Borrell Associates Reports Local Paid Search To Approach $1 Billion in 2006.

PORTSMOUTH, Va. -- From $25 million in Atlanta to $220,000 in tiny Zanesville, Ohio, local advertisers have begun to spend larger amounts on paid search advertising, according to research released today by Borrell Associates Inc., a leading research and consulting firm covering the local online advertising industry.

According to its latest report, "Local Advertisers Plowing $1 Billion Into Search," published today, smaller local businesses are doubling their expenditures this year, up from $420 million in 2005. The Borrell report includes spending estimates for 210 cities.

Borrell's research looked at thousands of individual advertisements on city-related keywords and found that local advertisers were buying 36 percent of all text ads on Google and Yahoo results pages. When Borrell conducted this research 18 months ago, the figure was 5.6 percent. The highest users were local real estate agents, who were buying nearly half the links on city keywords. In some markets like Tampa, local agents occupied as much 80 percent of the sponsored links.

"Local advertisers buying links on Google is no longer an oddity," said Gordon Borrell. "It's commonplace in a lot of markets, from Des Moines to San Diego. The sudden reach of search advertising that can produce results for local businesses has caught many local media companies by surprise. They've tackled the Web nicely with banners and listings, but they're scrambling for solutions when it comes to search advertising."

The report also details predictions on paid search made with the help of Borrell's 400-member advertising panel. The panel foresees the morphing of the yellow pages and search engines, with the yellow page starting to print Web addresses for local businesses and the search engines starting to list more phone numbers and addresses. Finally, it predicts the emergence of a "local Google" that may trump the national search engines.

The report includes an appendix listing paid-search spending in 210 U.S. markets for 2006. A copy of the full report is at http://www.borrellassociates.com, via the "Reports" tab.

Borrell Associates Inc. (http://www.borrellassociates.com) is a Virginia-based research and strategy consulting firm that tracks local online advertising. In addition to consulting and publishing reports, our WebAudit(TM) service delivers detailed online spending data for any local or vertical market. Our hallmark is fact-based analysis. For more information, contact Gordon Borrell at 757-686-4502 or [e-mail].