Local Online Advertising to Reach $13.1 Billion in 2008
| Published: 18th July 2008 20:30 |
Local media Web sites are sharing in the $13.1b local online ad revenue pie this year, but Internet pure-plays continue to gobble up the most. While newspaper sites have gone on the attack, we see some dramatic share grabs from other media online.
This sixth annual benchmarking report is full of local media Web site ad data from over 3,100 sites owned by newspapers, radio stations, TV stations and independents.
Our survey requested information regarding:
- Total revenue
- Total expenses
- Revenue attributed to employment, automotive and real estate sales
- Revenue attributed to streaming audio - Revenue attributed to streaming video
- Percentage of revenue driven by up-sold print or broadcast advertising
- Percentage of revenue derived from banners and pop-ups
- Number of dedicated (online-only) salespeople
- 2008 budget projections for all of the above
Local Web site managers will benefit from the timely benchmarking data. Also included are 2008 projections for online ad spending.
Local Web sites continue to ride a wave that defies even the most optimistic forecasts. Local online revenues are growing at a phenomenal rate of 50 percent this year even more astonishing considering that retail sales have suffered such a sharp drop. We expect local online advertising to reach $13.1 billion in 2008, up slightly from our initial forecast last December.
Part of the growth is being driven by traditional local media companies selling advertising on their own sites. Most of it, however, comes from pure-play companies delivering lower cost advertising that intercepts consumers not as they are reading news online, but as they are using the Web to research products and prices. The recession is an economic prod that is motivating advertisers to abandon their long-time spending patterns and seek out more economical methods of reaching potential customers.
Amid the relentless growth, a transformation is taking place. A few years ago, it was easy to tell who owned which local Web site. Radio station sites looked like they belonged to radio stations. Yellow Pages sites had the walking fingers logo. TV sites carried the stations call letters and the anchor pictures at the top. Newspaper sites pushed local news and classifieds under their traditional mastheads. Now it is getting tougher to tell, and it is becoming less relevant by the year to compare Web sites against each other according to the core product their parent company owns.
After compiling this years survey, two headlines screamed out: The most financially successful local Web operations are venturing into page designs and product lines that have little to do with the medium that gave birth to them. Like their new media predecessors in radio in the 1920s and television in the 1950s, they are creating unique identities and breaking away from their print and broadcast roots.
Suddenly everyone seems focused on using the Internet to attack the Yellow Pages. Interactive directories have popped up everywhere, and legions of sales people are selling local business directories and search-advertising packages in competition with the print directories. Unfortunately for them, Yellow Pages publishers have already staked out the turf and have been the most successful of all media companies at developing their interactive revenues and protecting their core customer base.
What's in store for these local Web operations in the coming years? A slowdown is inevitable. Over the past four years we have seen local online ad sales reach a Compound Annual Growth Rate of 48 percent; over the next four we're expecting it to be 15 percent. We are forecasting another 18 months of strong double-digit growth for local online ad sales, which will settle to single-digit or market norm levels by 2012. By then we expect the winners in local online advertising to have grown to the size of the second- or third largest media outlets in their markets in terms of total revenues. Newspaper sites, with a formidable lead on everyone else, have the biggest head start.
sourced : M2 PressWIRE, June 27, 2008 Friday
