A recent story in BusinessWeek is worth a look for two reasons. It discusses the rise of local search, and the growing ability of SMBs to use some of the powerful tools being offered by the major search engines including local targeting.

Consider these statistics:

• A November, 2005, survey by Boston’s Yankee Group found that more than 30% of businesses with 20 to 99 employees and 40% of those with 2 to 19 staffers were using local search engine advertising.
• About 55% of consumers used a search engine to find information about a local business last year, up from 47% in 2003, according to Kelsey Group.

One of the tools being used by these businesses to optimize their ad spending is the use of local search. In this case, advertisers can select a radius around a city, and then only display ads (and be charged for clicks) to searchers within that radius. The technology used to locate searchers is called geolocation. Basically, the technology works by associating IP addresses with specific geographic locations, with the result that the search engine you use knows where your computer is located, and can display ads of local businesses.