In my earlier blog post today, I noted that the local advertising market is changing. Local media players are now battling with operators like Google and Groupon for market share. There is disagreement about exactly how big the local ad market is, but analysts say nobody should count out the local media companies who have been serving local businesses for decades.
Two leading research shops have presented vastly different numbers about the size of the online local ad market. Borrell Associates sees the $13.5 billion spent in local online advertising last year rising to $24 billion in 2015. While BIA/Kelsey, which measures the market differently, expects spending to reach $21.2 billion that same year.
Regardless of how the total market is measured, local media companies are scrambling to grow their digital revenues. For now, most local media companies are only generating between 5% and 15% of total revenues from digital. As everyone knows, the digital business brings in less money in general and the field is crowded with competitors. Peter Krasilovsky, a BIA/Kelsey vice president, warns competitors to watch directional media players. One of the most visible and successful operators here is Yellow Pages which is selling a number of different ad formats and converting print customers to digital.
For many small and medium sized businesses (SMBs) the ad market has become a very confusing and time-consuming proposition. This situation works to the advantage of trusted local media sales reps. Those who can clearly describe the value proposition of a new ad format and demonstrate a solid ROI will be the ones who make the sale.[Sources: Marszalek, Diana. Borrell’s Cassino: Local’s Future is All Digital. Netnewscheck.com. 3 Mar. 2011. Web. 15 Jun. 2011; Kouba, Chris. All Eyes On Local: Battle for Digital Dollars. Netnewscheck.com 9 Sept. 2010. Web. 15 Jun. 2011; Whitney, Daisy. How Web Giants & Startups Target Local Ads. Netnewscheck.com. 22 Sept. 2010. Web. 15 Jun. 2011]