Search has its limitations for local businesses. In fact, many would just as soon place media rich display ads, but for the expense and creative challenge of developing the ads. That’s the hurdle being addressed by AdReady, a venture-backed Seattle company that has created hundreds of ready-made ads that can be selected on a self-serve basis.

Since launching in October, the company has signed up 9,000 accounts. The clients range from painters and plumbers (along with large companies such as Alaska Airlines). Going forward, the company is targeting such entities as organic food stores.

Backed by $12 million from Madrona Venture Group, Khosla Ventures and Bain Capital, AdReady has developed more than 600 display ad templates covering 16 categories, including such verticals as health, auto, real estate and food and beverage. In the health category, for instance, the ads include a “Golf Back Pain” theme, a “beating heart” theme” and a “signed cast” theme.

The ads are free, so long as advertisers provide AdReady with a 20 percent commission when they are placed on various ad exchange services, including Yahoo!’s Right Media, Advertising.com and Google. In addition to art work and placement, AdReady provides full reports, such as clickthrough rates.

While the ads are available directly from AdReady, the company also makes them available on a white-label basis. For instance, the company is partnered with Cobalt for auto dealer relationships. Reader’s Digest’s Allrecipes.com, for instance, is another reseller. AdReady was started by former Classmates.com exec Aaron Finn. Recently, Finn was joined by former AOL VP Mark Feldman. There are more than 30 people at the company.

I’ve spent quite a bit of time over the Easter holiday talking with friends and family about the economy and how they are dealing with the budget crunch we are all experiencing. One of the common threads of all these conversations has been the need to stay close to home, combine shopping trips and call ahead so you don’t waste time and fuel going to multiple stores. 

More and more people are scaling back vacations and long car rides to try to save money. The next logical question is how people are adapting to this need to stay close to home and make every trip more efficient. Many of my friends and family admitted to using the print and online Yellow Pages more frequently as well as local search engines such as Google, Yahoo! and Citysearch because of the mapping features and more detailed information about the stores they were searching for. One friend admitted that if the ad or online profile page content was not specific enough, they moved on, which shows how valuable content is in driving leads. 

Almost everyone I spoke with was calling stores more often to check on availability, price and specific location before they left the house so they had a better plan of where to shop and how best to combine trips. One family member was even reserving merchandise on the phone so they could just pick it up to save even more time. Mapping, it turns out, is becoming a key advantage for online sites as was location specific information and maps in print. 

What does all this mean to Yellow Pages? If the trend is toward more local shopping and the need for directions, local business information and local contact information, then directional media such as Yellow Pages and local search are best suited to address these changing consumer behaviors. These suspicions were confirmed by a more scientific study conducted by Vertis Communications that focused on changing buying habits of grocery shoppers. The study echoes my less than scientific conclusions.

“Economic factors, such as gas prices and the housing market, are changing shoppers’ habits drastically,” says Scott Marden, director of marketing research at the Baltimore-based Vertis. “More than 90% are affected, and many are shopping closer to home, stocking up more and combining shopping trips.” 

Perhaps there is a silver lining for Yellow Pages and other local media in this new economic environment if they can get their reps tuned into this new phenomenon and effectively communicate the opportunity to local business owners.

S&MM online columnist Robert Grede shared some interesting insights in a recent article on how local advertisers can survive in a down economy and what local media sales reps should be communicating to their advertisers and prospects. While many of these items are not surprising, it is surprising how local media reps can get so focused on the troubling aspects of a down economy rather than being truly consultative salespeople who can maximize the opportunity for local small and medium-sized businesses and provide real guidance. Some of the key points Grede shared include: 

You need to keep your customers and prospects informed of changes in your business. The business environment changes quickly, and advertising, besides its power of persuasion, is your information tool. It provides information about those products and services to customers and potential customers. There’s an old adage that says, “Without advertising, you wouldn’t know.” If given the right information, your customers will become more likely to buy—even in a poor economy.

Your competitors are probably trimming their budgets, so you will stand out and gain market share at their expense. If your competition suddenly becomes invisible, whom do you think the marketplace will turn to when it needs to buy? That’s right, the one they keep hearing about. By advertising in a slow economy, you may minimize your decline in sales—or even increase sales—as you pick up your competitors’ customers.

Conversely, if your competitors don’t trim their advertising budget, you could lose market share to them. Makes sense. You trim your ad budget, and you suddenly become invisible in the marketplace. Meanwhile, your competitor has maintained his promotion and advertising spending. Your customers learn more about your competitors’ products. They decide now might be a good time to try them.

Your customers and prospects will remember you when the economy picks up again. You know the economy will rebound. It always does. You need to be positioned as a survivor. If you have maintained your promotion spending, your company will have the image of a leader—the one to depend on in your industry—when the rebound comes. 

During the advertising downturn of 2001-2002, sales organizations focused their efforts on communicating the positive aspects of a down economy. The key was promoting the fact that Yellow Pages advertising provides a solid ROI, a consistent base of ready-to-buy prospects and, combined with other media, a means to survive or establish a leadership position in the market place. 

It is a tough marketplace for local media; all the signs point to this fact. What this article suggests is that we should not make it any worse by feeding off the defeatist attitude in the marketplace particularly when it comes to Yellow Pages. The sales role should be the evangelizer, demonstrating the value of the Yellow Pages product and the value of the leads it creates to help local companies survive, maintain or grow.      

Neal Polachek and I had the opportunity this morning to sit down with Mike Galgon, cheif advertising strategist for Microsoft. Galgon was brought on board as part of Microsoft’s $6 billion acquisition of aQuantive, which he cofounded in 1997.

The $6 billion price tag was was roughly 2x premium at the time of purchase, 10X revenue, and almost 50X cash flow. It was also MSFT’s largest acquisition to date (and double what Google paid for DoubleClick), all showing the company has either lost its mind or it sees transformative capability in the Atlas platform. Galgon’s job is obviously to argue the latter and he makes a strong case.

On a basic level, Atlas will bring MSFT’s ad placement capabilities (display, video, text) beyond MSN to cover the remainder of the Web. It will also be important to compete with Google/DoubleClick (which closed on Tuesday). Galgon in fact believes that consolidation and other factors will cause 80 percent of the online ad placement to be covered by Google and Microsoft, while the remainder will be a fragmented mix of local and vertical ad networks.

He argues that Atlas not only extends addressable ad inventory but also display ad targeting capability at an important time. Behavioral targeting is the key here, to move beyond contextual display advertising where growth is flattening, as it is in search. The next growth curve will come with inventory on other devices or media, such as mobile, IPTV and in-game advertising, where MSFT is embedded in various ways (Windows Live Mobile, Massive, Mediaroom).

Search doesn’t hold the opportunity it once did with slowing revenue growth and Google’s dominance in both user and advertiser market share. But these other ad delivery opportunities are where Microsoft sees the “greenfield.” Atlas is the key to sit between this content and advertisers and agencies (aQuantive-owned Avenue A/Razorfish fits well into the equation).

Whether it was worth the premium is still an important question that will have to be proved in time. But I’m closer to believing than I was yesterday.

Spot Runner has gone into the local reseller channel in a major way by acquiring Weblistic, a company headed by Ketan Shah (and whose president is Yellow Pages Commando Dick Larkin). The company has 50 employees and is headquartered in Fremont, near San Jose, with additional offices in Carlsbad, CA, near San Diego and Chicago. It also has sales staff in the New York metro area and Denver. Its employees will be combined with Spot Runner’s 300 employees.

No price was disclosed but it’s an all-stock transaction. Going forward, Weblistic will be marketed under the “Spot Runner” brand.

Most of Spot Runner’s prior emphasis has been on providing largely prepackaged video production and media planning to national organizations as a way to offer localized video to franchisees and other national advertisers, including Realogy, Century 21, Steak & Ale, Diamond Jewelers and Warner Independent Pictures.

More recently, however, the company has been steadily building up its local capabilities, first by acquiring a videographer network a couple of months back — a step that put it in competition against companies such as TurnHere and Denver Multimedia, both of which are being resold by city guides, Yellow Pages and other local resellers.

Spot Runner also has opened 30 local sales offices in different parts of the country, all of which will now use the Weblistic software platform. The platform had its origins in the old Yellowpages.com platform, pre-AT&T (Shah had been Yellowpages.com’s CTO).

Spot Runner cofounder David Waxman says the company is now going to focus on providing a true multimedia capability. “TV is the best option for some. For others, some search is a better option.” Advertisers are “increasingly asking for other media” including radio, outdoor, print, he adds. “They are clamoring for a full-service offering.”

It doesn’t appear likely that Spot Runner will underestimate the considerable challenges of local advertising. One of its top sales executive is local sales vet Tim Lambert, who previously worked with Yahoo!, HotJobs, Knight Ridder Digital and Pac Bell Yellow Pages (although he is currently more focused on national sales efforts). But it will still need to get good interactive sales pros. They’re in very short supply.

Another challenge will be to differentiate itself among the glut of resellers, which include ReachLocal (valuation = $300 million), WebVisible, Yodle and Orange Soda. Each claims various advantages in software, algorithms and systems, but to a layman, the differences are slight.

The final challenge will be to truly leverage its existing relationships. Spot Runner investors include CBS and ad agency giant WPP. Moreover, former AOL President Bob Pittman sits on its board.

When it comes to small businesses on the Web, is it really only about video? AdReady, a new Seattle-based company started by Classmates.com alum and backed by Madrona and Bain Capital, thinks banners are really where the impact is.

Local marketers who test online video ads have seen “they can’t hold a candle to a well-optimized banner ad,” says VP Jamie Lomas. Lomas says that in addition to being optimization ready, AdReady has developed a number of templates for local verticals. For instance, it has banners specifically geared toward real estate professionals. Other templates address elective health care, automotive, etc.

It is pitching its services to metro-level clients, as well as “emerging national” companies that want to geotarget in just one or two regions (i.e., Alaska Airlines). But “hyper-local businesses – the moms and pops — aren’t really there yet,” says Lomas.

The cost of optimization and the creative have been big barriers to entry for local businesses, adds Lomas. But he thinks AdReady has significantly reduced those barriers. The company has programs starting at $500 per month, and currently has “75 to 100 clients.” In addition to its own direct clients, it plans to work with media companies and others on a white-label basis.

It is hard for me to comprehend, but we are finally finished with ILM:07. We were grateful to have had 650 interesting and enthusiastic attendees from all over the world, 72 stimulating speakers, a full load of sponsors and an excellent partnership with SES.

Our next conference, April 30-May 2 at the Westin in Seattle, will be a highly differentiated affair. Stay tuned for what we are doing with that (but not for a couple of months, OK?).

For those of you who can’t get enough coverage, a virtual conference will be up with all the PPTs in a couple of weeks (but only for attendees). You can also order the DVD.

For immediate gratification, however, check out the posts from my talented colleagues on the Kelsey Blog.

I especially liked Michael Taylor’s write-up of our discussion with Mahalo CEO Jason Calacanis. Michael is totally correct: “The long and short of Calacanis’ comments go to several of the key themes heard over and over again at ILM:07 — relevant content, deep content and engaging, passionate people are all needed to make a highly relevant and personalized search experience.”

In addition to the Kelsey write-ups, Mike Boland has captured links from the press and bloggers who attended our event. It was good to have them aboard. And Mel Taylor took some great pictures.

Here are easy links to Kelsey ILM:07 posts:

1. TKG Analysts Lay the Groundwork (Michael Boland)

2. Winebaum Provides a Fresh Look at Local Search (Michael Taylor)

3. Cash Is King for Local Search Investors (Charles Laughlin)

4. Herratti’s Citysearch: Social Media Video Partnerships (Bobbi Loy-Luster)

5. NCI: ‘We Can Work with Zillow’ (John Kelsey)

6. ILM:07 Spotlights mobilePeople (Stephen Marshall)

7. Stubbs Discusses AT&T’s Post-InGenio Vision (Michael Taylor)

8. TMP’s McKelvey Discusses Online/Offline Research Data (Michael Taylor, Michael Boland)

9. New West’s Weber and Independent Local Media (John Kelsey)

10. Marchex’s Horowitz: Bet on People Already Winning (Charles Laughlin)

11. Google’s Hanke: Maps, Mobile and Mashups (Michael Boland)

12. An Intuit-ive Approach to SMB Marketing (Stephen Marshall)

13. Injecting Social into Local Media (Michael Boland)

14. Taking It Home: The Final Panel at ILM:07 (Stephen Marshall)

Interactive Local Media: 07 is ready to roll Nov. 28-30 in L.A. That’s next Wednesday through Friday!

The show, which is being produced in partnership with SES Local, has attendees from all over the world. One exec told me he is coming on Wednesday, taking the red eye to New York that night due to a prior commitment, and flying back on Thursday night for the final day.

Attendance-wise, we have the biggest sign-up list for a Kelsey event since the mid-1990s. Almost everyone that we have slotted will actually be there. While the agenda has been tight for some time, with 70-plus speakers, here are some last minute adds:

• Christophe Maire, a cofounder of Nokia’s Location-Based Experience Development, is set for Day 3. HOT DISCUSSION TOPIC: Nokia’s $8.1 Billion purchase of NavTeq.

• Laurel Gilbert, from Microsoft’s Atlas division, is speaking on our localizing national advertising panel. HOT DISCUSSION TOPIC: How Microsoft will use Aquantative to transform itself into a true Web advertising giant.

• Doug Kilponen from MerchantCircle is speaking on the localized shopping panel. MerchantCircle just received a $10 million cash infusion from IAC and others. HOT DISCUSSION TOPIC: Best Practices for Signing up Small Businesses.

• Claudia Poepperl from mobilePeople is set to provide a demo of the London-based company’s cutting-edge social mobile technology.

We are also expecting a drop-in from a top executive of a company that’s been in the news, but we can’t say much more about it. And speaking of news, there are lots of interesting news announcements that will drop around the show as well. So, will we see you in L.A.? Here is the registration page.

The numbers are looking very, very good for the Interactive Local Media:07 conference in L.A. Nov. 28-30. Internally, we think this one is a record breaker. Register and book the hotel while you can. The latter tends to sell out.

In recent weeks, we’ve been putting the final touches on the program. For instance, we’ve added Facebook’s Chamath Palihapitiya, who is VP of product marketing. Here’s a snippet about Chamath from Fast Company’s cover story this month:

“Palihapitiya, 31, is tall and whippet thin, with elegant manners and a ready smile. A former electrical engineer, born in Sri Lanka and raised in Canada, he ran AOL’s instant-message group, then jumped to the venture fund Mayfield. He is part Sand Hill Roadster and part freethinker.”

Other notable adds include ShopLocal CMO Bob Armour, Scott Ferris from Microsoft’s Atlas division, LA Times.com’s Robertson Barrett, and City Voter’s Josh Walker. There is also a brand-new Local Mobile panel, featuring Gary Roshak, who has migrated from Marchex to Yahoo!, Jeff Torgerson at InfoSpace, and Collin Holmes at V-Enable.

Also, take a look at the SES side of the show. Google Local head Eric Stein, Zorik Gordon from Reach Local, and Topix head Chris Tolles are just some of the great execs SES is bringing in. Kevin Heisler and Kevin Newcomb are moderating the SES panels.

The Kelsey Group also has its LinkedIn networking set up for the show. We’ve got dozens participating already. Once you register, you should sign in for that, too (even if you haven’t used LinkedIn for a while). See you in L.A.?

I’m not as big on the impact of maps on the local eco-sphere as some others. But here’s something that really knocks me out: a banner tool by BigTribe that lets advertisers post a map of local points of origination (franchise locations, etc.).

BigTribe’s mapping can either be built right into the ad or generated when users click on “search locations” or mouse over the ads. Check out this dummy ad for the U.S. Army, which maps area recruiting centers. If I wasn’t so old, I would certainly join.

The technology that is involved is the company’s unique system for assigning codes for all the different types of data (and even languages) that it pulls in from a range of sites. “We’ve componentized POI [Points of Interest],” says CEO and founder Dan Greening, noting that the company has various patents pending (for the “geographic personalization” technology, POI tech and advertising system).

Greening says the company’s banner format “makes it easy to get merchants involved.” The company doesn’t have advertisers set up for the banner ad yet, but its technology is already being used for golf tee times by MetroGuide. The company also works with a number of advertisers, including Open Table, Hotels.com and Park Whiz.

Greening himself is a PhD, and his five-year-old, five-person company has been dwelling in the brainiac zones of Washington, D.C., with multiple grants from the National Science Foundation prior to developing commercial apps.