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WILLIAMSBURG, VA -- May 1, 2009: Last year $12.6 billion was spent by local advertisers online, says Borrell Associates in its latest report on local web revenues. And the sales were still dominated by "pure-play Internet companies with no ties to legacy media," says Borrell, citing Google, Local.com, Marchex, and others.

But, for the first time since the reports began in 2001, the pure-plays lost ground to traditional media -- with newspaper companies stopping their decline in online share in 2008 after losing since 2005. The pure-plays took 48 percent of the $12.6 billion spent on local online spending last year, compared to 26 percent for newspapers, 9 percent for broadcast TV, and 11 percent for directories like the Yellow Pages. Radio took just 2 percent in '08.

Says the report, "Could it be that the legacy media companies have finally turned their aircraft carriers? It's possible, especially considering that they have an important asset that the pure-plays don't: an estimated 98,000 feet-on-the-street salespeople who have existing relationships with local advertisers and can cross-sell online advertising products." The Internet-only sales forces at traditional media, meanwhile, are growing rapidly, up 30 percent 2007-2008.

Additionally, the importance of online media grew for "legacy media" companies in '08. For radio (and TV), online was about 3.4 percent of gross revenues in 2008, and Borrell says, "This dependence is likely to climb, bringing their online venture into even sharper focus as they find ways to give the pure-play companies a run for their money."

For the report, Borrell gathered data from local media companies representing more than 6,000 individual websites in the U.S. and Canada. Twenty-seven percent, or 1,994, of those properties were in radio.

Information was requested on total online revenue and expenses; revenue from employment, auto, and real estate advertising; and national, streaming audio and video, e-mail, paid search, and mobile revenues. The respondents were also asked for percentage of revenue from banners and pop-ups and revenue "upsold" from broadcast or print ads, and for info on number of dedicated online-only salespeople they employ. Their 2009 budget projections in all these categories were also requested.

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