Commentary

Local Online Advertising A Hard Sell

Local Online Advertising A Hard Sell

Right on the heels of a recent Brief indicating that local news holds Online newspaper readers, JupiterResearch reports that advertising will pursue the classifieds.

JupiterResearch recently announced that U.S. spending for online local advertising will grow 26% to $3.2 billion in 2005, and then 11% compounded annually, to $5.3 billion in 2010. The report, "U.S. Local Online Advertising Forecast, 2005 to 2010," points out that classifieds will continue to comprise almost 70% of that total throughout the forecast period.

David Card, Vice President and Senior Analyst at JupiterResearch, said "Outside of classifieds, local ad spending online remains relatively immature. For now, online publishers and networks will find better opportunities servicing national advertisers that are aiming at local audiences than they will servicing true local businesses." In 2004, local spending drove only 5% of online display advertising and 16% of paid search listings.

JupiterResearch Senior Analyst, Gary Stein, said "Local, service-based companies will lead the second wave of online local spending... if they are offered ad models that make sense for them. Pay-per-click doesn't make a lot of sense if you don't value your site as a source of leads. Pay-per-call technologies have promise, but face uncertain growth."

A JupiterResearch/Virtus executive survey of advertisers who typically use Yellow Pages found that about 30% of the executives surveyed were interested in pay-per-call, but over 40% said they were "very uninterested."

For more information on this study and JupiterResearch, go here.

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