• by Jack Loechner , Staff Writer, February 12, 2015

According to new research from Borrell Associates, at the rate digital advertising has grown in 2014, and the rate they’re forecasting for 2015, digital advertising at the local level will grow 42% this year. At that rate it would account for $2 out of every $5 spent by local advertisers. It’s grown to the level of dominance that newspapers enjoyed for years, until the late 1990s.

Four types of companies are forming:

• Traditional media companies stuck in the analog world, selling a little digital stuff because it’s easy, but not really believing there’s good money in it
• Traditional media companies that are more excited about the prospects but still reticent (or unable) to invest more in order to grow quickly
• Traditional media companies that have seen the light and are determined to grow again, investing heavily in digital by hiring people or acquiring companies

But that actually makes three types of companies, says the report. The fourth is Internet “pureplays,” and there are thousands of them. True to predictions, they have gobbled up share at the local level. In 2015, these independent companies will account for nearly three-fourths of all digital advertising, elbowing out local-media competitors who have tried for two decades to use their existing sales forces to also sell digital advertising.

It’s an interesting landscape, and this is how it looks to us at the onset of 2015, says the report.  

This report, a digital advertising outlook for 2015, examines the companies that are apparently doing the best at morphing, and looks at where all the growth is. Several companies are making hundreds of millions of digital revenue but have essentially stopped growing. Others are morphing from traditional media companies into digital-media companies, now getting the majority of their ad revenues from online advertising.

Three years ago, traditional media sold half of all digital advertising. This year, traditional media will only account for 25%, or $12 billion.

Gordon Borrell, CEO of Borrell Associates, says "In 2015, independent companies will account for nearly three-fourths of all digital advertising, elbowing out local media competitors who have tried for two decades to use their existing sales forces to also sell digital advertising… “ This said, Borrell points out that traditional print and broadcast media are still a significant market force. At the end of 2014, they accounted for more than two-thirds of all advertising buys.

For additional information about Borrell, please visit here.