According to Borrell Associates, local online revenues are growing at a phenomenal rate of 50 percent this year – even more astonishing considering that retail sales have suffered such a sharp drop. “The $13 Billion Opportunity in Local Revenue” session will provide a detailed look at how much advertisers are actually spending in local Internet advertising and how some broadcasters have broken out of the pack to achieve significant revenue.

Part of the growth is being driven by traditional local media companies such as radio stations selling advertising on their own Web sites. Most of the growth, however, comes from pure-play companies delivering lower-cost advertising that intercepts consumers not as they are reading news online, but as they are using the Web to research products and prices. The recession is an economic prod that is motivating advertisers to abandon their long-time spending patterns and seek out more economical methods of reaching potential customers.

Amid the relentless growth, a transformation is taking place. A few years ago, it was easy to tell who owned which local Web site. Radio station sites looked like they belonged to radio stations. Yellow Pages sites had the walking fingers logo. Television sites carried the station’s call letters and the anchor’s pictures at the top. Newspaper sites pushed local news and classifieds under their traditional mastheads. Now it is getting tougher to tell, and it is becoming less relevant by the year to compare Web sites against each other according to the core product their parent company owns.

As Borrell Associates has reviewed the financial results of more than 3,200 local Web sites – more than 1,000 of them owned by radio stations – two headlines screamed out:

• The most financially successful local Web operations are venturing into page designs and product lines that have little to do with the medium that gave birth to them. Like their “new media” predecessors in radio in the 1920s and television in the 1950s, they are creating unique identities and breaking away from their print and broadcast roots.
• Suddenly, everyone seems focused on using the Internet to attack the Yellow Pages. Interactive directories have popped up everywhere, and legions of salespeople are selling local business directories and search-advertising packages in competition with the print directories. Unfortunately for them, Yellow Pages publishers have already staked out the turf and have been the most successful of all media companies at developing their interactive revenues and protecting their core customer base.

What’s in store for these local Web operations in the coming years? A slowdown is inevitable. Over the past four years, we have seen local online ad sales reach a compound annual growth rate of 48 percent; over the next four we’re expecting it to be 15 percent.

Come hear Gordon Borrell of Borrell Associates forecast at least another year of strong double-digit growth for local online ads sales, which will settle to single-digit or “market norm” levels by 2012 during “The $13 Billion Opportunity in Local Revenue,” Wednesday, September 17 from 1 – 2 p.m. at The NAB Radio Show in Austin.

For a complete list of Radio Show sessions or to learn more about The NAB Radio Show, visit www.nabradioshow.com and register now.