Borrell: Local Media Share of Local Digital Advertising is Down to 18%

The steady growth of local digital advertising has largely been driven by Facebook and Google, which account for 77 percent of all local digital revenue, per new research from Borrell Associates. Borrell notes that other national pureplays also play an out-sized role in local digital sales, including companies like Bing, Twitter, AutoTrader, HomeAdvisor and LinkedIn.

Just 18 percent of local digital advertising is now being sold by local media and directory companies, however. That’s down from their 75% share in 2002, when Borrell first started watching the space (when I was working with them.) Within each local marketplace, an individual media or directory company might only be taking 3% of digital revenue.

“Local media forms the thinnest part of digital advertising’s longtail,” notes Borrell.

Still … Borrell calculates that’s $12 Billion a year. For companies willing to go outside of their own skin, there’s always an opportunity to do more. While a lot of the new activity is oriented around being a sales affiliate for the large platforms, local media and directory players can also sell digital services like websites, reputation management and scheduling; sell video and audio packages; and grab more programmatic dollars from national brands targeting locally.

Digital services have proved to be especially promising, per Borrell. They can “comprise 14% to 34% of total revenues, depending on the year they started selling and the aggressiveness with which they’re selling.”

Looking forward, the local media and directory companies that will take up these opportunities will be those “whose audiences and revenue streams have been threatened most and who have thus acted more aggressively to build digital products,” says Borrell. “These Yellow Pages and metro newspaper companies are getting one-third or more of their ad revenue from digital media. Meanwhile, those who’ve been less threatened in past years – broadcasting companies, and those with properties outside of urban markets – get lower percentages.”

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