2005 Annual Report - Online Economics

Looking specifically at local ads -primarily employment, real estate and automotive - the signs are clearly positive. In the past, local advertisers have been the last to buy into a new medium, waiting to be sure it was solid before investing. That was true of online as well. As of 2002, local ads totaled just $1.7 billion, according to Borrell Associates.²⁷ But the figure rose to $2.1 billion in 2003 and was projected to reach $2.7 billion in 2004.²⁸

The growth of local ad sales appears to have developed fairly evenly across different types of Web sites. In 2003, online newspapers received 39% of all local ad spending, almost identical to 2002. That amounted to $811 million in 2003.²⁹

Meanwhile, AOL, MSN, Google and Yahoo! are estimated to have received 15% of all online spending, or $320 million. Those sites are able to advertise locally, mainly though search-engine listings based on key words, city names or zip codes entered by the user.³⁰

Where Local Online Advertising Goes

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Source: Borrell Associates, ‘‘What Local Web Sites Earn,’’ May 2004