Local ad spending to reach $12.6 billion in 2008

By Dave Forde on December 11th, 2007

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Borrell Associates released a teaser report recently entitled “2008 Outlook: Local Online Advertising” and I had a quick read through of the Executive Summery, mainly because I’m not willing to cough up $700+ for the full report. They indicated they expect to see a 48% increase in local online ad spending in 2008, bring it to a whopping $12.6 billion. This growth is due to the population of online video content in 2007 which is helping to drive local search and online video advertising. They also predicted local search advertising will more than double to reach $5 billion, while locally placed online video will triple to almost $1.3 billion.

For years Yellow Pages publishers, cable companies, newspapers have been struggling trying to redefine their business model and get a larger piece of the local advertising pie. Often you hear the horror stories about innovators fighting against legacy management who get caught thinking their traditional sales reps will be able to save the day, but who really wants to buy an “8-Track” when you have the lastest HD-DVD available for purchase. The local classified market started to heat up when Craigslist hit the scene, here in Canada we’ve seen players such as Kijiji Canada and Live Deal who have each had pretty impressive growth in 2007. There are also the local directories that have hit the scene such as Zip Local, and as of January 2008 there will be another player on the scene, we’ll have more about them shortly.

According to Borrell Associates automotive, recruitment and real estate will be the the dominate segments in 2008, and of course we’ve already heard that advertising spending will increase in the online world (link)