Local Advertising Key Web Battleground

Stage Set for Local Display and Search

Local display and search advertising has found life on the Internet and forecasts predict that growth in these segments will outpace that of the online advertising market as a whole. As a result the stage may be set for increased competition that spans well beyond a local market, according to a Jupiter Research study.

The US Local Online Advertising Forecast, 2007 to 2012 report predicts local advertising will increase at a 13 percent compound annual growth rate from 2007 to 2012, faster than online advertising as a whole, for which a 12 percent growth rate is anticipated during the same period. But it will be local display and search advertising that are poised to make the biggest impact.

With compound annual growth rates of 18 percent and 16 percent respectively during the next five years, the categories will gain lift from an ongoing strategic push by newspaper and yellow pages publishers as well as improved local performance by the major search engines. While this trend represents a shift from old media to new media, it in no way suggests tactics of the past are becoming extinct.

"Traditional media will continue to play an important role in the local market. But it's essential for advertisers to transition their customers to these new media before their competitors do," explained Barry Paar, Media Analyst for JupiterResearch. "However, the ability to assemble large audiences in the local market will remain a principal advantage of traditional media."

As search engines, local sites, and local businesses continue to improve their use of simple search engine optimization techniques, the use of search to find businesses and services in the local market will continue to grow.

Because the local online market is fragmented and depends on search engines for traffic, local media must learn to work in an environment increasingly dominated by the search bar and prepare for an eventual face-off with national competitors.

During the next five years, JupiterResearch believes local advertisers will become increasingly aware of online advertising as an option, have more opportunities, and gain access to improved tools for creating and managing their online marketing.

"At this point, most local advertisers are not marketers and do not have the time or resources to manage, let alone optimize, online advertising campaigns," said David Schatsky, President of JupiterResearch. "Although search is increasing its impact on the local market, it still demands a degree of sophistication unavailable to most local advertisers."

Jupiter Research reports vary in length. Vision Reports are usually around 20 to 25 pages long; Concept Reports are usually around five pages long; JupiterResearch Takes are short concept reports (less than three pages) that are a timely analysis of important industry news. Learn more about Jupiter Reports products and services.

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