Local Online Advertising to Grow 31.6% in ‘07

U.S. local online advertising is forecast to reach $7.5 billion - 31.6 percent over 2006 levels, according to “What Local Media Web Sites Earn: 2007 Survey,” the fifth annual benchmarking report from Borrell Associates, MarketingCharts reports.

Nearly 25 percent of the local media websites in the Borrell survey were on track to generate more than $1 million in gross revenues this year; and 6.6 percent of them are forecast to generate more than $10 million, the research firm said.

According to Borrell’s findings:

• Newspapers account for the dominant share of all locally spent online advertising: 35.9 percent
• Pure-play internet companies (Google, Yahoo, Monster, etc.) are right behind with 33.2 percent
• Yellow pages operators control 11.7 percent
• Other Print (e.g., Homes & Land and other local magazines), 9.2 percent
• TV stations, 7.7 percent
• Radio stations, 2.2 percent.

Pursuing non-traditional advertisers is becoming the route to growth, according to the report: “The number of locally based online-only salespeople grew 26 percent in 2006. Budgeted figures for 2007 anticipate an additional 35 percent increase in hiring this year.”

For 2007, newspaper online ad revenue is expected to reach $3.2 billion; TV stations will account for $602 million; and radio stations will pull in $189 million, writes MediaWeek, citing the Borrell report.

Local ad growth will continue to surpass that of national online advertising, which is expected to increase 20.7 percent, to $22.1 billion, according to MediaWeek.

Most local media are generating 2-5 percent of their revenue from web operations, though newspaper companies tend to generate more, according to the article: “Online ad revenue represents 10.7 percent of The Washington Post’s gross revenue; the New York Times and Morris Communications, 8.1 percent; Scripps, 7.0 percent; and McClatchy, 6.6 percent.”