MOLINE, Ill. – Local online newspaper advertising continues to surge, according to a recent research report and web analytics at more than 1,500 U.S. newspapers.

Local online advertising has grown from $1.7 billion in 2002 to an estimated $12 billion in 2008, according to a report recently released by Borrell Associates. Borrell predicts that the total will nearly double within five or six years.

Statistics gathered by TownNews.com – a web hosting company serving over 1,500 U.S. newspapers – showed that web advertising at those newspapers nearly doubled in less than a year.

In January 2008, TownNews.com’s total online ads served surpassed 1 billion impressions for the first time. Just eight months later, in September 2008, the total number of impressions served by TownNews.com customers totaled 1.95 billion.

“That’s phenomenal growth in online advertising,” said TownNews.com general manager and founder Marc Wilson. Wilson said the huge growth spurt is a combination of several factors, including:

1. Advertisers are increasingly interested in online advertising.

2. Local online newspapers are proving to be the most-trusted sites for Web advertising.

3. Traffic on Internet newspapers continues to show strong growth.

4. Newspaper management is placing greater emphasis on selling online advertising.

5. Local newspaper advertising staffs are getting better at selling online advertising.

The Borrell research showed local online advertising growing nearly 50 percent from 2007 to 2008. Borrell forecasts the growth to continue, reaching an estimated $22.9 percent in 2012.

The Borrell report also showed a major trend toward local online advertising. In total, local online advertising has been less than 10 percent of total online advertising. Borrell estimated that more than 40 percent of all online advertising will be generated locally by 2012.

The Borrell data also showed that total online advertising in the United States passed total radio advertising in 2007. Online was fifth in total advertising, behind direct mail, broadcast TV, newspapers and other print. Borrell projected that online advertising will grow to be the No. 2 largest advertising category, behind only broadcast television.

The Borrell report also noted that local newspaper Web sites have the potential to draw larger audiences than local radio stations.

“Newspapers have a great opportunity,” Wilson said. “Advertisers want to move to the Internet, and they want ‘safe harbors’ to advertise on the Internet. Newspapers can have the best and most-trusted Internet product in their trade areas.”

The Borrell research predicted that local online video-based advertising will grow five-fold in the next five years.

“Technology will allow community newspapers to – in effect – become small local television stations,” Wilson said. “This will allow newspapers to totally reinvent themselves while continuing to be the No. 1 source of local news and advertising for their communities. We are extremely pleased to see so many of our TownNews.com customers embrace technology and Internet advertising. We think many of our newspapers are leading change in their communities – a trend that is great for newspapers and their communities.”

About TownNews.com

TownNews.com, based in Moline, Ill., is majority owned by Lee Enterprises (LEE), a premier publisher of daily, weekly, online and specialty publications. TownNews.com hosts more than 1,500 online publications, and offers a wide variety of products and services to U.S. newspapers. For more information, visit www.townnews.com.