Paid Search Will Be Driving Factor Behind Local Online Advertising
Local online advertising in the US is forecast to reach $1.3 billion for 2006, which equates to 7.9% of the total $16.7 billion in US internet ad spending for the year, according to a new report from eMarketer called Local Online Advertising: Measuring the Potential.
However, eMarketer says that while the local online ad market is developing more slowly than anticipated by some analysts, change is coming.
eMarketer expects that the driving factor behind future growth in local online advertising will be paid search. Just as paid search contributes over 40% to the total US online ad spending market, says eMarketer, it is a similar story with local online advertising, where paid search provides over 55% of the local total.
The report predicts that the next few years will see much livelier growth due to such factors as a critical mass of internet users (with 69% now connect via broadband), more web publishers from the traditional media side needing to regain lost ad revenue and enhanced local advertising resources such as mapping from Google, and other providers.
E-consultancy’s 2006 Search Marketing Buyer’s Guide recently predicted that the UK paid search market would grow to £1.26 billion in the next year, a 67% increase on 2005 (see Growth In Paid Search Market)
David Hallerman, eMarketer senior analyst and author of the report, said: “When local audiences, search engines and local advertisers fully converge in a union of research needs and marketing desires, the spending figures seen here will look as ancient and insignificant as total internet ad spending data from the late 1990s now looks.
“Since the vast majority of local advertising is aimed not at branding, but some kind of conversion (often away from the computer), search marketing could become the ideal channel for uniting individual with merchant.”
