Online Ad Revenues Soar For Local Media Web Sites.

Old-line media companies such as newspapers and local radio and TV stations are benefiting from the surge in Internet advertising, tapping into half of the $3.9 billion that is being spent by local advertisers in 2005, according to a newly released report, “What Local Web Sites Earn: 2005 Survey,” from Borrell Associates Inc.

Spending on local online advertising grew 28% last year, to $2.7 billion, according to the report. The growth is expected to accelerate 46% in 2005, mushrooming to $3.9 billion.

Borrell’s latest annual revenue survey encompassed 2,177 local media properties with Web sites. It found that newspapers, TV stations, radio stations and Yellow Pages publishers are turning to the Internet to boost sagging audience numbers and profits.

Newspapers, in 2004 grew their online operations to a $1.19 billion industry segment, saw roughly 3% of their company revenues coming from Internet advertising but those same operations represented as much as 45% of an individual company’s advertising growth.

Radio and TV stations have begun to sit up and pay attention, too. TV stations grew their Internet ad revenues 58.7% in 2004, to $119 million. Radio stations grew theirs nearly twofold, to $34 million.

Two key indicators suggest that the growth seen in 2004 will not abate anytime soon. First, local ad budgets will continue to grow as they seek equilibrium with the audience: While more than three-fourths of consumers regularly use the Internet, local advertisers spent just 2.1% of their ad budgets there in 2004. Second, the ratio between national and local online
advertising will continue to sync as well: The traditional split between nationally placed and locally placed advertising is roughly 50-50. Of the $11.9 billion spent on online advertising in 2004, the split was 77-23.

For more information at http://www.borrellassociates.com