My friends (and former colleagues) at Borrell Associates are out with their fourth annual survey of local online revenues. As usual, the survey is a data goldmine, based on confidential reporting from 2,266 local sites- a very impressive count. Borrell found that local online revenues were $4.8 billion in 2005. For 2006, they’re projected to surpass $5.8 billion in 2006.
Borrell indicates that a perfect storm has kicked local up a notch. Traditional media companies have accelerated their efforts on the Web; the portals have ramped up their local initiatives; thousands of entrepreneurs are selling local advertising; and there is a natural migration of local advertisers, who are finally accepting the Web as part of their marketing plans. “It is no longer a case of artificial upselling,” says Borrell.
Major trends include a jump in local search revenues from five to nine percent, and the rise of targeted advertising, including paid search, lead generation, directories and classifieds. Display ads such as banners and popups are down to just 14 percent of revenues.
While much is made of the decline of newspapers, Borrell says that papers continue to hold their own as the leaders in local online sales with 41 percent of all local revenues. “Pure Plays” ranging from Yahoo to Monster make up 25 percent; Yellow Pages and similar directories make up 16 percent; Paid Search is up to nine percent (up from five percent);TV sites make up six percent; and “Other Print,” such as shoppers, make up two percent.
This is great data…I wonder how aggressive newspapers will get in this space? Up until now, all they have done is advertise in their print mediums for their websites or classifieds. What if they actually bundled their online ads as part of a print ad campaign?