• by Jack Loechner , Staff Writer @mp_research, May 2, 2008

According to data from Borrell Associates' fifth annual local online revenue survey, newspaper-owned Web sites maintained a three-to-one lead over other local competitors in advertising market share last year, capturing 26.9 percent of the market.

NAA President and CEO John F. Sturm, says "This survey provides further proof that local advertisers recognize newspaper Web sites as an indispensable way to reach their best customers... "

Newspaper-owned Web sites earned more than $2 billion in local online advertising revenue in 2007, says the survey, a figure that surpasses all local online media companies combined and represents a 27 percent share of the total local online ad market.  Local Yellow Pages and television Web sites were next with 9.5 percent of the market each, while radio stations captured 2.1 percent.

The survey indicates that video, the fastest growing segment of local online advertising, generated $363 million in 2007, with local online advertisers expected to spend $1.2 billion in 2008 (nearly a four-fold increase).  Newspaper-owned Web sites have seized a foothold in this area as well, with a 26 percent share of all local online video advertising - more than any other local competitor.

National advertising also impacted newspapers online. According to the study, newspaper Web sites earned $1.1 billion in national online advertising revenue throughout 2007, bringing the combined total to $3.1 billion. NAA had similar estimates for newspapers' 2007 online ad expenditures, with newspaper Web sites generating $3.2 billion in ad revenue.

According to the survey, the largest newspaper Web sites achieved a majority of revenue from non-print advertisers for the first time. The online-only advertisers accounted for 59 percent of the total ad revenue generated by newspaper sites.

These changes come as newspapers have doubled their online sales staff since 2005, adding an estimated 3,800 sales employees nationwide who are dedicated to developing, managing and selling new online products at their properties.

John Kimball, NAA's senior vice president and chief marketing officer, notes "... the survey found that newspaper Web sites who employ at least one salesperson dedicated to selling online advertising averaged 87 percent more revenue than sites that relied solely on print representatives to sell online ads."

In a sample of 61 markets covering the full range of market sizes, Borrell Associates compared the number of online-only salespeople at each market's largest newspaper site with the number at its largest TV site.  The numbers demonstrate the medium's commitment to generating revenues by meeting the needs of online advertisers:

• Across all markets, the largest newspaper Web site had an average of 2.4 times as many online-only salespeople as the largest TV site.
• Among the 20 largest markets, the largest newspaper site averaged 5.1 times as many online-only salespeople as the largest TV site.
• Among the 50 largest markets, newspapers averaged 3.1 times as many online-only salespeople as the largest TV site.
• In several markets, the main newspaper's online-only staff of 12, 18, or 22 is competing against TV station online-only staffs of two, one or 0.3 people.

For additional information about the study, please visit NAA at their press center here.