Local Online Advertising Spending Up?

eMarketer has published predictions for the online advertising industry over the next five years from two sources with conflicting points of view.

Piper Jaffrey predicts a compound annual growth rate of 9% for local online ad dollars compared to 4% for national internet advertising spending.

Local Online Spending

Local Online Spending

Borrell Associates on the other hand predicts a much smaller 2.9% compound annual growth rate over the next five years for the local internet advertising market.

From eMarketer:

While Borrell believes the local online market is approaching saturation, Piper Jaffray indicates in its report that small businesses will begin to catch up with consumers online, bringing significant growth to the local online sector and moving local dollars from offline to the Web.

Piper Jaffray considers lead generation the primary goal of local advertising, and suggests that mobile presents a major opportunity on that front. With online search the preferred method to find local business info, and consumers highly connected to their mobile phones, especially during the weekends, the research firm predicts huge growth in mobile search spending through 2012.

US Mobile Paid Search Spending

US Mobile Paid Search Spending

“Local lead gen companies will play a key role in bringing small businesses into mobile advertising,” according to the report. “Small businesses need to understand that mobile can be as valuable a channel as online and lead gen players be the educators.”

While each analyst has well thought out and reasoned positions, I think both of their predictions will be proven wrong!


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