Local Online Advertising Growing Rapidly
The local online advertising marketplace has been evolving quite rapidly in the last year and I was a bit surprised to read that it is expected to reach $5.8 billion in 2006.
Spending on local online advertising was up 78% in 2005 according to a new report titled “What Local Web Sites Earn: 2006 Survey,” from Borrell Associates. Reaching $4.8 billion in 2005, compared with $2.7 billion in 2004, the local online category is expected to increase 21% to $5.8 billion in 2006. Borrell defines “local online advertising” as “advertising placed by locally based businesses for locally focused online messages.”
Online revenues at newspaper websites were an estimated $2 billion in 2005, up from $1.19 billion in 2004, with real estate, help wanted and car ads accounting for 75 percent of 2005 online ad revenue. Newspaper sites were profitable last year, according to the report, but the average site lost market share within its designated market area; the average site controlled an estimated 14.8 market share last year, down from 18 percent in 2004. The search engines have begun stealing share in the local media, offering a new form of targeted advertising that is luring dollars from real estate, automotive, legal and other advertisers traditionally the mainstay revenue stream of the newspaper business.
Local TV station websites generated $283 million, up from $119 million in 2004 – it is expected that those numbers will increase rapidly as online video takes off.
Borrell examined revenues at 2,266 local media properties, including the sites of 696 daily newspapers, 148 weeklies, 1,154 radio stations, 437 TV stations and 24 independent local sites.
This post was written by: Kim Mickelsen