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Search To Reach $4.07 Billion By 2010
Sept. 21/2005 -- LOCAL
SPONSORED SEARCH WILL GROW far more quickly than online local
advertising overall, according to a new report by research
company Borrell Associates, Inc. The local online ad spend will
climb to $4.78 billion next year--up from an estimated $3.73
billion this year, predicts Borrell Associates Inc. But paid
local search will nearly triple, climbing to a predicted $907
million next year from $347 million this year, according to the
report, "2006 Outlook: Local Online Growth Continues--for
Some."
By 2010, predicts Borrell, spending on local search will reach
$4.07 billion --accounting for 12 percent of the forecast $34.81
billion online ad market for that year -- while local display ads
will total just $4.54 billion.
This anticipated shift from display ads to search will surprise
many online publishers, said Borrell Associates President Gordon
Borrell. "Local banner ads and local listings will start
declining to the point that paid search will roughly match it
over the next five years. That's going to catch a lot of
newspaper and TV Web site operators off guard," he said.
Newspapers currently capture the largest share -- 41 percent --
of the local online media spend, but the report cautions that
this situation could quickly change. Internet companies such as
Google and Yahoo! already account for 32 percent of the local
online ad market, and directories are responsible for 20 percent,
according to Borrell Associates.
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