Local online ad spending to hit $3.2 billion by year-end, Jupiter says

Local online ad spending in the U.S. will increase 26% to $3.2 billion this year, and will grow at a compound annual rate of 11% to $5.3 billion in 2010, according to JupiterResearch’s newly released report “U.S. Local Online Advertising Forecast, 2005 to 2010.” Classified ads will comprise nearly 70% of that total.

“Outside of classifieds, local ad spending online remains relatively immature,” said David Card, vice president and senior analyst. “For now, online publishers and networks will find better opportunities servicing advertisers that are aiming at local audiences than they will servicing true local businesses.”

Total online advertising is expected to grow at a compounded annual growth rate of 9.6% to $18.9 billion in 2010, Jupiter says.

Another study also predicts an increase in local online ad spending. Borrell Associates Inc. projects local online advertising will hit $5.7 billion next year, a 39 % increase from the $4.1 billion expected by year-end.

By 2010, local online ad spending is expected to reach $8.6 billion, Borrell says.