Local online ads set to rise in 2008

Pure-play Internet companies have, for the first time in 2007, cornered a bigger share of local advertising budget than their traditional counterparts, concludes a recent report from Borrell Associates.

by Helen Leggatt

Local online ad spending will increase by a massive 48 per cent in 2008, taking it to $12.6 billion. That’s according to local media research firm Borrell Associates, whose report goes against many others that predict an economic slowdown next year.

"About a year ago, we were thinking 2008 would see 20 to 25 percent growth," said Gordon Borrell, CEO of Borrell Associates. "Now we are saying this thing is not slowing down. It's erupting again. Something very dramatic is happening that has gone beyond anything anybody expected in terms of Internet advertising."

And what of the future of the tome that is Yellow Pages? If these more traditional channels are to survive, says the report, they must look to dedicated online sales teams instead of relying on their existing traditional reps.

The research firm also predicts that 75 percent of local online advertising will be presented via paid search and video-infomercials in five years time.