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Local vs. National Online Ads

The locals are no longer yokels.

January 31, 2008

Local online display and search advertising are set to be the fastest-growing online ad categories, according to JupiterResearch.

The research firm recently predicted that local search would eventually compete with national search.

“Although traditional media such as newspaper and local broadcast are facing new challenges regarding their business models, local advertising in these media mainstays is not a dying market,” said Barry Parr, analyst at JupiterResearch.

This analysis agrees with eMarketer's predictions for local online ad growth over the next several years. In 2008, the local online ad growth rate will be nearly twice that of national online ads.

US National vs. Local Online Advertising Spending Growth, 2006-2011 (% increase vs. prior year)

However, despite local online ads' rapid projected growth, national ads will still account for the vast majority of online ad spending through 2011.

US National vs. Local Online Advertising Spending, 2006-2011 (billions)

The ratio of local to national ad spending is somewhat more equitable when including all types of media. Local ads account for roughly one-third of all media ad spending, and the ratio will actually fall slightly through 2011.

US National vs. Local Total Media Advertising Spending, 2006-2011 (% of total and billions)

As eMarketer has mentioned before, changing economic conditions could affect these projections significantly. This would be especially true for any reduction in consumer shopping, which would lessen the number of shopping-related searches and associated search revenue.

The eMarketer Internet Ad Spending report will be published in April 2008. Click here to be notified when it is released.


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