Mobile Touted As Major Revenue Driver

Smartphone

Advertisers will spend 17.8% of online ad budgets for local this year -- up from 14.9%, or $13.5 billion, according to a report by Borrell Associates. The Benchmarking Local Online Media: 2010 Revenue Survey points to mobile as the catalyst driving growth.

While local advertising reached $90.4 billion across all media in 2010, mobile will drive local advertising through 2015. Borrell estimates that within five years, two-thirds of the $24 billion in local online advertising -- up from $18 billion in 2012 -- will arrive on mobile devices such as tablets, smartphones, and GPS-enabled laptops.

Pure-play Internet companies that offer the best technologies are partnering with legacy media companies with the best local sales forces and promotional strength. Companies like Yahoo, Google, Local.com, Groupon, Zillow, Monster and others find it more productive and lucrative to work with legacy media companies than to compete.

In 44 of more than 200 markets Borrell tracks, Groupon or Autotrader. com generate more revenue than the largest local newspaper, TV or radio station online operation in that market, according to the study.

This year, about two dozen of Groupon's local offices will generate more than $10 million each. Craigslist brought in about $20 million from its New York location, and about $1.6 million each in Phoenix and Houston. Autotrader.com brings in more than $10 million per site in more than two dozen cities.

The study, which analyzes 4,588 U.S. and Canada online operations and advertising projections in 2011, suggests that market share held by pure-play Internet companies has stopped growing. While they held the lion's share of local online ad dollars from zero to 48% between 2000 and 2008, growth for them slowed. The biggest have been forced to form partnerships with local newspapers, TV, radio and directories.

AT&T YP.com, Autotrader.com, Groupon, CareerBuilder.com, YP.com in Canada, and Monster.com derive content from their own advertisers. Autotrader.com and Groupon expect to see their respective revenue in the U.S. exceed $1 billion this year. The remainder in the top five should see revenue between $400 million and $475 million.

AT&T experienced a 125% increase in mobile searches across the YP Local Ad Network in 2010, according to AT&T Interactive Analytics. The division also estimates YP.com attracts over 30 million monthly online unique visitors.

The report points to AT&T's YP.com as an example of a Yellow Page company making a quick adoption, and benchmarks a variety of traditional platforms from newspaper to television to radio.

 

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1 comment about "Mobile Touted As Major Revenue Driver ".
  1. Lucy Young from Luminosity Marketing , March 29, 2011 at 9:40 a.m.

    As mentioned in the article, local marketing and search are experiencing revenue growth, and this can be attributed to the surge in mobile users accessing the web via their phones. Search is the top activity conducted by mobile users, and often the search is for a local establishment (movie theatre, restaurant, museum, and more). For more insights on mobile marketing, read our blog at: http://luminositymarketing.com/blog/?p=3608