“All advertising is local”… Borrell did a study that showed in 2005, U.S. Local Advertising spending (YP, Newspapers, billboards, etc.) was approximately $140 billion (offline and online combined). 70% of that spend was done by truly local businesses, the rest was done by national advertisers targeting local markets. Total online advertising in 2005 (national and local combined) was about $4 billion… there is an enormous amount of potential growth for local online advertising as the offline spend of local and national businesses continues to migrate online.
National retailers increasingly understand the importance of driving Internet consumers to physical storefronts, as offline purchases still far outweigh online purchases. In fact, Yahoo recently reported that 92% of conversions occur in the offline environment.
Given this consumer behavior, as the local online advertising industry grows, national merchants will be targeting a larger percentage of their advertising budget to address the local consumer by utilizing geo-targeted ads, driving consumers to local storefronts and offering great deals on their Web sites. Local advertisers, of course, will be doing the same thing. This means that both national merchants and local merchants are very important drivers of the local advertising ecosystem, and both will be competing for the clicks, calls and wallets of local online consumers as this industry continues to expand.