Do people really use the Internet to search for product and service providers in their local area? Most definitely yes. Many of my clients do very well out of local Internet marketing. Most local businesses are yet to harness the Internet as an effective marketing tool. In my view, they should start doing so. Local Internet marketing can be very cost-effective for two reasons:

1. You're able to target your potential customers at the time of purchase: People look online when they're ready to purchase a product or service, as much as they would turn to the phone book. These consumers are usually ready to buy; exactly the market you want to have access to. This is targeted marketing which is much more effective in driving sales than print ads.

2. Poor competition: Numerous local businesses advertise offline in venues like the Yellow Pages, but have not built an online presence for themselves. The Yellow Pages is one way to get noticed, certainly, but there you are surrounded by your competitor's advertisements. There is a lot less competition online, which means more sales and a better marketing ROI for you.

Local internet marketing is not really all that complicated. Just as with any sort of online business, your website should be focused on making sales and follow sound marketing principles. However, the most important thing is to generate the targeted traffic which will get your business increased sales. The best target market for a local business is of course, the people in your immediate vicinity.

Here are my top 5 strategies for generating targeted local traffic. Some of these strategies will be more effective than others. My advice is to test and see which ones work for you.

Strategy #1: Google Adwords

Google Adwords is an essential part of internet marketing, It is easy to use, cost effective and can be used to highly target your prospective customers. Here are a few guidelines for building effective local campaigns with AdWords.

1. Compile lists of keywords including your targeted geographical area.

2. Devise ads that mention your locality.

3. Track conversions

4. Test differing ads

5. Compare different search phrases too

Strategy #2: Search Engine Optimization for Targeted Local Search Phrases

1. Target your search phrase carefully

Remember that the object of SEO is not to be all things to all people. You need to focus on a single keyword or phrase to increase your odds of getting a high page ranking for it. Focus, focus, focus.

To decide which keyword or phrase to focus on, have a look at the conversion rates which your AdWords campaigns are earning you. Take the most effective word or phrase and target this phrase. You can also try this formula as a default and usually works well:

[your location] + [your industry name]

2. Include your key search phrase in the homepage title tags.

Title tags include the text which shows up in that blue bar at the very top of your browser windows. Search engines use these tags as part of their formula for determining page rankings. Keep your title tags concise.

3. Build some backlinks.

Backlinks are links from other websites to your website. Backlinks tell search engines such as Google that your website is important, and important websites get higher rankings.

Here are some simple guidelines for building backlinks to your website:

You should list your site in as many directories as you can. You can also do link exchanges with other websites. Some of the best backlink building strategies are to write articles about your field and submit them to directories and e-publishers, linking all of these articles back to your website. A blog can be another good way to build backlinks, as can online forums (you can make a link to your site part of your signature). You can even purchase backlinks through services like www.text-link-ads.com.

IMPORTANT: Whenever possible, make sure that the text of these backlinks contains the keywords for which you want to rank well.

4. Use your keywords in the website content

Again, this can get very technical, but you'll do fairly well just by including your keywords throughout your website content in a natural way (DON'T overdo it). If possible, use your keywords in the headline and in the first paragraph of text, then here and there throughout the content.

Strategy #3: Other Pay-Per-Click Search Engines

If your campaigns are working well in Google Adwords, try other PPC [Pay Per Click] search engines such as Overture and Sensis [Australia]. In my tests to date, these services haven't produced the ROI that Adwords does, but they can nevertheless add value.

Strategy #4: Yellow Pages Online

This may work differently for you if you're outside of Australia, but the Online Yellow Pages in my experience is more effective than the print edition, in fact, as much as ten times higher ROI in some cases! This may not work equally well for every business; but if your client value ratio is high ($500 or more in sales/per new client), then Yellow Pages online may work well for you.

Strategy #5: Integrate your offline marketing promotions

Obviously, you should always include the website address of your business in your print ads and marketing materials. This by itself will not generally net you a lot of leads, but making your website the focus of some of your offline marketing efforts can. Try offering a freebie like a whitepaper or report to visitors in your print ads or direct mail campaigns.