Local Advertising And Traditional Media
Expect a 48% increase in local online ad spending in 2008, taking it to $12.6 billion according to a new report entitled 2008 Outlook: Local Online Advertising by Borrel Associates.
This growth would be driven by the popularity of local search and online video advertising. Local search advertising will more than double next year, to $5 billion, while locally placed online video will triple, to almost $1.3 billion. A major component of local video advertising will be long-form pieces for home, automotive and health-related categories.
For traditional media companies such as yellow pages publishers, cable companies, newspapers, radio stations, TV stations, etc. however this serves as a warning bell to change and fast.
As the Wall Street Journal states, for the first time, pure-play Web companies have the biggest share of the local online-ad market. In 2007, Internet companies had a 43.7% share of the $8.5 billion local online-ad market, while newspaper companies had a 33.4% share. In fact, even upto just 3 years back, newspapers commanded 44.1% of the local online-ad market.
Most traditional companies are still looking at the Web as a extension to their traditional medias, and not as a media in itself - hence, the online presence serves merely as a repository of content without too much of emphasis on leveraging the qualities of the digital media.
Expect (a) more emphasis on the online media by traditional media companies. Initially, newspapers simply put their papers online instead of creating Web sites that offered advertisers something they couldn’t get in print. USA Today took the lead in adding a number of user generated content features to their website, and now even Indian websites such as the Hindustan Times are going down that road.
(b) expect a lot more collaborations between Online companies and traditional media. More than a year ago, Yahoo started making deals with newspapers to create a national online-ad sales network, which has grown since then. This also allows the newspapers to offer more sophisticated technology using behavioural targeting etc. In another example, a group of 11 newspaper companies representing nearly 300 newspapers recently formed a partnership with real-estate site Zillow.com to tap into more real-estate classified ads.
Filed under: Business, Media, Statistics