Social networks to take bite out of local ads

By Cory Bergman 

If you sell local advertising, a study from Borrell Associated released today should catch your eye. Borrell predicts that marketing spending on social networks will skyrocket 68% this year, making up about 11 cents of every marketing dollar spent online.

In five years, Borrell predicts the number will hit $38 billion — a full third of all online marketing spending in the U.S. “Social networks are increasing their ad revenues at a tremendous pace and before long it could take a toll on ad spending at local media websites,” Borrell explains.

For example, compare Facebook ads with a traditional display ad campaign. A “fan” is someone you can communicate with for months (or even) years to come, while a display ad is a fleeting experience. From this perspective, a Facebook ad campaign is an investment for a business to build a direct communication path to customers, reducing the dependency on local publishers to make that connection.

The bottom line: publishers need to become part of this ecosystem with innovative ad packages that span social media.