Local internet advertising in the United States has turned in to a full-fledged boom, says Borrell Associates, and as a result estimates that newspaper-owned internet sites will generate a staggering $1.14 billion this year.
When the forecast is compared to the $811 million revenue from newspaper based web-sites produced last year, it’s easy to see why the American based research and consultancy firm describes online revenue as ‘the botox of the newspaper industry’.
According to Borrell, newspapers are using the internet to bolster sagging print classified revenues.
However, the report warns that newspapers could be a on a collision course with local television stations when it comes to the internet. Although television revenues are growing faster than newspapers, Borrell says their growth is relative considering their low starting point. By mid-year internet growth rates had reached 70% but it is expected that for the overall year, less than $130 million will have been generated in local internet advertising revenue.
According to Borrell, television operators have said ‘their foray into the classified arena is faltering but revenues from streaming video sponsorships and commercials is mushrooming for several types of advertisers’.
More trouble for television brews as a result of newspapers who have been boasting that they will soon hold the No. 1 and No. 2 spots in local markets, stealing the second spot from TV.
Other companies are also tapping in to the local advertising stream and are fairing even better than newspapers, says the report. AskJeeves doubled it advertising revenue in the first half of 2004 and has just announced that it will launch a local search programme this month, while Google is on track to be a $3 billion company by the end of the year.
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