Jupiter Forecast: Local $ Grows, But Disappoints

Local advertisers have discovered the Internet and will boost their advertising 26 percent to reach $3.2 billion this year. But after that, they’ll grow just 11 percent per year through 2010, reaching $5.3 billion, according to a new Jupiter Research report, “US Local Online Advertising Forecast, 2005 to 2010.”

According to Jupiter’s analysts, local advertising will fall short in its transition to the Net, as most local businesses will be slow to jump online. Instead, local online advertising will remain centered on national firms targeting on a localized basis.

Why? The portals won’t invest in local sales forces, and existing local advertisers see better leads coming from word of mouth, magazines, trade shows and other offline marketing tactics. “They are just beginning to build databases of email addresses,” notes Jupiter.

Planet Discover Adds Gannett, Scripps

Planet Discover’s addition of Gannett and Scripps titles suggests that it is increasingly poised to breakout in the newspaper search space. The potential for newspaper search remains fairly good, as newspapers begin to compete more seriously against the Yellow Pages for search-oriented shopping and small business advertising.

For Planet Discover, the Scripps tie is especially interesting, as the parent company looks for ways to localize its new Shopzilla acquisition. Up to now, Scripps executives have solely focused on Shopzilla’s synergies with the conglomerate’s non-local cable properties, such as HGTV, The Food network and DIY.

Estimating Online Revenues for Newspapers

eMarketer is out with a new forecast for online newspaper revenues, which is is unreliable but basically in line with prior efforts from The NAA(very optimistic) and Borrell Associates Inc. (fairly optimistic).

For the record, we note here that eMarketer is saying that newspapers made $1.03 billion in 2004 and predicts that they will make $1.4 billion in 2005. NAA hasn’t forecast its 2005 numbers yet, but said that newspapers made $1.5 billion in 2004. It found that newspapers made $500 million in Q2, so newspapers would be theoretically in line to surpass $2 million for the year. Borrell reported $1.19 billion for 2004 and forecasts $1.52 billion this year.