BIA/Kelsey – Local Media Watch

Online Ads to Surpass YP?

Saw this today in an AP report on Yahoo!’s 1Q earnings:

In a report released earlier this month, Merrill Lynch media analyst Lauren Rich Fine estimated spending on Internet ads this year will increase 27 percent to $14.5 billion, surpassing magazines and the Yellow Pages — both more established media markets.

This is interesting and inevitable perhaps. Our forecast has YP a bit north of $14.5 billion in the U.S. this year. A more important issue is the relevance of the comparison. YP is essentially a local and directional medium. Interent advertising is all over the map, with a sizable local component. We think the more useful comparison is between Yellow Pages and the local component of online advertising. Still, this is an interesting milestone.

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2 responses to “Online Ads to Surpass YP?”

  1. Donna Avatar
    Donna

    What is the definition of the Internet "local component"? Wasn’t the premise of Drilling Down ’06 that "local" can no longer be neatly catgegorized? "Media is fragmenting and more choice is being put in the hands of consumers to pull in content where, how and when they want it." At ILM ’05, all of the keynoters, and the VC panel, presented different definitions of "local" and "local applications".

  2. Neal Avatar
    Neal

    TKG’s estimate of "local" Internet ad revenues is about $1b today growing to $6b by 2010. It is also interesting to note that Hachette Filipacchi Media decided that Elle Girl magazine with 50% growth in ad pages and 20% growth in circulation was done and shut it down. If you take a really long view – 20 years – most of today’s measured media will be significantly smaller than today. The Internet’s affect on the ad market is just now being felt.

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