Despite a tough year all round for the advertising industry, local online advertising in 2009 continues to grow in the USA to US$14.9bn, according to Borrell. Driven by search, local directories and video advertising local business has been and continues to plan to pull spend from traditional channels such as newspapers, cable, and radio into online.

This dramatic spend shift, has certainly been a major component of the closure of 1 in 2 newspapers in the USA over the last 12 months, as advertisers realise they can deliver results (enquiries, sales and branding) at a fraction of the cost online, vs. the tradtional media channels they have been using.

For local business these kind of statistics should be re-enforcing marketing planning into online media. Viewing the detail shows the key areas of growth are search (effectively Google in New Zealand), directories – increasingly new local offers (see NZS.com and Hotfrog.co.nz here) and vertical directories (good local examples menumania.co.nz for restaurants and equinetrader.co.nz for the horse market).

Online Video is clearly identified as a growth driver through businesses advertising with video online and ensuring their listings in directories and in search engines are re-enforced with video to both stand out and increase conversions.

Unsuprising that search, directories and video are fundamentally changing local advertising behaviour. The old channels did work, they were just expensive and media companies ran obsene proft margins for these, well done to them. They have not adapted fast enough and now small businesses can reach their market more effectively, efficiently and affordably.

If you are small business that is not or is considering changing your marketing mix, drop us a line, we’ll add some distinct value to ensure you get more bang for your hard-earner buck.