Analyst firm expects growth in display and search advertising through 2012, and changes in classified advertising.
Jupiter Research predicts local online advertising will reach $8.9 billion within five years.
In a report titled "US Local Online Advertising Forecast, 2007 to 2012," analyst Barry Parr states that local display and search advertising will grow over the next five years at compound annual growth rates (CAGRs) of 18 percent and 16 percent, respectively. It attributes that growth to continued interest by newspaper and yellow pages publishers along with improved local performance by major search engines. It also states that local advertising will grow at a CAGR of 13 percent from 2007 to 2012, a faster clip than online advertising in general, which has an anticipated 12 percent CAGR.
Parr writes in the report that although the newspaper industry and local broadcasters face challenges, their more established mature readers will keep them afloat as "local media must learn to work in a world increasingly dominated by the search bar and prepare themselves for an eventual face-off with their national competitors."
Drilling down into consumers' preferred methods for accessing local business information, Jupiter found portals have maintained a strong position with younger individuals. Thirty-six percent of those aged 18 to 24 cited portals as among the top two or three "most helpful" sources. Online yellow pages and traditional yellow pages also ranked well with the younger demo, appealing to 33 percent and 30 percent respectively.
Online review sites like Yelp and others performed comparatively poorly across age groups, ranking below 5 percent in all demos with the exception of those aged 25 to 34, 8 percent of whom said they found value in them. Perhaps not surprisingly, 45- to 54-year-olds tend to favor traditional channels, with 46 percent citing newspapers and 44 percent citing print papers as "most helpful." Respondents could select up to three preferred methods for researching local business info.
The report also said classifieds will continue to be the dominant form of local advertising, but predicts that major changes will occur in real estate and employment fields due to fears of a recession and major job sites like Yahoo HotJobs and Monster building relationships with local newspapers.
Revolutionize your digital marketing campaigns at ClickZ Live San Francisco! (August 10-12) Educating marketers for over 15 years, we return to San Francisco this August with our action-packed, educationally-focused agenda that will cover every aspect of digital marketing. Early Bird rates available through Friday, July 17 - save up to $300! Register today.
US Consumer Device Preference Report
Traditionally desktops have shown to convert better than mobile devices however, 2015 might be a tipping point for mobile conversions! Download this report to find why mobile users are more important then ever.
E-Commerce Customer Lifecycle
Have you ever wondered what factors influence online spending or why shoppers abandon their cart? This data-rich infogram offers actionable insight into creating a more seamless online shopping experience across the multiple devices consumers are using.