Report: Local digital ad revenue expected to nearly double by 2015 in U.S.
By Chris Hogg
According to a press release issued today, BIA/Kelsey is forecasting a significant bump in local digital ad revenue over the next four years. The research and consulting firm says local advertisers are going to steadily migrate to digital media properties and revenues are expected to climb to $42.5 billion in the U.S. by 2015. That is almost double the $21.7 billion generated last year.
“This growth coincides with anticipated improvement in the U.S. economy and a continued rise in overall local advertising, which the firm expects will reach $153.5 billion in 2015, up from $136.3 billion in 2010, representing a 2.1 percent [compound annual growth rate],” the release states.
Some consider local advertising to be the Holy Grail of digital revenue, but it’s an area that has yet to fully maximize its potential. Small companies who have money to spend often find online advertising complicated or confusing to measure. Many also lack the resources or technical know-how to manage online advertising, so they simply don’t do it.
A growing exception to the rule are daily deal companies like GroupOn that have provided a very simple way to spend and measure return on digital investments. Google is also pushing its Google Places product for small business to get listed online.
BIA/Kelsey predicts digital media — including mobile, Web or other electronic means — will represent 23.6 percent of all local ad spending by 2015.
“As the business climate improves and advertisers step back into the market, they are gravitating to digital options that perhaps were not as mature before the recession began,” Tom Buono, CEO of BIA/Kelsey, said in a press release. “Our analysis indicates that as advertisers move to online, mobile and, particularly, the variants of social media, we are fast approaching a tipping point where digital media will soon become a dominant segment of the local advertising marketplace.”
Among the key drivers for increased digital spending are the growing number of smartphones and tablets; declines in newspaper revenue and the rise of paywalls; and interactive and online sectors are advancing rapidly with new options and formats.
Finally, BIA/Kelsey believes the social part of digital media is increasingly becoming a core channel for revenue. The company says the daily deal space alone will grow to $3.9 billion by 2015 and both Twitter and Facebook will be part of this expanding market.
Hard news attracts more ad clicks than popular celeb stories
By David Silverberg
Popular articles on Lindsay Lohan and Justin Bieber don’t reel in as many ad dollars as they do eyeballs, a new study has found. The most profitable online news articles focused on topics such as unemployment, the Gulf oil spill and recalls.
Online news outlet might be convinced “link bait” articles on pop stars and weird news will attract revenue, but a new study refutes that claim. Research from the Perfect Market, a company that helps newspapers make their sites profitable, found “articles about unemployment benefits, the Gulf oil spill, mortgage rates and other serious topics were the top-earning news topics based on advertising revenue per pageview,” according to a press release.
Julie Schoenfeld, CEO of Perfect Market, remarked: “The great insight unveiled by the Vault Index is that the stories with real revenue opportunity for news organizations today are not always, as it turns out, celebrity scandals but difficult subjects that affect people’s lives.”
The company looked at advertising revenue generated from more than 15 million articles from 21 news sites over a three-month period this summer. Perfect Market analyzed revenue per pageview and found that articles about Social Security were the most profitable, earning an average of $129 for 1,000 pageviews. Articles on mortgage rates made $93 for every 1,000 pageviews. Unemployment was tabled at $28, $33 for articles on jobs, $20 for articles on the egg recall and $26 for pieces on immigration reform.
By comparison, articles on Lindsay Lohan generated $2.50 for every 1,000 pageviews.
Tim Ruder, Chief Revenue Officer at Perfect Market, added: Without this kind of data, publishers end up chasing trends to increase raw pageviews, but that is not necessarily the best revenue strategy. And it’s a disservice to their readers who want credible and important news, their advertisers who want high-value advertising placements, and their brands which live and die by the quality of their editorial coverage.”
Earlier this month, Gawker Media founder Nick Denton admitted his company’s focus on “pageview journalism” isn’t converting readers into ad dollars.
–
This blog post is part of the Future of Media‘s ongoing coverage and examination of what’s happening in the media around the world. If you have a story idea, please contact us. This blog post was originally posted on Digital Journal.
Internet ad revenue in U.S. climbs to $12 billion for first half of 2010
According to a press release from the Interactive Advertising Bureau (IAB) and PwC US, the first half of 2010 broke a record for Internet ad revenue. The report says search ad revenue remains strong, while digital video and display ad revenue climbed.
Internet ad revenue in the U.S. climbed to $12.1 billion for the first half of 2010, growing 11.3 percent over the first half of 2009. Furthermore, Q2 revenue in 2010 saw the highest second-quarter revenue on record, up 13.9 percent over the same period in 2009.
“Consumers’ appetite for immersive online experiences is limitless as technological innovation and creativity give rise to new forms of entertainment and information in the digital age,” Randall Rothenberg, President and CEO of the IAB said in a news release. “This report highlights marketers’ ongoing adoption of interactive media to build brands—and that’s only going to continue.”
According to the report, display ads (banner ads, rich media, digital video and sponsorships) totaled more than $4.4 billion in the first six months of 2010. That is an increase of 16 percent over the same period in ’09.
Digital video is seeing record growth, with the first half of 2010 growing 31 percent over the first half of 2009.
Search advertising holds the biggest piece of the pie at 47 percent, or more than $5.7 billion in the first six months of 2010. That is 11.6 percent growth over the same period in 2009.
“Interactive advertising revenue is on a strong upward trajectory,” said the IAB’s Sherrill Mane in a news release. “Nearly all types of ad formats are showing positive movement and marketers across all advertising categories, most notably consumer packaged goods and pharmaceuticals, are increasing their investment in digital media.”
Based on the strong growth numbers, PwC US says “Internet advertising is back, and better than ever.”
—
This blog post is part of the Future of Media‘s ongoing coverage and examination of what’s happening in the media around the world. If you have a story idea, please contact us.