We did an analysis study a while ago about local portals in some areas, advertising expenditures by category, etc.
After looking through all the numbers, we're currently in the process of building a trial local portal based around PPC. However, as the local business don't really know that much about PPC or net advertising, so we're going to be using a fixed bid system and then randomize each category as to who comes up first.
It doesn't make sense for a business that might get only 10-50 hits a month from such a portal to have to worry about logging into a cp and manually bidding. They have to log in once, supply business info, credit card, etc and then they can be done with it.
They are allowed to modify their ads at will to take advantage of any new specials or something they'd be running, but it's not necessary.
This site should be live within a month, so in 3-6 months, I'll be able to give details about the effectiveness our trial with such a portal - if you're really patient - long time to wait for an immediate question.