Yodle, Yellowbook.com and Local.com have been named the fastest-growing local online ad companies among those with revenue of more than $25 million in 2009 by local media research firm Borrell Associates.
Local online ad and lead-generation firm Yodle is on track to triple revenue to roughly $75 million this year, according to Borrell, while Yellowbook.com is expected to nearly double sales to about $390 million. Publicly traded Local.com is expected to grow its revenues by more than one-third to $50 million.
The strong projected gains for the three companies come amid slowing growth in local online advertising as a result of the recession and the maturing of the sector. Borrell released a forecast earlier this month predicting that spending in the category will increase only 5% next year to $14.9 billion after more than tripling between 2005 and 2008.
At midyear, Borrell found that two-thirds of 34 companies accounting for 40% of all local online ad dollars had declining revenue. Those that continued to grow in 2009 were focused on selling search advertising, online directory listings and streaming video advertising.
As the top three gainers, Yodle, Yellowbook.com and Local.com each sell primarily performance-based advertising. For Yodle, which has 6,000 local advertisers and 125 sales reps in 25 offices nationwide, it's the second straight year that the four-year-old company has been recognized by Borrell as the fastest-growing in the space.
Yellowpages.com, the online arm of the traditional local directory publisher, has benefited from selling search and video advertising in markets where it maintains print editions. Its online sales average is just $650 per customer, or about $55 per month.
Internet-only competitor Local.com, meanwhile, derives 90% of its revenue from search-based advertising. Earlier this year, Local.com unveiled a redesigned Web presence placing greater emphasis on hyper-local content and more detailed local business information.
Peter Conti Jr., a senior vice president at Borrell, also noted that these companies also act as soup-to-nuts marketing consultants for small businesses. "They'll put together a Web site for your business, offer complete analytics, online upgrades through a dashboard, or if you get stuck, just pick up the phone and talk to someone," he said.
Getting that kind of hand-holding service from a traditional media out or a big online player like Google can be more difficult. "Plus, these guys are going after the most lucrative online ad-spending business categories," he added. Those include lawyers, health care providers and home improvement companies.
Conti said executives from each of the three companies are scheduled to speak at the firm's 2010 Local Online Advertising Conference.
The Borrell Associates must have only looked at a few companies because if they looked at ReachLocal they would have seen that they are in front of the three they named.