Google and Yahoo Face Off Over Local Ads

Yahoo (s YHOO) this week described itself to as “laser focused” on bringing local brand advertisers online. Meanwhile, Google’s (s GOOG) director of mobile advertising, Diana Pouliot, told an audience at a CTIA-related event that a third of mobile Google searches are now related to the location of the searcher.

It’s no secret that local and mobile advertising are growth areas — Borrell recently projected that location-based mobile spending would grow to $4 billion in 2015 from $34 million in 2009 — but now both giants and startups are rushing to get their ducks in a row. Yahoo says it wants to bring on national chains like fast food restaurants that advertise regionally, but often spend just 1-2 percent of their budgets online. “Local display is about to take off,” Lem Lloyd, Yahoo’s VP of channel sales for North America, told Forbes.

At the same time, Google wants to expand advertising formats to accommodate local intent and incorporate interactive features like navigation. For instance, the company recently added in-stock local inventory indicators to mobile product search, similar to what offers. Yet online ad categories are often won by new entrants, as was pointed out in a GigaOM guest column this weekend.

Now would be a good time for one of the hype-y mobile social networks like Loopt, Gowalla and Foursquare to cut a favorable ad deal — or something tighter than that — with Google or Yahoo.

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