Borrell: Local Ads $7.7B In 2007

    September 7, 2006
    WebProNews Staff

Spending for local online advertising should continue to power upward in 2007, as research from Borrell Associates forecasted a 31.6 percent increase in spending for online ads.

Eventually this kind of growth will taper off, but it does not look like 2007 will be the year for that slowdown.

A report from Borrell Associates compared the rapid pace to Pac-Man chowing through a maze of pellets.

Email marketing and paid search will lead the way in 2007, as spending rises to $7.7 billion.

The ability to reasonably target an audience with those methods offers local marketers ways to retain loyal customers and educate new customers about the business.

Video advertising should begin to make an impact on local online advertising in 2007. Borrell predicted that local video ads would become a trackable category for online advertising next year.

The categories with the most promise for online ad spending in local markets should continue to be real estate and automotive. Borrell sees both as having “the biggest online ad opportunities” available.

Together, the two comprise a little more than a third of all local online advertising.

Once 2008 rolls around, some deflation in the local online ad spending market could begin.

That slowdown might then be followed by another one in 2009, and a possible flattening or even a slight decline in 2010.

Borrell has previously predicted the search component of local online advertising alone will be worth in the $4 billion range by 2010.

That September 2005 report described an even tougher time for newspapers, when it comes to online ads:

“Big newspapers … are accustomed to tracking only a handful of local competitors,” states the report. “With the Internet’s low barriers to entry, they now face the prospect of being, well, nibbled to death by ducks.”

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David Utter is a staff writer for WebProNews covering technology and business.