Local display and search advertising are among the leading online advertising categories marked for significant growth within the next five years, according to JupiterResearch’s US Online Local Advertising Forecast.
According to the report, display and search advertising are expected to grow by 18% and 16%, respectively, from 2007 to 2012.
Local advertising, overall, is expected to increase by 13% in this time period, while online advertising as a whole is expected to grow by 12%.
Internet users are getting savvier when it comes to searching for local businesses online, the forecast stated. In addition, search engines are working to increase the quality of their local and zip-code-specific results.
This growth should not discount traditional media, JupiterResearch warned. Local advertising in traditional media “is not a dying market,” the report states. Consumers continue to rely on print materials for information on local businesses, the report said.
For example, there is still an audience, particularly among older Americans, for print yellow pages, the report stated. At the same time, according to data from Hitwise, the use of online yellow page sites is growing.
That said, newspaper publishers have begun to look for new ways to make up for lost print revenue. JupiterResearch found that local newspapers have started to partner with online employment classifieds such as Yahoo HotJobs and Monster.
At the same time, online classified advertising, which is the “most mature” category of local online advertising, is growing at a slower pace than search and display advertising, the report said. Despite this slower pace, this market is starting to evolve.
Real estate classified advertising has not yet met its full online potential, JupiterResearch found. If the real estate slump continues throughout 2008, sellers and agents may need to “rethink” their methods for marketing homes.