The market research firm Borrell Associates says local online advertising revenues rose 78 percent in 2005 to $4.8 billion. Newspaper websites accounted for about $2 billion of that (up from $1.19 billion in 2004) and online revenues now make up an average of about 4 percent of total revenues at the 10 largest newspaper websites. Four years ago the comparable figure was one percent.

“LocaL online advertising barreled forward in 2005 reminiscent of the dot com heydey,” according to an executive summary offered for free via PDF download. “The largest web sites in most markets will generate more in ad slaes this year than the largest grossing radio station in that market.”

But a MediaPost story on the report noted that local search advertising was gaining ground in the local online revenue mix:

“The average (newspaper) site controlled an estimated 14.8 market share last year, down from 18 percent in 2004. Borrell proposed that the dwindling market share stems from the growing importance of search.”

That should provide support for startup and blog operations. The report conveys the sense that times are flush for new media.

Tom Abate
MiniMediaGuy
‘Cause if you ain’t Mass Media, you’re Mini Media