We take a lot of pride in our projections, which have been on target year after year. But we may have been far too conservative earlier this year when we projected that local online advertising would grow 8% in 2009. At the end of the first quarter, the increase looked closer to 11%. When we finish collecting our second-quarter data in the next few weeks, I’m certain the number will be quite a bit higher.
We initially saw three things happening in 2009: 1) lots of small businesses would collapse or severely curtail ALL ad spending; 2) local online advertising simply HAD to slow down after 10 years of double-digit growth; 3) and high advertiser churn-out rates for search, banners and video would begin taking a toll. While all of those are still correct to some degree, #2 is apparently less true than all the others.
Phenomenal as it may seem, we’re getting data indicating triple-digit growth for some companies selling interactive advertising. These are definitely the “get it” companies that have hired dedicated sales forces and are plowing ahead with the products advertisers are buying. We aren’t, however, seeing triple-digit growth from companies that continue to labor under the delusion that “convergence sales” is a viable strategy.
Right now we’re pegging local online advertising at $14.03 billion, up from our estimate of $13.3 billion issued back in January. As I said, this full-year estimate is likely to inch even higher when we get our midyear data.
Stay tuned to this blog. Over the next few weeks we’ll highlight a few examples of where that triple-digit growth is coming from, and how they’re doing it.
Tags: churn. SMB, local media, local online advertising, local pure-play, search advertising, SEM, video advertising
Online Advertising will continue to grow for the next 12 years significantly. The growth pattern in the last 6-12 months is attributed to the slowing in the economic growth, however the trend of online advertising is heading through the S-curve. The volumes in advertising spending done online will rise to 90% of all advertising budgets.
The main attribute that will contribute to this growth is the tracking ability to advertising results.
Dear Mr. Online Advertising Network:
I have 5 kids. Every one of them has grown an average of 2.5 inches per year once they started walking. So doing the math, I’ll have a bunch of 10-foot-tall kids in a few years. I strongly suspect that the likelihood of that is equivalent to the likelihood that 90% of all media buys will be online. My kids, as well as online advertising, have to stop growing and reach maturity at some point. (Judging by the behavior of my kids, I suspect online advertising will get there first.)
Online advertising is receiving a lot of bad press lately about its effectiveness but also it is immediately, easily measurable – unlike television, radio, or print. Online ads complete the prospect inquiry/customer buy cycle in one seamless transaction. That’s why the online ads go up.
We have certainly noticed this trend – in this economy, local businesses not only need to track every advertising dollar they spend, they need to make sure that it is as effective as possible. So they’re putting more into online advertising because 1) it gets great results (especially SEM), and 2) it is 100% track-able, so they are able to calculate their ROI.
Good post!
Excellent news – we have also noticed an increase recently.
Excellent site, useful information ,Thank you very muchfor sharing……
Any updates on the online local paid search market forecast?