• by Mark Walsh  @markfwal, April 3, 2012

Autotrader.com topped the ranking of local online ad revenue leaders in 2011, taking in more than $1 billion in sales on the strength of a rebounding U.S. auto market. The car site edged out perennial local ad powerhouse AT&T Yellowpages.com, with nearly $1 billion in revenue, followed by newcomer Groupon, at $650 million.

Rounding out the top five were employment sites Monster and CareerBuilder, each with just under $500 million in ad sales.

Borrell Associates annual benchmarking report for local online media also showed pure-play Internet companies overall continued to dominate the sector. They accounted for 46.2% of the $16.4 billion spent on local online advertising last year, trailed by newspapers (24.7%), directories (12.6%) and broadcast (12%).

Among Internet-only companies, Groupon led the way in average ad revenue per market, at $5.8 million. But that reflects gross revenue from the sale of deals- -- half to 60% of which goes to the business client. Craigslist, which is only in 19 local markets, was second with an average of $4.75 million. Fourth on that list -- behind Autotrader.com -- was Yelp, which averaged $1.8 million across the 47 markets it serves.

The Borrell report noted that traditional media players ramped up online efforts to try to outpace the decline of their legacy businesses. To that end, Yellow Pages companies, spent last year reorganizing their sales staffs and strategies to focus on digital sales. Local Edge, which operates print directories for Hearst Corp, for example, earned 51% of its gross sales from digital products in 2011.

Newspapers are likewise adapting, holding steady with a quarter of the local online ad market and growing digital ad revenue last year by 20% to $4 billion. Borrell projects that newspaper online revenue growth will match last year’s rate, reaching $4.8 billion. Even so, the firm also predicts that if current trends hold, online media -- including banners, streaming audio and video, email advertising, paid search and mobile advertising -- will overtake newspaper ad revenue in two years.

Currently, newspapers account for about 22% of the $91.2 billion spent on local advertising compared to 18% for online. Borrell predicts that local online ad spending will grow 21.1% this year to $19.9 billion.

Local TV online ad revenues did not come close to those of Internet-only companies or newspapers, but continued to grow at a healthy clip last year, rising 41% to nearly $2 billion. Borrell expects that total to increase another 35% this year to $2.7 billion, on steady demand for streaming video commercials and mobile traffic growth.

The firm also sees strong growth potential for online advertising this year in radio, which has been the slowest of the major traditional media to make the digital shift. After increasing online ad sales by only 6.1% to $303.7 million last year, Borrell forecasts a 35% jump this year to $404 million, fueled by greater pressure on sales for in-stream audio commercials and from increased election-year political ad spending.

Among other trends highlighted in the report is the embrace of the so-called agency model by both traditional and new media companies to boost digital revenue. This means going beyond display ad sales to offer value-added services like SEO, SEM, Web development and social media marketing.

Sales training was also stepped up last year. Trade groups such as the Local Media Association and individual companies launched online sales-certification programs to ensure that reps were properly trained in how to sell digital products. Yellow Pages publisher DexOne went so far as to fire 40% of its 1,700-member sales force and replace them with more Web-savvy reps, according to the report.