The market for online local advertising is to grow by 31.6 per cent next year, according to a survey reported in Mediaweek.
Borrell Associates said that local online advertising will grow to be worth $7.7 billion in 2007, with online advertising expenditures above $1 million in the vast majority of US local markets.
However, the study said that the pace of growth within online advertising will slow down from 2008 to 2010 as advertisers move from online advertisements to online promotions – growth in local ads is expected to decelerate to below seven per cent within three years.
"This slowdown and potential decline is due chiefly to the growth of spending on online promotions, a phenomenon being seen across all advertising channels," claimed the report.
Local online advertising is expected to command 30 per cent of all online advertising in 2007, compared to 25 per cent this year.
Some sites are also making handsome returns from the enterprise – with the largest sites in some markets generating more revenue than the local largest radio station by advertising revenue.