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Newspapers Halt Decline In Share Of Local Online Ad Revs

This story was written by David Kaplan.

The slowdown in local online ad spending is having a unexpected effect: newspapers stopped the downward spiral in local ad revenue of the past four years, according to a report by local media analyst Borrell Associates, while the web companies not tied to what Borrell refers to as "legacy media" like print and broadcast actually began to lose ground.

See more findings after the jump

The report, What Local Media Sites Earn, which is due out later this afternoon, concluded that it helps to have a lot of salespeople, especially in a downturn. Unlike the pure-play internet companiesBorrell cites Google (NSDQ: GOOG),, Interactive Corp. (NSDQ: IACI), Marchex, ReachLocal as examplesthe traditional media side has roughly 98,000 feet-on-the-street salespeople who have existing relationships with local advertisers and can cross-sell online advertising products. And those companies are adding "internet-only" sales reps at a rapid pace, which could help offset the severe downward pressures related to the recession. At the beginning of 2009, this collective online-only sales force numbered about 9,000, up 30 percent from a year ago, according to Borrell. So far, Yellow Pages companies averaged nearly 11 percent of their gross revenues from online sales, while newspapers realized 7 percent from web-only, while radio and TV stations received 3.4 percent each from digital.

Overall, Borrell is calling for a rebound in local online advertising by next year, with spending expected to rise to $15.1 billion from the slightly better than flat $13.3 billion this year. Spending will peak in 2011 at $15.9 and then start to slowly decline to $15.3 billion in 2013.

Total 2009 Projected Local Ad Spending:  $13.3 billion
Local newspapers: 2008 Online Revenue: $3.4 billion
Local TV broadcast: $1.1 billion
Local Radio: $220 million
Yellow Pages: $1.4 billion

By David Kaplan

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