A new year, a brand new season of forecasts for market researchers. Aside from the widely-publicized report of The Kelsey Group, Borrell Associates releases another bold 2008 prediction: local online ad spending will double by the whopping 48% in 2008.
According to Newsfactor.com, the demand for paid search and video advertising will drive the demand, according to a new study.

After a decade of testing the Web, local advertisers are making significant adjustments to their marketing dials, turning up the volume on online advertising, says local media research firm Borrell Associates. The firm predicted local search advertising will more than double next year to $5 billion, while locally placed online video will triple to almost $1.3 billion.

While Borrell’s numbers don’t line up with the predictions of other research groups (who generally predict slower growth in the online local ad segment), nearly every report indicates the same thing: local ad sales are on the rise on the Internet.

The Borrell report reveals that the growth is mostly being experienced on pure-play Internet sites, while local media outlets are losing market share. Further, the report predicts that “key advertising segments for 2008 will continue to be the Big 3 classified categories of automotive, recruitment, and real estate, with online political marketing holding promise for local sites as state and presidential campaigns heat up.”

Major online media companies have also realized the massive potential that exists in local advertising in recent years, wrote Josh Catone of Newsfactor.com. We noted this past summer that online classified ads have experienced some of the fastest growth of any online ad segment.

Yahoo!, for example, has begun to form a newspaper alliance that puts its HotJobs recruitment classifieds in local markets around the United States. Yahoo!’s alliance now reaches over 400 newspapers.

Meanwhile, much of Facebook’s advertising play is about hypertargeting based on location and other demographic data.

The voice of the consumer will now become all the more vital in web advertising. User-generated content in particular, the growing proliferation of user reviews of businesses on the Web are set to play a more major role for local online advertising, according to the recent Kelsey Report on 2008 forecasts.

Local businesses will begin to interact more directly with consumers who frequently post comments and reviews on local Web sites through a series of new interactive tools. Theoretically, the local retailer would be able to spot a negative review on the Web and then contact that reviewer and hopefully rectify the situation.

This year products that aim to bring the merchants into the consumer review process will begin to become more widely available, said Matt Booth, senior VP and Program Director, Interactive Local Media, The Kelsey Group. These products will give merchants a voice in the feedback about their businesses by allowing them to contact review writers and offer to fix any problems.

Widgets offer a range of digital marketing techniques, including online PR, strategic viral marketing, brand advertising, direct response sales, and lead generation through affiliate marketing.

Although they may seem like trivial and playful applications on your desktop or  social networking site of choice, widgets are actually the new marketing phenomenon with lots of potential.

Sanaz Ahari, Microsoft’s Lead Program Manager, believes widgets will introduce a new form of marketing in the near future. I can see a whole new level of advertising through gadgets,  she stated in a FastCompany.com interview last year.  An early example was when Google had that Da Vinci Code gadget a replica of the ‘cryptex,’ the cylindrical decoder device from the book and movie. You could take the puzzle and put it on your Web page for your friends to discover.

According to iMedia Connection, marketers see widgets as both an exciting opportunity (e.g. free advertising) and a daunting challenge (e.g. uncontrolled advertising). In reality, neither of these points of view captures the implication in any robust sense.

In social media applications, widgets are primarily driven by RSS feeds, which creates tons of opportunities for marketers to develop lead generation programs, and more opportunities for publishers to monetize their content.

They’ve evolved from cool, cute toys of self-expression to major media and marketing tools. Apple, Firefox and Typepad, for example, have used widgets as a way of enhancing user experiences, and some companies are already starting to take advantage of the opportunity.

Typepad’s array of widgets are offered by companies that are primarily trying to increase their share of voice in the crowded market of social networking sites  according to the Influential Marketing Blog. Offering widgets allows them to gain free exposure on blog sidebars, and drive awareness and trial of their services from the growing ranks of Typepad bloggers.

Apple’s Dashboard widget does the same, but they can become even more higher profile  with some past Apple ads even showcasing new and funky widgets in the ad.

Widgets present a host of new and creative opportunities, as marketers we just have to figure out the right way to use them. Perhaps we should form a Widget Brainstorming group. Wouldn’t that be fun?

Cyber Monday, one of the largest online shopping days of 2007 (November 26), brought in over a whopping $700 million in online sales, according to Loren Baker, Editor of Search Engine Journal.

But not through Yahoo Stores (now known as Yahoo Merchant Solutions), which suffered a dramatic loss in revenue from over 10,000 online merchants which use Yahoo Stores to power their ecommerce systems.

According to Baker’s posting, Yahoo suffered technical problems that prevented some shoppers from completing purchases on November 26. A message on the Yahoo Merchant Solutions System Status page characterized the problem as an Error Message During Checkout at 8:31 a.m.

At 5:12 p.m., Yahoo posted it was still investigating the issue, apologizing for the ongoing service interruption for our V3 checkout users (Checkout Manager).

Yahoo published another update at 6:51 p.m., reporting it had made configuration changes:  All merchants are able to accept orders at this time with slower than expected performance. We are continuing to investigate and make additional changes to optimize the checkout experience. Additional updates will be provided as they become available.

Merchants were, understandably, outraged and for good reason. The next day, thousands of them were trying to get answers from Yahoo! regarding payment system outage that left their online cash registers closed on such a critical day.

Yahoo’s shopping check-out service buckled under what the company called “heavy holiday traffic,” preventing as many as half of Yahoo’s 40,000 online merchant customers from processing any transactions for more than 11 hours.

Rich Riley, Senior VP of Yahoo’s Online Channel Division, posted on statement on the Yahoo blog: “We have apologized to our merchant partners for the impact that this service interruption had on their business and their customers at this busy time of year. As a token of our commitment to them, we have communicated with them our intent to waive all sales transaction fees for the month of November.”

Yahoo seems to have everything back on line, but the damage may already be done as far as partner relationships are concerned.

The Toronto-based Call Genie a provider of enhanced local search products and services to Yellow Pages publishers, directory assistance providers, and wireless carriers has closed its previously announced acquisition of PhoneSpots for a consideration of $5.75 million. (This consists of $5.093 million worth of Call Genie common shares and a net cash payment of $711,000.)

The technology of California-based PhoneSpots, a provider of advertising and mobile content delivery solutions, enables directory assistance and yellow pages providers to deliver local search results along with contextual advertising to users of mobile phones. (PhoneSpots was venture-backed and had raised approximately US $32 million since its inception.)

The acquisition will expand Call Genie’s voice-enabled local search capabilities to include mobile advertising and mobile content delivery specifically focused on consumers who access Call Genie’s solutions via a mobile device,  stated an article in TechFinance.ca. In addition, Call Genie will now be able to offer a complete AdExchange (with pay per call tracking) that can be used with multiple media types and multiple services as part of an integrated solution or as a stand-alone ad exchange platform.

Call Genie said the acquisition will be accretive and revenues generated directly by PhoneSpots and through cross selling into Call Genie’s customer base will be incremental to previously announced guidance provided on future financial performance.