Media moguls have been kicking up quite a storm about charging for content over the past few months. But a more subtle shift is the one towards local content online. And according to digital media consulting firm BIA/Kelsey, another section of the local market — geo-targeted display ads — is expected to grow to 15% of the display market by 2013.

That's good news for those who are betting on local online. From NBC to News Corp. and The Huffington Post, publishers are rushing out local content sites that can capitalize on local ads. As consumers get more focused on reading and concentrating on local and hyperlocal events online, those moves could be well advised. But it remains to be seen who will come out on top in the local market.

The economy may be causing some publishers to scale back their coverage — just last month The Washington Post shuttered the last of its domestic bureaus — but others are hoping that local content and advertising will bring in much needed advertising dollars.

For advertisers, drilling down into local markets is becoming increasingly appealing. Reaching consumers where they are is a big step toward getting them into stores and taking their wallets out.

That's why many publishers are shifting into local gear. For a few examples, look at the recent launch of Huffington Post's local branches. Meanwhile, New York magazine has branched out its popular food blog Grub Street into several other cities. NBC is currently investing in writing talent to create city specific portals. And even Rupert Murdoch's News Corp. is going local.  

From a technical aspect, reaching consumers where they are is becoming more viable. BIA think geo-targeted ads are poised for aggressive growth over the next few years. The market earned $897 million in 2008, but BIA thinks it will grow to more than $1.9 billion by 2013. 

If advertisers can move past the online content on display and move to directly contact consumers based on their location and other demographic data, that would be a big switch. BIA estimates that banners shown only to people in specific areas or ads that change according to where the viewer is currently occupy about 10.2% of the display ad market. But that should change as targeting information and data analytics get more refined.

Matt Booth, SVP and program director at BIA/Kelsey, tells Clickz:

"Resellers like AT&T and the Yahoo Newspaper Consortium...are going to start to sell these geotargeted display products because the search CPCs are really high. If you're a reseller, you're buying a search click for $2 and you can get 1,000 impressions for 45 cents, the economics are in favor of shifting to this market."

As consumers get more comfortable sharing their location and other personal information, this space is becoming more open for advertisers. Booth thinks that social networks and portal are the most fertile place for localized ads:

  "There's just a ton of banner inventory that's just not getting used. People are just finding new ways to utilize it."

But the local ad market is quickly being joined by more than portals and social nets. BIA's predictions are in line with the idea that local will become increasingly important in the next few years — whether it's via hypertargeted content or advertising, local is certainly picking up these days. But it still remains to be seen who will succeed in proving their dominance in the local market.

Meghan Keane

Published 2 December, 2009 by Meghan Keane

Based in New York, Meghan Keane is US Editor of Econsultancy. You can follow her on Twitter: @keanesian.

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