Growing local ad spend: Top seven predictions

Growing local ad spend: Top seven predictions

Summary: John Kelsey, CEO, The Kelsey Group, kicked-off “Drilling Down on Local” in Santa Clara this morning, billed as an “insiders conference,” the annual Silicon Valley summit for the leaders and innovators who participate in the local online content and advertising space.

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John Kelsey, CEO, The Kelsey Group, kicked-off “Drilling Down on Local” in Santa Clara this morning, billed as an “insiders conference,” the annual Silicon Valley summit for the leaders and innovators who participate in the local online content and advertising space.

Kelsey put forth the increasingly two-way interactive world is spurring an online environment where, in “A Whole New Mind” words of author Daniel Pink, creators and empathizers will play leading roles in a 21st century conceptual age.

Leading Kelsey’s 12th interactive local media conference since 1997, Kelsey believes local advertising online now presents a “positive play,” as four prior key barriers to Internet growth have dissipated:

Lack of accessibility to broadband connectivity,
Dearth of compelling SME online applications,
Risk averse traditional media companies online,
Internet investment bubble.

For Kelsey, there are two dominant factors which will help drive growth in local search and local advertising revenues in the coming years:

1) The online-offline connection: On average, 80% of purchases are made within 20 miles of home or office.

2) Online video explosion: All consumers have grown up consuming video consumption of some form.

Kelsey’s broad local media brush outlook was reinforced with forecasts presented by Neal Polachek, SVP, Advisory Services, Research and Consulting and Matt Booth, SVP and Program Director, Interactive Local Media.

SEVEN PREDICTIONS FOR ‘07 to ‘11

1) Over 50% of SMBs that advertise will include vertical or specialized directories, print and online, as part of the advertising mix.

Why? Vertical or specialized directories will increasingly be considered the most effective media and ad budgets to vertical or specialized directories will grow..

2) Even though only half of SMBs maintain a Web presence, these businesses will have a disproportionate influence on the local media space in the next five years.

Why? SMBs with Websites spend almost triple on advertising and SMBs with Websites generate more revenue.

3) Twenty-five percent of SMBs with Websites will integrate video into their user experiences.

Why? A majority of consumers watch Internet video ads and almost 60% of consumers move closer to a transaction after watching.

4) Twenty percent of SMBs that advertise will advertise on a mobile platform.

Why? Consumer “unfriendly” challenges to mobile adoption are being increasingly addressed by a confluence of industry solutions.

5) SMBs will embrace consumer and expert feedback.

Why? Consumers are relying more on reviews and they generate business as interactive media is increasing in importance for local shopping.

6) SMBs will embrace “agency-like” relationships with their local media sales representatives.

Why? More ad choices necessitate help, younger businesses are increasing ad budgets faster and a “My Yellow Pages company should handle all my advertising needs" position is growing in importance.  

7) Connected services growing in importance.

Why? Combining software and services are becoming increasingly more valuable and relevant.

The twenty local interactive media keynotes, panels and presentations on tap over the next two days focus on “drilling down” on the strategies and tactics that will be employed in the local advertising space to help make the Kelsey predictions a reality online.

STAY TUNED FOR MORE COVERAGE FROM DRILLING DOWN ON LOCAL!

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