Part of the reason NAA sent me (and Pili Linares, who works in the NAA advertising department) to the Interactive Local Media conference this week is because the “local space” and search, search engine optimization/marketing and local directories are quickly becoming a very, very important part of newspapers’ strategy. But when one of the moderators this morning asked how many people in the audience had local search programs in place, few hands went up. Even fewer people said they were satisfied with their programs. Even though this area is important, it’s clear many companies have a long way to go with it.

Search Engine Strategies organized the first portion of the conference on search engine strategies. The Kelsey Group organized later sessions the first day and other sessions throughout the conference.

For newspapers, the main message of the opening session this morning is that newspapers need to have programs in place that really target smaller businesses, especially in assisting them with online advertising. Having a strategy in this area will help keep Yellow Pages competition at bay and make the newspaper Web site the true leader in local information. Having a local directory will attract small businesses to the newspaper – offering low-cost directory-based means for small businesses to advertise on the newspaper Web site will attract those businesses and perhaps take advertising dollars away from competitors. Unfortunately, it’s much easier to write that mandate than it is to actually do it.

Gib Olander, director of business development at Localeze, said somewhere between 40 percent and 60 percent of small businesses do not have their own Web sites. Offering them a space online – a microsite with their basic information, for example, hosted by the newspaper – can help increase the business’ revenue, making them loyal newspaper advertising customers in the future.

Eric Stein, director of local sales at Google, pointed out this morning the number of searches people enter a search as “car wash 60616” – in other words, a business category plus the zip code or town name – are increasing. It’s entirely possible through search engine optimization for a newspaper Web site’s directory listing to pop up high in the Google search results. Stein demonstrated the Google Local Business Center, an easy way for small businesses to ensure they show up on Google search results.

It’s not necessary for a newspaper to entirely build their own local directory, and the local search area is where partnerships with established companies can really pay off. Companies like Zvents, Localeze, Citysearch, ShopLocal and dozens of other companies do this. (For a long list of providers, look at the 2007 NAA report “The Online Newspaper Shopping Report: Online Relationships with Retailers.”)

More to come from the conference later today…