Jupiter: Local Online Advertising Will Be Worth $8.9 Billion In 2012

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Jupiter: Local Online Advertising Will Be Worth $8.9 Billion In 2012
Jan 18, 2008 at 9:31am ET by Greg Sterling

There are now a range of local forecasts in the market, some more bullish and some more conservative. But all generally agree that locally targeted ads in search, display (including video), and classifieds are growing at rates faster than overall online ad growth.

Recently Borrell Associates put out a new local forecast that offers very impressive local numbers. The company said that “local online advertising,” defined as search, “local banners,” and video (classifieds are also in there), would reach $12.6 billion in 2008, with “local search” contributing roughly $5 billion to that total.

JupiterResearch’s local online ad forecast is quite a bit more restrained. By contrast it says that local online advertising, defined as display, search, and classifieds, will be worth $8.9 billion in 2012. Local search is $2.5 billion of that total, according to Jupiter.

The Jupiter report says:

“Local advertising will grow at a CAGR of 13 percent from 2007 to 2012, faster than will online advertising as a whole (at a CAGR of 12 percent). Display and search advertising are leading the way, with CAGRs of 18 percent and 16 percent, respectively, during the next five years. Meanwhile, online local classified advertising, which is a relatively much larger and more mature market, will grow at a CAGR of 10 percent.”

Veronis Shuler Stevenson previously estimated that local online advertising was worth $8.4 billion in 2007 and would be worth $19.2 billion in 2011. Of that 2011 number, $6 billion was attributed to local search and online yellow pages spending.

The Kelsey Group is likely the next up with their local search and Internet yellow pages forecast.

The overall local ad market has been estimated by UniversalMcCann to be worth roughly $100 billion annually across all media. However, small business software provider Intuit recently estimated that small businesses spend $110 billion annually on marketing. That’s an eye-popping number and probably defines “marketing” very loosely. But most small businesses are local in terms of where they do their buying and selling.

One has to bring some caution to these very large numbers for obvious reasons (unless you’re pitching a local startup to VCs). And in local one must also remember that varying definitions can result in wide ranging figures and forecasts.



Greg Sterling is a Contributing Editor at Search Engine Land, and writes a personal blog Screenwerk, examining the broader world of media and advertising. He also posts at a Local Mobile Search, which is focused on the mobile Internet.

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