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Local Advertisers Shifting Dollars to Internet

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This year, local advertisers are expected to shift $13.1 billion of their budgeted funds to the Internet, according to Borrell Associates. The number is up 50% over last year.

In 2009, local online ad spending is projected to grow another 40% to $18.2 billion in 2009. By 2012, the growth in spending will eventually slow down and plateau at about $23 billion, but still average 15% growth over the next four years.

Online advertising is cheaper than traditional methods of marketing and is thought to be the reason for the change. According to Borrell, internet CPMs average $3.65, the lowest of any media, while an offline Yellow Pages ad carries an average CPM of $9.29.

The numbers seem to be in line with recent projections for global internet advertising, expected to exceed $106 Billion by 2012.

Of course, search engines are gearing up for the increased ad spends. Google recently announced its brand new media planning tool, Ad Planner. Microsoft recently acquired Navic Networks, a TV ad company that will likely help Microsoft clients integrate online and offline campaigns. And Yahoo inked an online and mobile advertising partnership with Publicis.

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