are local websites profitable? (wow)
TRANSCRIPT
1© 2013 Borrell
Selected Charts &Information fromBorrell’s 11th AnnualBenchmarking Report
April 2013
2© 2013 Borrell
Our Foundation: Research
Introduction
Illustrations and information in thispresentation may be used with attribution to Borrell Associates.
The following slides offer a summary of Borrell’s 11th Annual report, “Benchmarking Local Online Media,” published on April 11, 2013. The
report contains analysis of revenues and expenses from 6,284 local digital ventures in the U.S. and Canada, as well as a survey of digital
managers and online ad-spending data from 513 U.S. Digital Marketing Regions (DMRs). The full report costs $995 and can be
downloaded at www.borrellassociates.com.
3© 2013 Borrell
Our Foundation: Research
Growth Isn’t Abating for Local Online Ad Spending
Local Businesses spent $18.5 billion on digital advertising in 2012, 20.5% more than the previous year. In 2013 the number is trending toward $24.3 billion, for
a 31.4% growth rate.
4© 2013 BorrellSource: © Borrell Associates, Inc. 2013
Local Online Advertising, 2004–2013
5© 2013 Borrell
Our Foundation: ResearchWho Gets All That Money?
Pureplay companies dominate, with 47% of market share.That’s because there are so many of them: Craigslist, Weddings.com,
Autotrader.com Angie’s List, Yelp, Yext, ReachLocal, Monster,Groupon, Marchex, Local.com…. Perhaps two dozen
getting small chunks of share from each market.
6© 2013 Borrell
How $18.5 Billion Was Shared In 2012
7© 2013 Borrell
Our Foundation: Research
Clear Pattern:Local Businesses Prefer Digital
Consumers over ‘Readers’
The Top 20 list of companies in the local digital space is dominated by those who have nothing but advertising as their content, trumping traditional news & information sites. Even though Gannett, a “news” company, tops the list, 60% of its digital
revenues are not from its news sites.
8© 2013 BorrellSource: SEC Documents, company statements, Borrell Associates Inc.; April 2013
Top 20 Locally Based Competitors
*Some overlap in revenues occurs for CareerBuilder and Classified Ventures because both are owned by Gannett, McClatchy and Tribune, which also appear on this list.
9© 2013 Borrell
Our Foundation: ResearchDigital Growth For Newspapers Is Low
10© 2013 Borrell
Newspapers Online Rev. Growth, 2004–2013
11© 2013 Borrell
Our Foundation: ResearchBut They Average 50% More Digital Revenue Than Local-
Market Competitors.
Why? Because they got in the game early, leveraged large local ad-sales forces, and focused on classified
advertising, which migrated to the web fast.
12© 2013 Borrell
Who’s Making What: Avg Per-site Revenue
13© 2013 Borrell
Our Foundation: ResearchTV Stations’ Digital Revenue Continues to Grow – Maybe
As Much As 26% in 2013.
14© 2013 Borrell
TV’s Local Online Ad Revenues
15© 2013 Borrell
Our Foundation: ResearchLocal Radio’s Growing, Too...But is Nowhere Near the
Billions that TV and Newspaper Competitors Make.
16© 2013 Borrell
Radio’s Local Online Ad Revenues, 2004–2013
17© 2013 Borrell
Our Foundation: ResearchBut the REAL Story CentersAround This Number:
+49%
18© 2013 Borrell
Our Foundation: Research
Our Survey Found:The average EBITDA* for traditional media company digital ventures is 49%.
They don’t account for rent, advertising or content furnished by their host media company.
Many pureplays (who do account for these expenses) are making 20% to 30% margins.
There’s a high level of confidence (96%) in the accounting.
* Earnings Before Income Taxes, Depreciation and Amortization
19© 2013 Borrell
Want More?
We can’t give everything away!
The report spans 45 pages and includes 37 charts and graphics (we showed you just 7 of them here). It also includes a list of all 513 U.S. Digital Marketing Regions (DMRs) and how much businesses spend on various forms of digital advertising in these locales.
For the full report visit www.borrellassociates.com
20© 2013 Borrell
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We’d love to hear from you.
Call us: 1-757-221-6641Email us: [email protected] us: @borrellassocGet head’s up on our research: www.borrellassociates.com Join the LinkedIn debate: Local Advertising & Marketing Trends
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