Local US websites, operated by newspapers and TV stations, are expected to bring in revenues of more than $1 billion this year; a huge chunk of the total local advertiser spend which reached $2.1 billion last year says Borrell Associates.
The
What Local Websites Earn report says, these sites generate 10 to 20 times the revenue of their peer group, by devoting more sales resources and tapping both traditional and non-traditional revenue streams.
Newspaper groups capture the lion’s share of local internet revenues with 83% reported profitability – earning them the respect from their parent companies.
The internet operation run by The Boston Globe and The New York Times for the The New York Times Company, is expected to contribute as much to the company’s bottom line profit as its eight TV stations this year. Last year profits hit $20 million, up 30% on the same period last year.
Local websites will continue to focus on the traditional classified advertising categories such as property, automotive and employment says the report. Last year, newspapers generated 60% of revenue from these three categories, down from 73% on 2002. The report says, the reason for the decline is that newspapers have already tapped in to a large proportion of online advertising revenue from these categories and other advertising categories are growing fast.
As TV stations tap in to the traditional newspaper categories, its also expected that they will incorporate video streaming into their websites which Borrell Associates expects to be popular and profitable.
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