• by Wayne Friedman , February 3, 2011

Total digital advertising sales -- display and digital video -- amounted to $1.4 billion in 2010, a 14% gain over 2009. And another 17% increase is expected this year, according to a new Borrell Associates report commissioned by the TVB.

While online ad business is improving, it still remains a small piece of a broadcast TV stations' overall business. Online revenue is now 6% of TV stations' total advertising pie, up from 3.5% in 2007.

Overall, TV stations accounted for 10.4% of the total $13.5 billion online advertising revenues in 2010 -- up from a 9.3% share in 2009. The average for each TV station was $750,000 in online dollars. But the majority made less than $500,000. The best-performing TV stations pulled in $5 million to $11 million. Borrell Associates tracked some 4,332 local sites operated by 630 broadcast stations that submitted data.

TV stations are gaining in advertising, but not from their endemic and traditional video advertising. Display advertising accounts for $935 million, with digital video advertising around $255 million. According to other research estimates, the entire digital video advertising revenue market comprises some $1.2 billion.

"Despite search, despite social networks, and despite national portals' focus on local sales, TV station sites continue to grow in share of the local online ad spend," stated Jack Poor, vice president of marketing insights at the TVB, the local media advertising group for TV stations.

The survey estimates more rapid online advertising growth for TV stations in later years -- 33% in 2012 and 25% in 2013. TV stations are anticipating that mobile advertising sales will make for faster growth.

Gordon Borrell, CEO of Borrell Associates, said: "Mobile applications will inject new excitement into an otherwise flattening Web-advertising environment and as TV's most familiar form -- video advertising -- goes interactive."

The report said top local ad-spending categories continue to be general merchandise stores, car dealers and real estate agents.