Local Search Ad Spending to Reach $1 Billion
According to the “2006 Local Search Advertising” report released by Borrell Associates, dollars spent on local search advertising will grow to almost $1 billion this year. While local businesses placed $420 million into search advertising last year, the report predicts that spending will double this year to nearly $1 billion, reaching up to$4 billion by 2010.
The report also states that banners and listings will grow slowly and then decline, while local paid search will grow and dominate the online industry. Eighteen months ago local advertisers made up 5.6% of sponsored links on major search engines, while today these advertisers occupy more than one-third of sponsored links.
Moreover, real estate agents are purchasing half the sponsored links online. Gordon Borrell, President and CEO of Borrell Associates, tells Adotas that he attributes this trend to real estate agents as “early adopters” of online advertising because “the things that really grew fast in terms of advertising involve deep databases that you can search,” which include real estate classified listings. As housing prices have risen, real estate agents have had larger commissions to spend on advertising. Borrell agreed that the “amount of advertising spent is tied to amount of money these guys get from their commissions.”
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