March 10, 2003 6:15 AM PST

Citysearch homes in on local ads

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Citysearch on Monday announced the launch of a new advertising program and related search engine that bring a local flavor to the "pay-for-performance" strategy popularized by the major national search engines.

Citysearch, a division of USA Interactive, said it will direct people searching on its site for services in a particular region or city to local businesses that have agreed to pay the search engine only when a person clicks on their listings. This model is generally known as "pay-per-click" advertising.

Advertisers on these Web sites bid for placement for search results--with paid links appearing higher on the list or with greater visibility. The search engines are paid when people actually click on the links.

Citysearch's program, called Local Pay for Performance, mimics a highly successful model popularized by national search engines such as Overture Services and Google. Even news and information sites such as NYTimes.com, Boston.com and Washingtonpost.com are hoping to benefit from search engine marketing.

The marketing of pay-for-performance search is providing an increasingly larger source of online advertising revenue. Analysts reckon that sales from paid search comprised between 20 percent and 24 percent of the nearly $7 billion generated by the online-advertising market in 2002. That compares with between 10 percent and 12 percent in 2001.

Citysearch, which estimates the local-advertising market at about $90 billion, said the pilot program for local pay-for-performance in Atlanta and Boston more than tripled the company's sales for those markets. The company said the program will be running in other local markets by April.

In conjunction with the new program, the company said it launched a new version of its search engine that is designed to connect people more quickly and effectively to local businesses, from restaurants to medical offices and plumbers. Citysearch said the new local search provides improved editorial reviews, enriched and high-profile placement for advertisers, and information on more than 12 million businesses.

 

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