Wayfire Media

BusinessWeek has an interesting story about local search marketing, and a small company called Skyhook Wireless that's hoping to change the way local businesses advertise on the internet. The major ad networks already provide some tools that allow advertisers to target specific geographic areas, but this new technology promises even more granular targeting, so ads could be displayed only to users within a few blocks of a local business.
It's yet to be seen if Skyhook's technology will be picked up by any of the bigger online ad networks, but they're reportedly in talks with both Google and Yahoo. If we do see this made available to advertisers, it will give smaller businesses even more power to direct their message to the exact customers who are most likely to buy. A Chinese food restaurant could advertise only to customers within their precise delivery area. A small, local bookstore could target their ads to users within a few blocks, hoping to attract walk-in customers from that coffee shop down the street that offers free Wi-Fi access.
More precise ad targeting can only benefit small businesses with limited marketing budgets. The downside, perhaps, is that more targeting options will probably make it even more difficult for do-it-yourself marketers to manage their campaigns efficiently. More options too often leads to more confusion. However, with the increased conversion rates expected from targeting only the users that are most likely to buy, advertisers will likely find that it's worth their time to learn how to properly zero in on their market. And those who don't have the time to learn may find that hiring an outside consultant to manage their online campaigns can pay for itself.
This sort of powerful targeting isn't available yet, but it's worth keeping an eye on, especially for neighborhood businesses that cater to very specific areas.