The local online market is decelerating, says research firm Borrell Associates in its 2010 Outlook: Local Interactive Advertising. Market revenue grew at a compound annual rate of 46.5% in the five years prior to 2009, but growth is dropping off to 12% this year and will rise just 5% to $14.9 billion in 2010, it says.
Local online media is not immune from the recession that just won’t let go, according the latest forecast on the market from Borrell Associates.
The local online market is decelerating, says the research firm’s 2010 Outlook: Local Interactive Advertising.
Market revenue grew at a compound annual rate of 46.5 percent in the five years prior to 2009, the study says. But growth is dropping off to 12 percent this year and will rise just 5 percent to $14.9 billion in 2010, it says.
For the next five years, revenue will grow less than 3 percent due to “a slow economic recovery and the fact that online as a local media advertising category is approaching what we believe is saturation,” the study says.
Online media currently takes 13.8 percent of all local advertising. “We believe it will peak at a 16 percent share in 2013,” the report predicts.
The flattening of the growth curb is not discouraging new entrants, the study adds. “PBS, ESPN, AOL, Huffington Post, The Knot, Microsoft, Yahoo and scores of others have announced plans to reach deep into local ad sales,” it says.
“The game in 2010 will center more on stealing market share than growing the market.”