “75 percent of the top 100 keywords searched on Internet Yellow Pages sites were non-branded, indicating that a majority of consumers have not decided on a specific company or product brand when they begin their search. ” One last data point: “nearly half (45 percent) of Internet Yellow Pages and local online directory searchers made an online purchase in the fourth quarter of 2008.”
What it means: The discrepancy between local search and online directory search growth means two things. First, that directory companies still need to play catch-up in terms of user relevancy and branding vs. search engines. Second, that search engine optimizing your local directory content is still critical to get found in regular search.
I’m also a bit disappointed at the number interpretation in the press release. To start with, on the non-branded keyword stats, I don’t think you can infer that people are mostly searching on non-branded terms when they use an online directory. We would have to look at total search volume to properly interpret those numbers, not the top 100 keywords. Obviously, top keywords will be generic terms (more people search for the word restaurant than the name Joe’s Pizza). But I’m convinced the sum of all business name searches is certainly higher than the sum of all keyword searches. It’s basic long tail theory.
The second data point (online purchases by online directory searchers) is nice but it would have been better to compare it with local search “searchers”. I’m convinced data shows that online directory users end up purchasing at a higher percentage than search engine users but we don’t know for sure.
Seb Provencher's Blog 
I’m not convinced that “the sum of all business name searches is certainly higher that the sum of all keyword searches”. And long tail theory supports that, in my opinion.
In managing search marketing for small businesses I see in their traffic stats that company name searches (and url searches) are a very small fraction of total search traffic. And the long tail on keywords related to their business (products or services) is very very long indeed.
I believe most people searching online for local businesses are in discovery mode, looking for a business that provides the service they need. They rarely know brand names to start with.
Also, data from my clients sites shows that conversion rates from online directories (internet yellow pages) is, at the broad local level, on par or slightly ahead of search engines. Search engines however exceed the directories in total volume by a massive margin.
By broad local level I mean drilling down and looking at all the search traffic that came only from the local area (ip targeting), ignoring the random hits from far away. Same with the directory traffic, isolate that to local only. And a conversion is an email lead sent from the website contact page.
I see broad website conversion rates of about 2% to 3%. Local search traffic comes up to 5% to 8%. Local directories about 7 to 10%. Conversions on the main local keyword of “city name business type” fall around 4% to 12%. In the long tail conversions are extremely high for the unique and highly targeted search terms. Many of those that generate some volume convert at 20% to 30% and lots of those that only get used once converting at 100%, also many of those that show no conversion. That’s getting into the very long tail. The combined volume of all those long tail searches far exceed the volume for the few main “city name business type” keywords.
This of course from a handful of my own clients. It is certainly not representative of the majority of small businesses owners running their own website without any expert SEO advice. However, all that longtail local search traffic is still out there, just many small businesses are not capitalizing on it. Instead it goes elsewhere.