JUNE 04, 2007 -
Local online advertising is expected to hit $7.5 billion this year, a 31.6 percent increase over 2006, according to new estimates scheduled for release Tuesday by Borrell Associates. While local ad growth began to slow in 2005, it is still growing faster than national online advertising, which is expected to see a 20.7 percent increase to $22.1 billion.
Newspapers will continue to pull the dominant share of local online advertising at 35.9 percent, followed by pure-play Internet companies (such as Google, Yahoo, Monster) at 33.2 percent. Yellow pages are expected to control 11.7 percent of ad dollars. Local print magazines have 9.2 percent. TV stations have 7.7 percent and radio stations, 2.2 percent.
For 2007, newspaper online ad revenue is expected to reach $3.2 billion, while TV stations will pull in $602 million and radio stations, $189 million.
“If newspapers are engaged in an online feeding frenzy and TV stations have set out on the hunt, radio stations are rubbing their sleepy heads and wondering what’s for breakfast,” the Borrell report noted. Although radio stations have doubled their share of the local online ad market, Borrell pointed out that growth has come at the hands of a few aggressive operators such as Cox Radio, Emmis Communications and Clear Channel.
During the past year, companies making a play for local online advertising focused on building their organizations to capture more dollars; several media companies appointed corporate-level interactive executives. Some of the largest local sites now employ two dozen or more online-only sales people.
Most local media operators are generating 2 to 5 percent of their revenue from Web operations. Some media companies, most notably newspaper companies, are getting more. 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.
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