Search giant Google will offer its advertisers the chance to more tightly target the geographical areas where their ads will be seen

It's also expected to announce Thursday the upcoming addition of ads to its Google Local site. Both innovations are aimed at attracting more local ad dollars to the search space. The Kelsey Group expects that local paid search will amount to $2.5 billion in the United States by 2008, and there appears to be plenty of room for growth. The researchers' recent survey of 460 advertisers found only 11 percent currently using pay-per-click advertising. "The opportunity is to more granularly target local advertising, which benefits both national and local advertisers," said Sukhinder Singh, general manager of local and third party partnerships at Google. The new features mean that when advertisers from the U.S., Canada, the U.K, Germany, France, Italy, Spain and the Netherlands create ads on Google's AdWords program, they'll have the option of targeting by region or city. Only regional targeting was previously available, and that was only in the U.S. The new features also let advertisers around the world create "customized targeting." In this case, an advertiser indicates where his business is located -- either with an address or with latitude and longitude information -- and can then specify a radius in miles. The feature is likely to be most helpful to advertisers outside the seven countries with city or regional targeting, because the minimum radius is 20 miles, or 35 kilometers -- in most cases, probably equal to or greater than a city.