Borrell Associates has always been one of the most aggressive forecasters when it comes to the local market. The revenue projection for 2009 is $18.2 billion, growing to $23 billion by 2012. To put that first number is perspective, it would represent about 60% of online ad revenue in 2009 (based on an assumption of $30 billion in overall online ad spending).
Borrell’s numbers contain search, display, classifieds and video.
I don’t have the report, but have seen the third party write ups. MediaPost has a good overview of the numbers:
- Pure-play Internet companies have a 57.3% share of local online ad dollars (e.g., Google, Yahoo, Local.com)
- Newspapers — 24.6%
- YP/directories — 7.8%; Borrell projects $1.2 billion in IYP spending in 2008
- TV affiliate sites — 6.9%
I suspect the newspaper share is so high (although declining) because all the ad spending on newspaper sites is simply assumed to be local. The report’s methodology involves a survey of the various publishers and I suspect that newspaper accounting practices also result in an inflation of “online” ad dollars attributed to them.
Borrell also says that YP publishers have the greatest percentage of traditional to online revenues, ranging from 9.1% to 10.7%. Newspapers hover right around 8%, these days, in the US.
Another interesting data point, Borrell estimates the relative CPMs for IYP vs. print YP: $3.65 vs. $9.29.
Screenwerk 
May 30, 2008 at 4:26 pm
The bundling and push advertising model has definitely pumped up the percentage and is the main reason for the decline. If print advertising is slipping and your advertising strategy is to bundle online with print, it will lead to a decline in online.
Reading between the lines I believe that was the warning in this report.
May 30, 2008 at 6:05 pm
Indeed. There’s apparent criticism of bundled approaches that subordinate online sales to maintaining traditional product.
June 6, 2008 at 7:01 am
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August 13, 2008 at 2:07 pm
[…] today. That would respresent about 25% of online ad spending overall. Borrell says the local number at least double the $5 billion I’ve estimated […]
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