Local Paid Search Spending to Double: Report

Local online ads will continue to show strong growth next year, increasing by 31.6% to $7.7 billion in 2007, according to a new report by local ad research firm Borrell Associates.

Paid local search will outpace other forms, nearly doubling to $1.8 billion and accounting for almost one-fourth of local online advertising, per Borrell's projections. Local e-mail will grow by 54% to $233 million, and local online display and banner ads will increase 18.4% to $5.6 billion.

Borrell projects that local search and e-mail together will make up half the local online ad market by 2010. After that point, maturation will lead to a flatter growth curve for the category.

"Recent growth rates can't continue forever," firm president Gordon Borrell said in the report. "We are projecting a slowdown in the growth of standard online ads by 2008, a further slowdown in 2009, and a flattening or perhaps even a mild decline in local online advertising by 2010 as online promotions begin to attract more ad dollars away from traditional advertising."

Right now, real estate and automotive advertising account for more than one-third of all local online advertising.