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Economy Weighs on SMBs, According to Sentiment Survey Released by Local Corporation

  Economy Weighs on SMBs, According to Sentiment Survey Released by Local
  Corporation

Over 80 percent of Small Business Owners Cite ‘State of the Economy’ and over
   Half Cite ‘Change in Government Support of Small Business’ as Impacting
                     Confidence in Their Company’s Future

Business Wire

IRVINE, Calif. -- November 02, 2012

Local Corporation (NASDAQ: LOCM), a leading online local media company, today
reported findings from its first ever Small Business Sentiment Survey. The
survey was commissioned to help understand the current sentiment of small
business owners as it relates to the economy, the future and their businesses.

Conducted last month by Kelton, a global insights and research firm, the
survey polled over 400 small business owners and found:

  *92 percent of small business owners report that their financial decisions
    are influenced by the economy
  *46 percent of respondents would be more confident about their business’
    future if their personal income taxes were lowered, and 37 percent would
    feel this way if there was a change in administration

The survey indicates that small business confidence levels may correlate to
whether business owners are hiring or cutting spending. In response to the
shaky economy in the last three years, 46 percent of small business owners
have considered raising prices, 40 percent have thought about cutting back on
marketing spend and 24 percent have considered reducing staff. Importantly, 61
percent of business owners admit they would be willing to take a pay cut
themselves to ensure that their own business doesn’t close prematurely.

Additionally, in the past three years, business owners have considered:

  *Reducing operating costs (51 percent)
  *Reducing operating hours (19 percent)
  *Reducing benefits (16 percent) or salaries (16 percent)
  *Closing temporarily (11 percent) or permanently (16 percent)

As small business owners are conserving budgets, they’re also seeking
additional value from their advertising spend, which is driving a $5 billion
decline in traditional media spend from 2010-2015, offset fully by an $18
billion increase in digital media spend during that same period^1. ^ To
capitalize on that growth, Local Corporation has released a full service
digital media solution for small businesses to help them reach online
consumers: http://launch.local.com.

“Small business is a major growth engine for our economy. We can interpret
from these results that when small business owners are not confident about the
economy, they look more closely at their expenditures and where they’re
getting the most value for their money,” said Heath Clarke, chairman and CEO,
Local Corporation. “Based on digital media growth projections, small
businesses clearly see the value in moving their dollars from traditional to
digital media, which is why we’ve focused our development efforts in this
area.”

More than half (63 percent) of respondents are currently investing in digital
marketing, and 30 percent are planning to increase their digital marketing
spend in 2013. Additionally, more than half (53 percent) of respondents
believe that a website or a better version of their current website is the
digital marketing solution that might most help them reach consumers.

More than half (56 percent) of participants are willing to make a long-term
investment in their business right now, with business development (46 percent)
and online advertising (37 percent) topping this list. More than a quarter (26
percent) of respondents also reflect that customer relationship management has
been their biggest marketing challenge in the last 12 months.

^1BIA/Kelsey

About Local Corporation

Local Corporation (NASDAQ:LOCM) is a leading online local media company that
connects brick-and-mortar businesses with over a million online and mobile
consumers each day using a variety of innovative digital marketing products.
To advertise, or for more information, visit: http://www.localcorporation.com.

About Kelton

Kelton is a leading global insights firm serving as a partner to more than 100
of the Fortune 500 and thousands of smaller companies and organizations.
Utilizing a wide range of customized, innovative research techniques and staff
expertise in marketing, branding, PR, media, and business strategy; Kelton
helps drive our clients' businesses forward.

About The Survey

The Local Corporation Survey was conducted between October 12 and October 18,
2012, using an email invitation and an online survey among 403 small business
owners who make at least some financial decisions related to marketing and
work at companies with 25 employees or less, have annual revenues of less than
$1.5 million, are not franchises or branches of national companies, spend
$75,000 or less every year on marketing or advertising, and some that have
home-based businesses.

Results of any sample are subject to sampling variation. The magnitude of the
variation is measurable and is affected by the number of interviews and the
level of the percentages expressing the results.

In this particular study, the chances are 95 in 100 that a survey result does
not vary, plus or minus, by more than 4.9 percentage points from the result
that would be obtained if interviews had been conducted with all persons in
the universe represented by the sample. The margin of error for any subgroups
will be slightly higher.

Forward Looking Statements

This press release contains certain forward-looking statements that are based
upon current expectations and involve certain risks and uncertainties within
the meaning of the U.S. Private Securities Litigation Reform Act of 1995.
Words or expressions such as "anticipate," "plan," "will," "intend," "believe"
or "expect'" or variations of such words and similar expressions are intended
to identify such forward-looking statements. These forward-looking statements
are not guarantees of future performance and are subject to risks,
uncertainties, and other factors, some of which are beyond our control and
difficult to predict and could cause actual results to differ materially from
those expressed or forecasted in the forward-looking statements. Key risks are
described in the filings we make with the U.S. Securities and Exchange
Commission. The forward-looking statements in this release speak only as of
the date they are made. We undertake no obligation to revise or update
publicly any forward-looking statement for any reason. Unless otherwise
stated, all site traffic and usage statistics are from third-party service
providers engaged by the company. Traffic and our monetization of that traffic
combine to determine our revenues for any given period. Our traffic volume
alone for a period should not be viewed as demonstrative of our financial
results for such period.

Contact:

Investor Relations Contact:
Local Corporation
Janine Zanelli
949-341-5340
jzanelli@local.com
or
Media Relations Contact:
Local Corporation
Cameron Triebwasser
949-789-5223
ctriebwasser@local.com
 
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