2008 Local Online to grow, but needs dedicated sales organization

According to the Executive Summary of a newly released Borrell Associates study on the 2008 outlook for local Online advertising in the USA, a 48 percent increase in local online ad spending is anticipated in 2008, bringing it to $12.6 billion, due to the popularity of local search and online video advertising. Local search advertising will more than double next year, to $5 billion, while locally placed online video will triple, to almost $1.3 billion. Very important for local video advertising will the home, automotive and health-related categories.

In 2008, however, selling advertising may be challenging for local media companies. Most yellow pages publishers, cable companies, newspapers, radio stations and TV stations are still relying on their traditional sales reps to sell online ad packages.

There is increasing evidence, says the report, to support the idea that a greater investment in an independent online sales force will be necessary to continue the growth these properties have enjoyed for the past few years. The growth rates for most local media operators have slipped well below the overall growth rate for local online ad buys - which means these properties are losing market share. Much of that share is being captured by pure-play Internet companies hungry for the growth they see in the local market, although they are seeing benefits to partnering with local media companies to supplement their own efforts.

Marketing budgets will accelerate their shift out of traditional advertising formats (both online and offline) and into non-ad activities such as promotions and public relations, which are better at delivering the improved targeting and accountability that advertisers are demanding.

(Source: Center for Media Research MediaPost Communications)