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ReachLocal increases options for small businesses advertising online

April 20, 2009 |  7:03 pm

Many local advertisers are moving online from the Yellow Pages. Credit: frankh via Flickr.

Looking at the likes of L.A. companies such as SpotRunner, which is cutting staff and changing its business model to focus less on local businesses, you might think that businesses that deal in local advertising have a pretty bleak future. But Woodland Hills advertising juggernaut ReachLocal says that business is just beginning to heat up in the local online advertising marketplace.

The company today announced the ReachLocal Xchange, a platform that allows small business to advertise on a host of sitesrather than just major sites such as MSN, Yahoo and Google. As a result, different publishers will be able to compete for the $1,000 a month or so that ReachLocal's thousands of advertisers each spend on average buying ad space online.

"There's a flood of dollars moving online," said Zorik Gordon, co-founder and CEO of ReachLocal. "This will cause an explosion of more ad opportunities for small businesses."

He estimates that billions of dollars of local advertising are currently moving from the Yellow Pages and print publications to the online marketplace. ReachLocal will be able to help those advertise buy spots on sites such as Fox Audience Network and Ask Sponsored Listings, among 100 others.

"ReachLocal has done something potentially quite significant here, making local inventory more accessible to more marketers," wrote Greg Sterling, founder of Sterling Market Intelligence, on his blog.

ReachLocal was launched in Encino of 2004 with the goal of making it easier for small businesses such as dentists, plumbers and car dealers to advertise online. Advertisers liked the idea -- the business added 34 offices globally in 30 months. Venture capitalists liked it too: The company raised $55 million in a Series D round in 2007.

-- Alana Semuels