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Borrell: Local Search Companies Lead Rankings for Top ‘Traditional to Digital’ Transformations

Borrell Associates

Earlier today, Borrell Associates released the findings of its new “Local Online Media: 2012 Revenue Survey.” The survey analyzed 6,284 local online operations in the U.S. and Canada and online ad-spending forecasts in 513 U.S. digital marketing regions (DMRs). Borrell found that traditional local media companies are rapidly making the jump to digital and are seeing a growing share of their revenue come from digital ventures, with local search organizations heading the pack.

Digital ‘Morph’ Rates

Local search companies are leading traditional local media organizations in growing their shares of total gross revenues from digital sales. Yellow Media, YP, hibu, Dex One, and SuperMedia represent five of the top ten traditional media companies with the greatest shares of digital to total revenue.

Borrell Associates

Borrell notes that if current trends continue, digital ventures could contribute half of company profits to these traditional media companies within the next five years.

Changing Behaviors

The study found that consumers are increasingly willing to pay for online content, including directory information. We’ve seen the pay model adopted recently by newspaper websites (notably the New York Times and the Washington Post), but Borrell found that online directories like Angie’s List are experiencing success with charging customers to access listings and reviews as well.

Angie’s List saw a 66% increase in paid subscriptions for 2012, with 250,000 new subscribers in the fourth quarter of 2012 alone.

Local Search Ranks High, But Challenges Remain

Borrell also ranked the top local online marketing companies in terms of 2012 revenue. Local search companies dominated the list of top performers with YP, Yellow Media, CityGrid Media, Dex One, Hibu and SuperMedia all placing in the top 20.

But traditional media local search companies still face obstacles to overall growth.  While Yellow Pages directory companies are growing at a strong rate in digital, as a whole, many are growing at a slower rate than industry average given the decline in print revenues.

The biggest opportunity the report found for future local online ad revenue was in the loyalty space. Borrell found that while local businesses are ramping up promotions focused on attracting new customers and driving traffic, they aren’t doing much to retain those customers for the long-term. Borrell suggests local marketing companies help businesses create tailored programs to keep customers coming back.

The Borrell report offers a vast array of fascinating insights on the local advertising industry and how traditional media is adapting to changing consumer behaviors. To access the full survey, visit Borrell’s website.

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