• by Jack Loechner , Staff Writer @mp_research, September 28, 2006

Local online advertising faces another banner year in 2007, says Borrell Associates in their recent research release, as local businesses continue to seek new, more efficient ways to drive traffic to their Web sites and to their businesses. It will grow to a $7.7 billion category in 2007, reflecting 31.6 percent growth over 2006.

Web site operators are scrambling to add hunters, says the Executive Summary. About half of the local Web sites were adding to their sales forces this year already, increasing the small but growing army of online-only sales people by about 37 percent. Some of the largest local Web sites now have three to four dozen salespeople dedicated to online sales.

Borrell projects a slowdown in the growth of standard online ads by 2008, a further slowdown in 2009, and a flattening or perhaps even a mild decline in local online advertising by 2010 as online promotions begin to attract more ad dollars away from traditional advertising.

In the near term, online ad spending will continue to migrate toward more targeted forms of online advertising such as e-mail and paid search. The report expects local video advertising to become a trackable category in 2007.

The biggest online ad opportunities currently revolve around real estate and automotive. Combined, these two categories comprise slightly more than one-third of all local online advertising.

Read the Executive summary here.