Does CityGrid From Citysearch “Answer” The Local SEO Problem?

At one time local startups could reliably count on Google organic traffic to help build their own traffic and brands. Indeed, this is how Yelp gained visibility in its early days. And larger publishers, such as yellow pages sites, have relied heavily on SEO, as well, to drive traffic to their advertisers. However, recently that’s become more difficult with the Map + 7 Pack showing up with greater frequency (roughly 1 in 13 SERPs) on Google.

Not counting the map listings, depending on the query and the user’s PC screen size, there may be only one or two slots available for SEO in a local context. See, for example, the result for “dentist, Los Angeles“:

There’s another challenge for local consumer destinations, especially startups and smaller publishers: selling advertising to small businesses. Without digressing too much, take my word that it’s very difficult to sell ads to small businesses at scale unless you own a large sales force. Self service advertising for this segment has always been more of a dream than a realistic proposition — although ironically Google may find success with some of its new, simplified ad products.

Thus, monetization of local sites has been quite difficult, even for a successful local player such as Yelp. There has always been AdSense but only a few sites with significant traffic have been able to “make a living” off of it; MerchantCircle is one example.

Enter Citysearch’s new local ad exchange/marketplace called CityGrid. This has been in the works for almost three years and it launched at the end of last week. Basically Citysearch is making any and all of its content and advertisers available to third parties (and specifically smaller publishers and mobile developers) via an API. In addition, Internet yellow pages publishers also distribute advertisers through the network.

According to the PR materials accompanying the launch, “In December 2009, CityGrid aggregated more than 500K paying advertisers, enhanced listings and content for 15M businesses, and reached more than 100M unique users across 100 web and mobile sites.” Independent local marketing provider ReachLocal and local-mobile search vendor V-Enable also operate local ad exchanges as well.

In terms of CityGrid, you can see how the same advertiser is presented across a number of participating, partner sites:

BingYellowpages MerchantcircleInsiderpages.comUrbanspoonMySpace LocalCenterdJudys Book

Other independent sales channels, such as Yodle, also operate networks of partner sites that expose their advertisers in a range of places beyond Google, Yahoo and Microsoft. And for several years, the yellow pages publishers have done a more “restrained” version of sharing advertisers and traffic.

CityGrid and the other local networks, to varying degrees, begin to solve several problems:

Getting qualified traffic and leads to local advertisers across a very fragmented local online segmentProviding better monetization for local publishers and developersProviding traffic for publishers that don’t want to rely too heavily on a single source (read: Google)

Citysearch also told me that CityGrid participation doesn’t interfere with AdSense in any way. The ads are content so they’re in the center of the page.

In CityGrid and the other networks, you can see a local monetization “infrastructure” emerging that extends into mobile and helps publishers find qualified traffic for their advertisers, in addition to geotargeted SEM and local SEO, which is becoming much more challenging lately.