TVB – Significant Growth in Local Television’s Online Advertising.

The growth in local television’s online advertising has been exponential in 2005 and the outlook for 2006 projects local online advertising to grow by as much as 39 percent across local markets, according to a new survey released by TVB.

Entitled “Benchmarking the Local Website Marketplace,” the survey was commissioned by TVB and conducted by Borrell Associates, Inc. Overall, it reveals that during 2005, local television stations “caught the Internet bug,” increasing their online ad share an average of two percentage points over the past 12 months. The survey reveals that several stations captured more than 15 percent of all locally spent online advertising in 2005, and that some station groups are now generating millions from Internet operations.

Among other findings, the survey reveals:

By year’s end 2005, local broadcast stations had generated an estimated $283 million, twice as much as they did in 2004.

Many TV Web operations stepped up sales efforts, growing their online ad revenues an average of 46 percent.

More than 100 stations – many of them UPN, WB and Fox affiliates – started generating money from their websites for the first time in 2005.

In 2005 TV local Web revenues accounted for a six percent share of all locally spent online advertising, a gain of two points from 2004. The gain, though on a relatively small portion of $3.9 billion, is still impressive.

The Survey further projects local online advertising will grow 28 percent in 2006 across all local markets. Adding local Paid Search advertising to the equation, the growth climbs to 39 percent.

The survey further reports that local television stations significantly increased their Web-based advertising efforts and sharpened their ability to make remarkable use of the most visible of non-traditional media platforms. For example:

Stations in smaller markets did a better job of grabbing online share than those in large markets, on average garnering three times more ad share.
In 2005, many broadcasters geared up online sales with more 20 percent of them reporting revenue increases higher than 100 percent; most stations went from generating tens of thousands of dollars in 2004 to hundreds of thousands in 2005.

Auto and Health Care are the most popular categories for ad sales, but stations are beginning to use the Web to tap plenty of non-traditional ad revenue, particularly in real estate and financial services.

The best TV station websites are characterized by very strong executive support, participation in a network of other websites, multiple revenue streams from various ad formats and types, and dedicated, online-only sales staffs.

Borrell Associates solicits online advertising data from local website operators via e-mail and telephone year-round. Participation in this survey currently totals about 2,300 individual websites. The names of participants and their companies are confidential, as are their individual data points. The numbers are used only in aggregate for benchmarking purposes, as in this report.

To view report CLICK below (Adobe Acrobat Reader required):

http://www.tvb.org/pdf/multi-platform/Borrell_2006_TV_Internet_Growth_NonMem.pdf