• by Jack Loechner , Staff Writer @mp_research, October 24, 2005

As a follow on to last week's reports about local newspapers online, here's another perspective on local advertising Online, and the availability of a complete report...

According to a recent study by Borrell Associates Inc., through the participation of advertising experts in a quarterly panel, local online advertising is enjoying a bonanza year, with many site operators reporting revenue increases of 50 percent or more.

While newspapers continue to benefit, the heightened sales activity is seen in independently owned city.com sites and Web operations run by local TV and radio stations.

Companies are competing for a slice of the $4.1 billion that local businesses will spend this year for online advertising, 51.5 percent more than they spent last year, says the report. Local online represents just 3.1 percent of the nearly $130 billion that local businesses will spend on all media advertising this year. Borrell projections over the next five years show local online growing to $8.6 billion, but still less than 6 percent of local ad spending.

Looking ahead, local paid search is the biggest growth category in online advertising, but unavailable from most local site operators. Spending by local businesses on paid search is expected to rise 161 percent next year, to $906 million, and to account for nearly half of all local online advertising by 2010

For the complete report from Borrell Associates, visit here.